Karl Strauss CEO Shares Tips to Building a 100-Year-Old Business at Brew Talks GABF

Chris Cramer and Matt Rattner set out to build a 100-year-old brewery when they founded Karl Strauss Brewing Company in 1989, Cramer shared during a recent Brew Talks meetup held at Great Divide Brewing Company earlier this month.

In a one-on-one conversation with Brewbound editor Chris Furnari, Cramer, the CEO of Karl Strauss, shared the strategies that helped grow the brewery from a single downtown brewpub into a distributing brewery with 10 satellite locations throughout Southern California.

Building a business that will last 100 years requires an understanding of your competitive advantages as well as the capital sufficiency to seize on opportunities, such as buying pricey equipment for “pennies on the dollar” at asset sales, Cramer said.

“Matt and I joke that we’re somewhat bottom feeders,” he said. “We’ve taken over failed restaurant locations. We’ve used other people’s assets that haven’t been purposed correctly. Most times people go out of business because they’re undercapitalized.”

Cramer believes that a wave of brewery closures and cutbacks is looming, which he said will lead to a lot of “good opportunities” to buy equipment.

“If you have the cash and you are ready to jump, you’re going to be able to save yourself a tremendous amount of money,” he said.

Cramer added that the number of entrants into the marketplace has exceeded what is sustainable. He predicted that as breweries struggle, many will deploy “bad business practices,” “behave badly” and “die horribly.”

“If you want to be successful, you have to stay above the fray,” he said. “If you lose the value of your product because you’re trying to compete on price, you’ve already lost the war.”

In the video above, Cramer shares tips on appealing to different types of investors, the importance of buying the property your brewery sits on and the advantages of accepting private debt versus bank debt, which he said gives you “the most friendly bankers in the world — your own investors.”

“Why would they call your debt?” he asked. “It’s just going to end up screwing their equity investment. It’s a structure that’s worked really well for us.”

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