USA, CA: Moonlight Brewing severs partnership with Heineken, takes on smaller-scale local partner instead

In an unusual trajectory, one of the Bay Area’s most beloved craft breweries has severed a partnership with a global beer corporation and instead taken on a smaller-scale, local partner, the San Francisco Chronicle reported on May 13.

For the past six years, Heineken International has owned half of Moonlight Brewing, the 30-year-old Santa Rosa maker of popular beers like Death & Taxes and Reality Czeck. On May 13, Moonlight announced that it had transferred that 50% stake to Patrick Rue, the former owner of southern California’s the Bruery and current owner of Erosion, a wine and beer producer in Napa Valley.

“Moonlight is preserved,” said founder Brian Hunt, who will step back from day-to-day operations while retaining his 50% ownership.

The partnership aligns two highly respected figures within California’s craft beer industry. Hunt has long had a devoted fanbase among beer-industry insiders for his subtle-tasting beers and his refusal to jump on brewing fads. Rue developed a cult-like following at the Bruery, which he founded in Orange County in 2008, thanks to his experimental beers and exclusive membership program. He moved to Napa and started Erosion after selling a majority stake in the Bruery to a Boston private equity firm in 2017.

Rue has been drinking Moonlight beers since he was in college, he said, and has long admired Hunt’s approach. “Moonlight is a brewery that thrives despite not chasing trends, or perhaps it thrives by not embracing trends,” he said. As a half-owner of Moonlight now, he planned to “keep Moonlight what it is,” he said, and “provide (Hunt) resources to grow at a patient pace.”

When Hunt sought a partner for Moonlight in 2016, he was looking for a succession plan more than a capital injection, he said. He wanted to find a partner who could continue the business after his retirement. He sold half his business to Lagunitas, another Sonoma County brewery, which at the time was itself half-owned by Heineken. His primary point of contact at the time was Lagunitas founder Tony Magee.

The following year, however, Heineken took full ownership of Lagunitas. Magee eventually left the company. The nature of the deal that Hunt had made in 2016 suddenly shifted.

For the last several months, Hunt said, he’s been looking for a new partner. He was confident that Rue was the right person. The two men share an approach to beer production, Hunt said, that centers around “artistry and vision.”

“I really didn’t want Moonlight to become less personal and more institutionalized,” he added.

Erosion is primarily a wine company, albeit an unorthodox one. Rue produces high-end canned wines, sold at a St. Helena tasting room. Some of his wines borrow from a craft-beer ethos, using ingredient additions that are atypical for the wine industry like cacao nibs. He makes a small amount of beer at Erosion, too.

The Erosion and Moonlight brands will remain separate, operating their respective tasting rooms in St. Helena and Santa Rosa. No personnel changes are planned at Moonlight; Hunt’s daughter Erin Latham-Ponneck will continue as general manager, and Zach Greenwood will stay on as head brewer.

Moonlight’s beers are currently sold only in Northern California, and production can’t keep up with demand, Hunt said. He hoped that Rue could assist in updating the brewery’s infrastructure to make beer production more efficient and grow the distribution footprint.

Hunt said that with Rue, who’s about 20 years younger than him, he could feel confident taking a step toward retirement and traveling more. “Patrick has visions of what a beer should taste like,” he said. “It wasn't that he said ‘we need to fill this shelf space with the type of beer that's missing in this portfolio.’ He is about about vision and beauty.”

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