When Carrieann and Jon Schneider of Sideways Farm & Brewery recruited the services of SysTech Stainless Works in February 2017, there were no signs the transaction with the Canton, Ohio-based company would be anything but smooth.
In need of a 3½-barrel brewing system for their Etowah facility, the Schneiders researched 10 different manufacturers. SysTech made their short list and stood out for what Carrieann Schneider calls “a feel-good message” of affordable, artistic, American-made products using U.S. steel and being family-owned by Amanda and Jason Spurrell. SysTech was also the closest company the Schneiders could find that offered American-made equipment on a scale that fit Sideways’ modest brewing needs.
“Deutsche [Beverage Systems] out of Charlotte primarily deals in Chinese equipment, and a couple in Tennessee [do, too],” says Jon Schneider. “Our whole mission, our kind of ethos is American-made — local, local, local. We wanted our equipment to represent that aspect of us.”
A trio of references had nothing but positive things to say about working with SysTech. Moving forward, the Schneiders primarily dealt with a sales representative, adding and reconfiguring their array of tanks with his help. They signed off on drawings in April, and SysTech requested 50 percent down, which the Schneiders say is typical in the industry.
Signs of trouble
The Schneiders wired SysTech just over $29,000 with a target delivery date of the second week in October. May then elapsed without much communication. Emails were sent in June asking about progress, and they were told the materials had been ordered and that pictures would be sent once work began in July or August, due to a few clients being ahead of them.
No updates were provided from then through the end of August. At that point, the Schneiders say they inquired about adding another brite tank and received a curt email from the salesman, saying the company was doing everything it could to meet demand. After another week without a reply, they emailed again and the salesman said Jason Spurrell would contact them to set up a meeting.
Figuring the equipment was delayed a few months — which was fine since the brewery construction had likewise been slowed — they say they were instead told that SysTech was closing, had “nothing left,” and were given the option to work with a Chinese manufacturer. Xpress emailed Spurrell for comment but received no reply.
Still wanting American-made products but feeling like their options were limited, the Schneiders researched the manufacturer and contacted multiple breweries that used its equipment. One was Asheville-Buncombe Technical Community College’s Craft Beverage Institute, whose program director Jeff Irvin advised against using the company’s products. He says the CBI’s distilling equipment has had multiple leaks, requiring a local welder’s services to keep it functional.
“It was very frustrating on our end. We’ve still had some problems with the equipment functioning correctly,” Irvin says. “We’ve had to actually put a lot of money in it ourselves and just a lot of effort on myself and the staff here.”
At that point, the full weight of the situation sunk in for the Schneiders. “We kept saying, ‘No, we want our deposit,’ and it was almost like a chuckle, going, ‘We don’t have anything. This is your option: You can buy this Chinese equipment or nothing,’” Jon Schneider says. “We were just blown away. It was such a shock. It was the craziest moment of my life. I just could not believe it was happening.”
The Schneiders contacted the Ohio attorney general and, with the case being an interstate matter, the FBI in Cincinnati, filing complaints against SysTech with both offices. Kate Hanson, Public Information Officer for Ohio Attorney General Mike DeWine, says there have been 14 complaints filed against Systech with the office’s Consumer Protection Section.
“The Dover Police Department, the Tuscarawas County Prosecutor’s Office and the Stark County Prosecutor’s Office had formally requested assistance from the Ohio Attorney General’s Bureau of Criminal Investigation in a financial investigation related to an alleged theft of money from victims. BCI had agreed to assist in the case,” she says. “The FBI has now taken over the case.”
Asheville-area lawyers informed the Schneiders that if their money still existed, it would take a few years to get it back, but the cost of the court battle would outweigh what they’d recoup. They say other affected breweries among the estimated 25 companies with varying complaints against SysTech have reported similar advice from their legal counsel. The several breweries that are in litigation have asked for their names not to be mentioned by news sources.
As a member of the Asheville Brewers Alliance, its executive director, Kendra Penland, was one of the first people the Schneiders contacted after it was clear their deposit was gone. Penland says dealing with the SysTech experience is a first for the fairly young organization, and that the best the ABA could do was direct the Schneiders to legal recourse, which they were already pursuing.
Penland adds that a primary benefit of the ABA is that it connects breweries with vetted industry partners that provide goods or services to breweries. Though Deutsche and Divinity Beer Systems in Arden don’t meet the Schneiders’ American-made standard, she plans to keep an eye out for potential new members who can help prevent such situations in the future.
“As the ABA continues to grow and folks know about us, and as we learn about what our members want, then I’ll file that away, and the next time I go to [the Craft Brewers Conference], I’ll go out and talk to different equipment companies and say, ‘Hey, this is something that’s important to at least one of our members. You might want to consider becoming involved with the ABA so that other folks have you as a resource,’” Penland says.
Sideways is on track to receive its new brewing system by the end of March or early April from Greenville, Mich.-based builder Psycho Brew — which has so far been the honorable partner the Schneiders hoped SysTech would be. Sideways will then spend a month brewing to have enough product to launch the business. Sales of custom-engraved bricks that will form the brewery’s front porch are helping recoup some of the deposit.
In the wake of the SysTech ordeal, the Schneiders and other affected breweries have formed a tight-knit group and communicate with each other weekly. Along with making these positive contacts — with whom they’d love to make some collaborative beers once their fellow fledgling breweries are up and running — they feel they’ve become more business-savvy and resilient.
“It was really emotional. Because we are a mom-and-pop without investors, it hurt us financially, and we had to make sacrifices to the building — the porch isn’t going to have a roof when we open,” Carrieann Schneider says. “We had to make adjustments, but I think that it added to our determination, and it made us stronger — that we can rise above and still do this with that original thought of being a truly local company, using American-made as much as possible.”