I have this really basic problem with the craft beer industry. Well – it’s not really a problem, per se, so much as a difference of ideals.

For all that craft breweries talk about how different they are from the Big Boys, they really trend toward the same: a flagship beer with a few supporting brands. As brands expand the key word isn’t “flavor” it is “consistency.” Based on what I hear at the Craft Brewers Conference, from personal discussions and advice through panel topics, I’d say that everybody’s ultimate goal is consistency over anything else.

There’s a lot to be said for consistency.

I truly believe that every great brewery has its own character. It’s an over-arching flavor or terroir, for lack of a better term, that is infused into all of that brewery’s offerings. Maybe it’s due to the equipment, or something in the process, or even just a certain ingredient combination that they use a lot – it doesn’t matter. There needs to be consistency in that character. You also want consistent quality in a brewery. A brewery should always be striving to make great beer. Will you make one every once in a while that’s just good? Or that maybe needs some work? Sure. Absolutely. Shit happens. (Heh.) But you need to learn from those mistakes to make that beer better, or know when to cut your losses on a recipe. The goal should be “consistently great beer.”

But when you’re talking about what it tastes like? Consistency is just insane. Similar? Sure. But always consistently the exact same? You’re ripping the soul out of the beer. You’re talking about using a palette of constantly changing agricultural ingredients and an actual live organism to make the exact same product every time? You must be joking. That’s like saying that you’re going to go to the art store and buy completely different paints, canvases, and brushes every time you shop and paint exact replica pictures. Will you get close? Sure. But exactly the same? Not unless you take some of the “art” out of the art.

What if the wine industry valued consistency over variability? Would there be as much mystique about different years, vintages, and terroir? If the agricultural differences between each field and batch of grapes were all blended out of the wine, would people buy case after case for aging purposes?

In beer, why do people age special release beers if not for that variability? If all beer tasted the same after aging why would people bother to buy different years and compare them? What’s the point of a vertical if everything tastes the same?

Craft brewers see a constant stream of variable products. The alpha acid content in hops varies from year to year and even from field to field. You can adjust how many hops you’re including in your recipe to keep the bitterness the same, but that will invariably change the amount of essential oils you’re getting – and even those essential oils may change depending on those variables… or others, like when they’ve been picked.

Malt changes from year to year, from field to field, and from maltster to maltster. Can we work to blend away these changes and to reduce any character influence these agricultural changes have on the final product? Certainly. But isn’t that what we snobbishly accuse AB-InBev of doing all the time? I remember one of my instructors at Siebel saying that there is something like 60 batches of beer blended into every can of Bud. Why? Consistency. They know that each batch tastes slightly different, for a variety of reasons. They also know how to achieve consistency to an amazing degree.

And what’s the buzzword I hear around the craft industry? Consistency. Why are we working so hard to emulate those we work so hard to distance ourselves from?

I don’t want to fall for it.

This is why I like to tell people that at Mystery Brewing Company I’ll never make the same beer twice. It’s not completely accurate, of course. I’ll be making the same recipe over and over again, but rather than try to minimize every single variation between the batches, I’d like to celebrate them, tell people that they’re there, why they’re there, and why they should be enjoying them.

“We had to replace Hop X with a similar one, so in this batch you should tastes notes of A, B, and C instead of the normal X, Y, and Z you’re used to tasting.”

“It was really hot in the brewery while we were fermenting Batch 9 of Evangeline, and we think it is a little fruitier than previous batches.”

But don’t get me wrong – it’s not about having a lazy process or being transparent about having a lazy process. The plan is to work hard to make every batch of beer as good as it can possibly be, and then to give as much information as possible to the drinker to let them know what is going on. What’s the malt bill? What hops were used? What yeast? How is this different from other beers that we’ve made? How is it the same?

One of the things that I’ve learned over the years as a homebrewer and a drinker is that the more I learn about a beer, the more probable it is that I’ll enjoy it and others like it because I can made educated and informed decisions about it. The craft industry lacks this as a whole – we strive for sameness and we don’t tell anybody what we don’t have to tell them, sometimes not even alcohol content.

I want to change that, and I feel like the only way to do it is to do it myself.

Consistent quality, but real beer has variability. That’s my motto.

À votre santé,
Erik

 25 Jan 2011 @ 3:14 PM 

And before you ask me to never use the word “sluice” again, here’s a lovely picture of a sluice from Wikimedia Commons:

I would also like to relay that “sluice” is a surprising safe Google Image search.

We will now carry on with our regularly scheduled blog post.

So, what’s coming down the sluices!?

I’ve been conspicuously silent across both this blog and Mystery’s blog (where this, incidentally, is being cross-posted, if you’re reading this at Mystery’s blog, you may want to check out Top Fermented), for the past couple of weeks and that’s primarily because my days have been turned into a twisting mass of odd jobs, manual labor, staring at the wall waiting for inspiration, and alternately burying myself so deep into work that I forget to eat. A good chunk of this has been keeping me away from writing.

But it hasn’t been keeping me away from the computer. More on that in a sec.

I’m on a more regular schedule now, where I’m actually spending 3 days a week “at the office” so you should be seeing a few more blog posts popping up here and there.

Also popping up should be the fruits of (some of) my labor, so here’s a little preview of what to expect in the next couple of weeks:

Educational Opportunities

In case you haven’t heard, myself and a couple of excellent friends organized and hold a monthly beer Meetup here in the Triangle in NC called Taste Your Beer for lack of a better, more inspiring, name. It’s been received pretty well and people seem genuinely excited to learn more about beer – not how to make it, but how to enjoy it, and just more about beer in general. So when I heard that there were upcoming Cicerone exams coming to Raleigh, I had the idea to make a study group for it.

However, after thinking about it, I thought – why limit this to just people who want to become Cicerones? Lots of people want to learn about beer but don’t necessarily have the desire (or the work experience and wallet) to become Cicerones. That’s why, starting in February, I’ll be offering beer education classes at my location at Mystery Brewing. It’ll be an 8 week class meeting once a week (with a few exceptions) covering beer from ingredient cultivation to serving and food pairing including off-flavors and style samples. It will cover the Cicerone exam content thoroughly so if you, like me, want to take the Cicerone exam in April or June, then this should act as an excellent study guide. However, if you just want to learn about beer then that’s cool, too.

Look for more information about these classes popping up in the next few days. We need to get going soon to be ready for the Cicerone exam AND the World Beer Festival.

New Website

With a new brewing company comes a new website. The blog over at mysterybrewingco.com will soon be going away for a more robust website with some features that I think will be fairly interesting to people. Among them are the normal kind of website things: discussion boards, a news feed, info about the brewery, social media and that sort of crap. But here’s a little preview of some of the other things I’m working on (not all of which will be up and running immediately):

  • A check-in point/badge system specifically for Mystery Brewing. Think FourSquare, or Untappd except you actually have the chance to get REAL REWARDS if you earn the right badges: Discounts on brewery merch, beer, private brewery tours, beer, t-shirts, beer, stickers, and probably, at some point, beer. This should launch with the new website, even if beer won’t.
  • A Mystery beer genealogy tree. I am quite proud of the fact that all of my beers started as homebrew recipes, and I am telling you now that they are all going to evolve over time. Recipes I have now may spawn other recipes in the future. This beer genealogy tree will be a way to find out how all Mystery beers are linked together, batch to batch over time. It will serve as a means as helping people find out both what they enjoyed about a beer and what new beers they might enjoy. Once all the equipment drops into place and Mystery beer starts hitting bars and restaurants, this will also serve as a way to track which batches of which beer are out in the public and where you can find them.
  • An ongoing art contest. I am a big fan of the arts in general. I went to an art school for my undergraduate experience and was, shall we say, intimate with the art school, even though I was only a performing artist, myself. I would like to take the opportunity to showcase art through Mystery. In specific, I will be announcing an ongoing art contest of sorts through which artists of any sort – professional, amateur, painters, web comics, whatever – can submit artwork for use to represent beer in our repertoire. The artist who’s work is chosen will receive money in return for the use of the art, as well as a royalty for every piece of (non-packaging) merchandise sold using the artwork. (Since we won’t be in bottles for a good long time, we’re talking posters, t-shirts, etc.) More details on this later in the spring, but artists, start thinking Evangeline.
  • Weekly updates on progress in the brewery. Things are starting to pick up speed and while anybody who is part of the classes up above will be able to see things starting to pop up around them, a lot of people don’t know what exactly is going on in there, so we’re going to get into some detailed updates on how we’re progressing toward getting beer on the market, even if that update is why progress isn’t being made. Back when I started Top Fermented, this is one of the things I really wanted to do is get into the nitty-gritty of what goes on behind the scenes when a brewery is opening. For the most, especially when it’s come to financing, I’ve felt like it was either a little boring or getting into detail would get into confidentiality issues with my partners. Now that we’re moving past getting money and into (*whimper*) spending it, I feel a little more like I can let people behind the curtain. Prepare yourselves to see week after week after week of.. ermm.. well… pictures of an empty cement box. Yaaay!
  • More from me about the industry in general. I’ll be folding Top Fermented into the new website. It’ll still exist on the original domain and function independently, but it will also be integrated into the new website as the brewer’s blog. It means no more separation of sites and it should mean a more rigorous update schedule. It might also mean that I piss more people off that I probably want to retain the respect of as I voice my opinions, but.. ermm.. well.. that sucks.

    Okay – this part isn’t nearly as exciting to you as it is to me. Still. I’m excited.

Kickstart-y Goodness

And no, that doesn’t mean that I’m starting another Kickstarter project (yet), but Kickstarter backers will remember that there are still homebrew recipes to go out, Irregulars memberships to revel in, beer dinners to eat, and video chats to watch. I haven’t forgotten, and there will be movement on a couple of these things soon.

And more.. much, much more.

If I’m running into any sort of problem, lately, it’s the fact that I have more ideas for things to do than I have resources and, frankly, spare neurons for processing. The important part that my next blog post should be a snark filled rant about some sort of craft beer segment piece and not one of these lame update sessions.

But! The future is bright and there’s beer there. Join me!

À votre santé,
Erik

If I’m going to correctly cover all my startup bases, there’s one more startup option that I need to get into: contract brewing.

I’ve been a little dicey on contract brewing for a long time. There’s a stigma against it that I’ll discuss in a little while, but first, let’s start here:

There are two versions of contract brewing.

Version 1: Contract brewing. You come up with a recipe, a brand, and a wholesaler’s license, then you contract with somebody else to make the beer for you. They package it and sell it to you. You sell it.

Version 2: Alternating proprietorship. You rent a brewing facility and do your own brewing and packaging.

I’m going to talk about them separately, because they’re really completely different animals.

Some of the most recognizable names in craft beer have started (and continued for years and years) as contract breweries: Sam Adams, Brooklyn Brewery, and Terrapin come to mind. If you play your cards right, it can be a very profitable venture where you essentially act as a middleman as experts that you hire do their work on either side of you. You pay for the beer to be made, you manage the freight for the beer to be delivered to your distributor, then the distributor does all the sales and delivery for you. Aaaand scene.

Of course, that’s where the stigma comes into contract brewing. If you’re using that model – where does the brand really exist? You, as the middleman, carry the name of the brand on your organization, but your involvements exists on a purely organizational and managerial level. You didn’t make the product, you didn’t sell it, you’re just a money-collector in the middle with a good idea. It’s why people started getting bent out of shape when Sam Adams started winning medals at the GABF way back in the day. Sure – it’s great beer – but who deserves the credit for it? The guy who made it or the guy who marketed it? Tough call.

On the other hand, for a startup brewery, this is a really smart way to go. You get to pay someone who already has equipment and licensing in place to get your product off the ground. It’s a shortcut to revenue generation and you don’t have to be the mindless drone middleman. There’s no reason you can’t be actively involved in the brewing process – go hang out while your beer is being made, make sure that recipe is being followed to a T. What’s more – you need to be set up as a wholesaler to be a contract brewer, so get out there and sell your beer and make the deliveries. You don’t have to be out of touch with the product, but you can be if that’s your cup of tea.

Alternating proprietorship is a horse of a different color. Here’s the idea behind alternating proprietorship: You are set up as a brewer in another brewery’s space. Every once in a while, on an agreement with the brewery, you take legal possession of their brewery for a certain amount of time. It’s essentially a really short term lease – like 24 – 48 hours. In that time, the brewery is legally yours. You (and your employees, if any) are the people who are in there managing the product, the equipment, and everything in between. Sounds awesome, right?

Sure, but you have to get someone to let you into their brewery.

Alternating proprietorship comes from the wine world. Wine, as I’m sure you know, has a much longer production period than beer. In a winery, you’re only ever spending a few weeks per year using the equipment to actually make wine. The rest of the time, the vintner’s job exists in the cellar managing the inventory and aging. That means that the equipment itself is free, and if someone else comes in and uses it for a few weeks it won’t interrupt the flow of business in the winery.

That doesn’t really work out the same way in the beer world. Since our long turnaround times are measured in weeks instead of years and our short turnaround times are measured in days instead of months it means that the amount of time when equipment is not actually in use in a brewery is much smaller, thus, the amount of time available for somebody to come in and rent that equipment is low.

However, if it can be done, it’s another great way to get going as a startup, and that’s exactly what it’s designed for. In addition, since you’re in ownership of the entire process (just not the equipment), you avoid the traditional stigma of the contract brewer.

For my own operations at Mystery Brewing, I had been hoping to participate in an Alternating Proprietorship but have had to change my plans and am now looking at a short-term contract and getting quotes for brewhouses. Why? It’s simple: finding a contractor is hard. The craft beer industry is doing well, and very few people have the space available to allow a contract. That means that even fewer people have space available AND feel comfortable renting their facility out on a regular basis. From my assessment, and others I’ve talked to in the industry, the feeling is that if a brewery has the ability to offer alternating proprietorship, then their business is probably failing and they’re using this to generate extra revenue. Not a bad way to go about staying afloat, but a little sad, and risky from the standpoint of the startup business. Of course, the alternative is that they’re just a really low volume brewery and doing fine, but it seems hard to believe that a brewery would exist right now with that much empty space around on a regular basis.

Still, I’d like to offer you this Pro/Con chart between the two methods of contracting. (I’ll probably update this over time as more items are either brought up to me or occur to me.)

Contracting
Pros Cons
  • Low startup cost
  • No need for brewing equipment.
  • You don’t actually need to know how to make beer.
  • No need to buy supplies, etc.
  • No brewer’s bond needed, just basic wholesaler’s permit.
  • Contract brewery handles the bulk of the paperwork, COLAs, etc.
  • Traditional stigma against contracting – hard to market to beer geeks (everyone else doesn’t care).
  • Space is a premium; it’s difficult to find a contractor, especially on a small scale.
  • It’s even more difficult to find a good contractor; you’re often required to use their base supplies instead of being able to specify your own.
  • Extra freight cost after manufacturing.
Alternating Proprietorship
Pros Cons
  • All the benefits of owning your own brewery, without the initial startup cost.
  • No need for brewing equipment.
  • You actually get to make the beer yourself, manage supplies, and manage your own brand.
  • No contracting stigma, if you can explain just what it is you’re doing.
  • Space is a premium; it’s extremely difficult to find someone who will let you use their space.
  • All paperwork falls into your hands, plus extra paperwork for the host brewery.
  • You lose control of your product while you’re not in possession of the brewery.
  • If something goes wrong while you’re brewing, the potential for incurring additional cost is high (it’s not just your equipment/beer/space, but somebody else’s.)

Read more from the TTB Industry Circular describing contract and alternating proprietorship breweries.

Tags Tags: , ,
Categories: brewery, industry, startup
Posted By: erik
Last Edit: 17 Sep 2010 @ 01 18 PM

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 02 Sep 2010 @ 10:15 PM 

This month’s Session is being hosted by The Beer Babe and is a topic of particular interest to me. It is, New Kids on the Block. Her summary:

With the astounding growth of the number of craft breweries this year, chances are there’s a new one in development, or has just started out in your area. My challenge to you is to seek out a new brewery and think about ways in which they could be welcomed into the existing beer community. How does their beer compare to the craft beer scene in your area? Are they doing anything in a new/exciting way? What advice, as a beer consumer, would you give to these new breweries?

I’m going to take a little bit of a different tack on this because I am, myself, a New Kid on the Block. In fact, I’ll be cross-posting this post on my brewery’s website and so, in a most amazingly selfish manner, I’m going to write about me.

I want to tell you about my crazy plans to make only seasonal beers. I want to tell you about how I’m never going to make the same beer twice and that consistency only needs to be in quality not in flavor. I want to detail how I’m going to offer a food pairing with every single brew I make. About how I want to steal marketing ideas from the wine industry and how I never want to sell a 6-pack. I want to tell you about how I plan to market to nerds with literature references and appeal to history buffs because I’m tired of beer pong and tit jokes. I want to go on about how I want to use the web and social media to engage customers in ways that I don’t see anybody doing right now. I think that I’ve got some groundbreaking new stuff in mind that could change a lot of people’s minds about how beer exists in the marketplace and how it gets in to restaurants and bars.

But I’m not going to.

Instead, I want to talk about how awesome everybody else has been using two aphorisms that you tend to hear in and around the industry.

Beer People Are Good People

You hear this a lot. Hell. I say it a lot. Beer people are good people. Let me show you what I mean. Click on this link. What you see there are the results of 243 people who appreciate good beer enough to help some lucky bastard (ermm.. me) chase his dream. That is nothing short of absolutely phenomenal. (I should also note that 1 of those 243 people is the host of this month’s Session. Thank you, Carla!) I have received support from local beer people that is beyond anything I could have hoped for. I received offers for help with everything from construction to design to manual labor. Sure, maybe there’s the hope that some free beer might change hands here or there, but I haven’t heard much about it. Instead, I’ve heard, “I’d just like to help.” As a new brewery coming onto the scene it’s heartwarming. It’s great to run into people in bars and hear their excitement. It’s humbling and ridiculously exciting.

A Rising Tide Lifts All Boats

Let me tell you a starry-eyed plan that I have for my brewery. No! Let me tell you first about North Carolina beer. Here in North Carolina, we have a great beer scene. There are breweries up and down this state that are making world class beer. There are ground-breaking new breweries, veteran award-winning breweries, brewpubs, nano-breweries, Reinheitsgebot-following breweries, and everything in-between. The past year has seen 5 new breweries open in the state, 3 within an hour drive of me. On top of that? I have received nothing but kind words, support, and help from the local industry. Instead of competition, I am being treated like.. well.. a new kid on the block, a new friend. So that starry-eyed plan?

I have a clause written into my business plan that says that, whenever possible, I would like to avoid taking another North Carolina beer off tap in a location where I go on. Is it always going to be possible? Probably not. It’s not my decision, after all. But I would rather go in next to a great local beer – and have the establishment that I’m in sell the local option than replace a local beer and go in next to … whatever. Sam Adams Seasonal. Hell – keep the Boston Lager tap, but let the locals roll together because a rising tide does lift all boats. What helps one of us, helps all of us. We’re all riding this wave together, and we’ll get there a lot better if we act in unison against the forces of bland sameness instead of individually. United we drink, divided we sink.

Maybe I’m going into this with rampant naivety. Maybe all this support is merely a facade of good will, warm-fuzzies, and glowing elf hugs and it will all be whisked away by the cold light of The Need For Sales and Revenue, but I think that, as the topic of this Session suggests, there is a groundswell of support for new breweries, even in the wake of so many new openings in the past few years.

The question has been posed in the past: Are there too many breweries? I still contend that the answer is a resounding, firm no. Rather, there are still too many people in this country settling for less. There’s room in the marketplace for all of us new breweries and many more. Beer people – good people – are making that clear with their vociferous support.

Thanks to all of you good beer people. I look forward to reading the advice posted for new breweries in response to this Session.

À votre santé,
Erik

Tags Categories: brewery, Sessions Posted By: erik
Last Edit: 02 Sep 2010 @ 10 15 PM

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 03 Jun 2010 @ 10:30 AM 

If you’ve never started up a brewery before, as I haven’t, you may be interested to learn of what I think is the most interesting challenge up front. I’ve been thinking of it as the “Order of Operations” problem. Allow me to explain:

In order to sell make/beer, you need to be licensed by your state to do so. This process can take months, depending on your state.

In order to be licensed by your state to make/sell beer, you need to be licensed by the TTB to do so. This process can take months (they quote 95 days).

In order to be licensed by the TTB to make/sell beer, you need to have a place of business outside of your home.

In order to have a place of business outside of your home you need money to pay a lease.

Okay, now go!

This, all of the “construction” or “buy equipment” or “make good beer” crap aside, might be the single most prohibitive process I can think of in new brewery startup. Why? Because it means that you can’t make your product, aka make money, aka pay your expenses from cash flow, until months after you’ve begun paying rent and, quite possibly, paying people.

Can you begin building out your brewery while waiting for licensing to come through? Certainly, as long as you have a floor plan design in place that you can submit to the TTB, but new startup brewers beware: You need capital up front to be able to pay for MONTHS of operations before you have the slightest possibility of being able to make any money back to put into your bank account and start to pay off your debts.

The thing that I hear most in brewery startup is that the #1 reason for failure is under capitalization. Now, I can be snarky and say that that should apply for any business, but it seems to me that in many other businesses you probably don’t have to pay for months worth of space and utilities while simply waiting for a piece of paper to come in that says you’re allowed to actually make/sell your product. Maybe I’m wrong. I feel like yarn stores don’t have this kind of long startup period.

To be fair, I don’t know how this works if you’re starting a nanobrewery, say, out of your garage. When I talked to my state board, they were very explicit about having a place of business outside of your home, but maybe it’s because I’m applying for a wholesaler’s license right off the bat and they don’t want you to distribute out of your living room.

So, potential startups, there’s your first warning from startup land: Be ready to pay out up front and be ready to wait.

Tags Tags: ,
Categories: brewery, startup
Posted By: erik
Last Edit: 03 Jun 2010 @ 10 30 AM

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