Within a span of 11 months in 2016, two of craft whiskey’s most notable brands went corporate, with Nelson’s Green Brier Distillery invested in by Constellation Brands, and Westland Distillery purchased by Rémy Cointreau. Within three months in 2023, Charlie Nelson announced his departure from the company he and his brother Andy founded to revive a historic, powerhouse whiskey brand the family once operated, and Matt Hofmann, the co-founder and distiller of Westland, announced he was moving on from the whiskey he spearheaded.
Nelson’s and Westland were part of a string of craft whiskey acquisitions that represented the industry’s first major momentum into consolidation. There had been earlier forays, but this was sustained, almost obligatory, participation from the big boys: If one made a move, so did another. Pernod Ricard, William Grant & Sons, Rémy Cointreau, Stoli Group, and Constellation Brands all got into the fun, and Diageo was active with its Distill Ventures arm.
This initial wave of acquisitions occurred as the industry’s upstart leaders were maturing and coming of age. Craft whiskey as an industry was also coming of age, and continuing to follow in the footsteps of craft beer to some degree, with the difference being that the major players were no longer content to twiddle their thumbs while a growing market threat emerged. Instead, the conglomerates wanted to pounce with haste, bringing the crème de la crème of craft whiskey into the fold before it was too late.
The craft beer world has seen a number of its big-ticket deals backfire over the years: Look no further than Constellation’s billion-dollar bet on Ballast Point, and the recent kerfuffle regarding Sapporo’s handling of Anchor Brewing. If craft whiskey really is following in the footsteps of craft beer, perhaps some attrition from those early deals should be expected. And while nobody is saying these whiskey deals have corked in the same fashion as those beer deals soured — Westland and Nelson’s each appear to be thriving — perhaps several of the relationships have gone on the rocks.
Whiskey Founders Are Departing
In January 2016, Constellation invested in Nelson’s Green Brier. This July, Charlie Nelson announced his departure from the brand on Instagram, with a long post of reflection and thanks.
The distillery still bears his name, and his family’s legacy, and his brother and co-founder Andy remains a part of its team. While Nelson declined to comment beyond his public statement, Constellation — which increased its stake to a majority position in 2019 — provided a statement from distillery vice president and general manager Daniel Schear. “We’re thankful for Charlie’s heart and passion during his time with Nelson’s Green Brier, and we’re supportive of his decision to move on in pursuit of opportunities more in line with his entrepreneurial spirit,” he says. “Charlie’s brother and co-founder, Andy Nelson, will continue with us as head distiller.”
In December 2016, Rémy Cointreau purchased Westland Distillery. This May, Matt Hofmann announced his departure from the brand on Instagram, with a long post of reflection and thanks.
In a recent conversation, Hofmann acknowledged he had the itch to consider a next chapter for quite some time. “I had this gnawing feeling that I had to reset my scope a bit, and it wasn’t a sudden thing. I felt it for years,” he says. “I started Westland when I was 21 years old. Am I the same person as I was back then? Do I still want to be doing this for the rest of my life?”
Stepping away from Westland gave him a chance to unplug and reset. Hofmann’s future may still be in the whiskey or spirits industry, or it may not, as he acknowledged he’s interested in other aspects of food, beverage, and agriculture at large. “It’s a big space, and there are certain parts that I became much more interested in as my Westland career evolved,” he says.
After long consideration, Hofmann timed his departure with intention. “It was a relatively convenient place for everyone, and I didn’t feel like I had anything left undone,” Hofmann says. American Single Malt Whiskey as a TTB-recognized category is finally, almost-almost-almost a done deal, and he unleashed the distillery’s Solum American single malt into the world; made with American peat, the whiskey is a culmination of Westland’s dedication to locality and terroir.
“When you sell a brand it’s not your brand anymore. … But there was still such a part of me that was tied to it and associated with it that it was still very personal.”
“We are beyond grateful for Matt’s dedication, passion, and the innovation he brought to not only Westland, but also the American Single Malt category and the whiskey industry as a whole,” says Jason Moore, who’s stepped into the role of managing director for Westland. “While his departure marks the end of an era, it also heralds the beginning of a new chapter for Westland, one that will be defined by a collective team.”
Even as founders step away, perhaps leaving an indelible mark on their companies that will always be felt, those former distilleries continue hurtling forward. Enormous multinational corporations don’t sit idle for long. “While changes are inherent in the evolution of any whiskey brand, our dedication to our craft and to our community remains steadfast,” Moore says. “We continue to honor our heritage while embracing new opportunities to enrich and expand the Westland experience.”
Another departure of note is that of Dixon Dedman, founder of Kentucky Owl. In January 2017, Stoli Group acquired the brand, which Dedman launched and tied to his great-great-grandfather’s legacy. He departed in the spring of 2021, previously telling VinePair that, “When you sell a brand it’s not your brand anymore. … But there was still such a part of me that was tied to it and associated with it that it was still very personal.” Surrendering control over something so personal eventually proved to be untenable, leading to his departure and the launch of the 2XO whiskey brand.
From Entrepreneurs to Corporate Entries and Exits
Why are the founders of some of craft whiskey’s biggest success stories moving on from their beloved projects, their babies, some with strong family ties?
“Most of the founders and distillers I have talked to who have moved on after acquisition have mentioned that they are looking for either their next creative challenge, or they are ready to retire — an option not open to every small business owner,” says Becky Harris, the co-founder of Catoctin Creek Distilling, which Constellation Brands bought into in January 2017. Harris is a former American Craft Spirits Association (ACSA) president, giving her unique insight not only as a distillery owner who found a conglomerate partner, but also on the evolution of the industry as a whole.
“Small distilleries may be becoming more numerous, but many small distillers are being squeezed between the cost of regulations built to handle multinational corporations with entire departments for compliance.”
“The person that is willing to take the massive risk to start a whiskey company has a different mindset than the person who has a corporate job — and both sides need to be able to work with people dramatically different from themselves,” says Paul Hletko, founder of FEW Spirits, whose distillery joined the Samson & Surrey portfolio in 2016, which was then acquired by Heaven Hill in February 2022. He’s also a former ACSA president.
“As the middle tier continues to consolidate and retail shelves become ever more crowded without a route to the customer for fledgling brands, founders can also become weary of the fight,” Harris says. With her industry advocate ACSA hat on, she believes that having more robust ways to connect with consumers, such as the direct-to-consumer shipping that wineries readily utilize, would help that fledgling to mid-sized tier succeed without the need of corporate backing.
“Spirits are a very challenging business, especially if you are working in an aged product category like whiskey with multi-year cash flow cycles,” Hletko says. In the face of that, sometimes the idea of bootstrapping against larger foes is too exhausting to carry on indefinitely. Instead, hand over the reins — perhaps making some of that cash back and then some — and let the big budget corporations do what they do best by capitalizing on their scale to grow in a way that wouldn’t otherwise be possible.
While an industry that has exploded from dozens to thousands of participants seems like it should have boundless tales of lucrative business operations, Harris reminds that’s not quite the case. “Small distilleries may be becoming more numerous, but many small distillers are being squeezed between the cost of regulations built to handle multinational corporations with entire departments for compliance, and ever-shrinking margins due to rising costs to market,” she says. “This is not a recipe for longevity for our small businesses.”
Adapting, Moving on, and Looking Ahead
Whiskey founders who haven’t departed their brands instead need to adjust to life within a larger entity, where they’re no longer the bold entrepreneur doubling down and calling all the shots, but a small cog in an enormous operation. “The person that is willing to take the massive risk to start a whiskey company has a different mindset than the person who has a corporate job,” Hletko says.
“One of the hard parts of being an entrepreneur or a startup is that you have to do literally everything, and you generally aren’t great at everything,” he continues. “So, as you grow and move into a larger portfolio, you get to do less of what you aren’t good at, and more of what you are.”
“As a founder and also a parent, there comes a time when it’s time for your baby to be on their own, be it literal or figurative.”
Hofmann admits to being worn out by a job that turned less creative, and more administrative, as the years went on. “There’s just a lot of ‘stuff’ that drags you away from what made you fall in love to begin with,” he says, estimating that 85 percent of his day-to-day became office work.
Not that he has any regrets. When asked if he would play it out the same way, from launching Westland to joining the Rémy Cointreau portfolio, he didn’t hesitate. “Yes, definitely,” Hofmann says. “There’s a sense that I now have the full breadth of what this industry can be, from an entrepreneurial startup to being a part of a publicly traded company. I really valued that education.”
Harris has seen the benefits of conglomerate investment firsthand. “I feel like I have learned so much through our partnership and am incredibly grateful to the Constellation Ventures group for their support,” she says. “Having a strong minority partner can really help accelerate a company’s growth.”
On that point, it’s worth noting that receiving support via a minority investor who has a say, but not outright control, is different from receiving the marching orders of a majority owner who has the power to overrule a remaining figurehead. “As a founder, I would imagine there is a significant difference between leading a company with a strong minority partner and ceding that leadership role to move into a subordinate role in a larger entity,” Harris says. “In my observations, that is when we see many founders step back from leadership.”
To that point, Catoctin Creek announced this month (after these interviews were conducted) that it was buying back the stake that Constellation had acquired seven years ago. While other founders have stepped away, Becky and Scott Harris doubled down instead by reacquiring full control of their fate. It further proves the point that while there’s many ways for a founder-partner relationship to dissolve, these arranged marriages are increasingly leading to divorce. Amicable or not.
As personal as a company may be to its founder, every hatchling leaves the nest in due time. “As a founder and also a parent, there comes a time when it’s time for your baby to be on their own, be it literal or figurative,” Hletko says.
“The toughest part of the whole thing is that Westland was not only my baby as one of its co-founders, but it’s been my entire working life,” Hofmann says.
Empty nesters the world over know that the trick is finding out what might give you purpose, or make you tick, next. “If I give myself the space, would I fall in love with it again?” Hofmann wonders. “Knowing that I was a little bit burnt out on it, knowing I had accomplished certain things, when the dust settles, how do I feel?” He’s ready to find out.