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V O L . X X I N O. X X I S E P T E M B E R 2 1 , 2 0 1 5 16 Other law fi rms with brewery experts include Drummond Woodsum, Bernstein Shur and Eaton Peabody. John Moran, an attorney at Eaton Peabody in Portland, started the craftcounsel.us law blog in March to help guide craft breweries, distilleries and others with general information on industry-spe- cifi c federal, state or local legal challenges. "Most startup breweries are focused on their craft and legal issues come in second, so I created easily accessible resources where entrepreneurs can go and get a sense of what is required," Moran says of the Craft Counsel blog. "It is a resource, a show of good will and it shows we have depth in this area." Understanding trademarks "Trademark, almost more than any other area of law, is underappreciated by breweries because it is misunderstood," says Dan Kleben, co-owner of Maine Beer and an attorney who had practiced at Pierce Atwood before starting his brewery in 2009. He says it costs $500 to $1,000 per trademarked brand or company name, including the U.S. Patent and Trademark Offi ce and legal fees. " ere is a whole cottage industry that has sprung up in reaction to the craft beer industry in Maine and around the country," he says. " e regulatory side is unique by defi nition. We're highly regulated at the state and federal level. Our company sells in 10 to 15 states, so we need to know the regulations in each state." He adds that the company also has confi denti- ality agreement to protect its recipes and production. Maine's largest craft brewer, Shipyard Brewing Co., actually has its own in-house lawyer. "I am the only in-house counsel [at a brewery] that I'm aware of in Maine," says Branden Maser, Shipyard's general counsel. Large brewers take notice e growth of and energy around craft brewers isn't lost on the big brewers. Craft brewers produced 22.2 million barrels in 2014, up 18% in volume and more than 22% in retail value to $19.6 billion, according to the Brewers Association. at's the fi rst time craft brewers reached a double-digit volume market share, at 11%. e total beer market was up only 0.5% in 2014, indicating that craft brewers are gaining share while large brewers aren't. e Brewers Association said craft beer makers are aiming for a 20% market share by 2020. On Sept. 16, Anheuser-Busch InBev said it plans to merge with SABMiller, which would combine the world's two largest brewers to make a $276 billion "super brewery." On Sept. 8, the Dutch company Heineken bought 50% of Petaluma, Ca.- based craft brewer Lagunitas Brewing Co. for an undisclosed amount. "What is going on in this industry isn't lost on the [big] beer companies," says Tod of Allagash. " e beer consumer wants these fl avored beers. And there's value to the customer to know where the beer comes from." Investments like Heineken's 50% bring up ques- tions about whether Lagunitas still qualifi es as a craft brewer. "It's up to the customers to decide," says Tod. " ere's more blurring of the lines as big- ger producers buy craft breweries. It could poten- tially change the landscape." Alan MacEwan, partner and chair of Verrill Dana's business and corporate group, says craft beer valuations are running at 10 to 13 times earnings before interest, taxes, depreciation and amortization, or EBITDA. A good range is seven to nine times, he says, so craft beer company valuations are high. "We're just seeing the beginning of merger and acquisition activity," he says. Adds Moran of Eaton Peabody, "Contributing to that are large macro breweries that want to regain market share, so they'll pay a premium." Courtney Sparks White, a partner with the busi- ness valuation and forensic accounting group at Clarus Partners in Columbus, Ohio, says it's diffi cult to place a valuation on craft breweries, but her com- pany looks mostly at a combination of market-based multiples of EBITA as well as income, including cur- rent and projected earnings. "It's all about asking the right questions," she says, adding that purchases like Heineken's are heat- ing up valuations. On a smaller scale, some local breweries are attract- ing attention from independent investors like Ayres Stockly of Cumberland, who put a small but unspeci- fi ed amount into Oxbow Brewing Co. of Newcastle. "A lot of it comes down to personally knowing the people. I immediately liked the two people who started Oxbow," says Stockly. "I took a leap of faith based on the personality of the guys, their experience, their philosophy and their passion for their product." Tim Adams co-owner and master brewer of Oxbow, says Stockly was part of the company's startup capital from private investment from friends, family and friends once removed, plus lines of credit and loans from Bath Savings. Oxbow itself has started a business to help support its craft brewery. Says Adams, "We have an Airbnb that we rent out for beer tours." L V, Mainebiz senior writer, can be reached a t @ . a n d @ LV Not only do you get the convenience of valet parking at the airport for $10 a day, but we'll take care of your car needs, too. www.parknjetportland.com 747-5650 Drive 100 yards past baggage claim. Look for our green sign. Open 4:30AM - 1AM or later. per day $10 park perks OiL chANge • cAr wAsh • DetAiLiNg with Get engaged, inspired and connected with a print + digital subscription to Mainebiz. You'll receive bi-weekly issues, special publications and full online access! Know Maine Business. Or call: 845.267.3008 Subscribe online: mainebiz.biz/knowmainebiz » C O N T I N U E D F RO M P R E V I O U S PA G E Key questions for startup breweries ¡ Did you choose the best form of business entity? ¡ Do you understand your legal obligations to your employees? ¡ Are your trademarks and intellectual property protected? ¡ Are you in compliance with alcohol production, sales and distribution regulations? ¡ Can your real estate facilities handle the projected growth of your business? ¡ What would happen to your business — and your family — if something happened to you? S O U R C E : Marianna "Molly" Putnam Liddell, partner, Pierce Atwood LLP

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