Q&A: Kickstarting a Brewery Incubator in Houston

There’s a little idea that’s making some noise in the big, red state.

Lucrece Borrego and her boyfriend, Jesus Acosta, are in the process of launching a brewery incubator in downtown Houston. The incubator, which has been primarily funded through more than $36,000 raised on Kickstarter, a crowdfunding website, will serve as the country’s first operating collaborative brewpub and co-working brewery.

Entitled “The League of Extraordinary Brewers,” a collection of up to 10 brewers will share a 2-barrel system (which could grow in time) on a space of approximately 3,800 square feet.

“We want people that are very hands on,” Borrego said. “Actual brew craftsmiths in the house, and not so much people that want to invest in a brewery because they think it would be cool or the returns might be high.”

Borrego, who previously launched the Kitchen Incubator and Cafe Luz in Houston, said that six nanobrewers have already signed on to join the incubator: TBD Brewing, High Fidelity Brewing, Warlocks Games and Beer, Down Easy Brewing, Frostown Brewing and Spiller Artisan Ales.

Brewbound.com spoke with Borrego about her inspiration for the idea and the steps that follow. Excerpts from the interview are below.

Brewbound (BB): How did you first come up with the idea for a brewery incubator?

Lucrece Borrego (LB) : I opened the Kitchen Incubator three years ago. And I came up with that idea, actually, because I was interested in going to culinary school, but I come from a business development background. When I started interning in restaurants, I realized that there was really this niche where culinary artists were truly artists and really needed some advice and specialized consulting to take care of the business end of things. So I launched the Kitchen Incubator in 2010 and I’ve always been very interested in craft beer. I’ve gone to a lot of beer festivals and I’ve just always loved the beer and that part of the industry.

BB: I read on your Kickstarter page that the idea sprouted by a bunch of brewers hanging out in Cafe Luz. How did they end up there in the first place? You don’t usually think of brewers as coffee house kind of people.

LB: We would share our home brew with people if they came to the space or they came to one of our dinners. We were always giving people beer because we wanted them to try our beer and get feedback. So naturally that attracted other people that made beer.

BB: What about working at the Texas Beer Festival last year made you realize the possibility of this incubator?

LB: It was beer people…It was just kind of that catalyst. It was like: ‘I don’t want to run a coffee shop, I want run a craft beer bar. This is where I’m supposed to be.’

BB: How has your experience with the Kitchen Incubator helped you throughout this process?

LB: I have learned so much from the Kitchen [Incubator]. I don’t think I would feel comfortable doing the brewery incubator if I hadn’t been running the Kitchen Incubator for the past couple of years. Because with the brewery, we’re taking on the responsibility for the products that the brewers are making…I’ve learned a lot about doing that due diligence in terms of what I need in contracts for people using the space, how I should protect myself, how I should actually monetize the advice I give to people instead of just acting as a private consultant for free, how to structure the space, the time and appropriate pricing. And a lot of it has just been the due diligence of getting a feel for people that are a good fit for a co-working space.

BB: What is your role in this whole process, and what is Jesus’ role?

LB: I’m in charge of the business side of the operation. If you would think of a normal company, I would be the CEO/chairman of the board, and then Jesus would be the COO. He comes from an engineering background, so he’s designing all the equipment systems…He handles basically all the logistical operation sides of how the actual brewery itself functions. And he is the master brewer for our in-house brewing.

BB: I know you already have a pretty solid grounding in the city of Houston, but what makes Houston the right place for an idea like a brewery incubator?

LB: Houston doesn’t have a brewpub right now. That’s something the city needs. But from a community standpoint, our craft brewing community is pretty nascent, partially because of the laws, partially because that’s just the way it happened in Texas…We have a very tight-knit, very supportive community. This process isn’t going to work if we don’t have collaboration going on with other brewery or brewpubs.

BB: How did you get the idea to use Kickstarter?

LB: I always wanted to use Kickstarter for something. I love the crowdfunding platform. The whole idea of crowdfunding I think is so fascinating because I come from a finance background and I see a lot of small companies that think they should go to investors right away. They don’t really understand the concept of giving away equity in a company…If we’re going to use some kind of fundraising platform and I’m going to be paying a fee to that fundraising platform, I’d rather pay it to Kickstarter, which is an organization that I’m a big fan of, as opposed to a bank or some other type of platform.

BB: How many breweries do you expect to be a part of this?

LB: The maximum that we will be able to handle with the equipment that we have is going to be 10. So we have five other breweries right now and we’d like to do our house beers, but those will be lowest on the priority list, basically meaning that when everybody else is brewing and the brew schedule is full, we’ll work around that. But we will have our own fermenter for house brews and an additional fermenter for collaborative brewing, for whoever would like to come do a collaboration with us.

BB: Will tank space be evenly distributed among the brewers?

LB: The initial membership fee, everything is divided equally, but if they do want to add additional equipment, then we’re going to try to accommodate that as much as possible.

BB: Will this be a Houston only thing, or will you encourage brewers to eventually branch out?

LB: We would definitely encourage that, even if it’s on a contract brewing scale, where we could have a relationship with the contract brewer. They could come test out the idea of a brewpub or a brew lab on our small system and we could contract brew and distribute with them somewhere outside of Texas. That would be awesome.

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