A little over a year ago, one of Hawaii’s few breweries was sold out of bankruptcy to a relatively unknown buyer. Long time Honolulu oncologist, Dr. Paul DeMare, beat out a slew of other bidders to purchase Hawaii Nui and Mehana Brewing Company based in Hilo. Many wondered, why a life long doctor, would purchase a struggling brewery. I recently got a chance to sit down with Dr. DeMare to find out more about why he decided to buy the brewery and what his plans are for reviving the company. Mehana cans are now back on the market with Hawaii Nui products coming later this summer.
How did you come to buy Hawaii Nui/Mehana Brewing Company?
I was on vacation and my neighbor had collected a bunch of newspapers for me. I was going through them on Memorial Day weekend. I saw that the brewery had gone bankrupt and there was essentially going to be a sale of it. The dollar amount that was in the paper was really quite low. I have an interest in the Big Island because I used to work there doing radiation oncology. I guess I must have been looking for a new avenue because I was/am in the process of trying to retire from the medical field.
So were you looking for a new investment?
No. It just really fell in my lap.
Did it really happen that easily?
It was a business and I enjoy drinking beer. I follow up on it and I called the attorneys who were handling the bankruptcy and a day or two later Andy Baker (then President of Hawaii Nui) came over to my house. We sat and talked for a few hours and he told me all the great things about the brewery. It seemed like a really good opportunity. The location was just right. If this were on Maui or Kauai I probably wouldn’t have paid much attention to it. But the fact it was in Hilo, a community that I know, made it a good fit. I really enjoy it there and I know the people there.
Have you practiced medicine your entire life?
Yes. The only business I’ve ever owned is my medical practice business.
How did you end up in Hawaii?
I’m originally from Cooperstown, New York. I first came to Hawaii as an intern back in 1967. I went back to the mainland and did my residency at Jefferson in Philadelphia, then a years fellowship in London, and then came back to Jefferson as an assistant professor. A job finally opened up back here in Hawaii and I said, goodbye to Philadelphia. Hawaii is a great place to live and after experience the blizzard of 1966 in upstate New York, I said no thank you.
There were more than a few entities in the bidding for the brewery. How did you win out?
I offered a little more money and also offered a down payment. The other people interested didn’t choose to up the ante.
What your vision for the company?
The vision for the brewery is to survive, which means not to go bankrupt again. I’m the sole owner of the company and I think one of the issues previously was that the owners didn’t have a common vision. I feel I can provide a clear vision.
After the purchase of the company, how much further investment was needed to help get the company to a healthy place?
I think the previous company was not well capitalized and it’s taken a fair amount of money. It was more than I thought was needed.
Were you surprised at the amount of money it took to bring the brewery back up to speed?
Yes. I was surprised. But it is what was needed.
What are some of the changes that have been implemented at the brewery?
We’ve changed from bottles to cans, which is not only better for the environment, it’s a lot cheaper. Our 12 ounce cans are made in Kapolei and we’ll be bringing in some big imperial pint cans from Texas. We have a new canning machine in place. We spent a good amount of time redesigning all of the labels and graphics as well. We are also buying 500 new kegs.
We’ve also invested heavily in recruiting the right people to work with. I brought on Ron Weeps, who was the former controller of Olympia Brewing, to handle all of the finances as a consultant. I’ve also added Darren Akiona, a former lobbyist and strategist, who is charge of our sales and marketing as a consultant.
What we didn’t change was our brew master, Richard Greene, who has been part of the company for a couple of years. Most of the brewing staff has stayed on board. We haven’t changed any of the brew system, although we had to do a lot of work on the glycol system. The 15 barrel system was in pretty good shape when I took over.
Why keep both the Mehana and Hawaii Nui brands versus just focusing on one?
Well I think on the Big Island the Mehana brand is very popular. It’s been there since the mid 90’s. Hawaii Nui has been more popular on Oahu. So, I think both have a good track record for sales and I think to abandon one would leave money on the table. We’re setting up websites for both brands and really paying attention to both brands. Each brand has unique and different styles of beer than the other, like Hawaii Nui’s Hapa Brown Ale and Mehana’s Mauna Kea Pale Ale.
Are the beers for both brands staying the same?
At the moment they are staying the same. I don’t want to try and put something new out yet. The brands that we brew have been selling and I wanted the marketplace to determine which beers do well. If there is one that is lagging, then we’ll probably find another beer to take its place.
Can we expect new experimental or special release beers?
We will be doing that in the future. But at the present time, I’m emphasizing getting a consistent high quality product that we can do all the time.
What is your role going to be in the company?
I’m officially the COO. I’m in Hilo every week that I’m in Hawaii and not traveling. I’m there at least 2-3 days a week, sometimes more. Right now I’m trying to be there on a pretty regular basis to make decisions, but I’m also trying to surround myself with as well qualified people as possible to help me.
How long do you think it will take you to get the company stabilized?
I would hope by the end of summer. We will have all of our cans we need completed, a full marketing strategy and have our new distribution partner, Johnson Brothers, with a good handle on things. We have to really get our draft beer business back on track.
Why did you decide to change distributors?
The contract with Paradise Beverages really wasn’t favorable for our company. I felt Johnson Brothers presented us with a better opportunity.
Are there any plans to distribute outside of Hawaii?
Right now we are only focusing on Hawaii. We’d consider it in the future, but not right now.
Where do you see Hawaii Nui and Mehana fitting in the local craft beer market?
I think our beers is certainly competitive taste wise with all of the other local breweries. I think we need to emphasize that our beers are brewed and package here in Hawaii.
What are your personal beer favorites? Before you bought the brewery what did you drink most often?
Stella Artois was my go to beer. When I mow the lawn I drink a lot of Miller Lite too.
What have been some of the high and low points of buying the brewery?
Owning a brewery! People want to talk about the brewery. I normally talk to a lot of doctors and patients about cancer, radiation and treatments, but it’s nice when we can talk about something else. It’s a popular topic.
The overall expense of owning a brewery was a surprise. There were a lot more dollars that needed to be put on the table to move all of this forward than I initially realized.