🔒A new brand — and start, for Sebago Brewing

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Kai Adams leans forward, his trademark smile widening as he talks about Sebago Brewing's high growth over the past two years, during which it changed its branding as well as its packaging to cans to better suit wholesale buyers, saw wholesale sales volume rise 65%, while also enduring a costly, self-initiated recall of some of its beer it thought was of poor quality.

Adams, vice president and co-founder of the brewery, predicts another banner year in calendar 2016, with sales expected to grow to more than $12 million, up from the $10 million in calendar 2015. Of that, he expects beer sales to rise 36% to 40% and sales at the company's four restaurants to rise 6% to 7% year-over-year.

And there's more to come next year, when Adams and his co-founders, President Brad Monarch and Treasurer Tim Haines, plan to invest $5 million in a new building in Gorham that will double the size of the brewery to four vessels and 40 barrels. The money will come primarily from a new bank loan, Adams says.

The company was scheduled to go before the town's planning board on June 6 with a pre-approval application. The company is headquartered in Gorham Industrial Park. It is seeking approval to construct its new corporate headquarters, manufacturing and warehouse space, a brewery, restaurant and event center on lower Main Street (Route 25) in Gorham.

If approved, the company's new location will be on a large piece of land owned by the Shaw Brothers Family Foundation. Adams says Sebago Brewing will move into a new 21,000-square-foot facility from the 12,000 square feet it now has in two buildings. It would also be closer to Sebago's distributor, Nappi Distributors.

Adams hopes another brewery moves into Sebago's current location. “We hope to attract a budding brewery that can save hundreds of thousands of dollars,” he says.

If the company is granted a permit by this October, it would open the Gorham location in the fourth quarter of 2017.

The planned five-acre campus will be a destination brewery, says Adams, meant for brew bus and other tours to stop by and taste the beer. The trails in the nearby woods will be further developed for hiking and snowmobiling with access to the Presumpscot River, which is the main outlet of Sebago Lake, the brewery's namesake.

Changes pay off

Even though Sebago Brewing is in the Top 10 of Maine craft brewers, says Adams, he still sees it as a small brewery about one-third the size of Baxter Brewing Co., a mid-sized craft brewer based in Lewiston. But he's keenly aware of his own company's growth.

“I look at the percentage growth every day,” he says. “We've had huge growth in the past two years because of a bunch of great decisions. One of the biggest things was embracing the changes that need to be made in a business. Brad, Tim and I listened to our employees and our customers.”

One of the turning points was a visit Brad made to a Hannaford supermarket to try to find one of their beers. “It was in the third door at eye level,” Adams says, but all that was visible was the name of the particular beer, not the company's brand name, which now is displayed prominently at the top of each can, on top of the individual beer's moniker.

“We upgraded the logo and rebranded the whole company in 2014,” Adams says.

The company also changed its packaging to all cans instead of bottles when it needed to upgrade its bottling line, which Adams says also helped with distributors, because “cans are everywhere.” It made that decision in December 2014 and installed the can machinery in May of last year.

“We also introduced two new beers and cut four beers from our lineup,” he says. Currently the brewery is selling two year-round beers, three rotating season beers and four specialty beers, two of which come in 16-ounce cans.

Most of the company's sales are to wholesalers, with 21% going through its four brewpubs in Portland, Scarborough, Kennebunk and Gorham.

Growing pains

While Adams speaks enthusiastically about the company's recent and anticipated future growth, he knows there's reason for caution.

In early March the company decided to recall some of its own beer after a brewpub worker noticed it wasn't up to Sebago's standards.

“We destroyed it,” says Adams, adding that it was run over with a front-end loader. “It had too high a level of diacetyl. Peter, our head brewer, went back to get all the batches.” Diacetyl has an intense buttery flavor, and too much spoils the beer's taste, he says.

“We lost thousands of dollars,” says Adams, who attributes the bad batch to growing pains at the company. “There's a great learning lesson in how you deal with that as a leader. We are growing so rapidly and that touches all aspects of the business including attitude, culture and finances.”

The experience forced Sebago to look at its processes and standard operating procedures. “Everyone runs into this,” he says of quality issues.

Another issue is competition. Adams says bars and restaurants see Sebago as competition because of its brewpubs, notably the one in the Hampton Inn in Portland.

“We don't do a ton of business in the Old Port, which is the biggest beer market in the whole state,” Adams says. Some of its bigger customers in Portland are Buck's Naked BBQ and Portland Pie.

Still, he says he's really charged up about the Maine beer scene. “People are excited about it,” he says. “The Maine beer industry has a $450 million economic impact, which is close to the $500 million for lobster.”

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