The first was a chance I got to speak with Wim Vanraes of the startup Saint William Brewery. We met up at the Ship Inn on the Delaware River in Milford, NJ, where there was some excellent session beer. The Giggling Monk was a great 4.2% Belgian-inspired ale that was balanced and light with a lot of flavor, and the lightest beer offered was the 4.1% Chocolate Stout, which was a delicious dry and roasty brew. Wim actually got a chance to go talk to the brewer afterward, and you can read more about it on his blog.
|Saint William drank beer from a bowl.|
As usually happens when I get together with beer people, we ended up in a conversation about beer, particularly the industry and its quirks. As a Belgian, Wim has an outlook on beer similar to the one I heard from Don Feinberg, which is to say more balanced and concerned with tradition than the average American craft beer drinker.
"Like cuisine, each [brewing] tradition has its own philosophy," Wim said. "You have to understand where it's coming from."
As someone who trained with a third-generation brewer in Belgium, that view is perhaps not terribly surprising. What was a little surprising to me, though, was his perspective on the issue of what defines a craft beer. While he acknowledged the political realities of a need for definitions, Wim said the production and ownership structure of a brewery generally do not matter to him.
"It's not about the size; it's not about who owns it in the end," he said "It's about do they respect beer?"
That in some sense reveals Wim's plan for Saint William, which is an ambitious and growth-focused one. As you've picked up by now, this post is about business models for breweries and, while I must of course respect confidentiality for b plans, I can say that Wim's is quite different than almost any I've seen in craft beer. While all business plans rely to some extent on growth, Wim's is one that takes a different approach, building in expansion plans from the beginning.
Of course, any such approach will require more significant investment upfront, but it does what few breweries have done, which is plan for the fact that most production breweries have much greater trouble meeting demand than creating it. Given the vast expansion plans and withdrawal from markets that we've seen from even larger craft breweries, one can't help but wonder if Wim's thinking will become more common. As he put it:
"I can't imagine that you'd start a brewery and say 'I don't want to grow. I don't want to be successful.'"
He noted that this "challenges the homebrew mentality" that we saw in the initial generations of craft breweries.
|"Brother Adelbrecht, remember when we could make geuze without an MBA?"|
- One homebrewer will be entered in next year's GABF Pro-Am competition. All he had to do was ask a local brewery if they'd brew and submit with him.
- He was told "we'd just never considered it before."
- That beer required a decent quantity of an expensive ingredient. He got it donated from a large, recognizable company. All he had to do was ask.
- When buying a former industrial facility (at least in Pennsylvania), we discussed the need for an environmental engineering firm to get the state to sign off on pollutants.
- We had an attendant who had gone from a homebrewer to a bottling volunteer to a production worker at a nearby brewery. It mostly came down to a willingness to work slave hours for free, and then very little money, for extended periods of time.
- Brewpubs, the consensus was, are easier in a sense, because one can crank out beer, put it on a tap, and then never make it again if it doesn't sell. On the other hand, they are also longer hours, because they combine the 70 hours a week it takes to run a bar with the 70 hours a week it takes to run a brewery.
- Production breweries, on the other hand, are mostly a struggle to hit a moving target of sales demand from distributors and bars that are want everything immediately, but will never guarantee space or sales.
Then, Eric Steen posted two great videos on two models for beer - nonprofit and co-op, that seem to take the grassroots/community aspect of craft beer and go a step further (go watch them). The place where the above group met was a bar where the owner, an accomplished homebrewer, is doing exclusively extract brewing, another quirky idea that might have seemed crazy a few years ago. I have a Q&A coming with Bomb Lager, one of the new contract brewing beer companies that is focused more on marketing and price points than exotic hops and two-row malts.
So what is the point of all this?
I believe the days of the amateur brewery are over.
Even small outfits in craft beer today require a level of business planning and acumen that was absolutely not required ten years ago. Yes, the industry is growing, but competition is growing faster, and there is no room any more for a homebrewer just starting a brewery and winging it for a few years while he or she gets the hang of it. And before you protest: Yes, there were many. Many of them made it, cleaned up, and are big names now, a few did not.
The craft beer market is more crowded and sophisticated every day, and it flatly won't tolerate amateurish endeavors. When even groups of true amateurs get together to talk theoretically about going pro, and everything from production schedules to environmental engineering is on the table, we've left behind the days when Sam Calagione could open a brewpub and figure it out as he went along. It is not even just about beer quality (we can all think of breweries with quality beer that closed). The level of business acumen required to be successful in craft beer, it seems to me, is significant.