Trade Secrets

breaking ties 2.jpgLongtime readers of this blog may have noticed a change in the content over the last year: now, my posts contain little-to-no information on recipes or brewing technique.  This, unfortunately, is the consequence of an ever-evolving beer market, increased competition, and time invested in R&D.

At this point, no one should have to tell you that adjunct-laden beers and hazy IPAs are dominating the hyper-local market.  If you want to move cans, you need to know how to brew good versions of these styles.  While pilsner and other regular beers will still sell great in taproom pint sales and distro, they do not generate the excitement that a can release of a more hyped-up style does.

Back in 2016, we started pivoting towards this trend, albeit without the canning line.  While our beers still need some work in my opinion, we are getting better at brewing some of these styles, and I’ve come up with some creative stuff in the pipeline soon.  In the meantime, we keep tweaking our beers to hopefully lock on to some good stuff.  Little changes here or there can eventually add up to something great, and mastering your production schedule to offer the right balance of beers and really optimize output is the other half of the equation.  Hopefully, this pays off and you see double can releases of some creative-yet-polished beers in the coming months.

Consequently, I am not going to reveal the techniques we’ve learned.  People will figure these things out eventually.  Ten years from now I think some breweries in the 10-15 BBL range will have expanded and begin offering distro, as larger breweries with multi-state distro and regional breweries that are either slow to adapt or make sub-par beer begin to close.  The most successful breweries right now are all the early adopters of these styles.  More people will start figuring them out, but until then good producers have a large competitive advantage.

One critical thing I will talk about is to reiterate the importance of scheduling and marketing.  Beer releases need to be consistent, i.e. 1-4 beers per week, appropriately marketed, i.e. good labels and social media leading up to it, and appropriately sized.  The last one is a bit trickier.  You need to make sure you don’t overproduce anything.  If you don’t sell out of the beer, people stop caring as much about it.

This last part can be really tricky for a brewery without an established demand for cans.  The issue you have is that some of these beers are so expensive to make that you can’t really distribute the cans and make much money, and there isn’t enough market for draught.  That last one really aggravates me.  I remember last summer sampling various buyers our Berliner with blackberries, vanilla, and milk sugar.  The reaction I got ranged from “this is weird” to “I like it, but I don’t think customers will.”  I happen to make my living off knowing what customers like, and I’m looking forward to a time when bar managers are caught up with today’s trends.  Fortunately, we have good bars like Meridian Pint, Churchkey, and others that we can sell some kegs to, but there aren’t enough folks running great beer programs to handle much volume unless you go outside your local market (not a bad idea, by the way, which I’ll discuss in my next blog post).

However trends change, whatever you do, I think you need to be true to who you are.  I am somebody who enjoys nearly all styles, so I get excited about brewing practically anything.  There is one style I don’t care for and won’t brew (and it’s super-popular) but otherwise I feel good about brewing anything.  Beer fans, I believe, can really sense in-authenticity.  Brew beer you believe in.  It’s important.

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Staff Retention

10648301_1071259959581417_362256683812601827_oCrooked Run has done one thing exceedingly well: staff retention.  With 20 employees on staff, we’ve added quite a few new members, but in five years of business, we have lost very few employees.  I think this is very important to the success of our business for a variety of reasons.  Why is staff retention so important, and how do you keep people on?  It’s not very complicated, but time and again I’ve seen the effects of neglecting to do a good job keeping people happy, and they can be devastating.

The biggest issue facing restaurants right now is personnel.  With Americans dining out more than ever before, restaurants are struggling to remain fully staffed.  A similar situation is facing breweries as well, with a shortage of both back of house and front of house staff.  For the time being, more breweries continue to open than close.  Finding and keeping qualified staff is harder than ever these days.

For taproom staff, the money can be very good, but there’s such a demand for servers and bartenders in our area that you can be fired from a job with very just cause and get rehired the next weekend somewhere else.  While a bar may have somewhat of a revolving door for employees, one very important thing to keep in mind is that your individual bartenders have regulars–sometimes friends, sometimes people they meet through the course of their work, but people who come to see them.  If your staff leaves, other people may too.  One bar in our area fired their entire staff, and, to their surprise, nearly their entire customer base went with them.  In addition, many bars and breweries suffer due to often times a single disgruntled employee.  I peruse Yelp fairly frequently, and I often see situations where one rude taproom staff seems to ruin the reviews for the place.

For brew side staff, the money is less, which means as an owner you need to find other ways to keep people on.  Hours are long, the work is tough, and upward mobility can be limited.

So how do you keep people on and happy?  It’s not really complicated.  You need to treat them well and pay them well.  That sounds obvious, but it definitely is not for a lot of brewery and restaurant owners.  You need to be aware of the effects of turnover.  If certain key staff leave, the short-term effects can be devastating, and the long-term effects can cost you a lot of time and money.  Basically, if someone is important, pay them.  Pay them more than the average pay for the position.  If your head brewer leaves, you could end up losing thousands per week in the interim.

But pay is only one thing, and can be limited by your revenue.  People actually don’t care about money so much as they care about recognition for a job well done, which can take many forms in addition to just extra dollars.  Find ways to make people feel better, feel included, and feel like they get something out of their continued hard work.

At Crooked Run, we do a few things to address these items.  First, we pay higher than average.  Second, we offer insurance and other benefits, and hopefully soon retirement plans.  And third, we genuinely care about our employees.  We’ll buy lunch for our staff once a week.  If someone is on the bar and needs a break to eat, I’ll cover for them.  I’ve helped our employees move.  I still mop floors.  We take our staff on company outings once a quarter to things like laser tag, go-karts, etc.  Lee and I still aren’t taking full salary, but all our key employees got substantial raises this year.  I tell everyone that as we grow, you can grow with us.  If we bring in more revenue, we can pay more.

Do this stuff because number one, it’s the right thing to do, but number two, it will lead to the long-term prosperity of your company.  So many areas of the economy are experiencing major disruption right now, and hospitality industries need to either figure out how to pay higher wages, or re-evaluate their businesses.

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Upcoming Beers

supernaturalteaserLast weekend’s golden sour release was a huge success!  Thanks everybody for the support.  I was really pleased with how our second bottled sour turned out…after Cuvee, I knew we needed to keep going strong with our mixed-ferm stuff and Nepotism was a nice follow-up.

Here’s a preview of what’s coming up.  We are going to be offering regular weekly can and bottle releases going forwards…some cool stuff in the pipeline! The goal is to continue to offer our cores on a regular basis but also some cool one-off stuff.  A greater variety of cans, more high abv 500 ml bottles, and 375 ml mixed-ferm sour bottles.

3/6 Without You: DDH IPA w/Ekuanot and Lemondrop.  Soft, pillowy, very mellow.

3/9 Firelight: A collab with Charm City Meadworks, this 16% wheatwine is made with avocado honey.  Bourbon barrel and rum barrel-aged versions available in 500 ml bottles.

3/9 Katana: DIPA w/cherries and vanilla

3/17 Skittlebrau: A collab with Eavesdrop, a gose conditioned on strawberry, lemon, and orange Skittles.

3/23 Sunshine Type: A collab with Turnover, an IPA w/lactose, vanilla, mango, pineapple, and guava.

3/30 Supernatural: saison w/hibiscus, Nelson hops

 

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Happy New Year

20180101_1222012017 has been a great year!  We brewed a lot of beer, learned a lot, and made new friends.  I am proud of all we have done in this year–cans, bottles, coolship beer, collaborations, and lots of new equipment.  What’s in stock for 2018?  Take a look.

Less rotation: Don’t get me wrong, we will continue to offer new beers.  But we’re going to start rebrewing some beers that really stood out.  Winners from this year are:

Envision IPA w/Vienna malt, Mandarina, and Sorachi Ace hops

Dedicated IPA w/Motueka and Denali hops

Only You IPA w/Comet and Citra hops

No Captain DIPA w/Ekuanot and Lemondrop hops

Noriega triple IPA w/pineapple

Dolce Vita BBA milk stout w/coffee

Best Days hefeweizen

Saving Light saison

Vibes Berliner w/blackberries and vanilla

Crankcase Baltic porter

Altruism dark sour w/elderberries

Nepotism golden sour

Cuvee coolship red

Mixed fermentation sours: Currently, we have five different iterations of a 30 BBL golden sour base fermenting with different yeast strains.  We also have 20 BBLs of coolship red fermenting as well.  We’ll be releasing a previous golden sour in one month that fermented for 8 months in barrels.  Look for more of these beers from us as time goes on, in both draught and bottle, and in distribution as well.  We feel as if the market is lacking this style in distribution, and I aim to fill that void.  I think we are already on the right track with 375 ml bottles.

Greater distribution: We are exploring adding another 40 BBL tank and also contract brewing Heart and Soul.  It’s become clear that we cannot brew enough to meet demand for distribution, especially in cans.  My goal of creating an accessible double dry-hopped IPA has paid off.  It’s really crazy–the first time we brewed into the 40 BBL, we were only planning to fill it halfway.  On the second turn of the system, we decided to just go ahead and brew four batches.  When we sent the beer out to distribution, it was more than I had ever put out.  I was very worried that it wouldn’t move fast enough, and spent the whole week going out and doing sales in the evening and pestering our distributor to help move it.  As it turns out, the beer sold out in two weeks, well before another batch was ready.  That made me feel pretty good, but a bit alarmed, since I promised a lot of accounts that it would be available all the time.  And cans…cans sold out in a day!  We cannot really distribute many cans on this scale and keep enough for the taproom.  I also absolutely loved a comment I read on a Facebook page.  “I love that I can go to Crooked Run and pick up a four-pack of Heart and Soul whenever.  It’s one of the best IPAs in the area and there’s no line.”  Not too bad!

Seasonal beers: If we can get another tank or contract brew, that means we can do some more seasonal beers for distribution and cans.  Expect to see Vibes (Berliner w/blackberries and vanilla) and Charm (super thick 7% milk stout) in cans, and Best Days (super hazy hefe) and Crankcase (Baltic porter) in distro.  We’re exploring roll-on labels and new shrink-sleeve cans so we can expand our repertoire of four-packs.

Expansion: We will hopefully be adding additional space at our Sterling location.  It’s become clear that we do not have enough seating, and we can also use some extra space for more fermenters.  We intend to add 3,000 sq ft of additional taproom space, a second restaurant, a stage for live music, and a separate sour facility.  Our existing Sterling taproom is undersized because of county regulations that went into effect in 2016 that limit taproom size to 20% of total square footage.  We are looking forward to having more seating and an area for private events.

 

 

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Upcoming Beers

Here’s a look at what is in the pipeline.  Reminder: dates not guaranteed and probably will change.

12/27 Crankcase Baltic porter

12/29 No Captain DIPA w/Ekuanot and Lemondrop CANS AVAILABLE

1/2 Only You IPA w/Comet and Citra

1/5 Sin Nombre imperial stout w/vanilla beans and cinnamon sticks

1/12 Verdant Force DIPA w/Citra and Simcoe CANS AVAILABLE

1/19 Halcyon IPA w/Galaxy and Blanc hops

1/25 Charm milk stout

1/27 NEPOTISM golden sour bottle release!

 

 

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Méthode Traditionnelle

MTpaintThis week, we are wrapping up winter coolship season.  We brewed six batches of our winter coolship red, Cuvee, for a total of 20 BBLs to work with.  I feel pretty good since I am really liking last year’s, and am stoked to have a lot more beer to work with next year.  20 BBLs is not a lot, but the fact that it is 6 different batches makes things a little more interesting.

Cuvee was meant to be a uniquely American sour ale, with a base of Red X and rye, and special mash schedule meant to mimic turbid mashing, the traditional labor-intensive mash and boil used by Belgian lambic brewers.  However, I’d like to also work on a Méthode Traditionnelle beer as well.  What is Méthode Traditionnelle, or M.T?  M.T. beers subscribe to a set of standards used by lambic and gueze brewers.  You can read about these standards and the background of the M.T. Society here.  In order to use the stamp pictured above, a beer must conform to these standards.

Mainly, the difference is that M.T. beers use a turbid mash, unmalted wheat, and aged hops, and Cuvee did not involve any of those.  While I think the schedule for Cuvee produced very good results, I am excited to try to produce a beer that adheres to these standards.

The base beer, which we will try producing in the spring, will be called Primo.  As per requirements, it will be made of 50% pilsner and 50% raw wheat.  Depending on the trajectory, we will experiment with producing some fruited versions with cherries or raspberries.

Overall, I am really happy to be able to make some of these beers and that we have had such success so far.  As a homebrewer I always dreamed of making sour beers like this.  They seemed so mysterious, but now we are starting to understand the process.  There is still a lot of mystery, but that is part of the allure.  You set up conditions to hopefully produce something good, and then roll the dice.  I am excited to see what we and some of our friends at other breweries are going to produce over the next few years.

While we wait, we have some more mixed fermentation sours nearing completion.  Our next release is a golden sour made with Flemish ale yeast blend and aged in oak barrels for eight months.  This beer, called Nepotism, will be released soon in bottles.  We really like the way this turned out, and have already started making more of it.

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The Realities of Running a Small Brewery

In Loudoun County, we have a lot of breweries, and even more are slated to open.  The business-friendly local government and plethora of flex warehouse space pretty much guarantees the majority of new breweries are going to open here.  I am happy for the success we have had, and I think we will do fine even as the market passes saturation and some breweries begin to close.  However, in my experience in the last three years I have seen an alarming amount of misconceptions about running a brewery, and I think if some people realized the inevitable endgame shaping up here, they might think twice about opening a brewery this late in the game.

First, a 10-15 BBL brewery is not going to make you a wealthy person.  If you have a head brewer on payroll, you are losing a big chunk of your profits.  Your scale isn’t great, it’s a ton of work, and you pretty much have to be an operating owner putting in 50-80 hours per week to make it work.  You might be reading that and thinking “I’m OK with working that hard.”  OK sure, but for how long?  How long until you start to miss spending any time with your family?  I’ve seen it happen.  Also, you might think you don’t have to work that hard.  Some people don’t.  They also don’t do even close to the revenue that we do.  In my opinion, if you invest in the plant, you put it to use.  If you don’t care about making any money, I would urge you to not open a business and take away revenue from people that need it.

Second, your numbers for distribution should be very conservative.  I have heard some just insane numbers from people opening/who have opened breweries.  The distribution market is so completely saturated at this point.  People have told me all sorts of things, like 200 BBLs/month in draught with no sales rep off the bat, or 420 BBLs/week on a 15 BBL system.  Ain’t happening.  What galls me is that I politely try to help people, but it is never well-received.  Well, I have been there and done it.  I spent all summer taking first shift brewing and then doing sales until bedtime.  All to move 6-8 BBLs of beer in distro per week.  I had to twist peoples’ arms to get them to put us on tap, and we make some decent beer.  I have done everything I can to help our accounts and distributor move more beer.  Now our stuff is moving and we have a rep, but that was not something that happened overnight.  I have heard rumors of some 40 BBL breweries in planning with zero industry experience.  That is insane.  No one should be opening with a 40 BBL brewery at this point in the game.

Third, if you are not brewing the beer yourself and selling it yourself, you’d better hire a real ace team.  You probably want to pull a brewer from a really good brewery–just a suggestion.  The beer industry has a lot of intricacies, and figuring out sales can be tough.  Your MBA is not going to be of much use here.  I handle brewing, production management, and sales management myself.  It’s nice in the aspect that I can coordinate planning across all three, but I am working essentially three jobs.  Sales has been the most maddening to figure out.  Constant rotation at bars means I may be selling a decent amount of beer, but I still can’t definitively tell you where we are on tap currently.

Lastly, here is the big one.  If you ever want to sell your brewery, its value will only be in relation to its profits.  If your brewery isn’t profitable, it will be worth its fixed assets, which currently get you about 90+ cents on the dollar.  Well, just wait a year or two.  That number is going to go way down.

You may think your brands or IP will be worth something.  Nope.  First, there is zero loyalty right now with thousands of breweries putting beer on shelves.  Unless you are pretty big, your brands are not worth anything.  Second, who wants brands or IP from a failed brewery?  I have seen two breweries for sale with asking price way over their fixed assets (and I have no idea what their debt is.)  What exactly would I be paying for here?

I hope if you’re planning a brewery and any of this was news to you, you don’t tune it out and think somehow none of this applies to you.  The next five years are going to be very interesting, and I am already seeing some surprising things.  Better bring your A-game.

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