The Brew Start Experience – The Business of Craft Beverages

 

Like many other passionate homebrewers I have thought often of opening up my own brewery.  It seems to me to be the pot of proverbial gold at the end of a passionate yet time consuming, hot and sweaty, back breaking, garage day filled kind of rainbow.  Except the reality is that there isn’t a lot of gold and it’s still hot, sweaty and back breaking.   Opening a brewery or a craft beer related business can be your pot of gold if you want it bad enough and even more if done correctly but if you lean too heavy on your passion for filling up the kegerator and illusions of beer dinners with Garrett Oliver while on R&D trips to Belgium then you will surely be taken aback with your decision to “go pro.”  If I was ever going to take the leap to professional brewing I needed to heed this knowledge so I headed up to ABTech in Candler, NC, just outside of Asheville, for a couple of days to check out the Brew Start – Craft Beverage Business Development Conference.  This workshop promised to be a guide through the business side of the craft beverage business complete with legal, financial, marketing and business plan advice coming straight from the professionals that make craft beverages an industry.  Brewery owners, graphic designers, beertorneys (they’re really called that), accounting professionals, and local craft association members were  a few of the minds we got to pick throughout this 2-day workshop.

I want to be clear that this was a craft brewing industry workshop and not just a craft beer workshop.  This allowed the class to be comprised of a varied and eclectic group ranging from aspiring distillers and brewers, nano-brewers, ingredient sourcers, brewpub owners, beer tour operators and cider makers.  This mix proved to be an invaluable resource as each class member came with different points of view to contribute to the conversation allowing for all to gain a greater understanding of the craft industry as a whole.

The workshop began on a Thursday morning with an introduction from Scott Adams of the Craft Beverage Institute then we spent half of the morning with Adam Charnack, one of the owners of Hi-Wire Brewing (you can hear Adam on Episode 038 of Cheers Charlotte).  Adam’s brewery is fairly new to market so he offered a unique introspective as to how Hi-Wire got started and what growth within a year can be when you focus on your business.  One of my take aways from Adam was don’t underestimate human capital. We are a community after all, inside the brewhouse and outside in the bars and at the festivals.  We also had help from the Small Business Center Team on business plan development with a focus on the executive summary.  The executive summary is the first impression of your business and usually what banks and investors will look at to determine if your business is worth considering.  The craft beverage industry holds first impressions very close to the chest because they know that if their product is inferior out of the gates it is extremely difficult to get those customers to come back. Business plans are no exception.

Adam Charnack, owner of Hi-Wire Brewing, kicked the class off with the story of building up  his breweries business.

Adam Charnack, owner of Hi-Wire Brewing, kicked the class off with the story of building up his business.

Thursday afternoon was all about the benjamins with an accounting best practices overview hosted by the Dixon Hughes Goodman CPA’s Dennis Demitros and Natalie Canipe.  Discussions ensued on entity selection, record keeping and taxes.  This is often referred to as the “fun stuff” and probably not what you are expecting to discuss with Garrett Oliver at your weekly beer dinners.  We then were treated to a discussion with Mike Rangel, owner of Asheville Brewing Company and Cat Ford-Coats, owner of Blue Kudzu Sake.  Mike is an Asheville craft beer pioneer and maintains many different businesses under his craft umbrella.  His tips on handling two brew houses while producing 40+ beer styles per year and his diversification surrounding his business was impressive.  He even owns a screen printer so we can capitalize more on all those Ninja Porter hoodies.  Cat Ford-Coats discussed the rising of the American craft sake movement while bringing up some interesting insights about starting a business in a sector that has trouble being defined state to state.

CPA's

Dixon Hughes Goodman CPA’s Dennis Demitros and Natalie Canipe, Asheville Brewing Company Owner Mike Rangel and Blue Kudzu Sake Owner Cat Ford-Coats.

 As Thursday’s classroom experience winded down we left ABTech and reconvened at Highland Brewing Company for a much needed beer.  I actually ran over to the soft opening of the Pour Taproom on the way and got to be the first legal pint, rather ounces, that they served!  At Highland I ordered a 20th Anniversary Scottish Ale to celebrate the breweries 20 years of high country brewing which is happening this year.  We then jumped over to Troy & Sons Distillery, located next door.  We were greeted by owner Charlie Ball for a private tour of the craft whiskey distillery.  Our education was heightened as the distilling process was explained and the differences in whiskey examined.  Our education continued back at Highland as we rolled right into a private tour with John Lyda, head brewer and vice president.  John couldn’t have more open and giving with his 16 years of brewing knowledge.  John also helps out ABTech as a brewing teacher.  We then polished off the night with small plates and sour beers at the ever impressive Wicked Weed in downtown Asheville.  I had to head back to Fletcher to grab some shut eye before the next day but I think the rest of the class shut down the Thirsty Monk just down the road!

Troy & Sons

Charlie Ball, owner of Troy & Sons Distillery, educates the class on the distilling process and the business of selling liquor.

 Friday morning came early and the coffee pours were heavy all around.  With almost everyone accounted for (we lost one and were thankful that the Asheville night didn’t take more) the morning kicked off with Ward & Smith PA, or the Beertorneys are they are referred to. With around 60% of their business involving the craft brewing industry these three attorneys, Derek Allen, Hayley Wells and Norman Leonard covered the spectrum of the legal landscape.  Projecting start-up expenses and preliminary planning, permitting, zoning and site selection all the way to trademark law, copyrights and trade secrets.  You cannot underestimate the attention to detail you will need to pay to legalities when opening a craft brewing business.  If you don’t you can literally be out of business before you even start.  Choosing your extended brewery team wisely was highlighted as were the laws surrounding distribution.  You may be able to handle the TTB and ABC but for everything else having an experienced lawyer team to refer too is critical. 

The class enjoying a guided tour with John Lyda, Brewmaster and VP of Highland Brewing Company.

The class discussing business ideas after a tour with John Lyda, Brewmaster and VP of Highland Brewing Company.

After lunch we headed into our last session which was fortunately a session dedicated to marketing.  I say fortunately because this tapped into the creative and artistic side of our brains since the other parts were now full of tax codes and statutes.  A panel was formed with graphic designer Stephen Becker with Big Bridge who works with Greenman and Hi-Wire, Leah Wong and Drew Stevenson from Highland Brewing, Jen McLucas the Director of the Asheville Brewers Alliance and Sheila Neisler from Catalyst Marketing Company.  This panel dove into the importance of packaging and brand identity as well as cause marketing, supporting your business goals with your marketing plan and making social media work for you instead of social media working you.  The craft beverage industry is much more than the product, it’s an experience, a community and a way of life and your brand needs to reflect your perspective of this on multiple levels.  Marketing your brand helps you speak for your beer, cider or sake because sometimes it might not get the opportunity to speak for itself.  We were left with a few stats such as 55% of millennials will choose where they work based on what the company stands for and that 88% of buyers will change their preferred brands because of a cause they believe in.  So align your company to be part of a bigger picture.

As the workshop came to a close ended with everyone’s final thoughts and questions all I could think about was that the spark was still burning inside me to one day make a brewery a reality.  I had not been dissuaded or discouraged by the barrage of business checks and balances or the doomsday opinion of a looming craft beer “bubble”.  On the contrary, I had been inspired and felt rejuvenated in my quest.  I had heard a lot of things that backed up what some of my previous research has lead me to believe.  But what most impressed and relieved me was that all of the professionals that had spoken to us over the past 2 days, no matter what their role was within the craft brewing industry, were happy and motivated to help the craft brewing sector grow.  It is indeed a special industry and one that must be grown with care and diligence.  I am hopeful that my fellow classmates had the same feeling and are now back at home diligently working towards getting their doors open. If craft brewing is your path you only need to make sure of two things: your product is high quality and that the business side of your project is payed close attention too.  If you do then there is plenty of room for you to be successful and flourish and you will helping an industry that can only grow with dedicated business people like yourself.  The craft beverage industry is indeed a noble quest so cheers to you and best of luck in your endeavor.  When you make it don’t forget to let me know, we’ve got an episode of Cheers Charlotte waiting for you!

High;and Brewing Front Doors

To my classmates: May your doors be open soon and for many years to come!

A special thanks to everyone at ABTech including Katharine Morosani, Jeff Irvin, Steve Pollen, Jill Sparks, Scott Adams and anyone else I may have missed that played in role in getting this class organized.  Cheers!

 

1 Comment
  1. 3 years ago
    Dean

    Well written and insightful Ford!

    Reply

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