When I started working on finally getting Mystery off the ground, I really wanted to try to keep things fairly transparent. I wanted to be able to share the startup experience with people via Top Fermented, because it’s really living every homebrewer’s dream.

I’ve been having a difficult time doing that, because when progress is slow or when there doesn’t feel like there’s progress you don’t really feel like you want to share that. One of my least favorite questions that people ask me on almost a daily basis is, “So, how’s the brewery coming along?” The reason that I hate it is that it’s such a complicated answer. Nobody wants to sit down and hear me pontificate for 45 minutes in response to that question, so my normal answer is, “Good!” and then they invariably ask, “So, when can I buy beer?” Which is just as complicated a question. It’s hard to share that nothing is moving, or that you’re waiting for phone calls or that you’re frustrated with a lack of response from a bank or something. You want to share good news and not seem like you’re complaining or – worse – like you don’t know what you’re doing. But I’m in a place now where I feel like there’s been a significant amount of movement and I’m happy to throw the curtain back a little.

So, now, here’s the story behind the startup of Mystery Brewing Company … so far. This is going to be a long post. This is by no means a “how to start a brewery” post. Hell, in a lot of ways it’s a “how not to start a brewery” post. But I think it’s interesting and worth reading.

So, let me start from the start and bring you to present day:

Like a lot of homebrewers I’ve entertained the thought of opening my own brewery for some time. I started brewing about 11 years ago, now. As I’ve said in many forums: my mother bought me a kit for Christmas one year. It was one of those crappy 2 bucket systems with an IPA kit. You know, a fermentation bucket and a bottling bucket that, if you’re some sort of wizard, you could make some decent beer with. I did not do that. I made some crappy – nay – intensely crappy beer with it. But a few reasonable successes kept me going until I could upgrade my equipment here and there and started having more good beer than bad. I’ve never won an award for homebrew. In fact, more often than not, homebrewing competitions kinda irritate me. They’re incredibly subjective, the feedback sucks more often than not (and if I’ve ever judged your homebrew, I’ll tell you now: my feedback sucks – sorry) and there are only a few that I’ve been involved in that I felt were really well organized. So, the decision to start a brewery wasn’t because I was rolling in gold medals or anything like that. The decision to start a brewery was really based on the fact that I find making beer to be fun – way more fun than anything else that I’ve spent days and days and days of my life focused on.

I think somewhere on some “about” page somewhere I talk about the heady mix of art and science that is making beer and I’ll stick to that. There’s this one thing that I’ve decided will live on everything that Mystery puts out:

Flavor : Art :: Quality : Science

Making a great recipe is an art. Making it over and over again for a consistently great product is a science, and the blend of those things are what I like about the brewing industry. My entire background is balanced between art – I have a degree in performance art – and science – I’ve been working in IT and programming, much of it in a Medical School, for the past 15 years. Brewing is the perfect synthesis of both sides of my personality. Plus, I get to be a nerd about business and finance and be my own boss. It’s a win-win-win-win-win.

So, anyway, that’s the why. I think it gives you a little bit of a background about where I’m coming from. Now, let’s get into the how and what.

As you might know, when I launched, I decided to use the website Kickstarter as a basis for seed money. If you want, you can watch the original video and read the whole idea there, but I’ll give you the quick and dirty, so I don’t have to think about somebody watching it again (I’ve only ever watched it once, I find it unbearably embarrassing to watch myself on video). After going to the Craft Brewers Conference for the second time in a row – the first as a beer-interested blogger, the second as a panelist talking about social media – I came home feeling ridiculously inspired (it’s hard not to at the CBC) and decided, with my lovely wife, that it was time to launch the brewery. At the time, my wife was still in graduate school so the idea was to launch using Alternate Proprietorship (AP) to create a mobile brand.

If you’re not familiar with AP, it’s sort of like contract brewing – you’re using somebody else’s facility to make your beer, but instead of hiring somebody to do this work for you, you do it all yourself. You are in legal possession of the brewery for, say, a day. You are technically renting the entire place and it is your brewery for that time span. It was originally designed for the wine industry. Since wine spends so much time aging, there is a lot of time in any given winery where equipment is not in use. AP allows multiple wineries to use the same space for startup, and allows a winery to capitalize its assets a little easier, since they can get money off of the equipment even while they are not using it themselves. The trick is that in order to be licensed for AP, you need to show the TTB a business plan that states that you are working toward creating a brick-and-mortar brewery at some point. Incidentally, the two most well-known AP breweries out there that you might have heard of: Pretty Things and Stillwater.

So, that was my plan. Knowing that my wife would soon be graduating with her Ph.D. and not knowing where the job market would lead her, I decided that starting an AP brewery would be a really interesting project. If it launched and did well, I could probably move myself and keep the brand with me while still staying in my current market because, at absolute worst, I could always make the beer somewhere else and ship the beer down OR I could just go back to my original location on a regular basis and brew some more. I spoke to a bunch of breweries in North Carolina and got a fairly good response that, yes, we might be able to make room for you, get everything put together and let’s talk. That’s when the Kickstarter campaign launched.

As you can see from the little widget above, the Kickstarter campaign was successful. Asking for $40,000 was a bit of a gamble – it was a pretty high goal for Kickstarter at the time (still is one of the higher ones) and there had not, at that point, ever been a brewery successfully funded on Kickstarter. A few had tried before me. One had failed well short of its goal and one never even got a pledge. Not one. I think that a lot of my success with Kickstarter was just being in the right place at the right time. I was able to market myself on the crest of a wave of social media interest in the craft beer world, and it worked really well to spread the idea wide. On top of that, I have incredibly generous friends and family who were able to help boost my dream to the edge of reality. That said, I personally know less than half of the 243 people that backed me (though I’ve met many since then, and they’re really awesome people).

On top of the Kickstarter campaign, as I was working up a business plan, it became increasingly obvious to me that $40,000 was not going to be anywhere near enough to start an AP brewery, or even a contract brand. $40,000 will probably buy kegs and a cold room. So, I also worked at putting together some larger investors. This is where generous friends really come in to play. I’ve been lucky enough to assemble a team of five investors that I’ve known for years. They are excellent friends from college, old roommates, and drinking buddies who, for some reason, believe in me enough to help me see this through to reality and allow me to retain creative control over the company. In return, I have given them one of the best pickup lines ever (“I own a brewery”) and will hopefully give them a return investment that will be worthy of their trust in my vision.

The Kickstarter campaign ended in July, and the investors were all wrapped up in September 2010. We had an Operating Agreement in place, we had a company formed, we had money in the bank, recipes, and a plan. I gave notice at my job so that I could focus on getting the company off the ground. That happened at the end of October 2010. The only thing we needed, then, was a brewery to brew in. And so I started going back to people that I had conversations with and that’s when I hit my first hurdle:

The craft beer industry in North Carolina is doing great. At first blush this doesn’t seem like it should be a problem, but that’s when I discovered the problem with AP in the brewing industry: it really requires a brewery that isn’t doing well or, at the very least, is not growing. By the time I put everything together, every brewery in North Carolina was operating at capacity. It stopped me in my tracks.

In retrospect, I really should have seen that coming. It seems like such an obvious problem and I can’t figure out why I didn’t realize that it would happen. We switched gears quickly and started looking at doing just regular contracting – the idea being that if I could just get some beer on the market and start making a little bit of income it would give me time to get AP going. Or, that by getting myself on the market and showing proof of concept, it might be easier to get a larger chunk of money together to get a brick-and-mortar brewery going. So, in November 2010, we officially switched gears to getting contracting off of the ground.

Let me take a moment with an aside to tell you that I’m not really a big fan of contract brewing. I’m a little bit of a control freak, and I want to be able to be in charge of every aspect of my product and company. To basically send my recipe off to someone else and trust them to make it right is a pretty big leap for me. I’ve always been a believer in “if you want something done right, do it yourself.” It’s probably the only-child in me. But, I wanted my company to work, so I started looking at contracting.

Here’s the thing about contracting: Most places that contract aren’t really interested in doing a lot of really creative brewing. Most of my recipes involve rye, unmalted grains, or some sort of weird spice addition or other. I really like balancing flavors from all different parts of agriculture, and I think I make some really great beer. But go to a contract brewery and say, “I want you to make a beer with 60% rye in the grist and throw 15 lbs. of hibiscus flowers in” and most of them reply with something along the lines of, “You can use this pilsener malt, or you can go home.” The really big contractors require you to use the ingredients that they have on hand. I have my own proprietary yeast for my saison and a lot of people don’t want to even consider that. The smaller ones will do it, but want to charge you extra for weird shit, even if you’re willing to provide said weird shit. But in the end I ran into a more familiar problem:

All the contractors I contacted were full. I actually came within a few hours of signing contracts with two separate brewpubs in different parts of the country that had some extra space to rent and interest in helping me do the wacky stuff, but both contacted me at the last minute to say that they couldn’t do it because they just closed on distribution contracts that would – you guessed it – require them to operate at capacity. The only contract brewery that I was able to get solid response with was Lion Brewery who does contract brews for a bunch of people. You can use their ingredients… all 6 of them, or something like that. You can use their lager yeast or their ale yeast, and the minimum order is 300 bbls. Basically, it meant that if I contracted with them not only would I have to throw out all of my recipes, but I would be stuck with 600 1/2 bbl kegs of this beer to move before it went stale. There was no way it would work.

It took a few months of getting turned down by contractors to get me to decide that starting a regular brick-and-mortar brewery would probably be the best way to go. I spoke with my investors about it and gambled a little that my wife would be able to find a job somewhere nearby post-Ph.D. (She didn’t – so begins The Commute.) and made the plunge. The business plan officially changed over around January of 2011 and I started working on securing enough money to get a small brewery off the ground. I got my first quotes on equipment in and applied for an SBA loan to get everything going.

Thus starts the section in which I will, against everything I would like to do, not name any names.

What happened from January through April of 2011 is that I got dicked around, and dicked around hard, by a financial organization that will remain anonymous, but about whom I have written long and detailed letters to the North Carolina Attorney General. The long and the short of it is that after months of receiving nary a phone call or e-mail response back from anyone after literally hundreds of e-mails and messages, and not wanting to start down another path for fear of mucking up the first one, I finally got turned down for my loan (in reality, I am positive that they never once even looked at the paperwork). During those months I was pushing in every way I could. I kept moving marketing forward, I was paying rent, me, utilities, supplies, test batches, and everything. Basically, I was shedding money and seeing no possibility of income and for a while I was really thinking that I was going to be looking at returning money to my investors, taking a huge personal loss, apologizing to everybody that funded me via Kickstarter and calling it a year.

In May, though, things started to turn around a little. First, enter the awesome North Carolina craft beer industry. In my time working the the Brewer’s Guild, I’ve ended up becoming good friends with people at a few local breweries. Namely, LoneRider, Fullsteam, and Natty Greene’s, among others (I really, REALLY, like the Roth brothers). After lamenting about my problems to them over a few beers, they graciously put me in touch with a lot of their personal contacts and, wonderfully, they put me back on the road to bank funding. Soon afterwards, I found some good deals on used kegs and a used cold room, and I started to feel the tepid breeze of progress again buffet my sails. I can’t say enough about how amazingly generous and helpful the local industry has been to help a potential competitor open its doors. It’s astounding and humbling to have peers like this.

At around the same time, I started looking for new space around Hillsborough, NC where I wanted the brewery to be based. The space that I had been renting was perfect as a storage space when I was going to be doing AP or contracting, but it was small and required an enormous amount of upfit to make it a reasonable space for a real brewery. On a whim one day, I walked into the renovated Eno River Cotton Mill (now the Hillsborough Business Center) and found.. well.. I found a brewery.

I found a space three times larger than the one I was currently in. It already had trench drains, a loading dock, office space, ventilation, and a 3″ water main. Above all, it had a landlord who was excited at the prospect of a brewery moving in. We have been working together for a few months to make it work and I am happy to say that I signed a lease to move in this week. He’s giving me a great deal and in return, I’m hoping to help revitalize that corner of Hillsborough and make his business center a new center of commerce.

Within the past week, I have received great news from the bank that my good friends in the NC beer industry put me in touch with, and I hope to sign paperwork next week that will make it all a reality. I have met with manufacturers to talk about custom-building a brewhouse for me. I will be moving in to my final space as soon as the previous tenant finishes getting all of their stuff out, and I feel generally more positive about the state of Mystery Brewing Company than I have since I originally put the project together last year. I feel, with confidence, that I will be operating this year.

There’s still a long way to go. the equipment has to be built, shipped, and installed, there’s a lot of TTB licensing and processing to get through and that can take months (and months and months), and there will probably be another one of these book-length posts explicating all of the things that have been happening along the way, but it’s all moving forward.

So that’s “how the brewery is going.” It’s a long and complicated path to startup, but in the end I feel like it’s been worth it as everything has started to come together, and I can finally say that I look forward to sharing a pint of Mystery Brewing Company’s beer with you soon.

À votre santé,
Erik

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Categories: brewery, history, industry, Mystery Brewing Company, startup
Posted By: erik
Last Edit: 24 Jul 2011 @ 09 47 AM

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 01 Mar 2010 @ 7:38 AM 

Sometime last summer, I got an e-mail from this guy Kevin. I didn’t know who he was. He was a fan of North Carolina beer and had an eye on this website called Know Your Brewer. It was a site that I had run across before – it was something that had been put together at the tail end of Pop the Cap by Sean Wilson – the guy who put PtC together – as a site to highlight North Carolina beer. Kevin had noticed that there wasn’t much movement on the site and had a few ideas about how to get things rolling again. I’ve never been quite sure about why he decided to include me on the e-mail (among a few others who I DO understand, because they’ve been involved in the beer scene – @Geistbear and another local beer guy – who ended up being too busy to be involved at the time). It turned out to be me, Sean, and Kevin sitting at a bar sort of brainstorming ideas of how to highlight NC breweries.

A few weeks later, the North Carolina Brewers Guild spoke up. They were interested in pulling the content that Sean had originally put into Know Your Brewer into their domain, NCBeer.org. They needed someone to manage the creation of content and help move the site forward. Sean was busy (and still is) with the launch of his own brewery, so he sent a message out asking if anybody was interested in stepping up. I jumped at it, and have been working for the Brewers Guild managing their website, its content, and whatever else they need – alongside Rob Ulick who has been in-freakin’-valuable and fantastic – ever since.

In the meantime, Know Your Brewer went a little vacant. A lot of the content that had originally been created got moved over to ncbeer.org. A lot of the traffic moved, as well. But I had an idea sort of banging around in the back of my head and I pitched it to Sean.

This Know Your Brewer idea was a good one. I had really enjoyed reading the interviews on the site, and I was a little sad to see it die. What if, I asked, we took the time to move this nationwide? Wouldn’t it be cool if we could celebrate breweries everywhere? One of the things that had struck me ever since I started getting into the craft beer industry is just how nice the people are. It might be the friendliest industry I’ve ever had the pleasure to be a part of. There’s camaraderie in the place of competition. What’s more, like any small business, the people involved are very much the epitome of their own brand.

Every brewery has its own story that each day and each beer become sentences, paragraphs, and chapters of. The people that work there are characters in their own storyline. Customers – beer geeks – tend to get wrapped up in the story of the brewery and in most cases (high profile breweries aside) don’t get the chance chance to know anything about the greatest protagonist: the brewer. That, I said to Sean, is what I’d like to see. We’re such a young industry, we’ve got so many good people with so many good stories – someone should be telling them.

For whatever foolhardy reason, Sean agreed; we’ve been moving forward ever since. He’s been an idea machine and – let’s face it, it was his site. That he was gracious enough to allow me to descend on it with my idea was wonderful. That he jumped in feet-first with brainstorming and hard work whilst in the midst of starting a business is beyond awesome.

It’s been a little rough to get moving at times. Neither of us really have the time to dive into another project that we’re not getting paid for. The site needed a pretty hefty redesign and, most importantly, it needed content. I started contacting breweries in every place that I was traveling in the winter and coming up in the spring and trying to arrange interviews. We asked a friend of mine that I met through Intrepid Media, Russ Carr to give us a hand with the design and then we set out to recruit writers. Kevin Myers, the guy who sent me the e-mail to start this insane chain into action, was one of the first people to sign up. His interview with Josh Brewer of Mother Earth Brewing will start off our second week. The reason that Know Your Brewer looks as snazzy as it does is due 110% to the hard work that Russ put in. I owe Russ lots and lots of beer.

The reason that we have good content queued up is because we’ve had some really great writers step up and volunteer to throw some stuff our way. Nobody’s getting paid to do any of this. We’re all working through this as a labor of love to tell the stories of some pretty admirable men and women.

Take the time to head over to Know Your Brewer and read a little bit about Brian Connery, Senior Brewer at Dogfish Head – a really nice guy who took time out of his schedule two days after Christmas, to get interviewed by me at the end of his work day. He’s dealt with me badgering him over the past few months, promising that this content was going to go up sometime and, oh by the way, would you mind answering this other thing, too?

I hope you enjoy reading about his background and about why he loves his job so much. Later on the week, you can read a great recipe that he made up using two Dogfish Head beers that I’ll actually be cooking up in my kitchen this evening.

I hope, too, that I can get back to writing here on a more regular basis. Know Your Brewer has been taking up so much of my attention lately that Top Fermented has only gotten a few rants from me. Look for more in the upcoming weeks – when I’m not typing out my interviews for KYB.

And finally, I hope you’re moved to take the time, go talk to a brewer, and write it up to submit it to Know Your Brewer. We will always be in want of more content, but with 1500 breweries in the U.S. and more opening every day, there’s no reason that we shouldn’t be swamped with it. If you’re interested in contributing, send a message over to info@knowyourbrewer.com and we can get you hooked up.

Enjoy. 🙂

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Posted By: erik
Last Edit: 01 Mar 2010 @ 07 38 AM

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 21 Oct 2009 @ 2:00 PM 

The post in which way say goodbye to the ever-dwindling remains of my free time.

Earlier this week, I took the reins of ncbeer.org, the website of the North Carolina Brewers Guild. I’m an enormous nerd and I like to promote local beer, so it was a no-brainer on my part. Why they agreed to allow me to help, we may never know.
NC Brewers Guild
Of course, this means that my attention is going to be split between here and ncbeer until their website is a little bit more robust with content and useful functions for member breweries. I’m still going to be shooting for two entries here, per week. (Yes, this counts as one. I’m not stupid.)

In the meantime, if you’re in North Carolina (and even if you’re not) make sure you head on over to the site, bookmark it, and subscribe to the RSS feed. It’s a little light on content right now, but based on the amount of e-mail I’ve received today it’s not going to stay that way for long. If you’ve got ideas of the kinds of things you’d like to see about local beer and breweries as a beer enthusiast, let me know. What’s more, keep an eye out for information on how to become a member of the guild.

Join the club! They have beer.

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Last Edit: 21 Oct 2009 @ 02 00 PM

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