On Friday the Honolulu Star-Advertiser reported that Big Island based brewery Hawaii Nui has filed for bankruptcy, and that the lender who has provided the money to keep Hawaii Nui operational during bankruptcy is aiming to acquire ownership.
Current Hawaii Nui president Andy Baker said the company went into bankruptcy because "double-digit distribution growth over the past six months" made it difficult and expensive to acquire sufficient bottles and packaging. The company estimated the value of it's assets between $100K and $500K, and debts between $1 million and $10 million.
The article also mentioned that the brewery has "about a dozen employees" and produces "about 5,200 barrels a year." In 2009 Hawaii Nui acquired Mehana Brewing Company, another Hilo-based brewery.
Now, I'm sure that there's a lot more to know about the situation than what can be gleaned from the Star-Advertisers relatively brief article, but I'm still pretty stunned by the facts on hand. First of all, the looseness of the numbers is pretty alarming--between $1 million and $10 MILLION of debt? That's a HUGE difference. They can't narrow it down any more than that?
But even if you go with the best available numbers--the company is worth $500K and its debt is $1 million--the resulting situation is still baffling, especially when you read that the company president attributes the current disastrous situation to "growth." They're selling more product, and because of that they're losing more money?
There's something very wrong with a business plan when selling product costs more than it gains. And when you've got debt that is potentially 100 times greater (assuming the worst case scenario of $100K assets and $10 million debt), and it all happened in the last six months, something is very, very, outrageously wrong.
Oh well. The beer itself is actually pretty good, even if the people involved seem to have royally botched the business side of things. Hopefully the beer will remain as is, and the new owner will fix the rest of it.
It seems like there's a market saturation of sorts affecting craft breweries right now. At least in San Diego, there seems to be a new brewery opening (and another closing) all the time. It's too bad that a good product has to get derailed by the business side of the craft.
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