On May 29, 2008, a devastating fire broke out at the F.X. Matt Brewing Co. in Utica, New York. Within hours, the brewery suffered millions of dollars in damages, losing its canning and bottling operations and much of its warehousing space. It was a dark time for F.X. Matt, but the family-owned brewery had survived worse: Founded in 1888, the company has endured Prohibition, decades of industry consolidation and more than a century of changing tastes, so the fire was just another bump in the road.
With help from the brewing community—the Genesee brewery packaged some of F.X. Matt’s beer while the company recovered—the historic facility was able to rebound about a year later. Now boasting improved canning and bottling operations and a new warehouse, F.X. Matt is stronger than ever. F.X. Matt celebrated its 125th anniversary- in 2013 as the 11th-largest craft brewer in the country and the 18th-largest U.S. brewer overall, according to the Brewers Association.
Relatively few 19th-century regional breweries still survive, and only three—F.X. Matt, Pennsylvania’s D.G. Yuengling & Son and Minnesota’s August Schell Brewing Co.—remain independent and family-owned. Since the majority of its volume comes from the Saranac craft beer brand, F.X. Matt also enjoys the unique distinction of being, first and foremost, a craft brewery. “That’s where we’re probably unique,” says CEO Nick Matt, who runs the brewery with his nephew, president Fred Matt. “We’re the only historic regional brewery today that’s really focused on selling craft beer as its mainstream beer.”
Long History
The brewery’s roots date back to the late 1800s. In 1878, Nick Matt’s grandfather Francis Xavier Matt I emigrated from Germany’s Black Forest region, where he had worked in the Duke of Baden brewery. After a few stints at breweries in upstate New York, he ended up at Utica’s Charles Bierbauer brewery, which was founded in 1853. In 1888, at age 28, he reorganized the facility as the West End Brewing Co., which was renamed in his honor in 1980. “When he started out, it was by far the smallest brewery in Utica,” Nick Matt says with pride. “Ten years later, we were the biggest brewery in Utica, and today, we’re the only brewery in the city.”
The brewery was a regional success until Prohibition, which the company survived by making soft drinks, near-beer, malt tonic and other products. “Although we got through, it was by the skin of our teeth—the financial situation was devastating,” Nick Matt says, noting that repeal revived the company. “We were the first brewery in the country to have a license to sell after Prohibition.” As a result, a new beer named for the company’s Prohibition-era soft drink line, Utica Club, became the first beer sold in the United States after Prohibition—a distinction that’s still noted on the can today. The end of Prohibition inaugurated decades of success for the company, driven by Utica Club. But by the 1980s, Utica Club had largely retreated to upstate New York in the face of increasing competition from large national brewers, and the family decided to make a change.
In 1985, the brewery introduced Saranac Adirondack lager, a craft beer, to celebrate the 100th anniversary of the Saranac railroad between Utica and the Adirondack Park. “It was meant to be a return to the past,” Nick Matt says. “The brand did reasonably well, but back then craft beer wasn’t as big it is today.” The turning point for the brand—and the brewery—came in 1991, when Saranac Adirondack lager won the gold medal for best American premium lager at the Great American Beer Festival. The company seized the opportunity. “When Saranac won the award, we were selling around 15,000 cases,” Fred Matt says. “Nick came into my office and said, ‘We really aren’t cutting it doing what we’re doing right now. We ought to put all our efforts behind Saranac.’ That move probably saved the company.” At the time, Saranac comprised less than 1 percent of the brewery’s volume.
The decision to focus on Saranac paid off. “Saranac allowed us to expand again, to go to Boston, New York City, Philadelphia and the entire East Coast, which is where we sell today,” Fred Matt says. “It was a big change for this brewery and really got us into the craft beer segment.”
Craft Success
Volume for Saranac, now the brewery’s biggest brand by a large margin, increased last year to about 170,000 barrels. Recently, the brand has grown at a rate of 5 percent to 10 percent annually. “To be honest, we’re a little frustrated because we aren’t growing the way some people are,” Nick Matt admits. “But we’ve been very solid over the last few years.” The Saranac line includes four year-round expressions ($8.49 to $9.49 a six-pack), with Saranac Pale ale as the strongest performer, rounded out by the original Adirondack lager, the Bavarian-style Black Forest and Legacy IPA, which is based on Francis Xavier Matt I’s original IPA recipe, with increased hop levels. “It dates back to 1914,” Fred Matt says. “We like to think we’re the oldest IPA in production today.” The beer was introduced in 2013 to celebrate the brewery’s 125th anniversary, and the company included a free pint of the brew with its 12-packs for three months. Consumer demand led to the brand becoming a year-round expression.
Saranac does very well with mix-packs, which the brewery introduced in 1993. “We created mix-packs as you know them today,” Fred Matt says. Offerings include a year-round Trail Mix 12-pack (around $15.99)—comprising three Pale ales, three Black Forest lagers, three Adirondack lagers and three White IPAs—and four seasonal 12-packs, which contain a mix of core beers and seasonal offerings. Because of the strong mix-pack business, seasonals are a key part of Saranac’s lineup. This summer’s new Wild Hop Pils was a particular bright spot, and the autumn seasonal Saranac Pumpkin ale is a perennial success. Canned offerings also do well, led by the Can-Do pack ($14.99 to $16.99 a 12-pack of cans), which was introduced this past summer and contains four cans each of three different brews—Legacy IPA, Pale ale and a seasonal.
The brand’s higher-end High Peaks line ($9.99 a four-pack of 12-ounce bottles) has also recently been revitalized. “We revamped our High Peaks line, and we’ve been doing some one-offs to get our reputation back in that area,” Fred Matt says. “It was doing pretty well for us, but it was a casualty of the fire. We felt we had to focus on our core business.” The permanent High Peaks IPA and High Peaks stout offerings were both relaunched this year and have been strong performers. One-time releases like High Peaks Scotch ale, which was aged in Scotch barrels and sold out immediately, and Clouded Dream, a double white IPA, have also succeeded.
Roughly 80 percent of Saranac’s business is off-premise, while 20 percent is on-premise, with New York state’s on-premise share somewhat higher, at around 30 percent. “On-premise is an area where we really can improve, and we’re putting a lot of effort behind it,” Fred Matt says, noting that the company is increasing its focus on Saranac Pale ale as the flagship draft beer. The brand is available in 21 states, and New York is its top market, comprising over 60 percent of total volume, followed by North Carolina at around 10 percent. “So many people who leave upstate New York go to North Carolina,” Fred Matt explains. “We’ve got all these New York loyalists, and Saranac becomes a taste of home.” The brand also does well in New England and the Mid-Atlantic region. The company sees the Southeast as an opportunity area, but isn’t rushing to expand, focusing instead on increasing market share in existing territories. “We think the investment in our core market is better than expansion,” Fred Matt says.
Saranac and the brewery have even played a role in revitalizing Utica, a Rust Belt city with a population and industrial base in long decline. During the summer, the brewery hosts Saranac Thursdays, which is in its 17th year. “We get, on average, 2,000 people every Thursday night,” Nick Matt says. “It’s basically Utica’s happy hour.” The brewery also regularly hosts concerts. “It’s redeveloped this whole section of Utica,” Nick Matt adds, explaining that several restaurants and bars have opened near the brewery to bring in the nighttime crowd. “If you go back 17 years ago, there wasn’t really much of anything.” In addition, the brewery helps sponsor the Boilermaker, a 15-kilometer race that draws 12,000 runners from around the world and brings millions of dollars into the city. The race ends at the brewery, which celebrates with a live concert—and hundreds of barrels of Saranac.
Brewing Legacy
While Saranac is F.X. Matt’s biggest brand, around half of its capacity is allocated to other projects. The brewery produces around 30,000 barrels of Saranac soft drinks a year, 85 percent of which are destined for the New York market. It also has a sales and distribution agreement with the Lake Placid Pub & Brewery and makes the beers available throughout New York.
Old stalwart Utica Club ($14.99 a 24-pack of cans) contributes around 30,000 barrels a year as well, and sales have been increasing in the last decade. “It’s got a Pabst thing going for it,” Fred Matt explains. “It’s very nostalgic—25 years ago, if people found out we were making Saranac and also made Utica Club, it was like we were lepers. It wasn’t considered cool to be coming out of the same brewery, but it’s really evolved to a place where people do think it’s cool that we make Utica Club.” The beer, which is more sessionable and lower-priced than other craft brews, is often accepted in craft accounts where national brands don’t play well. “One of the comments we get most is that it’s a craft beer drinker’s everyday beer,” Fred Matt notes.
Because of its reputation for quality and its large capacity, the brewery has also played a key role in helping many craft brewers expand over the years. F.X. Matt devotes about a third of its capacity—around 120,000 barrels—to contract brewing, a practice that dates back to 1981, when the craft movement was first taking root. “We were one of the catalysts for the craft industry in the region,” Fred Matt says. “If you look at the major players on the East Coast, almost everyone has some roots here.”
Currently, F.X. Matt contract-brews for five or six other breweries. “We’re doing fewer contracts than we once did,” Nick Matt explains. “It’s really because we’re growing and some of our contracts are growing.” Fred Matt notes that having fewer contracts has helped to maximize tank capacity. At one time, the brewery made 600,000 barrels a year, largely with the same equipment. “Now, if we get to 400,000, we’re pushing it very tight on capacity,” Nick Matt says, explaining that fermenting and aging, not brewing and bottling, are the bottleneck. “Back then, we were basically filling all the tanks up to the top, and now we’re making all these different beers, so we don’t use the whole tank.”
Contract brewing provides a variety of benefits to the brewery and its clients. “In a way, it’s a collaboration,” Fred Matt says. “They’re learning from us, and we’re learning from them.” While the company charges higher rates than other contract brewers, the results speak for themselves. “Nobody ever leaves here,” Nick Matt says. “Our reputation is very good because we understand the role. We make wonderful beer for them—we use their formulas, and it will always be the same quality.” While the Matts are trying to boost capacity, they have no plans to change the contract business, which will continue for the foreseeable future. “We’re very comfortable with that piece of our business,” Nick Matt adds.
The Next 125 Years
Looking to the future, the company has purchased property adjacent to the brewery for a possible expansion that would add new fermenters and replace some legacy equipment. In addition, the company acquired the Flying Bison Brewery in Buffalo in 2010, retaining company founder Tim Herzog as general manager. They’re building a new brewery for Flying Bison in Buffalo. “It’s a smaller facility, so we’re doing one of their brands here,” Fred Matt explains, adding that the Buffalo brewery now produces some of the High Peaks line. “Our intention with the new brewery is to cover their growth and do smaller stuff there that we’d like to do.”
Even as it expands, F.X. Matt Brewing Co. continues to embrace its history. “If you look at our display case, you’ll find an IPA, a pale ale, a brown ale and a stout—all from just after Prohibition,” says Nick Matt, whose son, Nick R. Matt, recently joined the company. “I often think my grandfather would have loved the whole craft beer movement that’s happening today. In many ways, we feel like we’ve come full circle.”