Brewery and beverage incubator Pilot Project celebrated its fifth anniversary in August, and is now setting its sights beyond Chicago and Milwaukee, toward becoming a nationally recognized name.
In the last five years, Chicago- and Milwaukee-based Pilot Project has grown from 15 employees, to 130, and from producing 500 barrels of malt beverage, to about 70,000 barrels of bev-alc across various categories.
Since its inception, Pilot Project has helped launch 20 beverage brands, including Luna Bay Hard Kombucha, Funkytown Brewery, Azadi Brewing, Donna’s Pickle Beer, Cerveceria Paracaidista, Mash Gang non-alcoholic beer and more. The company’s business takes inspiration from record labels – co-founder Dan Abel’s former career – offering bev-alc brands resources such as recipe creation, production, marketing, brand building and distribution.
“We look at the role that Pilot plays in innovation and all that it plays in diversity,” Abel told Brewbound. “When you lower the barrier to entry, you start to see a more accurate reflection of what the world looks like.”
Moving forward, diversity does not only mean the variety of founders and brand stories, but also the variety of products going through Pilot Project’s system, Abel said.
“I love that in watching this industry as regulations soften and the definition of what is beer versus wine versus spirits gets more and more murky, it allows so many more creative ideas to thrive,” Abel said. “So now we have diverse people and wildly diverse ideas coming to Pilot Project every day.
“We recognize that our portfolio could widen so much further because we are now licensed across the entire spectrum of beverage,” he added. “We just launched two non-alcoholic brands. We’ve launched the kombucha brands. We’re in the midst of launching cannabis. We have an RTD [ready-to-drink canned cocktail] in the market now. That’s the space that we get to live in.”
In late 2022, the company acquired Milwaukee Brewing’s former facility in Wisconsin in an $8 million deal, allowing it to ramp up the speed it can grow brands, and expanding its distribution reach. The company’s brands can be distributed in up to 15 states as of November, with five more states being added in the next six months.
With the Milwaukee location comes additional tank space, with Pilot Project using only 50% of its available capacity at this time. Some of the idle tank space is sold for contract brewing, allowing Pilot Project to learn from other businesses who are producing products that Pilot Project’s brands have yet to try, including cannabis and spirits.
“This isn’t just about lowering a barrier to entry anymore, this is about helping someone learn faster,” Abel said. “And how do you do that as an accelerator? It’s not just about, ‘Here’s enough money to make more product.’ It’s ‘These are all of the potholes that you could fall into, and here’s how to avoid them.’”
Beyond expanding product offerings, Pilot Project is also setting its sights on expanding the brewery incubator concept to outposts across the U.S., allowing more brands to have a physical space to test innovation products and connect with consumers.
“We’ve validated the concept of an incubator,” Abel said. “On top of that, we’ve now built in the system to allow our incubator brands to not just launch and validate but actually scale nationwide.”
Pilot Project is actively trying to “lock down” two new locations in the next year, with Southern California and Nashville, Tennessee, as top prospects. Once the company has the “bandwidth” to scale more quickly – investing more in personnel and marketing – Abel hopes they will add an additional 3 locations annually for the next couple of years.
The new locations will replicate Pilot Project’s Chicago facility, which has a smaller brewing operation and taproom, with a variety of the company’s brands available. The taproom serves as a proof of concept for brands, which becomes “really, really valuable information to share with distributors [and] to share with the likes of anyone paying attention to us in the industry,” Abel said.
“The benefit that we have is we get to validate this brand or this idea so quickly in terms of the need,” Abel said.
The new locations will also give Pilot Project greater flexibility with the type of products it can help launch.
The way Pilot Project operates now, founders can submit an application online, and then have a phone conversation with the Pilot Project team about their brand and ambitions, followed by a Shark Tank-style pitch at the facility. In the pitches, the company looks for three things: good product, brand vision and whether a founder can be an “operator.”
“I don’t know that you have to be all three, but I think you have to knock two of them out of the park,” Abel said. “I hope one of those two is that it’s a killer product, but you have to knock two of them out of the park and the third one we can help you with.
“What has evolved over time is that we cannot be your crutch,” he added. “We are the system that you get to make the most out of, but if we’re your crutch, then we may as well run your business, and that’s not the point. And the necessity of being a strong operator is becoming more and more and more important.”
A hurdle for Pilot Project is location, with some brands missing out on the benefit of having a presence in their local communities because Pilot Project does not operate there. For example, its hard kombucha brands are both California-based, and could have had the potential to scale even faster if they had a physical presence in hard kombucha-rich markets in California, rather than Chicago, Abel said.
Additionally, Pilot Project hopes to better market itself as a company behind the brands and products it’s supporting.
“One of my aspirations, really, in the next year is to start to shed more light on what is this Pilot Project thing,” Abel said.
“The line that I used with our team is, ‘We kind of have to start taking credit for some stuff,’” he continued. “Because it’s only going to benefit our brands if we start to take credit, because then they’ll be guilty by association. And then on top of that, as any future brands are going to be, their positioning is going to be improved by people looking at Pilot Project a little bit differently.”
However, Abel emphasized that Pilot Project will never put itself and its name before its brands, avoiding the route of some existing brand platforms that have its brand “in the background,” á la something like CANarchy (now Monster Brewing), Abel said.
“We will never do that actively as a strategy, because it doesn’t behoove us, and because they’re not all owned by us – in fact, they’re mostly not,” Abel said.
“Even in the world of platforms and mergers at the more local, regional level, it’s about how do we make sure that Pilot is perceived as this platform, but from the perspective of being in the background,” he continued.
Pilot Project also plans to be more “proactive” in recruiting brands that would work with its incubator/accelerator program, rather than having all brands come to the company first. The COVID-19 pandemic had droves of applicants seeking Pilot Project’s help with scale – including a man flying in unannounced from Brazil. Now, the company wants to seek out more potential collaborators itself, coming back full circle with Abel’s music industry inspiration.
“I like the idea of starting to be a little bit more proactive in finding talent the way that a record label would have a scout out there,” Abel said. “I want to be able to do the same thing.”