The Genny sale: a bet on Rochester’s brewing infrastructure

This story is a joint publication partnership between the Rochester Beacon and the Cleveland Prost.

The sale of Genesee Brewery parent company FIFCO USA was announced Thursday afternoon with a pretty simple press release. There was no big event at the brewery, no public unveiling of the new ownership and, as of now, no press conference or media availability planned.

The reaction from Genesee fans was quite a bit louder regarding the buyer, Saothair Capital Partners, a Pennsylvania-based private equity firm. A lot of the comments were some variation of the same thing: They’re worried. Some people were angry. A few said they’re done buying Genesee. Almost all of the concern traced back to private equity. (Most surprisingly to me, some of the employees I talked to are excited. If you need a taste of those comments, check out my Instagram post on the sale.)

Private equity has earned a reputation that goes well beyond the generic idea of “new ownership.” Investors put money into a fund, the fund buys companies, and the firm eventually looks for a return on those investments, often by growing the business and selling it. Depending on the company and the deal, that can involve new investment and expansion, or it can mean reducing costs and consolidating operations, or taking on debt.

That last part is what tends to make people nervous when the company in question is Genesee.

A brewery can be an asset on somebody’s balance sheet and still be an institution to the people who live around it. Genesee is a nearly 150-year-old Rochester institution that employs hundreds of people, so yeah, people are concerned.

There is something unusual about this particular transaction, though. We’ve actually seen this movie before. Saothair co-founder Rich Lozyniak and Peter Bodenham, the brewery’s new CEO, aren’t strangers walking into the building. They’re coming back to run the same company they ran nearly 20 years ago, when it was owned by another private-equity firm: KPS Capital Partners. In particular, I think we can learn quite a bit by exploring Genny’s first brush with private equity—when the company was called North American Breweries, the name that Saothair is bringing back.

The first private-equity run

The brewery—then called High Falls Brewing Co.—was in pretty rough shape when KPS arrived in 2009. That February, the Democrat and Chronicle reported that the city of Rochester and Monroe County had agreed to forgive roughly $9.8 million in High Falls Brewing’s past-due water and tax bills. The concession was part of the effort to clear the way for KPS to buy the brewery and preserve several hundred jobs.

KPS created North American Breweries as a new holding company and investment platform for the beer and malt beverage business. Its first deals included the acquisition of substantially all of the assets of High Falls Brewing, the purchase of Labatt USA and a perpetual license for Seagram’s Cooler Escapes and Seagram’s Smooth. Lozyniak became CEO, and Bodenham joined the marketing operation before eventually becoming vice president of marketing.

What’s interesting, looking back at the media coverage from those first few months, is that the brewery’s potential as a manufacturing operation was apparent almost immediately.

In February 2009, the D&C reported that High Falls Brewing was preparing to produce Iron City beer in Rochester after the Pittsburgh brewery ran into problems with its canning line. KPS already owned some of High Falls Brewing’s debt and was considering taking a larger stake in the company. A month later, Lozyniak told the D&C that flavored malt beverages including Seagram’s Escapes and Mike’s Hard Lemonade accounted for roughly 40 percent of High Falls Brewing’s annual production, with a large portion of that coming from contract brewing.

In other words, the Rochester brewery wasn’t simply a place where Genesee beer was made. It had excess capacity, packaging infrastructure and a history of making products for other companies. The KPS-era strategy was, at least in part, about putting that capacity to work.

And this wasn’t theoretical. High Falls Brewing had already become a contract producer for Seagram’s. KPS inherited an undercapitalized plant and immediately began investing in its infrastructure. Lozyniak talked openly about getting the plant back to full-time production by adding volume and spreading its fixed costs across more production.

The Rochester Business Journal’s coverage from April 2009 makes that strategy even clearer. KPS wasn’t simply buying a beer company and hoping to revive Genesee. Raquel Palmer, the KPS partner overseeing North American Breweries, said the firm wanted to build a larger, well-capitalized brewing company by acquiring both brands and “additional brewing capacity.” KPS saw High Falls as a manufacturing operation with problems it could fix, not simply as a collection of beer brands.

The first few years were, by almost any reasonable measure, a success. When KPS arrived, High Falls Brewing employed about 360 people, down from a recent high of 375 after the brewery picked up the Seagram’s contract. Lozyniak told the Rochester Business Journal that the investment thesis was not to “slash and burn,” but to put money back into the business, and he expected employment to grow. A year later, the D&C reported that employment had climbed to roughly 470. New products were being introduced, and Genesee sales were growing by double digits.

By late 2011, the newspaper was running a story headlined “Genny brews a turnaround.” Lozyniak told the D&C that the Rochester plant had “doubled output from where we were in ’09” and that Genesee had expanded into new markets, including New York City. In the same story, he described the company KPS had bought in blunter terms than you’d expect from a press release: KPS, he said, “didn’t see a company that was broke from the perspective of quality.”

North American Breweries also bought Independent Brewers United in 2010, adding Magic Hat, Pyramid and MacTarnahan’s to the company, along with several brewpub locations.

So, if you want to use the KPS era as evidence that private equity can be good for a brewery, there’s plenty of evidence to work with. A struggling company received new investment, employment went up, production increased and the company expanded its portfolio.

Then KPS sold it in October 2012. Cerveceria Costa Rica, a subsidiary of Florida Ice & Farm (FIFCO), bought North American Breweries for $388 million.

Lozyniak called the sale “the best possible outcome” for the company. He also told the D&C: “The workforce, the current leadership, the current operation will remain the same as they have been.” That is a pretty important quote to have sitting in the archive right now.

Meet the new owner

Saothair’s portfolio gives us a better sense of the type of company it is than the private-equity label does by itself. Arandell is a commercial printing and logistics company. MJM Yachts builds luxury boats. Pioneer Window makes aluminum and glass building façades. T BAILEY makes large industrial tanks. GatesAir, a more than century-old maker of broadcast and public-safety communications equipment, joined the portfolio this year, with Saothair saying it plans to invest to scale the business and broaden its product line. Earlier this year, Saothair also bought EAM Corp. from Domtar, a Georgia-based maker of specialized absorbent materials used in everything from diapers to medical packaging.

There is an important difference between the brewery KPS bought in 2009 and the one Saothair is buying today. KPS inherited an undercapitalized plant and immediately began investing in its infrastructure. Saothair is inheriting the result of years of subsequent investment, including the roughly $200 million FIFCO spent modernizing the Rochester plant. In 2009, the opportunity was to fix the factory. In 2026, the opportunity may be figuring out how much more business that factory can handle.

The Genesee name matters, and so do Labatt, Seagram’s Escapes and the rest of the portfolio. But there is a much longer story here than simply private equity buying a regional brewery. KPS bought an undercapitalized manufacturing operation in 2009, invested in its infrastructure and used it as the foundation for a larger brewing platform. FIFCO then spent years and hundreds of millions of dollars turning that Rochester operation into an even more capable beverage-manufacturing facility. Now Saothair owns it.

For a company like Saothair, that may be the most important thing Heineken just sold it. The opportunity isn’t simply to sell more Genesee. It’s to figure out how much more business that factory can handle.

That’s an infrastructure play, particularly at a time when Genny brands are struggling. According to reporting yesterday in Brewbound, NAB “recorded some of the steepest off-premise declines among the top 25 vendors in Circana-tracked channels year-to-date,” with total sales by dollars down 13.8% and volume down 12.8%. In 2025, FIFCO USA was the 11th-largest U.S. brewery, with 1.45 million barrels shipped—a decline of around 200,000 barrels, according to Brewbound’s reporting on Brewers Association data published in New Brewer magazine.

The acquisition raises a series of basic financial questions that haven’t been answered yet. How much debt did Saothair use to finance the acquisition? What financial targets has it set for the business? Does it see Rochester primarily as the home of Genesee, or as a much larger beverage-manufacturing operation with contract production, modern packaging equipment and room to take on additional brands or customers?

Those questions are more useful than debating whether private equity is inherently good or bad. They tell us what to watch.

We’ve seen what consolidation looks like

There is another reason I don’t think we should simply dismiss the concerns about what happens next. Some of the businesses North American Breweries assembled during the KPS years were eventually consolidated or disappeared. The Pyramid Alehouse in Berkeley closed in 2013 as the company consolidated West Coast production. Magic Hat’s brewery in South Burlington, Vt., eventually closed in 2020, with production moved to Rochester and Vermont employees laid off. (It’s important to note that most of these closures occurred after KPS sold the brewery to the Costa Ricans.)

The company’s lineup looks considerably different today, too. Thursday’s announcement highlighted Genesee, Labatt, Seagram’s Escapes, Lipton Hard Iced Tea and Bubly Wine Refresher. Brands such as Magic Hat, Pyramid, MacTarnahan’s and Dundee are no longer part of the company. (Or it’s probably more accurate to say they’re technically still alive but are missing and long presumed dead.)

Those changes took place over years and under different ownership and management teams. Lozyniak and Bodenham were gone by the time most of them happened, so I’m not going to assign decisions to them that they didn’t make.

The history still matters, though, particularly when the same executives return and the new ownership starts talking about stability and investment. In 2012, Rochester was told that the workforce, leadership and operation would remain the same. Fourteen years later, the brewery is still here, but the operation is very different.

That’s not necessarily a criticism. Some of those changes are precisely why the Rochester brewery is an attractive asset today. It is worth remembering, though, that keeping a brewery open does not mean keeping the business exactly as it was.

The questions we will ask

The private-equity label is going to dominate the conversation for a while. I’m more interested in what Saothair actually does with what it bought.

What will it invest in Rochester? Does it plan to add production or packaging capacity? Will it pursue more contract manufacturing or bring additional brands into the plant? And what happens to employment?

Those are the questions worth watching because this isn’t the brewery KPS bought in 2009. FIFCO spent years and hundreds of millions of dollars transforming the Genesee campus into a modern, high-capacity beverage manufacturing operation. Saothair now owns that infrastructure, along with Genesee, Labatt, Seagram’s Escapes and the rest of the portfolio. We don’t know yet exactly what it plans to do with it.

And that’s the point. The deal closed Thursday. Nobody can reasonably expect a new owner to have a five-year track record 24 hours into the job. But we can look at what Saothair has done elsewhere, what it says about the businesses it wants to own, and what happened the last time private equity controlled North American Breweries.

That history gives us reason to be optimistic. It also gives us reason to pay attention.

I’m not going to tell Genesee fans to boycott their beer, and I’m not going to take a private-equity firm’s promises on faith, either. I’m going to remain optimistic and open-minded until I’m not.

Healthy skepticism seems like a pretty good place to start. Because they bought a brewery, but they also bought a factory.

Will Cleveland is a Rochester Beacon contributing writer. A former Democrat and Chronicle reporter, he writes about beer in the Finger Lakes region and Western New York on Substack.

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