After merger with Mammoth Brewing, Lead Dog primed for growth

After Ryan Gaumer finished college in the spring of 2016, he wasted no time getting to work.

One day after graduating from Pepperdine University, instead of sticking around campus to party and drink beer with friends not ready to put their college days in the rear-view, Gaumer hopped in his car and drove back home to Reno.

The Reno native had beer of his own to make — and eventually sell. A handful of months later, Gaumer launched Lead Dog Brewing Co. in January 2017, opening a brewery and taproom on Fourth Street in downtown Reno.

Only 21 years old at the time, Gaumer, who said he learned to homebrew with his dad at age 14, was arguably the youngest brewery owner in the U.S.

“All of my friends were down there partying after graduation, and I was sweeping floors and getting building permits figured out,” Gaumer recalled. “I mean, I leased our building and was doing all the planning while I was still in a college dorm down in LA. I just wanted to be a local brewpub and have fun with it — and make really good beers.”

Five years later, it’s safe to say Gaumer has done that and more. The brewery quickly began raking in medals at international and domestic beer competitions. And it didn’t take long for it to and expand its distribution outside of Reno-Sparks to all of Nevada and, later, Arizona and California.

Lead Dog’s sales and demand were so strong, in July 2019, Gaumer invested nearly $1 million on a new taproom and production facility in Sparks. The 16,000-square-foot space is more than three times the size of Gaumer’s original brewery on Fourth Street.

A look inside the cold storage space at Lead Dog’s production facility in Sparks.

 

And last year, amid a pandemic that shook up the craft beer industry, Lead Dog saw its production volume and revenue rise.

“We went from packaging a little over a million cans a year to 2 million cans last year, so it was a significant bump,” Gaumer said.

The sale of pre-packaged canned beer, Gaumer said, was driven by dried-up demand for kegs while bars and restaurants dealt with closures and capacity limits. With draft beer left untapped for most of 2020, most of Lead Dog’s brews were bound for cans.

“We really didn’t fill a single keg for the entire year,” Gaumer said. “Unfortunately, most of our profit-margin is made in draft because the packaging and supplies, equipment and labor required for canning are expensive. So, we were working harder for a lot less. And it was a lot of work.”

It paid off. Even though keg sales plummeted, and despite having to halt production a few times due to COVID scares with staff, Lead Dog capped 2020 with its revenue up “12% to 14%” compared to 2019, Gaumer said.

LEAD DOG SCOOPED UP

This spring, Lead Dog took another big leap; it was acquired by longtime Eastern Sierra craft brewery Mammoth Brewing Company, based in Mammoth Lakes, California.

The price of the acquisition, which closed April 14, is not being disclosed, Gaumer said.

Gaumer began looking to sell Lead Dog late last year after he was offered an opportunity to use his distribution expertise at “another beverage company outside of the brewing industry” that he couldn’t pass up.

“I knew that if I was going to spend time on this new project, I wasn’t going to be able to maintain Lead Dog the way it needed to be captained,” said Gaumer, who reached out to Mammoth owner Sean Turner in December. “I knew Sean was looking for increased production, and we had excess production capacity, so it was no-brainer for both of us.”

Lead Dog’s Morgan McGaha adds ingredients to a fermenter tank at the brewery’s production facility in Sparks on July 14, 2021.

 

Despite the merger, Turner said the two brands will remain “unique and distinct” from each other and grow side by side, adding, “We’re pushing both brands with equal passion.”

Turner said Mammoth Beers LLC, the parent company of both brands, plans to turn Lead Dog’s Fourth Street location into a “little bit more of an inviting” space. Mammoth promotes outdoor recreation and sustainable tourism in the Eastern Sierra, and he envisions that being complemented by Lead Dog.

“We’re looking to turn the Reno location into much more of an anchor in Reno’s Brewery District,” he said. “I’ve always said that Mammoth Brewing Company needs to be an experiential company, first and foremost. And I want to make sure that we’re doing the same thing with the Lead Dog brand.”

Turner and Gaumer said the merger hasn’t resulted in staff reduction, either. Lead Dog, in fact, increased its workforce by 20% since adding on the production of Mammoth’s products in Sparks, said Gaumer.

In all, Mammoth Beers LLC has about 65 employees, with roughly 20 of those at Lead Dog’s facilities in Reno and Sparks.

Added Turner: “We didn’t need to release anybody because there is still so much work to do.”

‘MAXED OUT PRODUCTION’

To that end, Lead Dog’s Sparks brewery is on track to “more than double” its production of Lead Dog and Mammoth beers over the next three months, said Gaumer, noting the facility is currently set up to produce 13,200 barrels annually.

Added Turner: “We’ve already maxed out production in this facility such that we’re ordering more tanks.”

For years, Turner had been actively looking to acquire a brewery in Reno with excess capacity. Launched in 1995, Mammoth Brewing Company, which runs a 1,200-square-foot brewery and tasting room, distributes throughout Southern California and Northern Nevada.

“It’s very costly to produce down in Mammoth Lakes, and we’re very limited by our size,” said Turner, noting that being based at 8,000 feet elevation adds logistical challenges during winter storms. “We have not been able to meet our demand for sales orders for over a decade.”

GREAT BASIN DEAL FALLS THROUGH

Mammoth Brewing  came close to expanding its production in Reno-Sparks a couple years ago.

In April 2019, the company announced plans to purchase Sparks-based Great Basin Brewing Company, according to previous reports, with the goal of closing the deal by that August. That didn’t happen.

“Unfortunately, I had an investor that didn’t show up at the table,” Mammoth owner Sean Turner said. “There were a couple of challenges going on with that deal, and then COVID hit. And then (Great Basin Brewing owner) Tom Young and I both stepped back and said, let’s concentrate on our respective businesses and we’ll revisit the subject at the end of 2020.”

The time came and “little movement” followed, said Turner, who quickly pivoted his attention to acquiring Lead Dog.

“The one thing that I had learned in trying to acquire Great Basin was we were going too slow, and we were too public in how slow we were going,” Turner said. “So, Ryan and I did the exact opposite — we moved very quietly and fast to get this deal done.”