The Heretic Years

I can’t count the number of times I’ve been asked, “Are you having fun running a brewery?” Or, “Are you glad you opened a brewery?”

“Uh, well…” I often start out, “it has its good times, but it is challenging and a lot of work.”

I really don’t know what to tell people. I know they have the best of intentions when they ask, and I think they expect me to get excited and tell them how wonderful it is to go to work every day where the focus is great beer. I don’t want to make it seem like owning a brewery is somehow a horrible life choice, but on the other hand, I don’t want to make it seem like all we do is party and cash big checks from distributors. It isn’t anything like that. It is constant work, hard work. As a business owner in a very competitive market with hundreds of new competitors jumping into the market every year, you face new challenges every day and the vast majority of those challenges have absolutely nothing to do with beer.

You can ask any business owner if they’re having fun. I think most would respond the same way. Most of what you do when you open a brewery is the same stuff that every business owner does. You work on hiring the right employees, finding the right suppliers, working with distributors, keeping the building upright, making payments, and a million other mundane things, like paying taxes and keeping the bathroom clean for customers.

But don’t get me wrong. Even though running a brewery is a tremendous amount of work, even though it has its frustrating challenges, there are some great times. I do love meeting people geeky about beer and I get to do many events. Lately we’ve had the opportunity to do collaborations with brewers and breweries that I really respect. That is a blast. I also get to hire smart, fun people and surround myself with them. That is a benefit of any business, but I think, (like the software world) the craft beer industry just attracts a fun crowd.

Of course, I was doing a lot of this same stuff before I opened Heretic. I could have just kept on doing the fun parts and skipped all the challenging parts that come with owning a brewery. But, I would have missed the satisfaction that comes when you take on a substantial challenge and succeed.

The other day I was walking through the brewery late at night and there weren’t any catastrophic problems dangling over my head. Everything was clean and organized. Beer was fermenting and I was happy. I was satisfied. In fact, I was pleased with myself and everyone else that is part of Heretic. We’re not just working in a challenging industry, but we’re doing a great job of it. And that is where satisfaction comes from, a job well done. And yes, that does make me happy I opened a brewery.

I met several people at this year’s National Homebrewers Conference in Philadelphia who are interested in opening their own brewery. One of them asked me what was the most important skill they would need.

I can think of many. Perseverance is a big one. You can’t let the enormity of things stop you and you need to keep putting one foot in front of the other if you are going to succeed in this business.

Usually I answer, “business skills.” People need to know how to run a manufacturing business (production brewery) or a retail alcohol/food business (brewpub or tasting room). I think most breweries fail from a lack of common business knowledge. I know that is where I am weakest and we have incurred some setbacks because of it.

Once, for whatever reason, I told one person that butt kicking was high on the list. Based on my recent experience, it is perhaps the most used skill in getting a new brewery built. Everyone acknowledges your deadlines/specifications/budget, but almost nobody wants to follow them. Perhaps they are too used to dealing with large corporations or the government, where money flows free and the person in charge is not the person supplying the money. That isn’t to say you can’t get people who will do great work at a fair price in a reasonable time. But if you’re going in with that expectation, you will be disappointed more often than not.

“Oh sure, that is no problem, we can do that,” is how the discussion goes before you sign a contract. But inevitably, delays, cost overages, failed parts, misunderstandings, and a whole pile of other stuff starts falling in your lap. You have no choice at that point. It is usually too late to switch to another vendor at that point if you want to open in the same decade you started.

And that is where your butt kicking skills come in, but you can’t just start swinging for the fences. Great butt kicking, the most effective butt kicking, is a skill, perhaps an art. Sometimes it just takes a little tap. If you are too hard, you ruin the relationship. Sometimes you need lots of little taps and other times you need one bigger thump. But whatever you do, back it up with the written word.

When you agree with someone to provide a service or sell you some product, put it in writing. Detail what it is you’re getting and detail what it is you will pay. The more detail the better. If they balk at putting what they’ve been saying down on paper, let them walk. Someone telling you the truth will not hesitate to put those same words on paper.

Keep in mind that your power comes from your own backbone and the fact that you hold the money. Never give anyone all the money up front or you will have given him or her all the power. Even when purchasing equipment, don’t accept anyone’s claim that 100% of the payment is due up front. See if they will take 50% down and 50% on receipt. Most significant purchases are done on terms, so don’t be afraid to ask.

And when it comes to needing to kick a little butt, realize that sometimes a gentle kick is more effective than a powerful one, but back it up with paper.

I love dogs and children. They are amazingly loving and want nothing more than to be a part of a loving family (your pack). Whether you’ve had a great day or a tough one, they are there to share your happiness or your sorrow. They are always there to give you strength, there to let you know you are loved.

Unfortunately, dogs and small children are also fairly delicate when it comes to the brewery environment. Most brewers would never let a small child run about barefoot and unsupervised in a brewery. Even supervised, most breweries exclude small children from tours for safety reasons. I feel for families that come for brewery tours, but then can’t take the whole family through the brewery area. It is for safety. There are caustics and acids that can result in a nasty burn or even death. There are excessively hot bits, very heavy things, lots of moving parts, and some sharp stuff as well. A small child, as wonderful as they are, could accidentally be seriously injured or killed in the blink of an eye.

So, with brewers understanding the need to protect small children, why do some let pets roam? I certainly don’t think it is my place to tell anyone what to do or not do in their brewery, but I just don’t understand this behavior. There are wonderfully trained dogs. There are dogs that just lie down and never move also, but every dog that I have known is prone to getting up and going where you don’t expect every once in awhile. If that area happens to have a little hot caustic on the floor, then the dog is going to be in serious pain. And what if that forklift happens to back up into that cool, dark corner where your best friend moved to get out of the heat?

Oh sure, I know people are saying, “But my dog is different, so well behaved.” Yes, I am sure your dog is smarter than most humans, but until your dog puts on brewer’s boots and knows how to run the eyewash station or dial 911 I still doubt that it is well prepared for the brewery environment. I am sure there are plenty of breweries that have had dogs, cats and other free roaming pets in the brewery for 25 years without a single incident. I certainly hope every brewery has been so lucky, but for me, I am unwilling to take that chance. Call me a curmudgeon or something worse, but we do not allow pets or small children in our brewery area.

It also happens that many states have rules about animals present in a food processing plant and many states (if not all) consider a brewery a food processing plant, so we’re just following the rules. Rules that make sense to me.

I think I’ll go give my dog a treat for being such a great part of our pack.

Many people considering opening a brewery gaze in awe at the enormity of the task ahead of them. I had that same feeling. I faced that same mountain. From a distance, it looked enormous. A mountain I thought I might never climb. My worry, like so many before me, was that the cost of starting the climb would still be significant. If I didn’t make it to the top, that failure would be quite a burden on my family.

Therefore, it was with great trepidation that I began my climb. As the mountain loomed ahead, I became even more uneasy, especially as the costs of climbing gear began to mount. The first part seemed so steep that it made me hesitate; perhaps it wasn’t too late to turn back?

I fought off the doubts and pressed on only to find that what I thought was the start of the mountain was just a hill. Beyond that hill was another and another. Some were steeper, and some were higher, but there was no mountain after all. It was just a collection of hills, which from a distance had seemed unattainable.

The first hill turned out easier than I thought and I gained confidence from that first climb. Others were much harder and I struggled. Some were so easy I barely broke a sweat. If I felt strong, I ran after that next hill. If I was tired, I rested and tackled the next hill when fresh.

By focusing on the hill under my boots, I wasn’t discouraged by the enormity of the entire task. It took awhile to reach my goal, but standing at the summit of the final hill gave me a great sense of pride in what I had accomplished.

The same is true for you. The enormity of the tasks involved in opening a brewery may seem huge, but you can tackle it one little bit at a time. If you keep putting one foot in front of the other, you will reach your goal.

I can hear the question now, “But how do I start?” Start anywhere. Find a hill that you know you can climb and knock that out of your way. Then, with success under your belt, assess the remaining hills. It doesn’t matter if you can’t see them all. If you think you know all the obstacles to opening your brewery, then you are mistaken anyway. If the sum of the parts seems overwhelming, make your next hill an easy one. If you are feeling particularly bold and fit, go for that big one all covered in cactus.

If a hill defeats you, don’t give up on the climb. Rest and tackle a different hill tomorrow. Your goal is just ahead if you don’t give up. Just keep telling yourself it is only one more hill. Keep telling yourself there is no mountain you can’t climb, because you know it is really just a bunch of little hills. When you get to the top, you will find great beer there. Beer you made.

Cheers!

In the grand scheme of things, I really haven’t been a beer geek for very long, but I remember back when I first got geeky about beer, the places people dreamed of going to visit on beer holidays were exclusively in Europe.

You went to England for the sessionable, malty ales, Belgium for the abbey beers and the sours, and Germany for the exquisite lagers, hefeweizen, Kölsch, and alt. That is still mostly true. I just returned from a trip to Brussels and it wouldn’t have been complete without a visit to Cantillon. There are plenty of beer mecca sites in Europe, but now there are some sites in the United States that qualify as well.

This last summer, I had some friends visit from Australia. There are so many great breweries on the west coast of the United States, you really need to prioritize your stops. As we discussed where to go, it was clear that some of these places have attained beer mecca status. Russian River Brewing Company. Beer Mecca. Sierra Nevada Brewing Company. Beer Mecca. And there are plenty more. These places are so good, that beer geeks from around the world make the trip to the United States to visit them. It may seem like blasphemy to some, but I would say that there might be more great breweries on the west coast of the United States than there are in the entirety of Europe. Wow! When did that happen?

I remember a trip I took to Scotland in 2002 for a software conference. One of the conference events was a tour of the Caledonian Brewery, which was a real treat for me. At the end of the tour, one of the brewery employees was hanging out and the discussion turned to where everyone was from. Of course, he held the belief that beer in the United States was somewhat less well brewed than horse urine. Like many folks back then, they hadn’t had a chance to try the new craft beer that was really turning heads by that time.

To some extent, that is still the thinking around the world. Anyone that isn’t really geeky about beer and hasn’t traveled much, still holds this antiquated opinion of American beer. Those that have traveled to the United States and those that are geeky about craft beer do seem to realize how great the beer scene is today and they make a special effort to visit.

As I said, I’m not sure how that happened so quickly. I guess the folks that have been brewing and promoting craft beer perfection for the past 40 years would disagree that it was quick, but the pace of innovation and quality does seem to have accelerated over the past decade. And perhaps a large part of that has been due to the growth of the beer geek community in the United States. Those passionate folks, traveling to all of the beer meccas of the world, came back and began to demand more of their local craft beer. In some cases, they didn’t get what they wanted, so they decided the only way to do it was to create their own great brewery. And it is clear that at least a few of them became beer meccas of their own.

I don’t hide the fact that I am not a fan of pouring beer at public beer festivals.

While there are some passionate craft beer lovers mixed in the crowd, there are usually more people there trying to get insanely drunk for as cheap as possible. I’m guessing their thought process is something along the lines of: “Three gallons of the cheapest beer I can buy is $30 and the beer fest tickets are only $25. If I really put forth the effort to over consume, I can get so seriously drunk I won’t be able to drink for several days, thus saving myself even more money.”

I’m pretty sure the fests tell everyone not to allow people to over consume, but I still see it happen. I won’t serve beer to someone that appears intoxicated. Of course, when I cut someone off, they get upset, which is another reason I don’t like public festivals.

Don’t get me wrong, some fests have better crowds than others and I think there are a number of really wonderful people that attend these things. I love talking about craft beer with those folks and I’m sure it has a positive effect on craft beer as a whole to engage these beer lovers, but I just don’t have the peace of mind and saintly level of inner solitude that it takes to deal with the other people.

The “consumers” that bug me the most are those that say, “Gimme your lightest beer.” The first 369 times I responded with, “Are you referring to color? Alcohol? Body? Hopping?” And the response was always the same, “I don’t like beer. What doesn’t have a lot of taste to it? Gimme that one.”

“I don’t think we make a beer you would like,” I respond. “Maybe you should try another booth, as I don’t want you to waste a ticket on beer you wouldn’t like.”

“No, no. Gimme whatever you got,” they insist.

“I’m sure you would be happier drinking something else,” I suggest.

“No, just gimme anything. I don’t want to wait in line again.” So, you have to pour it. Sure, some of them end up thinking it wasn’t so bad, despite the fact that it has bold flavors. However, the majority probably just look at it as more alcohol toward oblivion.

I can handle this a couple times a year, but when I do several of these events close together, the willingness to deal with these folks abandons me. When they ask for the lightest beer, I just go straight to, “You won’t like our beer. Try another booth.” Of course, it never changes the outcome. They still insist and I still pour them the beer with a smile.

I guess this is why I like to have other people who are much more kind, understanding and tolerant than I go to these events. Sure, I still love meeting people passionate about craft beer, but I wish there was a better way than public beer fests to connect with them.

Oh, there is… The American Homebrewer’s Association conference is full of beer geeks. Awesome. I wouldn’t miss it. And then there are some other homebrewer-run campouts in northern and southern California and probably elsewhere in the country. I’m not sure how they keep out the non-beer geeks, but those are great too. By attending these events, it keeps my spirits up and my mouth shut at the public festivals when the next person asks, “What do you have without any taste?”

I’m not sure exactly what I was thinking, but somehow I had this idea in my head that I’d take all my risk up front in getting Heretic off the ground and once it was past a certain point, there would be a lot less risk. Ah, poor, simple fool.

We started out sharing a building and some brewing equipment with another brewery, so our costs were lower, but we still had to come up with a considerable sum to fund the fermenters, kegs, delivery vehicle, malt, hops, yeast, employee wages and more. Once the beer started flowing out and cash started flowing in, I thought the bulk of the risk was past.

The problem comes with every little step in brewery growth. If you want to grow at all, there are surges of capital that are required. When the need is relatively small, like buying another couple of pallets of kegs or more coasters, then it is not a big deal. Your revenue model should allow for a few thousands of dollars in these kinds of purchases, but it gets a lot trickier when you want to do a major expansion.

Purchasing a fermenter is not a small expense for a new brewery. And don’t think the cost is just the price of the fermenter. You need other pieces and parts to get it set up and fermenting. Valves, controls, hose, shipping, and even the down time while messing with installation add quite a bit to the costs. The good news is that fermenter starts paying for itself pretty darn quickly once it is installed, so you can recover the cost fairly fast. Still, you need to come up with the money in advance and it can take quite awhile before a fermenter can be built and delivered.

It gets even worse when you are looking at making a big move, as we are now. We have reached maximum production capacity in our current location, so we are on the hunt for a new building, a brand new brew plant, more fermenters, and more of everything. It is a large sum of money and a lot of risk. I suppose the risk is a little more tolerable, since we are already selling beer, but the amounts involved are not repaid quickly like a single fermenter. The way the world is now, nobody loans money to a small brewery without the people involved making personal guarantees with things like the house they live in, so the potential for a crushing personal financial loss looms large when attempting an expansion of this size.

Of course, one thing I learned quickly is that this isn’t an industry for the faint of heart. There are risks at every turn. If you don’t have the nerve to take on those risks, then you don’t get to experience the rewards. You want bigger rewards? Then you need to figure out how to fund bigger risks.

“A barrel full of certainties won’t roll very far.” – Gerd de Ley

From the beginning, I was certain that we would make barrel-aged beers at Heretic. We are close to Napa so it is easy to obtain used wine barrels and I really like the interesting character that develops from aging beer in a barrel.

I have had many people ask me why barrel-aged beer sells for significantly higher price than non-barrel aged beer. The higher price is due to the time and resources that go in and the lower amount of beer that comes out. For our barrel-aged beers, we start with the same amount of beer as a regular batch, but we never recover as much beer as we started with.

We start with 30 bbl (930 US gallons) of beer and we fill 12 wine barrels. The wine barrels hold a little under 60 gallons each, so when full they hold about 720 of our initial 930 gallons of beer. The remainder goes into stainless steel kegs. We reserve some beer for blending back later and for topping up the barrels during aging. As they sit, the barrels evaporate beer and you need to top them up every week. Topping up helps prevent too much oxygen pickup, which can have a negative effect on the beer. A tiny bit of oxygen can be good, but too much can easily be ruinous. Depending on how long the beer is in the barrels and the humidity of the barrel room, you can go through a fair amount of beer just topping barrels.

We taste the beer over the course of months, the length of time depending on what we are trying to achieve. What is fascinating is how different each barrel can be. You might think that two barrels sitting side-by-side filled with the same beer would develop to be the same. However, the beer is often quite different in each barrel. When we sample our barrels, we take tasting notes because no two barrels are the same. Sometimes the differences are subtle and other times the differences are huge, but all the barrels are different.

Once we feel the beer is ready, we blend the best barrels back into a single beer. Keep in mind every barrel is different so blending is important to make a great, properly balanced beer. If it needs it, we also add some of the beer we held in reserve. Many people assume that we just blend all the barrels back. Unfortunately, that is not the case. In order to get the best beer, you can only use the best of the barrels. While you might be tempted to blend in a barrel that tastes just “OK” that is a slippery slope. It is fine if maybe it is a barrel lacking in oak character and you are going to balance it with another barrel that has a bit too much oak character. However, it is another thing entirely if there is some off-flavor, no matter how slight. Why would you ever add beer that had any sort of flaw?

So you end up losing some beer to evaporation, some to transfers, some to analysis, and some ends up going down the drain. When we dump a 60 gallon barrel, the cost of producing our barrel-aged beer increases about 7%. Add to that the price of barrels and all of the special handling and time involved with barreled beers and you can see why the price of barrel-aged beers commands a premium.

Our distributors and retailers ask excitedly about our special barrel beers. They want to know how much the beer will cost and how much beer we will have available. The answer is always that I don’t know yet. I have to see how much great beer the barrels hold, and only then can I calculate how much it cost us to produce the beer. Barrel-aged beers are always full of uncertainties.

A reader asked me, “At what point does someone have enough knowledge to become a [professional] brewer?

Or do you hire someone to do the brewing and then learn from them?” That is a really good question and one that I think many more people should ask themselves when opening any kind of business.

My wife and I watch some reality shows about failing restaurants and we are always amazed how someone with absolutely no experience decides to open a restaurant and act as the chef. I guess everyone who has scrambled an egg thinks that they know how to cook.

In craft beer, I have met people with no prior knowledge of the industry buying a brewpub. In more than one case, they told me that after a single day of training, they became the head brewer. I’m not saying success is impossible in that case, but I think that must be one tough road to quality and success.

Well, how about an experienced homebrewer? I know a number of homebrewers who turned pro, including myself. Some had only brewed a few batches before jumping into the business and the results speak for themselves. Others, with substantial homebrew experience seem to fair much better. Some people say that I only loosely fit the definition of homebrewer, since I have had my share of experience brewing on professional equipment, but I have seen others do quite well with far less experience than I.

The brewing process is the brewing process. The fundamentals of great beer are the same at 5 gallons as they are at 5000, but it isn’t that simple. Where it gets tricky is in the size and scope of things. Cleaning a fermentor isn’t done with powdered wash and a carboy brush. You need to understand how to work with hot caustic and pumps safely. You can’t open a vial of yeast and toss it in the top of the fermentor, you need to harvest and transfer the correct amount of yeast in a sanitary way from one fermentor to the other. You’ll need to work with other chemicals and perhaps pressurized steam. It is possible to seriously injure or kill yourself or someone else in a commercial brewery. While you might be able to figure out most of this stuff on your own, it pays to have someone show you how to do it correctly and safely. The pressures, temperatures, weights, and chemicals in the brewery can turn deadly without warning for the inexperienced.

If you are not going to hire an experienced professional to work with you, then you must go and seek professional training first. You might be able to intern at another brewery or you can take classes from several brewing schools in the United States or abroad. And, if you really want to be successful, don’t just limit yourself to things like how to clean a unitank. Spend time learning about quality control and the business end of the brewery business. It will all be time and money well spent.

The current craft beer market is booming. Passionate beer lovers seek out new beers and are willing to pay a premium price for new experiences.

These aficionados are a tremendous boon to the craft beer world, especially when it comes to the success of new breweries. The fact is, without those customers, new breweries would struggle to stay in business. The larger a brewery grows, the better their cost of producing beer becomes.Economy of scale means they can put their product on the shelves at a lower price point and still make the business profitable. A small start-up brewery needs to charge more to cover the cost of production, so the price on the shelf ends up higher. Thank goodness there are beer lovers willing to pay more for beer from small craft breweries, but sometimes I wonder if they might be paying too much.

Most consumers think a brewery sets a price and that determines the price on the shelf or at the tap. Certainly, the brewery sets a price to the distributor or retailer, but the brewery has no control over pricing after that point. You can suggest a retail price, but the distributor and retailer are under no obligation to follow your recommendation.

As a brewery, you try to set your wholesale pricing so the distributor and retailer get a typical industry profit margin and the retail price to the consumer remains competitive with other breweries of your size. A couple of people told me that if I didn’t maximize my price, I might be leaving higher profits to the retailer. Sure enough, I found out that having a brand that is new and exciting causes some retailers to charge whatever the market will bear.

To be fair, things like distance to the brewery and the overhead of the retail location affect the retail price. For example, the cost of shipping beer in a refrigerated container outside the United States is going to add a considerable amount to the cost of a product that a local liquor store won’t have. The same would be true for a high-end store in an expensive town like San Francisco; their rent is often ridiculous and it all adds to the cost of the beer. But every once in awhile you find a place where your beer is sold at an artificially high price. They add a couple extra dollars to the price of a bottle or serve tiny pours at a premium price because they can. I guess that is the way of free markets, where each vendor sets their own price and their success or failure is up to the consumer deciding if it is worth it.

It can be a little frustrating for a brewery, because even though you hear about high or low prices you cannot say or do anything about it. So, in the end, the consumer is left to fend for themselves and you just hope that they find your beer served properly and at a reasonable price. Rest assured the vast majority of retailers do a great job, but even in the greenest lawn, there is always a dead blade or two.

Before we sold our first kegs of beer, I spent a tremendous amount of time investigating what similar products were selling for in our markets. I wrote about this in an earlier post, about the need to be careful about under or overpricing your product for a given market.

But that leaves you thinking you can just set a price that is competitive, as long as it seems like you can make money at it. Not quite. Really, you also need to take into account your mix of products and the revenue they bring to your brewery. Keep in mind your brewery is limited in how much beer it can produce. You need to figure out how to make the most of that beer.

I use a spreadsheet with all of our costs and then I break down the revenue for each brand by format. (A brand is each of your different beers and the format is the various sizes of kegs and bottles or cans you package it in. For a brewpub, it might also include pints, growlers, etc.) What I want to know is the profitability of each format. The best way to calculate this is to determine your profit per ounce. For example, bottling incurs a lot more expense with the bottles, labels, caps, and labor, but it sells for more, so the per ounce profit can be higher than it in kegs. Of course, there is a big difference between six-packs and bombers or cork-and-cage 750 mL bottles.

I had someone tell me that they made more profit on a half-barrel keg of beer than they did on a couple cases of bottles. Unfortunately for them, they were comparing the gross profit on a half barrel keg versus a couple cases of six packs. As a small brewer, the fact that a keg of beer sells for more than a case of beer shouldn’t distract you from what is most effective for your brewery. The total dollar amount might be higher on a keg, but the per ounce profit can be lower. Since most small breweries are limited on how many ounces they can produce, they need to make the most profit off of every ounce.

I suppose if you had a nearly endless production capacity, then you wouldn’t mind how much profit you made on an ounce of beer. You would just care that every format is profitable and you would sell as much as you possibly could. Only making $0.50 on a half-barrel keg? OK, sell a billion of them and you have made a half billion dollars. Nice. Unfortunately, it is impossible for most of us to sell that much.

Instead, the best approach is to focus on the per ounce profit. I would bet every new brewery has a goal of selling a high quality product, so unique and desirable, that consumers find it a good value at a higher price point. What many miss is that little trick of finding higher profit formats that the consumer also finds a good value. Don’t focus on selling as much volume as possible, rather focus on selling your beer in a way that shows its true value, and the best way to do that is through paying attention to your profit per ounce.

At the risk of you thinking I am obsessed with kegs, I am going to write about them one more time, because I think many people don’t understand a fundamental aspect of kegs in business: float, the cost of float, and the deposit.

Float is that portion of your kegs that are out in the market. Generally, the number of kegs you need for every tap handle you want to support is somewhere around three or four.

You will need one keg hooked up to the handle, at least one keg standing by for when the current keg goes empty, and another sitting empty, waiting to be picked up from the account or returned by the distributor.

Don’t think you can get by with less. If you think you might be able to get kegs to accounts the minute they run out, then you also don’t care if they have your beer for sale. They are not going to wait for you to deliver a new keg. They need to keep those handles pouring beer and they will put a another beer on right away. Now you’ve been bumped. Do you suppose that other brewery had more than one keg available to the account? Probably.

Getting empty kegs back can be a lot slower than anticipated as well. If you spend all your time driving around to accounts, you can get them quickly. Of course, you have other things to do, so the kegs sit for a few days. If you are working with a distributor, plan on it taking even longer to get your kegs back. Even when you get those empty kegs back, they are not clean and ready to fill. In a way, that pile of dirty kegs you haven’t cleaned yet is part of your float.

And you can’t cut the numbers close either. You can’t calculate that you will need 300 kegs and buy 300 kegs, no no no. You need to predict how many kegs you are going to need next month or next quarter, based on how long it takes to get more kegs from your supplier. Kegs don’t show up instantly when you decide you need more.

So, you realize the need for a lot of kegs. Currently, new kegs cost around $100 to $150, depending on size, condition, shipping, etc. Yes, your tiny little brewery really does have $40,000 tied up in kegs.

The funny thing is, many brewers don’t realize the impact the keg deposit has on their bottom line. I had someone tell me, “The deposit amount doesn’t matter, because it doesn’t cover the replacement cost and we don’t get to keep the deposit money.” Au contraire. Maybe a day comes when you have to give the money back to one individual, but you are missing the big picture. You need to think of the deposit in terms of the float. The float is always out there and you are always holding the deposits on that float. Maybe one place returns a couple kegs, but you’ve sold more beer to some other place at the same time. The float may grow or shrink, but generally, you can consider that money an offset of the cost of the keg purchase price. If you have 200 of your 300 kegs out in float, you are sitting on $8000 with a $40 deposit price. There might be some legal responsibility to keep enough funds on hand to cover refunds of deposits, but that doesn’t mean those funds aren’t there in your account for day to day business. Effectively, it is an offset on the cost of your keg fleet, changing the impact from $40,000 to $32,000. Every bit helps.

So, one year of blog entries down. Normally I need to think long and hard about committing to another year of writing anything, but these blog entries are different for me. I get to say just about anything I want. I get to ramble on about random thoughts, and as long as the topic somehow relates to beer, everyone seems to be OK with it. Cool gig, huh?

But don’t take that as an indication that I don’t care. I really do speak from the heart when I write these things (albeit, with a pint in hand) and most importantly I want to provide some truthful insight into my world of professional brewing.

Before I agreed to do another year, I looked at what I had written over the last year. I wanted to see if I had really said anything of significance. I wanted to feel that I had provided some sort of value to readers, other than just a momentary distraction. Honestly, I feel like there is some great stuff mixed in there with some OK stuff. Some useful advice along with some not so useful advice. I guess I had hoped to see some sort of unifying theme or message that would help at least one person in their struggle to open a brewery.

OK, here it is: You can only build a successful brewery on successful relationships. I suppose that is something you might find on a business school bumper sticker, but I’m beginning to think that relationships are even more important in the craft brewing world than in most other industries. Yes, there is that level of relationship, from brewer to brewer, where you can email any of your peers and assistance is freely given, but there are other critical relationships that you must foster, such as with suppliers.

You cannot survive in the smaller craft beer world solely on price. Whether it is the materials you buy or the beer you sell. Certainly, you can nickel and dime someone on price (I’ve done my share), but you also need to know when to step back and look at the service provided, the relationship being built. Sometimes you pay a little more now and save huge in the end. However, money is not the only measure of a relationship and a good relationship may save you a lot more than money some day.

You also have opportunities to develop relationships when there is adversity. I have one supplier who has had a number of issues with damaged and delayed shipments. Some folks tell me to switch suppliers, but I refuse to make the move. I have a great relationship with the representative and that is important to me. In fact, that relationship has already saved me in many other ways, because there was someone thinking about how to help us outside of just selling us more supplies. They wanted to improve the relationship, because we wanted to, and that has helped us tremendously.

The same rules apply to distributors, retailers, and even end consumers. Every contact, every transaction is a relationship. Nobody wants to be taken advantage of in a relationship and nobody wants to feel like the other person just doesn’t care. Keep this in mind.

Also, understand that every relationship will have its ups and downs. Mistakes happen. Do not concern yourself over the fact that someone made an error. Instead, value the process of resolution. A relationship where both parties try to ensure the success of the other is very powerful. Instead of you worrying alone about how to be successful, you have other people deeply connected to you, looking out for your interests. Those relationships are a good way to ensure success.

“The three-martini lunch is the epitome of American efficiency. Where else can you get an earful, a bellyful and a snootful at the same time?” — President Gerald R Ford

As a kid, back in the 1970s, I remember hearing about the “three martini lunch” for the first time. I couldn’t imagine how drinking could be part of a business meeting. How could you keep your head and make rational business decisions if you were half in the bag? By the time I was an adult in corporate America, there was more of a stigma against drinking during the business day and we never did. Drinking during the day was forbidden, and that was fine with me. I can’t do a lot of quality work when I’ve been drinking and I doubt others can either.

Now, here I am in the craft beer industry and it seems to follow its own set of rules on alcohol consumption. I can’t seem to get through a meeting with distributors, retailers, media, or consumers without drinking at least one beer. There are times when you are encouraged or even pressed to “have another.” Heck, when I attend events, I don’t buy any beer, but the beer just keeps showing up. As part of the craft beer industry, I sometimes feel pressured to drink even when I don’t want to.

To be fair, there are times during the day when you “have to” consume alcohol. Sampling product for quality is one of those. That is understandable, as is enjoying a pint or two at the end of the day after all the hard, dangerous work or driving is done. Consuming beer in moderation can be part of a healthy, rich lifestyle, but it can also easily drift into abuse, destroying your quality of life.

The weird thing is that everyone in the industry knows of at least one person working in some brewery that they would consider a “functioning alcoholic.” (I must admit, when I do the shows on The Brewing Network, sometimes I feel more like a functioning alcoholic than I do a professional radio host.) Like the weird uncle in your family nobody wants to talk about, alcoholism in brewing seems like one of those things that isn’t discussed out in the open. It is a shame, because I think the majority of brewers prefer that their consumers and staff enjoy alcohol responsibly. In fact, I would say that alcoholics make up a smaller percentage of craft beer sales than they do of just about any other alcohol segment. Why in the world would you buy high priced, often very filling, beer if your goal was to get drunk?

So why is there any alcoholism in the brewing industry? Well, the reality is that there are alcoholics in every segment of society, from doctors to ditch diggers. (Sorry, Excavation Engineers.) While I think more alcoholics might be attracted to working at a brewery, I think it may be that we are more aware of the problem when we see it. Maybe, because of our tolerance of alcohol consumption during work hours we are just more conscious that it is a potential problem, so we look for it more.

We have an inside joke at Heretic Brewing Company, “We can drink less than any other brewery.” By choice, we don’t drink during the day, we don’t drink during lunch, and we certainly don’t drink when there is work to do. Sure, we love beer, but in the proper place, time, and quantity. I’d say I am the company “lush,” but those people that know me, know that I moderate my consumption. There are no three IPA lunches at Heretic, but we do have a happy hour now and then.

People who have known me as a homebrewer for a long time often ask me what I think of professional brewing.

“Honestly,” I say to them, “brewing is pretty much brewing. The challenge is on the business side of things.” I find myself spending more time focused on spreadsheets than brew logs these days. Professional or homebrewing, you make wort, ferment it and then package it. The only reason professional brewing is different from high-end homebrewing is the added challenge of making consistent beer that you must sell in a profitable way, every day.

Notice I said profitable. This is the tricky part to the business and why I spend sooooo much time working with spreadsheets these days. Anyone can sell a small amount of beer and there are always people willing to buy beer based on price. However, the harsh reality for the smaller craft brewer is that you can’t compete on price with the larger craft brewers. The larger brewers have an economy of scale. Generally, the larger your production, the lower the cost per ounce. When the beer costs less per ounce, you can still make your needed margin at a lower price point to the distributor or retailer.

I’ve heard of some start ups that think they will compete on price, but that is not sustainable. They respond that their plan is to start with a lower price initially, to get their beer in the door, and then to raise prices later to a profitable level once the accounts can’t live without their beer. That is just crazy talk. I think most readers with half a bag of common sense will know right away what is wrong with that logic. There are so many great craft beers out there that the retailers and consumers can easily live without one more.

Often this low pricing strategy is borne out of another type of ignorance: cost of goods sold. While the brewery might have some idea how much their malt and hops cost per batch, they are woefully ignorant of all the other costs of production. Without tracking and knowing all of the costs, it is easy to make the mistake of under pricing your beer.

The opposite of that is when the brewery declares they will charge what their beer costs to make, plus a nice profit margin. I don’t think this is nearly as bad as the previous example, but it does have its flaws. Keep in mind that when a brewery starts up, the cost of production is usually higher than an established brewery. There are plenty of other breweries out there charging less for just as good a product, so there is little incentive for the retailer or distributor to take on your product if it is excessively higher than the competition. You do need to play the price game a little, at least to the extent that you don’t price yourself out of the market. You can be on the high end as a start up, but you still will need to run as tight a ship as possible if you hope to make a profit. It might be better to hope for breaking even, at least until you can get production and sales up. The goal is to grow production, and as production grows, your cost per ounce drops. As your cost per ounce drops, your profit rises without having to raise prices. At least that is my theory, but I’m still as green as anybody in this business.

So that is why it takes a great deal of tracking and calculating. It isn’t easy, and it is really boring compared to brewing, but if you hope to turn a profit, you need to focus on the business side of making beer.

As I mentioned before, I knew distributing beer would be hard work and I wanted to sign up with distributors as soon as possible.

It is not difficult to find distributors that are willing to work with new craft breweries. There are lots of newer, smaller distributors out there and the only way they can afford to take on new product lines is to sign them up as soon as the brewery starts producing beer. But the distribution business is like any other business; there are good companies and bad companies.

The question becomes how do you choose who to work with? I spoke with one brewery owner that told me, “Eh, they’re all the same. They all suck, so it doesn’t matter who you sign with.” I’m not sure that I would agree. I know from the horror stories I’ve heard that there might be some distributors who will cause you grief, but I’ve also heard good or great things about almost all of them as well.

I found all of this quite confusing, so one of the first things I did was to build up a list of trusted advisers that I call on for recommendations and advice regarding distribution. They come from backgrounds that span industries and each has a unique view into distribution that they are willing to share with me. I have found this invaluable.

One of the things that they have all told me is that first and foremost you need to decide what you want to achieve. Are you going to grow slow or fast? Do you want to have dense coverage in your backyard only or do you want a dusting of coverage across the nation? What volumes can you consistently produce? That alone will tell you something about how much distribution you can take on. You don’t want to sign up with a distributor, get them all excited, and then not be able to deliver the goods. Working with a distributor is a two-way street, like being married. You count on them for getting your beer out there, well represented, and in good shape, but they count on you to get them excellent beer, in the quantities they need, and when they need it.

Many folks like to categorize distributors into two groups, big and small. Often they identify “big” as those distributors that represent major national lager brands and those who don’t are “small.” Some craft brewers hold the theory that smaller is better, because they will have more time to focus on your brand. They will view your business as more dear, because it accounts for a larger part of their revenue. They also say that the larger distributors will ignore your brand, because they are focused on their cash cow and you are insignificant to their revenue.

I’m sure there must have been at least some examples of this happening, otherwise there wouldn’t be so many people repeating it. However, I’m not sure it is that cut and dried. Sure, a larger distributor with major brands needs to take care of those brands, but they also seem to know that they can’t remain stagnant in this ever evolving craft beer market. They need to foster new brands just like the little guys. I’ve heard from some of the more successful craft breweries that going with a smaller distributor can be limiting as well. They can help you distribute, but it can be harder for them to help you grow. One of the benefits to the larger distributors is that they have the resources to help a brand grow. Even a gentle push from a giant might be more effective than a mighty heave-ho from the tiny guy.

Most brewers will tell you that attending the Great American Beer Festival is one of the highlights of the year for them. It is a big spectacle of beer, brewers, and beer lovers. It is something for every beer geek’s bucket list.

I’ve attended GABF a number of times in different capacities. First as a member of the American Homebrewer’s Association Governing Committee. Another time as a Pro/Am entrant. Later I attended as an author, to sign books for Brewer’s Publications. Other times I’ve attended as a judge. This year I attended not only as a judge/author/governing committee member, but also as a brewer/owner pouring beer at the festival.

The 2011 GABF was a different experience for me, because I felt like I had more at stake than ever before. I still enjoyed the judging and book signings, but I was really looking forward to meeting people at our booth as they tasted our beers. How our beer is presented and how it is received is important for me. Wherever our beer is poured, I want sparkling clean glassware, proper sized pours with the right amount of head. Things like carbonation should be spot on. Don’t even get me started on something like flavor or aroma.

While I felt that our very first two batches of beer served at the homebrewer’s conference in San Diego were quite good, they needed a little more time before serving. At GABF, I felt our beers were all in excellent form. While I’m a perfectionist and I can always find things to tweak in almost every beer, I was quite proud. The comments were all positive and I really loved meeting all of the passionate beer lovers. Luckily we had some great volunteers helping with our booth, which gave us more time to speak with people. I spent almost all of my time at our booth, with only a little time spent visiting a few friends and trying their beers.

If I knew a person was a homebrewer, I would try to ask them about their beer. What was it they loved to brew? What was it that they were excited about? I think that is the great thing about meeting with homebrewers, they almost always have a beer they are working on that they are passionate about. When I made the move into professional brewing, I worried that I might get bogged down in the day to day work of producing the same beers time and time again for consumption. So far there is little danger of that. We’re still very young. There is still a lot to think about to try and get every beer to be flawless, especially for my perfectionist bent, but there is still lots of room for new beers and creativity. I just bought some fantastic wine barrels for a sour beer that I have in mind. As I work on it, I think about all those folks at GABF and I think about how I want to make sure that this is another beer I will be proud to serve at the next GABF.

I received an email from a homebrewer dreaming of becoming a commercial brewer and he asked, “How late is too late for a determined fool to chase an old dream?”

My answer to him was that it is never too late to follow your dream. The moment you stop pursuing your dreams, you might as well be dead. That is absolutely true and I will always stand by that claim. You should always live life and make of it what you can. But I can’t help but mention the flip side too. We know that it takes determination, persistence, creativity, and passion. The great thing is you can have all of those things no matter what your age, but there is a practical side to consider.

If you have deep pockets and can hire plenty of people to do the hard work, then you can go that route. The issue is when you can’t afford that, which is pretty much everyone that might want to open a brewery. So what is the physical demand in a brewery? You need to be able to lift empty kegs, sacks of malt, and push around pallets of grain. Brew days are long and physically demanding, dragging around heavy hoses, cleaning mash tuns, and many other tasks. Other days aren’t much easier and distribution day can be a challenge too. Note that I said empty kegs. Nobody should be lifting full half-barrel kegs by themselves. Certainly, it is often possible, but it isn’t really wise. The chance of causing permanent physical damage is not small, even with proper lifting technique.

At Heretic we team lift things like full kegs, but even still, I’d love to get a lift for the delivery van to make the whole process easier. In fact, we try to find tools or methods of working in order to reduce the physical demand where possible. I’ve visited a lot of different breweries and more often than not, it is clear that reducing the physical demands on the brewer is not high on the priority list. I’m always amazed when a brewer needs to carry sacks of grain up or down multiple flights of stairs. Sometimes they need to carry the grain multiple times. Once when delivered, a second time to mill the grain, and a third when it is time to remove the spent grain. I understand that there are often limitations on buildings and on the funds available to install solutions, but sometimes it is just that the comfort of the brewer is unimportant to those in charge. Maybe it is just me, but I think better and do a better job when I’m not struggling to survive physically.

And even worse, there are some breweries where the safety of the brewer gets short shrift as well. Simple stuff like chemical-safe goggles and gloves. Eye wash stations and fire extinguishers. Dust masks and hearing protection for the mill room. All of this stuff costs very little to implement and there is no excuse for allowing your employees to work without these basic protections. When we don’t keep things like safety and physical demand in mind, even the youngest and healthiest brewer can’t live the dream.

I’ve always wondered what the secret is to creating a successful brewery.

By success I don’t mean the place stays open and you are able to pay everyone minimum wage. I want to know what separates the modestly successful from the wildly successful. As much as it pains me to say it, I’m not certain beer quality is the differentiator. Yes, a certain high level of quality is needed to be wildly successful, but there are high quality beers being made from some less successful breweries. Heck, I’m sure there were breweries making some great beers that couldn’t make it financially and folded.

I know some folks think marketing separates the wildly successful from the less successful. Again, I really doubt that is the reason. Yes, clever marketing can help build a brand. It can get people to try your beer versus another. Yes, it certainly helps, but is it the key to success? I don’t think Sierra Nevada ever did any sort of “marketing campaign” to build their brand, but I would still put them in the wildly successful category.

Sierra Nevada is known more for their early pioneering, long term dedication to quality, and hard work. So, would that be the key differentiator between wildly and modestly successful breweries? Hard work? No. Like the other factors it certainly helps, but there are plenty of hard working brewers focused on quality with good marketing ideas that are most likely never going to make the jump to wildly successful.

Like so many other questions in this industry, I don’t have the answer. I have some thoughts, but no answers. I don’t even know for certain if Heretic will be even slightly successful. I think success comes with all of the above, but wild success requires one more ingredient, boldness. There is a reason the Latin proverb “fortes fortuna adiuvat” (fortune favors the bold) is so oft repeated. It is because it is true. In a competitive, challenging market like craft beer, boldness is a necessary ingredient in success.

Today, the new generation of craft beer consumer is not looking for the same old stuff. They want the new and the extraordinary, so it is important to be bold in exploring new ideas and ingredients. Boldness in market strategy also helps. While you don’t want to overreach, you don’t want to let timidity restrict you to your local area either. Go forth and take advantage of the new media opportunities, new packaging, and new markets.

Of course, whenever I say “bold” some people think I mean aggressive. Aggressiveness is often associated with how you interact with others, either to get them out of your way or to make them follow you. Boldness, on the other hand, is all about you. Boldness is you overcoming your fears and limitations. Boldness is about you thinking in new ways. Boldness may be stepping off the path that you have been following each day or maybe it is just running ahead much faster on that path. Boldness is being creative and adventurous.

Does taking a bolder approach guarantee success? Of course not. In fact it could result in a quicker demise, but that is OK in my book. It is better to shine brightly for a brief period than not to shine at all.

I think most brewers would agree, a beer’s life begins the moment the yeast are finished with fermentation.

Ergo, the moment yeast have finished fermentation, the beer begins its inevitable march toward death. Yes, beer has a finite lifespan and everyone who handles the beer has an impact on when that death occurs.

As I write this I’m sitting at a bar with at least 120 draft beers on at all times and it worries me. Every time I see a large number of handles I worry about how quickly they turn each beer. I don’t want to drink something that has already died or is on its last legs, so I start out safe, ordering a Firestone Union Jack (from Firestone Brewing Company in Paso Robles, California). The Firestone brewery is relatively close by and I know their beer sells quickly wherever it is served. Yes, as expected it was fresh, hoppy, and wonderful. No signs of “old age.” But I can’t imagine that is true of all the beers they are serving. The slow movers are on a ticking clock, marching toward an inevitable death. As consumers, we don’t know until we taste it if a pint is a youngster, in the prime of life, or a doddering old coot ready to collapse at any moment. Most bartenders have no idea how old a keg might be, let alone the conditions the keg was subjected to before it got to their location.

Many consumers also don’t know if what they are drinking is stale either. Some try to give the brewer and retailer the benefit of the doubt and accept the beer as, “the way it is.” Others just can’t differentiate between a stale beer and a fresh one. And even those who do have the ability to detect a flawed beer sometimes mistake the beginnings of staling as “complex maltiness.” I have to admit, I have fallen victim to all of those behaviors in the past, sometimes not realizing that what I bought was really a beer on its last legs, not a sweet, caramel-heavy beer.

I’m not sure that there is any one group to blame in all of this. Yes, the brewer should be trying to minimize oxygen pick-up and the distributor should be transporting the beer cold. Both should work to pull back old product before it can get to the consumer. The retailer needs to do their part as well. They should maintain the beer at proper temperatures and should pull slow moving product when it is no longer fresh. I was at the Stone Brewing Bistro and Gardens in Escondido, California several months ago and was told that the staff is asked to sample all of the beers regularly, to ensure that the beer being served meets their standards. That is a great attitude to have and I am sure there are a good number of other places that uphold such standards, but many more could. And, let me toss out a wild thought here: perhaps the consumer should share some of the responsibility for bad beer. Yes, as consumers we are all to blame for the behavior of those who provide what we consume. If consumers do not develop a knowledge of what they consume and fail to notice when a beer isn’t right, then there are some retailers, distributors, and brewers that won’t take action.

What does this all have to do with Heretic? Right now our beer is moving too quickly to become stale, but as we expand we are not immune to ending up with stale beer out in the market. We are not immune to the laws of the universe that make beer stale. As a new brewery, my concern is that consumers won’t know what our beer should taste like. Mistaking stale beer for “that brewery character” would be terrible for us and the consumer.

We’ve been spending a lot of time lately scrubbing some used kegs we bought.

The kegs came to us very dirty, so dirty that the nice automated keg washer can’t get them clean even with repeated cycles of hot caustic and acid. We’ve tried everything from soaking to pressure washing, but the only thing that seems to work is good old fashioned elbow grease. It wouldn’t be so bad if there were only a few to do, but we need to clean more than 500 of them.

After the first couple days of scrubbing, I had to admit that I had made a big mistake purchasing these kegs, but not for the reason most people would think. The kegs are solidly built. They have new valves and the price was very reasonable, even when accounting for the large amount of labor spent on cleaning. So why am I kicking myself? Because I did not identify the source of the labor correctly.

I thought I could hire someone at minimum wage to scrub kegs. We tried that, but the results were not acceptable. Our kegs need to be flawless inside before we can put beer in them. That means inspecting each keg with a critical eye. Even a faint hint of any remaining residue stuck to the keg is unacceptable. Scratches bad welds, and similar imperfections are also forbidden. It takes someone that is deeply invested in our beer to hunt out these flaws — and even then it requires the ability to detect these tiny flaws. That limits the labor pool to two of us: Chris Kennedy (our head brewer) and myself. We are the only ones who we trust to verify that a keg has been cleaned properly.

Therefore, the problem is that this keg scrubbing is taking Chris and I away from other tasks important to growing the business. When Chris and I are scrubbing and inspecting kegs for days on end, we lose out on the opportunity to work on other tasks. We’re still getting beer brewed and packaged. We’re still getting beer out to the retailers and distributors, but this whole keg thing is slowing us down.

That was my big mistake. I assumed that almost anyone could clean kegs. When I ran the numbers on buying new versus used, I did include a lot of time for cleaning. I also included the cost if a considerable percentage of the kegs were unusable. And those numbers have held up. My calculator works, but my foresight was weak. Allowing the keg cleaning to tie up Chris and myself was a big mistake. I counted labor costs, but neglected opportunity costs.

I think this is a common flaw in many nano brewery plans. The business plan often relies on exchanging labor for lower equipment costs. The plan includes some calculation on the cost of the owner’s labor, but it often fails to consider how consuming all of the owner’s time on inefficient brewing can limit the future of the business. When you take your limited pool of highly talented people and tie them up with time consuming tasks, the future of the business can take a hit.

It all seems so simple on paper. You brew the beer, stick it in some packaging, then sell it to the thirsty hordes. How hard could it be? It isn’t rocket science, right?

Well, each individual aspect of running a production brewery isn’t very hard. For example, ordering supplies for brewing, not so bad. You need to make some predictions, you need to research quality and price, you need to have your timing down so that the materials are there when needed, but not so early things go stale or take up too much room in the brewery. And the brew day itself isn’t too tough. It is really just a matter of getting the right amount of grain crushed, transferred to the mash tun, starch converted and sugar extracted, boiling, chilling, pitching yeast.

But there are dozens of these types of tasks and where it gets tricky is that they are all interrelated. Your hop contracts depend on production needs and production needs depend on demand from sales and also efficiencies in the brew plant and those efficiencies also feed back to sales, since you can only sell what you have. Of course, there are more, like ordering the right kegs for your product, getting the kegs tagged with all of the government warnings and brewery branding. Making sure the kegs are clean, making sure you get it back, managing deposits collected and deposits owed.

The list goes on and on. I don’t mean to be a whiner, but I think much of this escapes the person looking to get into their own brewery. Even many head brewers are woefully uneducated about all of the other stuff that goes on to make the whole process run smoothly. Everything from working with the government to working with the public has its own set of challenges.

I have a great deal of experience in managing complex high dollar projects with lots of dependencies. I’m well versed in managing resources and timelines. I am no stranger to predicting needs, scheduling, and accounting for the unknown. But dang it, getting the amount of beer brewed to match the timing of beer consumed is every bit as tricky.

I guess I could blame it on not enough fermenters, but I’m the person that predicted how much fermenter space we would need and how much money we would need for the fermenters. I suppose I could blame it on brewing some beers that have a longer residence time in the fermenters, but then I’m the one calling the shots on which beers we brew. Perhaps I should blame it on over-reaching on our sales, but then I’m the one telling people what they can sell.

I’m sure I will figure it all out eventually. This whole business of making beer for sale is new to me, so I’m bound to have a learning curve. I know it is possible, but now I have a greater appreciation for those out there doing it in a one man show. When I consider what someone like Brian Hunt at Moonlight Brewery has done over the years, my respect for him grows. It is trickier than it looks, getting beer made, getting beer sold, and making a living at it.

As soon as you start producing beer (and even before), you will get a flood of requests to provide beer for festivals.

My thinking, when I was just a festival attendee, was that it must be worthwhile to get your beer in front of a crowd of people. After all, these are beer geeks, right? Well, some of them are, but at the average event it seems many of them are just there to get hammered.

So with a dozen requests sitting on my desk I began to wonder how or if we could attend them all. Should we attend any? I guess the general idea is that festivals are “good marketing” because you get people to taste your beer, but the more I thought this through, the more I wondered if it really was a great way to present our product. I’m new to this whole selling beer thing, so I don’t know the answer, but I’ll share my thoughts anyway.

At first the idea of attending a festival seems easy and not too expensive, but there are hidden costs such as transportation, employee salaries, and booth fees. Just the beer alone adds up quickly. Most festivals want at least a barrel of beer. Giving up a dozen or more barrels of beer for festivals is costly for a start-up brewery. A very few festivals are willing to buy the beer, but most don’t. Even if they were all willing to buy the beer, there is no way we have the people to work a dozen festivals. While attending beer festivals might be fun, working a festival booth after spending long hours every day at the brewery is just more work. Some festivals offer volunteers who will pour your beer for you, but I always hate it when the folks pouring the beer can’t tell me anything about it or the brewery. Isn’t that supposed to be one of the benefits of the festival, getting to speak with someone from the brewery? If not, then a consumer might as well be trying your beer in their local bar or beer store. Might that cost of attending the festival be better utilized in beer production or lower prices on the beer?

Does that mean beer festivals are a bad idea? Of course not. There are plenty of festivals worth participating in, I just don’t think marketing should be the core reason to do so. There are a lot of events held to help fund various non-profit organizations or to support various industry groups that you might consider worthy. I’m not sure when the first craft beer festival was held, but I’d like to think it was in support of some noble cause. Hey craft brewers, lets gather together and donate beer because someone needs help. That seems very craft beer to me. That seems like a great reason to participate. Perhaps it wasn’t that way and I’m just a hopeless romantic when it comes to the craft beer industry, but that doesn’t mean it shouldn’t be that way now.

Well, people are drinking our beer. I guess that is a tiny measure of success in the brewery business.

Of course, it is easy to have people drink your beer when you’re giving it away, like we did at the Brewing Network anniversary party and pro night at the National Homebrewer’s Conference in San Diego last week. We poured more than a barrel of each beer (Evil Twin and Tafelbully) in just a few hours. To be honest, I felt that both beers were not quite ready to be served, but the pressure of having promised people that we would have beer for their events made me give in. It was nothing to be embarrassed about, but I would have preferred to hold the beers for just a few more days.

Once we got back to the brewery, the beer was ready and the real work began. We had to prep kegs and start selling them. Our first sale was easy, to the craft beer bar across the street. Later, Charlie Essers, our Minister of Heresy, and I had lunch there and witnessed the first pints of Heretic beer sold and consumed. It was neat to see the first paying customers with smiles on their faces while they drank our beer, but almost immediately I had a feeling of dread about what we needed to do next, selling the rest of that batch. Charlie hit the phones and we both hit the road in different directions. I think we’re really lucky we are in an area where craft beer bars are open to trying new product. There were a number of great places that warmly welcomed us and took a chance on our beer, but a few weren’t so welcoming. Why tell someone to come on down and bring a sample of the beer and then refuse to taste it? I think it must be some weird power trip. If you’re not interested in someone’s beer, just say so. Even with a few wasted stops, we made quick work of getting our beer in some excellent places around the San Franciso East bay area and around Los Angeles.

I knew going into it that distributing beer is hard work, but being on the road selling and delivering quickly gave me a new appreciation for the work of beer distributors. We were lucky to sign up right away with Central Coast Distributing in the San Luis Obispo/Santa Barbara area. They came up to the brewery and picked up a bunch of kegs and began placing them in bars throughout their area. As easy as that. Certainly you make a lot more money if you distribute your beer yourself, but you would make even more if you opened a bar and sold it by the pint. I’m not interested in running a bar and I’m not interested in self-distributing beer either. I’m interested in making the best beer I can possibly make and by partnering with the right distributors, I have more time to focus on the beer itself. I think anything that lets me spend more time perfecting our beer is worth the cost.

We nearly didn’t get to brew out a second batch of beer.

We needed to brew our Evil Twin right away to have it ready for pro night at the homebrewer’s conference in San Diego. We knew if we didn’t brew it right away, there was no way it would be ready in time. We had all of our ingredients on hand, except for a pitch of yeast. Our plans to have yeast on hand fell through at the last minute and here we were, ready to brew, but no yeast. I was in a panic and started contacting friends. Friends started contacting friends. As usual, luck and the kindness of the craft brewing industry came to our rescue once again. Derek Smith, head brewer at Black Diamond Brewing, offered us a pitch. I loaded our yeast brink into the van and ran to get the vital pitch of yeast. Derek quickly helped us get the best pitch he had available and in doing so saved our brew day. Most people in the craft beer industry are like that, ready to help another brewer in need, no questions asked.

Of course, that brew day was still a bit rough, dealing with the poorly running floor drains and other small issues. (We spent an additional four hours cleaning up just because of the drains.) Oh well, it could have been a lot worse and now the drain issue is fully resolved. We did get the mill dialed-in better and got other stuff fixed. The beer turned out fine, which is the important part. We don’t mind hard work, so a few long, hard days until we get all of the little issues resolved is not a deal breaker for us.

So the beers are finished fermenting. We got them kegged and we drove them down to the homebrewer’s conference in San Diego. Tomorrow we are going to serve two of our beers (Tafelbully and Evil Twin) at the Brewing Network anniversary party and Thursday at pro brewer’s night. People keep asking me if I’m excited or anxious about serving that first beer. The answer is yes and no. It took a lot of effort to get to this point, with a lot of help from loved ones, friends, and peers. It seems that there are a lot of people I owe for their kindness, and I don’t want to disappoint them, but I am confident that the beer is good. I believe that many people will enjoy drinking it. Like all new breweries we have a long road ahead, but Heretic Brewing Company isn’t going to succeed or fail on these first two batches of beer. It is more important to improve what we do, to strive for perfection. If we don’t put at least as much care and effort into batch 2000 as we did into batch 2, then we will fail. If we continue with passion and commitment, then maybe we have a chance of building something to be proud of.

OK, so the long awaited day arrived and we brewed our first batch of Heretic beer.

I’d like to say that it was easy, that there were no mistakes made, no equipment issues, and that all the woodland creatures gathered around the mash tun and sang songs while sewing me a gown for the ball. In reality it was somewhere between that and a twenty-two hour descent into hell.

Yes, yes. I hear you chuckling, “Didn’t he say he wasn’t so worried in his last blog entry?” OK, I deserve that. I put the bad juju on us by writing that, but I wasn’t totally unprepared for trouble. I did say that every brewery has some start-up issues. In our case the 22-hour day was mainly due to a lack of functioning drains and pumps in the brewery. The drains are there, they just don’t like to let things like water go through them. The pumps are there, but only one outlet was wired right to run them.

Our day started with a long drive to the brewery for each of the four of us. Chris Kennedy (our head brewer) and Charlie Essers (our minister of heresy) immediately headed off to heat water for dough-in, while Matt Staley (our Pro Am guest brewer) and I went to the mill room to figure out the mill setting and to start filling the grist case. Everything was going relatively according to plan, but we did run into an issue with the strike water. The way the brewery is set up, we use a heat exchanger and steam to raise the temperature of the water to strike temperature on demand. It turns out the adjustments are quite touchy and getting the right temperature and getting enough filtered water involved a couple of hours.

Everything seemed to go well from there, until we got the bad news that the drains wouldn’t take a Dixie cup of water. When it came time to clean up, we had to separate out all of the solids and then take the liquid by bucket to the one drain that still would run. We didn’t dare put so much as a single grain down that drain, in fear that our only outlet would clog. It took the four of us until the wee hours of the morning to get it done. Everyone worked hard, but Matt and Charlie went above and beyond, with Matt climbing into the mash tun and kettle to shovel grain and hops out and to scrub them clean.

It was a hot, wet, brutal day of hard work, but we got our first sweet wort into fermenter #1 with some measure of pride. I can’t imagine that day being successful without Matt, Charlie, and Chris. Thinking about it now, I get a little emotional about it. What they did, you can’t pay people to work that hard. People that are there on a whim would have disappeared long before that point. I feel so incredibly lucky to have friends that are so passionate about the success of Heretic that they will work 20 hours with no breaks, just to see us get that first beer into the fermenter. I know one thing: I will never forget that first brew day or those who made it possible. That is the fairytale, people going far beyond what is reasonable for a craft they care about deeply.

In a way, I can’t believe we will be brewing our first batch in just a couple days.

For the past several months it seemed like there was always one more thing that we had to do before we could be licensed or to get the brewery ready for production. It was a little frustrating at times, but then there were also moments when it seemed like the dream took a large step closer to reality.

Now our focus needs to change from preparing to produce beer to actually doing it. I know it seems simple. I’ve brewed enough times that the process doesn’t worry me at all and I have great faith in our head brewer, Chris Kennedy. We’ve done some pilot batches so we’re confident in the beers that we will be brewing (Tafelbully, Evil Twin and Miscreant). Sure, there will be some trial and error figuring out the new equipment. What kind of efficiency will we get? What kind of weird quirks will we have to deal with? (Every brewery has some.) We’ve gone to great lengths to make sure everything was designed and installed correctly, but brewing has a way of ferreting out the smallest of mistakes.

Even still, the stuff that worries me right now is not the production of great beer, but getting great beer out to the consumer. Regardless of how great you think your beer is at the brewery, you can’t just slap it in any old package and expect it will be great for all consumers. I think most craft beer lovers have experienced a bottled beer letdown at one time or another. Remember when you visited that great brewery during vacation and the beer was out of this world good? Later, distribution finally reached your area, but the beer tasted nothing like it did at the brewery. Perhaps the brewery packaging process was less than stellar or maybe it was something to do with handling at the distributor or retailer. (Stacking cases of craft beer in front of the store window is never great.) Regardless, you were a bit disappointed that it didn’t live up to your memory of the beer.

Of course, the ultimate responsibility is always with the brewery, no matter what the cause of the problem. The brewery needs to do everything possible to ensure a quality product reaches the consumer. There is a whole science behind packaging and distribution and I know if we don’t think about what we are doing early and often, we will end up disappointing the consumer. Heck, even the best of breweries out there have faltered a time or two, so I know we have a lot of work ahead of us.

So this is now what keeps me up at night. We plan to spend a lot of time stress testing our bottled product to see how well it will stand up to the rigors of distribution. Until we are satisfied with those results, we will confine ourselves to selling draft beer locally, where we can self-distribute and control the process better. But we can’t sit on our beer forever. Eventually we will need to take that step, put the beer in bottles and go for wide distribution if we expect our brewery to be successful. I am sure, by that time, I’ll have moved on to worrying about something else.

There are a lot of little and not so little things to do before your brewery is ready to produce beer.

Everything from installing the boiler to sweeping the floors needs to get done. For example, I spent last week framing out the walls for the mill room and gluing parts together for the glycol system piping. This week I will be installing the flex auger from the mill room to the grist case over the mash tun. The list of stuff to do is seemingly endless.

A handful of people have stopped by the brewery for a visit, (even though they know we’re not brewing just yet) and some of them seemed surprised to see me covered in dirt and sweat, holding a hammer or pushing a broom. (Or perhaps I was far dirtier and smellier than I realized.) I think they have this vision that opening or running a brewery is just a matter of having the money and telling other folks what to do.

I suppose a brewery can be built and run in more of a hands-off way, but I doubt that is the best way to do it. Sure, I understand that not everyone has the skills needed to do every task in a brewery and it is important to balance the length of time it takes to do things yourself versus the cost of lost opportunity to sell your beer. It is certainly important to bring in the professionals where logical, so the job gets done right and it gets done as quickly as possible. However, I also believe it is important to be involved in the process and get your hands dirty at every opportunity.

When it comes to the construction and outfitting of your brewery, the more involved you are, the deeper your understanding of how things work and how to maintain them. Stuff breaks in a brewery and the more knowledge you have, the more likely you are to be able to engineer a solution that gets you brewing again quickly. And I think a hands-off attitude in brewery construction can also influence the brewing process itself. When the person calling the shots doesn’t know the brewery and its idiosyncrasies, it seems beer quality often suffers.

Of course, just being involved isn’t always enough. Having a passion for brewing and a love of craft beer is critical too. In my travels I came across a brewpub where the new owner/brewer had recently purchased the business “because it seemed like a good opportunity.” I asked him if he had been a homebrewer previously and he said that he didn’t even like beer. His experience was in restaurant finance. His preference was for wine and malternative drinks, so I guess he probably didn’t realize that the beer he produced was mediocre at best. He then told me that his only training to brew was from the previous owner, who spent a day with him showing him how to do it. When I asked him if he considered employing a professional brewer he said, “No, brewing is so easy. Anybody can brew beer.”

Sure, anybody with money can probably open or buy a brewery and anybody with a day to spare can be taught to brew beer. However, quality beer takes more than money and a desire to cash in on the craft beer boom.

We haven’t brewed a drop of beer yet, but we’ve already run out of the hops we need to brew the beers we are planning to brew.

Even being conservative in our numbers, we need more hops than we can get for this year and the next. Let me be more specific. Of course you can get hops, you just can’t get several of the most highly prized aroma/flavor varieties. I think you will always be able to get hops for generic, flavorless bittering. That is what the mega brewers focus on, so that will always exist.

However, a craft brewery that depends on all of those bold, citrusy, piney, floral, spicy hop flavors does need to worry. As crazy as the hop market was a few years ago, and however much it has improved, it really isn’t that much better now when it comes to popular varieties. There isn’t the panicked buying that there was with the last shortage, but you still need to think ahead and lock in any hops that are critical to your business. Supplies are limited and those that wait will miss out.

The only problem for us is that we haven’t brewed any beer yet and we do not have a good idea of how much beer we will sell. Yet here I am trying to commit to tens of thousands of dollars in hop contracts. If I don’t get these contracts, then we need to rethink the beers we want to brew. We’d have to start over figuring out exactly what hop character will work.

Initially, I had planned on starting with beers that didn’t use a lot of hop character. I figured we could start with beers that were special in other ways and avoid the hop crunch. But this being the west coast, it wasn’t long before hoppy beers began to creep into the mix. “OK, let’s tweak that with a little dry hop” or “Oh sure, I think that malt bill can carry double the amount of late hops.” Soon I was looking at a spreadsheet that indicated we would need a big load of hops.

I’m sure there are other industries that live and die by the availability of one commodity or another. I think I’ve avoided working in those fields, because it is fraught with risk and I don’t like the uncertainty. The reality is, I am in one of those industries now. Without the character of these flavor and aroma hops, the craft beer industry (and the craft beer drinker) would be seriously hurt.

While the bigger craft beer breweries have more resources to plan out and secure contracts for the next five years, we’re much lower on the list and sourcing hops is much more challenging. Regardless, we need to be bold enough to ensure we have enough hops, but not so bold we sink ourselves financially with excessive hop contracts. Kind of difficult when you haven’t brewed or sold a drop of beer yet. However, that is the way the industry currently works, and we have no alternative but to play along. It is our own little hop crisis in miniature.

Even before I began the process of opening Heretic Brewing Company, homebrewers would ask me what it took to open a brewery.

I usually started off my reply by saying, “Lots of money and lots of hard work.” It is still true that it takes a lot of hard work, but nowadays, some folks are opening nano-breweries for less than what most people would consider a lot of money. (It still takes about as much money as you can find. Of course, if you can get your hands on more money, the scope of the plan just grows to accommodate the funding.)

I’ve come to learn that there is one more ingredient to add to that mix—motivation. Perhaps motivation is the only critical ingredient. Like yeast, there is no beer made without motivation. You must have the passion and the drive to do the hard work, even when there is no pay and there seems like no end to the list of tasks. You’ve got to be determined to keep going, even when people tell you “no” or your best laid plans just fell apart in the blink of an eye. Through it all, you need to have a little voice in your head that says, “You will be successful.” You need a little voice tells you to keep going, because it will all be worth it. That voice needs to be there at all times, strong, unequivocal, even in the darkest hour. While you may have your external cheerleaders, it is this internal one that pulls you out of bed early each morning and keeps you working late through the night.

I have had quite a few people tell me about their brewery plans. It is really neat to hear about how they got started brewing, what they plan to achieve, and where they are in the process. I always tell them to let me know about their progress. They all seem motivated and excited and I really enjoy hearing about their experience. However, there was one email I received that actually still bothers me to this day. The writer said that he was opening a brewery, but he was having trouble with motivation. He said that he faced an uphill battle with many people telling him why his venture would not work. He asked me to help motivate him to keep working on opening a brewery. He wanted me to give him some words of encouragement that would carry him through those dark times.

I wrote up a nice reply, filled with lots of trite sayings about sticking with it and how all things worth doing were not always easy. Then I deleted it. The moment I read it back to myself I knew it was fake, dishonest. What was I doing? Why would I lie to this guy? So I wrote up a much more painful, but true, response. I told him flat out that if he wasn’t motivated by his own love of brewing, then he was going into the wrong business. He should search long and hard within himself for the answer, because relying on others to motivate you will certainly lead to failure. Much worse, it will send you on a course that is not true to yourself. I felt a little uneasy sending that to him, but I would have felt much worse if I just fed him some line of garbage to make it easy on myself. I thought that a slap in the face would do a lot more to ignite a fire within him than holding his hand and telling him everything would be alright. I never heard back from him and I figure he might he even hate me for my brutal honesty, but maybe my response did jumpstart his spirit and he finally found the motivation he needs.

When you think about starting a brewery, you know you will need kegs to package some portion of your beer, but that is about as far as the thinking goes.

You blithely assume that you can just buy some kegs, put beer in them, and you are good to go. Not so fast. It takes more thought than that. In fact, I can’t believe how much time we’ve put into thinking about packaging so far. At least as much as we’ve put into getting set up to brew our beer.

The first step is to determine what size keg you will use and how many of them you’ll need. There are a variety of sizes and shapes, but the standards in the United States are mainly 1/2, 1/4, and 1/6 US bbl. The 1/2 bbl are nice, because you need to buy, clean, fill, and handle fewer kegs for a given volume of beer versus the smaller sizes. However, if you are unknown or selling an extreme beer that a retailer may sell in smaller pours or will only sell to extreme customers, then asking them to buy a 1/2 bbl may prove more difficult than a smaller package. Smaller packages are nice also, because the keg runs out faster and gets replaced more frequently. Of course, the bar staff isn’t always thrilled about having to change out kegs frequently. So, it is a balancing act. For Heretic, we decided it would be best to have a mix of 1/2 and 1/6 bbl kegs.

Once you know what size kegs you are using, then you can do some estimating to figure out how many you will need. You take into account the number of beers you’ll put out in the market and the volume of beer you will sell. Keep in mind you need to have enough kegs to allow some to be out at retailers and distributors, some waiting to be cleaned and filled, and some full of beer ready to go out to market.

The next step is to decide if you are going to buy or lease your kegs. There are keg leasing companies that “rent” you the empty kegs for a fee. You still have to clean, fill, and distribute them, but they worry about getting the kegs back. Sounds nice, but it isn’t cheap either. Within two years, you’ve paid about the same as buying kegs. I think the reason many folks go this route is that they don’t have to come up with the money for the kegs all at once, they don’t have to worry about getting kegs back from some distant account, and if kegs go missing or get damaged while out in the marketplace, that is not the brewery’s expense either.

If you want to buy kegs, they are available new or used. New is pretty straightforward. There are several great manufacturers and you just need to get a quote and pay the money. Oh, wow, a bit more than you anticipated? Yes, stainless kegs are not cheap, but they last nearly forever. An interesting alternative these days is plastic kegs. You can find plastic kegs at half the price of stainless, but the reviews seem mixed at this point. Some brewers like them for their low price, light weight, and the fact that people won’t steal them for scrap metal. Others worry about their durability and how sanitary the interior plastic welds might be.

And then there is the used keg market. The used market is quite active and you can get a decent discount, but even then, it costs quite a bit to buy a large supply of kegs. If you do find some kegs that you want to buy, often there are three other breweries interested in them too. You need to move quick and have your money ready when buying used kegs. The other issue with used kegs is that you often don’t get to inspect them before purchasing. Once you buy them you are on the hook for cleaning them and making sure they are ready for service.

And getting a keg ready for service goes beyond just cleaning them. You’ll need to inspect them, clean and sanitize them, but you also need to remove any other brewery markings, mark the kegs as your own, serialize them, and put the right federal and state warnings on them. Just a little warning sticker can cost you $0.50 per keg. Add to that keg collars and caps with your logo on them, getting federal approval for the collars, and you can see where your time spent getting beer in kegs can really add up.

Not long ago, it was a special treat to find great craft beer. You could travel extensively without finding any craft beer and often what you did find was just OK.

Things have really changed, and today the beer isn’t just good, but outstanding. By opening a brewery, you are essentially saying you think you can make outstanding beer too. If you cannot live up to that promise, then you are going to have an awfully hard time competing in today’s craft beer market. I thought about this before starting Heretic and I knew we would have to work hard and be creative to compete in this marketplace.

I had just been thinking about the high standard of beer quality in our area when the Heretic crew gathered in San Francisco for beer week. Our plan was to sample some of our homebrewed pilot batches, discuss business plans, and visit some of our favorite breweries in the area. One afternoon we decided to stop at one of my favorite places, Russian River Brewing Company in Santa Rosa, California. If you are a craft beer lover, then you have heard about Russian River and the magical beers they brew there. The four of us ordered some beers and a sampler to share. We worked our way through the twenty or so beers in the sample, commenting on what we liked about each one, and how much we loved this beer or that. As we worked our way through the twenty unbelievably fantastic beers, it hit me: The beer here was representative of the greatest craft beer in the world and this was our goal. “Oh man,” I said to myself, “They’ve set the bar really high.” This wasn’t a sampler of two great beers and a few decent ones. This wasn’t six variations of pale ale. This was a complex assortment of almost everything possible in craft beer and it was all flawlessly executed. As a passionate craft beer drinker, if Russian River was the source of all my beer for the rest of my life, I would be extremely happy and I would never get bored with the selection.

I am a confident person, but for the first time I started to think that we would never match up to a brewery like Russian River. Perhaps we could produce one beer that would compare favorably, but would we ever be able to put forth such a stunning show of brewing greatness as the sampler tray that sat before me? I am not sure if the rest of the Heretic crew realized it, but it freaked me out a little.

We began the drive back to San Francisco and it took awhile for me to get my head back on straight. I told myself we did not need twenty phenomenal beers. We only needed one to start. I’m sure Vinnie would have told me that he didn’t start with twenty phenomenal beers. He created them over time with many years of hard work and dedication. OK, I can do hard work, but is that enough? Will we have the inspiration and creativity that is clearly a key ingredient in greatness? I’m hoping we can, but there is only one way to find out. What is that saying? A journey of a thousand miles begins with but a single step. I guess the journey of brewing great craft beer begins with plenty of passion and a single brew.

Where I live every grocery store has been expanding their craft beer section. In some of them, the craft beer shelf space is now bigger than that dedicated to the large lager brewers.

Looking at the extensive selection of craft beer at the stores around here, you would think that maybe there are enough craft breweries already. You might think that starting a brewery and squeezing yourself into the marketplace would cause other brewers to shun you, but you would be wrong. The great thing about the craft beer industry is that most of the people involved are more passionate about great craft beer than they are about profit. They see a new brewery as yet another voice to carry the message of great beer to the public. By opening a brewery, you become a comrade in the fight for craft beer, not an enemy.

You quickly gain membership in a community of passionate, knowledgeable, and sharing people. As a brewer or brewery owner, you can call upon just about any of your peers for advice. Most of the time, you will get an immediate and thoughtful response, often with an offer of additional help, should you need it. They have all gone through many of the same questions and troubles you are experiencing and can offer sound advice. Sure, you should be reading, searching the internet, trying to figure out stuff on your own, but when you’ve exhausted your other options, it doesn’t hurt to ask your brewing brethren. I suppose if you act like a jerk and expect people to do things for you, then you might find that the responses dry up, but a little bit of politeness and patience goes a long way. I think the only expectation is that you pay the kindness forward, when the next crop of new brewers comes along.

Without this built-in system of camaraderie, it would be much more difficult to open a brewery. I always try to work things out for myself, but right from the start I had questions that stumped me. I eventually reached out to other brewers and quickly got the information I needed. Everyone I contacted was helpful, everyone was kind, and everyone made me feel like I’m not alone. Most importantly each had plenty of encouragement to go along with their advice.

There is a similar feel amongst homebrewers, but sometimes it isn’t quite as generous and open, and there are some people that think their information is “proprietary.” I guess craft beer, with its long work hours, low financial rewards, and other risks quickly weeds out the people that lack a passion for craft beer. Certainly, those that want to make a quick buck go elsewhere. Those that would do anything to make sure their creativity and passion reaches the mouths of craft beer lovers are the ones that remain. It is no wonder, with their dedication and passion, that they are willing to help others get started too.

The first thing people ask when you tell them you are opening a brewery is, “What kind of beer are you going to brew?”

I guess that is a reasonable question, although at first I thought it was kind of a weird question. “I’m going to brew great, tasty beer!” I thought to myself. What else would one brew? However, people insisted on knowing what “style” of beer Heretic would produce. “Oh, what style?” I would respond. Heck, I didn’t have any style in mind, but they wanted an answer, so I would proceed to mumble something about flavors and character until we both became confused.

When I first announced Heretic Brewing Company, I read an online discussion of what beers Heretic would produce. High quality they kindly proclaimed, but very style specific. The general consensus seemed to be that since I write the Style Profile column for Brew Your Own, and I did a whole series of shows on the Brewing Network about brewing the BJCP styles, and I co-authored a book called Brewing Classic Styles, then I must want to brew beers that were strictly to BJCP style. Some internet pundits doubted that I could think outside the style box.

The funny thing is, it never occurred to me that Heretic would brew anything “to style.” Our first discussions about beer involved creating something new, something we couldn’t find for sale already. We, of course, want to brew beers that we feel are exceptional. Beers that are always interesting and sometimes challenging for the craft beer lover. It isn’t that we’re anti-style, but there are so many great beers out there already, we don’t want to start off by brewing another great version of the same beers that are already popular. It seems to us that there are plenty of gaps in beer space, so we are trying to find some of those new or underserved niches to fill with our first beers. We’re not trying to reinvent craft beer, but maybe we can try to be creative with our first beers.

I’m know someday we’ll give in to those folks that keep saying we should brew a great IPA, but I don’t want that to be our first beer. If we can’t start out with something different that utilizes our creativity and passion, then I think much of the fun of brewing would be lost.

Many people might ask, “So why have you advocated for so long that people brew beers to style?” Well, brewing beer to style does have its value. It teaches you a great deal about ingredients, process, and beer. It is like training to be a world class chef. In culinary school they teach you to prepare many classic dishes first, so you can learn about ingredients and process. Without solid understanding of the fundamentals, your chances of creating something new and wonderful is very low. The same is true for brewing, but learning about brewing classic beer styles should never limit your creativity. Instead it should give you the tools and inspire ideas that allow you to experiment. Beer space is wider and richer than the BJCP style guidelines and it is fun to explore those new lands. Once you have honed your skills, don’t stay within the boundaries, feel free to color outside the lines. And if someone tries to corral you into a style box, be like the cowboy in the Cole Porter song and tell them “don’t fence me in.”

I must say the toughest part about starting a brewery is coordinating all the little parts. Sure, the paperwork is enormous. I think I killed a couple of trees trying to perfect my TTB application.

It isn’t that they make it tough (the folks at the TTB are quite helpful), but when you look at all those forms for the first time, there is a huge learning curve. There are businesses that will help you with the paperwork. One consultant offered to do the whole licensing thing for the paltry sum of $8,000. At the time I thought it was more of a princely sum, but every time I printed and reprinted and worked and reworked that giant stack of papers, the amount I was willing to pay for someone else to do it would rise a bit more. Of course, getting licensed is a big deal for us, because we can’t brew commercially until we are licensed. That requires approval from the federal, state, county, and city governments. And that takes a considerable amount of waiting.

However, there is still plenty to do and I’ve kept myself crazy busy making sure all the “other stuff” gets done, but it isn’t nearly as fun as brewing. We need logos, stickers, t-shirts and other marketing goodies. We need tap handles, glassware, coasters, keg collars, and more. We must have a website and I am told that we need to communicate with our “base” through “social media” such as Facebook and Twitter. (I must admit, this last part is kind of fun because we get to chat with people who are excited to try our beer.) Every day I spend most of my time making phone calls and writing emails trying to secure products and services for our brewery. In some cases it is more of a guessing game than a business decision. For example, certain hop varieties are getting scarce. If we don’t contract for them now, we probably won’t be able to brew with them this year. Given that we don’t know exactly what hops or how much of each we will need, signing on to buy thousands of dollars of hops is a bit like a game of chicken. Even the big stuff we need is in a hurry up and wait mode. It takes a fair amount of time to turn stainless steel into fermentors and we aren’t the only brewery that is waiting on delivery.

One saving grace in all of this frantic non-brewing is that I am still a homebrewer, and as a homebrewer I can still brew up to 200 gallons per year for my household consumption. When there is a lull in the action of typing and phoning, I spend a day here and there experimenting with new beer creations. Lately, I find myself trying some weird combinations of yeast, malt and hops that in the past I thought would never work. I think the adventure of starting a brewery has made me a bit bolder in my approach, and I’m determined to figure out some way of making these odd combinations work somehow. Someone asked me why we don’t brew recipes from the book Brewing Classic Styles. Those are great recipes that I am proud of, but using them never really crossed my mind. We need something new, something special to kick off the start of Heretic Brewing Company.

Experimenting on new recipes reminds me how much I love the creative process of brewing. It can be magical. A day spent in the garage listening to music and crafting what I think might someday become one of our core products is both exciting and relaxing. I know once we get our license and start brewing commercially that the relaxing part is probably never to be seen again, but I’m hopeful that the exciting part, the part with the creativity, magic, and great friendly craft beer lovers will last forever.

I’ve always been lucky. Ask my wife. Ask anybody that knows me. Things just work out well for me.

I like to tell my kids that it is all because of hard work and perseverance, treating others the way you wish to be treated, and a keen eye for opportunity. But then I have to admit, most of the time even I think I am just plain lucky. Take for example how I found the head brewer for Heretic Brewing Company.

I was on a road trip from California to Minnesota for the national homebrewers conference with my friend Peter Symons. We were making stops along the way at various breweries and meeting up with local homebrewers. I had received an email from Chris Kennedy, the head brewer at Yak and Yeti restaurant in Arvada, Colorado, inviting us to stop by. Peter and I both love Indian food and craft beer, so we were excited to get a chance to visit.

I didn’t know what to expect of Chris and his beer. After all, he only took up homebrewing five years earlier and had been brewing professionally for only three years, but some folks are just meant to be brewers. It was clear from the quality of the beers Chris was serving that he was skilled. The beers were as good as any and he showed creativity and a yearning to experiment and learn more. He did not have any formal training as a brewer, but here he was producing stellar beer. I love it when I meet someone that is driven by their passion to be great at something.

Later that day Peter and I were making another stop at Dry Dock Brewing and ran into Chris again. While enjoying a beer together, Chris and I talked more. I began to see that Chris was not only passionate about brewing, but he was smart, funny, and intelligent. At one point Chris asked me why I didn’t open a brewery and I ran through my standard litany of reasons. He persisted, offering answers to most of my objections. Since I had already grown to like and respect Chris I said, “Well, if I ever open a brewery, you can be my head brewer.” Of course, at that point I never thought I would open a brewery, so even though I meant it, I figured it would never come to pass.

It was a couple months after that when a chance at opening a brewery fell into my lap. So, being a man of my word, I contacted Chris and asked him if he still wanted to be my head brewer. I think he was a little shocked, assuming that I was just joking previously. We met again at the 2010 GABF and discussed our theories and passions for beer some more. Chris asked me why I would offer him the job and not someone else. I told him it was just intuition that he would make a great head brewer. And maybe intuition is a big part of luck as well. Later that week at GABF, Chris won a gold medal in a tough category, American-Style Strong Pale Ale, but I wasn’t surprised. So call it dumb luck or intuition, but for some reason, things just seem to be falling into place for Heretic Brewing Company.

When you finally realize you are going to open a brewery, it is an exciting time. However, the brewery just doesn’t seem real until you give it a name. When you talk about it with others, the conversation is very generic, more like discussing brewing theory than actually brewing. But once you find the right name, the brewery feels more real and comes to life. It is like finding out you are going to have your first child. It is exciting, wonderful news and you don’t think you could ever be happier, but once you’ve decided on a name there is a different, deeper feeling of reality and purpose that takes over.

OK, so my new brewery needed a name. It may seem silly, but you’d be surprised how difficult it is to name a brewery. Sure, you can name it after yourself or your location, but with a name like Zainasheff and located in a city that most people mistake for being on the east coast (Pittsburg is in California, while Pittsburgh is in Pennsylvania) I had to take a different approach. Perhaps you think I’m making a big deal of nothing, but give it a try. You have your heart set on ‘Weed Whacker Brewing,’ with visions of artwork already dancing in your head, when a quick Google shows it is already taken. Really? I wouldn’t have thought so. OK, move on to your second, third, fourth, and fifth choices. Now you’re getting down to names that sound more like auto spam emails that string random words together. ‘Enlarge Money Free Brewery’ sound good? No? Well at least it isn’t already taken.

I spent many a night running through various names. A couple of times I dreamt that I had found the perfect name and had failed to write it down. My best source of ideas was an online synonym dictionary. You start with a word that describes what you want your brewery to represent. (Of course, there is already a brewery with that name.) Then you look at alternative words that mean something along the same lines. When Google reveals that all of those are already taken, you start clicking and straying farther and farther from the first word. I’m not sure what word it was I clicked on that finally took me to ‘Heretic,’ but when I found out that it wasn’t already taken, I was amazed. Perhaps it is too edgy or steeped in religious reference for some folks, but for me it was perfect. I tried it out on a few close friends and the first thing most said was, “It is perfect. It fits you.”

A heretic is a person who practices heresy, and heresy is when you hold an opinion at odds with what is generally accepted. Galileo was considered a heretic for supporting the theory that the earth revolves around the sun. In a world where over 90% of beer drinkers believe mass market light lagers constitute the universe of beer, craft beer lovers are all heretics. Some folks may think a heretic has to have some sort of traditional religious meaning, but that is not true even though great beer is a religion for many craft beer lovers.

And that is what I really wanted. A brewery name that was both memorable and edgy. A name that showed my commitment and passion about great craft beer. A name that required Heretic Brewing Company to push the boundaries, to be different, to fly in the face of standard beliefs. Ah, at last it felt real.

There is a point in every homebrewer’s life, no matter how humble their brewing résumé, where they dream about going pro. Eventually, we all think about scrapping our current profession to work as a brewer or to open a brewery. For most it remains just a dream, but quite a few hardy (or foolhardy) souls do take the step, make the plunge, jump off that cliff.

Like everyone else, I entertained that dream myself, but I never thought I’d make it a reality. I’m too careful. I don’t like big risks and I actually preferred the financial security of my soul-crushing job in software engineering. Plus, I had plenty of opportunities to exercise my beer geekiness by writing for BYO, writing books, and hosting shows on the Brewing Network. When people would ask, “Why don’t you start your own brewery?” I would reply with, “I don’t want to ruin a great hobby by turning it into hard work.” That is a very real reason not to go pro, as being a successful professional brewer requires a great deal of hard work, but I’ve never been afraid of that. Software taught me that I can handle 100+ hour work weeks, but software also made me very wary of underfunded start-ups. The reality is that the amount of capital it takes to open a regional-sized brewery and to fund operations until the business can sustain itself is substantial. I didn’t want to mortgage my kids future.

So why am I taking the leap now? Why open a brewery if it is such a financial dice roll and such a torturous effort? Opportunity. If someone offered to lease you a brewery for a reasonable sum each month you’d be crazy not to take it, right? And that is what came to pass with my friend JJ Phair of the EJ Phair Brewery in Concord, California. Phair is building a new brewery in Pittsburg, California with a 30 barrel brew plant in an 11,000 square foot building. Like most new breweries, this one is more capacity than he will need for the next few years. When I asked if he was interested in leasing me his unused space and time to use the brew plant (an arrangement the TTB calls an Alternating Proprietorship) he kindly agreed.

While many homebrewers have heard of contract brewing (an arrangement where a brewery agrees to brew your beer for a fee) few have heard of an alternating proprietorship. The problem with contract brewing is that in most cases you have very limited control over the process. As long as the beer brewed is close enough to what you ordered, you have to take what they give you. If you dream of going pro because you love the process of brewing, then contract brewing isn’t going to cut it.

However, the great thing about an alternating proprietorship is that you are your own independent brewery, with full control of your process and your product. You must get your own federal and state licensing, brew the beer, package and ship it, and do everything for yourself. You are just leasing the brew plant instead of having to come up with the capital it takes to purchase it. Think of it as similar to leasing a car versus buying a car. Compare that to contract brewing, which is like taking a taxi. As long as the taxi gets you close to your destination, you have to pay. You don’t have control over the driver or the car.

Of course, when working as an alternating proprietorship you still need capital for fermentors, kegs, malt, hops, and everything else, but that big expense of getting the brew plant up and running is gone. It is a huge savings and a great way to get started. It is a great opportunity and one that I couldn’t pass up.