Brewbound Podcast

As Denizens Brewing prepared to open its second location in Maryland’s Riverdale Park neighborhood earlier this year, co-founder Julie Verratti was “staring down the reality of not knowing what you don’t know.” The company’s new 12,000 sq. ft. production brewery and taproom, which features a 30-barrel brewhouse, enables Denizens to produce about 10 times more beer than it did in 2018. The expanded brewing capacity also comes with additional distribution opportunities throughout Maryland, northern Virginia, and Washington, D.C. Working with wholesaler partners was something Verratti wasn’t as familiar with, however. Prior to the opening of its Riverdale Park location, Denizens had self-distributed all of its beer. But with extra brewing capacity and more beer to sell, the company needed to evolve. So Verratti got to work vetting and selecting distribution partners. Her process? “Interviewing a lot of distributors; asking other distributors what they thought of other distributors; asking retailers what they think; asking breweries what they think, and narrowing it down from there,” she said. In episode 44 of the Brewbound Podcast, Verratti discusses her experience opening a second brewing location, and explains why the company structured its debt around reasonable growth projections. She also dives into the topic of diversity and inclusion within the brewing industry and shares strategies for reaching a more diverse set of consumers. Listen to episode 44 of the Brewbound Podcast above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Chris Furnari and Justin Kendall, are published every Thursday. Episode 45 will be released on Thursday, July 18. For questions, comments or suggestions, please email [email protected]. Show Notes: 0:00 – 15:30: Chris Furnari and Justin Kendall introduce episode 44 and recap their Fourth of July vacations. 15:30 – 46:05: Furnari and Kendall interview Denizens Brewing co-founder Julie Verratti 46:05 – 1:14:07: Furnari and Kendall share takeaways from the interview, select their four-pack of all-time summer blockbusters, and do some “dumb journalist math.”

Although Oregon’s Ninkasi Brewing has scaled production to about 100,000 barrels annually over the last 13 years, the company’s growth and expansion strategy has remained rather modest compared to some other U.S. craft breweries. It never chased a national distribution footprint. It never attempted to build a brewery on the opposite coast. And it never took on too much debt to grow. “In retrospect, ‘thanks former self’ for being at least somewhat moderate in scope and decision-making,” Ninkasi co-founder Nikos Ridge joked during a recent interview for the Brewbound Podcast. Ridge — referring to his company’s tactic of selling 85 percent of its beer across three states (it has distribution in 12) and not growing too quickly — said Ninkasi always had a vision of becoming a “super-regional” craft brewery that didn’t need to rely on 20 percent year-over-year growth to service a larger chunk of debt. “Having gone through the process of negotiating a lot of the debt through our expansion, there were a lot of models that we passed on that would have been heavily impactful,” he said. “I can’t imagine what it’s like to try to manage 50 states of distribution where you’re thin and not really relevant across a giant territory,” he added. That’s not to say Ninkasi didn’t tap into bank financing to fund its expanded operations. In fact, the company completed a $24 million expansion in 2014, the last year it grew by double-digits. In 2015, the company’s growth slowed to 5 percent. Over the next two years, production declined 1 percent and 8 percent, respectively. Nevertheless, Ridge said Ninkasi’s decision not to expand beyond its means allowed the company to explore a variety of options when it came time to determine its next move. Ultimately, Ninkasi opted to sell a majority stake to Legacy Breweries, an upstart venture led by former Yakima Chief CEO Don Bryant that aims to acquire U.S. craft breweries. “Certainly, de-levering as a result of this partnership and putting ourselves in a position to be making investments again – in terms of potential acquisitions and other partnership discussions – is a great result, and part of why we did it, but it wasn’t driven by the need to de-lever.” In episode 34 of the Brewbound Podcast, Ridge shares his vision for the Legacy Breweries platform and explains some of the transaction options that are available to brewery owners. He also discusses how the proliferation of smaller craft breweries is impacting regional breweries, Ninkasi’s new hard seltzer offering, and how he sees the better-for-you alcohol space developing. Listen to episode 34 of the Brewbound Podcast above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Chris Furnari and Justin Kendall, are published every Thursday. Episode 35, which features an interview with Lawson’s Finest Liquids owner Sean Lawson, will be released on Thursday, May 9. For questions, comments or suggestions, please email [email protected]. Show Notes: 0:00 – 20:48: Furnari and Kendall introduce episode 34 and discuss the latest news 20:48 – 58:30: Furnari interview Nikos Ridge 58:30 – 1:21:31: Furnari and Kendall share their takeaways from the interview and rundown segments

Fresh off a $3 million capital infusion from investment firm Circle Up, Fort Point Beer Company appears poised for another year of double-digit growth. Since its launch in 2014, the San Francisco-based craft beer company has grown its revenue from less than $2 million in 2015, to $14.6 million in 2018, and its production has swelled to nearly 35,000 barrels. Along the way, Fort Point’s employee count has also grown to about 200, largely due to a robust self-distribution division that has helped give the company a competitive advantage in a crowded marketplace. During a conversation with Brewbound editor Chris Furnari, Fort Point founder and CEO Justin Catalana said self-distribution has been “tremendously helpful” when it comes to setting a go-to-market strategy. “Not to squash any of the distributors that are here, they are just frankly not able to take a new brewery and bring them to market as effectively as doing it yourself,” he said. In episode 27 of the Brewbound Podcast, Catalana shares his plan to grow Fort Point’s revenue to as much as $22 million in 2019, while hiring another five dozen employees. He also discusses the pros and cons of self-distribution, why the company takes a debt-averse approach to financing growth, and how it builds strong core brands at a time when breweries and consumers alike are chasing new beer offerings. Listen to episode 27 of the Brewbound Podcast above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Furnari and Justin Kendall, are published every Thursday. Episode 28, featuring Brewers Association chief economist Bart Watson, will be released on Thursday, March 21. For questions, comments or suggestions, please email [email protected].

Brendan Sindell is on a mission to bridge the gap between major domestic and craft beer offerings. “I grew up drinking major domestics in college and I found myself drinking them out of habit,” he said. So Sindell created House Beer, a sleek-looking lager brand targeted to millennial consumers who “don’t want to drink their dad’s beer.” The Venice, California-based beer company, which counts Ashton Kutcher and the Winklevoss twins among its investors, only makes one product – a “premium crafted lager.” “The strategy behind just creating a sessionable craft lager in five different SKUs allows us to be extremely focused,” Sindell said. He’s betting drinkers still want to drink lager beer, despite the fact that some of the country’s largest brands – Budweiser, Heineken, Pabst, and others – are in decline. “We’re starting to get a lot more attention,” he said. “I think the rise of Modelo, [Michelob] Ultra, Pacifico, Corona has a lot to do with it. The consumer that was once drinking the big four is trading up to those beers, and that is kind of where we lie.” In episode 20 of the Brewbound Podcast, Sindell discusses House Beer’s value proposition, the company’s distribution and growth strategy, the challenges and opportunities of selling a single product offering and why his investors remain interested in the beer category despite declining volumes. Also in this episode: Brewbound editors Chris Furnari and Justin Kendall discuss Super Bowl storylines, the closing of the Widmer taproom in Portland, Oregon, and key executive hires at Sierra Nevada and MillerCoors. They also share some social media accounts to follow and discuss the latest “Beer Twitter” debate over craft breweries using unpaid volunteers on packaging day. Listen to episode 20 of the Brewbound Podcast above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Furnari and Kendall, are published every Thursday. Episode 21, featuring former Guinness brewmaster Fergal Murray, will be released on Thursday, January 31. For questions, comments or suggestions, please email [email protected].

Josh Landan is back in the beer business. Landan, who co-founded Saint Archer in 2013, sold the San Diego craft brewery to MillerCoors in 2015, and departed the country’s second-largest beer company in 2017, has launched a number of new startup ventures based in Southern California. Those new businesses include a craft-focused beer and wine wholesaler called Scout Distribution, and a new craft beer brand called Harland Brewing, and a wine label called Claxton Cellars. Landan is also the co-founder of Villager Goods, a company that makes non-alcoholic beverages, as well as organic kids juices and snacks. But the impetus to rejoin an ultra-crowded and intensely competitive craft beer segment was not only aimed at building new companies with his closest friends but also helping other alcohol beverage entrepreneurs avoid some of the pitfalls associated with running being a startup. “When I got into Saint Archer, I didn’t know anybody or anything,” he said. “I needed help. There were so many questions. I didn’t know anything.” In episode 19 of the Brewbound Podcast, Landan talks about his time building the Saint Archer brand and the lessons he learned as a first-time entrepreneur. He also discusses the differences between building a beer company and a non-alcoholic beverage company. Also in this episode: Brewbound editors Chris Furnari and Justin Kendall discuss the early 2019 headlines and storylines. Furnari and Kendall also make some predictions for the new year and provide an update on the Goose Island field goal challenge. Listen to episode 19 of the Brewbound Podcast above, as well as on iTunes, Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Furnari and Kendall, are published every Thursday. Episode 20, featuring House Beer founder Brendan Sindell, will be released on Thursday, January 24. For questions, comments or suggestions, please email [email protected].

Jim Woods, the founder of Bay Area-based Woods Beer Co., opened his first brewpub location in San Francisco’s Mission District in 2012. But in the six years leading up to the opening of what he calls the “Woods Cervecería,” Woods had been selling a yerba mate-infused IPA called MateVeza, as well as two other offerings, that were brewed under contract and distributed to a handful of Western states. That exercise – brewing bigger batches of beer, partnering with distributors in non-local markets, and attempting to sell consumers on a relatively unknown brand – proved to be both costly and inefficient. “I was doing a lot of ride-alongs and growing the business, but I wasn’t seeing the kind of growth that I wanted to,” Woods said. “I just didn’t feel like I was making an impact or doing anything for my brand,” he added, noting the daily visits to retail accounts such as Whole Foods. So Woods did what any smart entrepreneur would: He pivoted. “I wasn’t seeing the scalability and I wasn’t breaking into the awareness of the customer that I wanted to, solely through being on the shelves,” he said. In 2012, Woods — who now oversees five locations throughout San Francisco and Oakland – began focusing his resources on a taproom-focused business model that enabled him to have a “more tangible relationship with the customer.” “Having a mecca, a brick-and-mortar where people can, you know, slip on a puddle and fall into the arms of their future wife,” he said. In episode 15 of the Brewbound Podcast, Woods discusses his company’s shift from a distribution-focused business model to a retail-minded operation. He also talks about the difficulty of trying to build a new product segment – in his case yerba mate-infused beer – and the challenges small breweries face now that thousands of competitors have flooded the space. Also in this episode: Brewbound editors Chris Furnari and Justin Kendall share the latest news, including information about a new co-packing facility in New Hampshire, details about equipment manufacturer DME’s receivership, and an update on Drizly’s latest round of funding. Listen to episode 15 of the Brewbound Podcast above, as well as on iTunes. The episode is also available on Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Furnari and Kendall, are published every Thursday. Episode 16, featuring Brooklyn Brewery CEO Eric Ottaway, will be released on Thursday, December 27. For questions, comments or suggestions, please email [email protected].

Delaware’s Dogfish Head Craft Brewery is bucking industry trends, growing off-premise volume sales at a double-digit clip, while many other similarly sized craft beer companies struggle to stay out of the red. So how is Dogfish doing it? If you asked co-founder and CEO Sam Calagione, he’d tell you that a relentless focus on producing high-quality and well-differentiated beers has helped his company avoid being chewed up by what he calls the “smiling jaws of death.” “There is the lower jaw, that has tons and tons of tiny teeth – which are the local and hyperlocal breweries, mostly oriented toward the tasting room,” he said. “And then the top level, there are the big ass teeth. The volume brands that are either indie brands like Dogfish, and Sam Adams, and Sierra, and Yuengling, and Bell’s. And then affiliate brands, that are really owned by global conglomerates, but market themselves like they are American indie craft breweries.” Calagione believes that, as the industry approaches 7,000 craft breweries, successful beer companies will need to either remain small and hyperlocal or be forced to invest large amounts of money in an effort to “break through the noise of the top 50 brands,” and “go up the ladder of your distributors.” “There are very little opportunities in-between,” he told Brewbound. “There are breweries that are over their skis in terms of investment in their equipment, but also over their skis in terms of five, 10, 20-state distribution networks, but they don’t have the resources to support a broad geographic distribution base.” In episode six of the Brewbound Podcast, editor Chris Furnari and Calagione discuss how Dogfish Head is “navigating the noise” of 7,000 small breweries, how other craft breweries can grow without taking on too much debt, and how Dogfish Head has financed its own expansion in recent years. Throughout the conversation, conducted during Dogfish Head’s annual distributor meeting last month in Baltimore, Calagione explains the benefits of remaining a small, taproom-focused brewery in today’s competitive marketplace, why he is bullish on the Brewers Association’s independent craft brewer seal, and how he envisions the marketplace evolving in the coming years. Also in this episode: Furnari and Brewbound assistant editor Justin Kendall share the latest news and run down segments. Listen to episode six of the Brewbound Podcast above, as well as on iTunes. The episode is also available on Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Furnari and Kendall, are published every Thursday. Episode seven, featuring Hops & Grain founder Josh Hare, will be released on Thursday, October 25. For questions, comments or suggestions, please email [email protected].