Bend, Oregon Trip report

Greetings Hopfools,

Well, the last three weeks have been busy and productive.  Our trip to Bend, OR to attend the Oregon State University Craft Brewery Startup Workshop was great.

This was the first time this course was offered and is part of OSU’s Professional & Noncredit Education program.  There were ~40 participants with many others on a waiting list for cancellations.  There were attendees from as far away as Taiwan and Australia.  The participants were in various states of the process of opening either a brewpub or microbrewery.  Some of the attendees already owned brewpubs and were looking to make the transition to becoming a microbrewery.  Overall, the interaction and networking with the participants was almost as helpful and informative as the seminar itself.

The class was 4 ½ days and consisted of three blocks.  Leo Sharkey and Roger Woods conducted the first 2 ½ day block.  Leo Sharkey has a background in chemistry as well as an MBA and currently works for Siemens Water Technology.  Leo also serves as a mentor and coach at the Acara Institute and is an avid homebrewer.

Roger is senior lecturer at Michigan Technical University as well as a consultant specializing in helping startups, well start-up.  Like Leo, Roger is also a longtime home brewer.

Leo and Roger covered the following topics:

• Being an entrepreneur;


• How to write a business plan;


• Market research;


• Market resources;


• Accounting/finance;


• Microbrewery financial analysis;


• Risks and assumptions; and


• Strategy.

Leo and Roger where very accessible and offered some very valuable insights into the many nuts and bolts that go into to a craft beer business plan.  Overall it was very informative with much valuable feedback from Roger and Leo.

Roger and Leo have also agreed to review everyone’s business plan to select the one that they feel has taken the most away from the seminar.  The writer of the winning business plan receives a two-week paid internship at Ninkasi Brewing!  (We just submitted our plan this morning….fingers crossed.)

The second half of day 3 was devoted to the topic of sustainability.  Matt Shinderman did a great job but it was probably a bit more theory and information than was needed for this audience.

The management team of Ninkasi Brewing conducted the last 1.5 days.  I mean seriously, when was the last time you took a seminar and had the entire executive management team of an up-and-coming business devoted 1-½ days to tell you how to be successful.  Kudos to Ninkasi for sharing their time, insights and demonstrating one of the greatest aspects of the craft beer culture, commitment to community.

Ninkasi covered the following topics:

• History of Ninkasi;


• Ingredients and Materials Sourcing;


• Onboarding and Performance Management;


• Building a Company Culture;


• Managing growth;


• Sensory and Supporting Quality from Startup


• Trends and Opportunities; and


• Panel Q &A

Needless to say it was a great opportunity to hear how they have grown and all that they have learned along the way.  Jaime and Nikos, along with everyone on the Ninkasi team, were very approachable and did a wonderful job of making everyone feel at ease.  They also allowed us to have copy of their slide packet for reference, a real bonus. I have to say it was a fantastic opportunity to interact with the entire management team.

The organizers of this course also arranged for us to have dinner and meet/mingle with the founders of 10 Barrel Brewing.  Dinner was catered by 10 Barrel’s brewpub and we had free reign of the brewery.  We gained some very valuable insight along the way and got to ask lots of beer geek questions; it was great.  As with all of the people we met in Bend, the guys from 10 Barrel were consummate hosts and great to hang out with.

As for the location for the class, Bend was fantastic and inspirational.  The craft beer community in Bend is the stuff of legends.  Had some really great offerings from Boneyard Beer, Bend Brewing, Deschutes, Crux Fermentation, Worthy and the list goes on.  Didn’t get a chance to partake of any offerings from The Ale Apothecary, but they were epic from what I heard.  What was apparent is that even a town as small as Bend (~80,000) can support over 14 craft breweries/brewpubs.  In fact in my opinion, it is the “critical mass” of craft brewers in this area that has allowed it to become such a hotbed for great beer, and tourism.  We can only hope that we can be part of creating the same thing in NOLA.

Last but not least, there were a number of “one off” tidbits of knowledge that we picked up along the way.  These aren’t things that you necessarily think of at this point in the startup but are good to know.  So here’s my list in no particular order:

• Anticipate using 3 kegs a week for a local account and 6 kegs a week for an out of town account (when you start adding up all the kegs you need at $150 a keg shell you can see how this hammers your cash flow);


• You make more money on kegs then you do packaged beer. The only exception to this are 22oz bombers.  These give you your greatest profit.


• When you negotiate and agreement with your distributor, make sure there is a keg audit included.  This way your distributor has to compensate you for lost kegs.


• Those variety packs that everyone loves, yeah those get packed by hand.  Yikes that’s a lot of labor.


• Chinese made kegs with MicroMatic spears seem to work pretty well and cost less.


• If you decide to can your beer, just remember that empty cans take up a lot of room.


• You are never too small to follow good safety guidelines.


• Don’t forget to register your brewery with many of the online smart phone apps like “findmytap”.


• Startup with a good, and trusted, lawyer and accountant.


• Ideal ratio of accounts/distributor sales rep is 80:1 or less.


• In markets with limited shelf space you’re probably better off going with 22oz bombers versus 6-packs due to shelf space issues and profit margin.


• If you're going to do dock sales, use plastic kegs and add the price into the cost (note there was a recent fatality associated with filling plastic kegs so be sure you know what you buy since many believe that some plastic kegs are better than others).

Well enough with the business talk.  My session IPA is almost completely dry hopped and ready for carbonation.  I’m not displeased with what it tastes like to date but have already begun to reformulate the recipe for the next batch.  The Keezer is getting low so I’ll be brewing next week.  Due to popular demand, I’ll be brewing my American Pale Ale with a few minor adjustments.

In the meantime we are submitting RFPs for equipment and will meet with a design company to discuss our logo and brand later this week.  The Master Brewers Association of the Americas Annual Conference is in October and the program looks extremely interesting.  Hoping to address some scheduling conflicts and attend but if not there’s always the Craft Brewers Conference in April.

Cheers,

Mark

P.S.  Finally got to try Pliny the Elder...pretty darn tasty!