F.X. Matt Brewing Co. tastes the craft-beer renaissance

UTICA — The year was 1888. Berta Benz of Germany completed the first long-distance drive in a motor car built by her husband Karl, covering 40 miles. George Eastman registered the name Kodak and received a patent for a camera that used roll film. Benjamin Harrison became president of the U.S. even though he lost the popular vote to Grover Cleveland.

The year 1888 also marked the incorporation of the West End Brewing Co. in west Utica. The brewery had originally been established in 1853 as the Charles Bierbauer Brewery, but was reorganized after Bierbauer’s death with F.X. Matt as president. F.X. had come to the U.S. in 1878  as an 18-year-old immigrant who had learned the brewing trade working for the Duke of Baden Brewery in the Black Forest region of Germany.

The Matt family is currently celebrating its 125th anniversary of crafting beer in Utica.

Now renamed the Matt Brewing Co., Inc. (also called the F.X. Matt Brewing Co.), the company “… employs 120 and generates more than $40 million annually,” says Nicholas O. (Nick) Matt, the chairman and CEO and a third-generation family member. “The brewery buildings [comprise] 385,000 square foot in total, and we are the eighth largest craft brewery in America [based on volume].”

“Reaching this milestone hasn’t been without its challenges,” adds Fred Matt, a fourth-generation family member who serves as the company’s president and COO. “We almost went out of business during Prohibition [1919-1933], when we had to change our business to only producing soft drinks, malt tonic, and syrups … If Prohibition had lasted another year or so, I don’t think we would be here today,” declares Nick Matt…. “The 1970s and 1980s were also particularly challenging, as regional breweries were forced out of the marketplace by giant national breweries [like Budweiser, Millers, and Coors]. Fortunately, consumers started to look for craft beers again and we made the decision to focus on Saranac.

“And then there was the fire,” continues Nick Matt. In 2008, the company suffered $10-million in damages from a fire that extensively damaged the canning and bottling operation and completely destroyed the third floor that was used for packaging and warehouse space.. “[F.X. Matt]  … reinvested the money from the insurance company to construct a new warehouse and to rebuild the canning operation … We introduced faster, more technologically advanced machines, expanded our storage capacity, and streamlined operations to make them more efficient. Out of the ashes of the fire, we now have a more modern and better facility.

“We are enjoying a renaissance in craft beer-making. At the end of the 1970s, there were fewer than 50 breweries in the country. Today, there are over 2,400, employing 108,000 more  people than 25 years ago … Consumption of craft beers is growing 15 percent annually while the consumption of beer overall declines. Still, [craft beer] represents less than 10 percent of the total volume of beer consumed in this country.”

“Our sales have been growing, especially since 1991 after we won a gold medal at the Great American Beer Festival for our new Saranac Amber Lager,” avers Fred Matt. “We made the decision then to focus on the Saranac brand. Sales of Saranac doubled every year for the next four years as more and more people tried Saranac and we expanded our distribution to new areas, “ adds Nick Matt. “We also used our excess capacity to do contract manufacturing for well known brands such as New Amsterdam, Brooklyn Lager, Boston Beer Co. (Sam Adams), and Dock Street … [Currently], contract manufacturing represents 35 percent of our production,” he says. The company also produces and distributes a line of Saranac soft drinks.

In addition to focusing on better brand recognition and wider distribution of its Saranac beers and ales, F.X. Matt has also sought new ventures. In April 2007, F.X. Matt entered into a supply-and-distribution agreement with the Lake Placid Craft Brewing Co.  The Lake Placid Brewing Co. was formed by the owners of the Lake Placid Pub & Brewery, a pub and restaurant located in the village of Lake Placid in Essex County. “The brew-pub/restaurant concept is a model that has been successful in building brands, and we’re looking at doing that with Lake Placid,” says Fred Matt. “It could be a new direction.

“Last year, F.X. Matt bought (asset purchase) the Flying Bison Brewing Co., located in Buffalo. Bison produced 6,500 barrels in 2012; this year we anticipate 8,000 barrels (100,000 cases) … We think it could be a big brand.” Flying Bison was incorporated in 1995 and opened in 2000. The company halted production in 2010 due to financial difficulties, but reopened with the Matts’ assistance in 2011. Flying Bison has been growing ever since and continues to brew most of its beer at a brewery in Buffalo. Tim Herzog, one of the founders, still runs the operation.

Nick and Fred Matt are two of the 11 stockholders in F.X. Matt Brewing Co. Before joining the firm in 1989, Nick was the president and general manager of Procter & Gamble’s Vick’s Healthcare division. He earned his B.A. from Union College (1967), spent three years as a U.S. naval officer, and received his MBA from the Johnson School of Management at Cornell University. Fred, Nick’s nephew, also joined the brewery in 1989. Prior to joining the brewery, he had been an account executive with Grey Advertising in New York City. He received his B.A. from Hobart College and his MBA from the Simon School of Business at the University of Rochester. Both men are married; each has three children.

In addition to Nick Matt as chairman and CEO and Fred Matt as president and COO, other key members of the F.X. Matt Brewing management team include Jim Kuhr, director of operations and brewmaster; Bob Cooley, controller; and Leigh D’Agostino, manager of the gift shop and tour-center operations.

Only three percent of all businesses reaches the fourth generation, according to the Institute for Family-Owned Business. The 125th anniversary of the founding of F.X. Matt Brewing is also a time to think of the fifth generation. “We have children who are potentially interested in running the business, but that’s years away” says Nick Matt. “If any of them does want to join us, we would be delighted but Fred and I insist that they first get outside business experience. Previous generations expected their [offspring] to assume a role in the company. We want them to understand that F.X Matt is a business; it’s not a family [right] or obligation.” Nick Matt’s son, Nick, just joined the firm in April, after garnering outside work experience with the investment bank and investment management firm Brown Brothers Harriman, earning an MBA from the London School of Business, and then working for Procter & Gamble. He is the brand manager of Saranac products.

F.X. Matt Brewing relies on a number of local firms for professional support. The firm’s primary banking relationship is with the Bank of Utica. The brewery also worked with M&T Bank to fund its anaerobic-digester project, which will deliver 40 percent of the company’s electrical needs when it is fully operational. The brewery’s legal work is performed by the Matt Law Firm, PLLC in Utica, which is associated with Hiscock & Barclay, LLP., headquartered in Syracuse. Accounting is handled by Kane Bowles & Moore CPAs, P.C. of Liverpool. In addition, “F.X. Matt worked almost exclusively with local firms after the fire to rebuild the brewery and to construct the new digester. The company also buys most of its packaging materials from New York companies and does a brew each year from locally grown hops,” says Nick Matt.

The world has changed since F.X. Matt incorporated the West End Brewing Co. 125 years ago. One thing that hasn’t changed, however, is the Matt family’s obsession with making great beers. As long as the public continues to demand quality from craft brewers, F.X. Matt’s descendants will keep providing products to quench their thirst and grow a company that continues to anchor the west end of Utica.

Contact Poltenson at npoltenson@cnybj.com