2012: The Year In Review

On Dec 31, 2012 - 1 Comment - Start-Up

2012 was a big year for Modern Times because it started to exist. On January 13th, 2012 I left my job at Stone Brewing Co. to wade full-time into the messy slog of building a beer factory from the ground up.

The ensuing 12 months consisted mostly of long stretches of hyper-anxiety dotted by brief moments of elation. I haven’t been shy about this, and a few people have pointedly questioned why I’m not constantly stoked out of my freakin’ gourd to be following my dream. In almost every case, these are people who have either never started a business or have profoundly delusional financial instincts.

And while many new business/brewery start-up blogs are a flurry of excited exclamation points, I know that’s not the reality. Several people have tried to convince me that it’s just me, that all the other new business owners are relentlessly upbeat cheerleaders for their fledgling enterprises. But I talk to the founders of new breweries all the time, and what I hear is the opposite.

They often feel obligated to maintain a positive façade because they believe that’s how marketing is supposed to work, but personally, they’re a wreck. The owner of one (excellent) new brewery told me that he survived on nothing but Clif Bars, gum, and Red Bull for six months. The anxiety in his voice was so intense I worried for his well being, and I handn’t even met the guy. Probably because my background is in social media marketing, I feel like my only obligation is to give people a look behind the scenes, no matter how messy it is back here.

So from a personal perspective—which is also essentially the perspective of Modern Times, since I remain the only employee—2012 has been incredibly taxing. But, the result of all that stress and panic has been pretty momentous.

First, I roped Mike Tonsmiere into working with me on developing recipes, and perhaps, if everything goes swimmingly, coming to work for the brewery. Since then, we’ve worked on a lot of recipes together, producing several very promising beers and at least one outstanding beer.

Second, I went from being an unemployed guy with a business plan to a guy with $1.25 million of investor money and a business plan. Fundraising was harrowing, but I pulled it off with assistance from several other people. Obviously, that has made the rest possible.

Third, I found and leased a 12,540 sq. ft. industrial building in Point Loma. It would be difficult to overstate how challenging it was to locate a building in the urban core of San Diego suitable for a production brewery, and the search often ventured into absurdity. But again, with the help of others, I got a killer building in a convenient location.

Fourth, I hired a contractor and an architect; I also ordered a brewing system. These were difficult and extremely expensive decisions, easily adding up to more money than I’ve earned in my entire life. But I feel like I ended up making the right choices even though they were made under tremendous pressure.

Fifth, we began construction, and I applied for a brewing license. And that’s where we are now.

So from 10,000 feet, that looks like pretty good progress for 12 months, and even though it’s been trench warfare on the ground, I’m thrilled to have made it this far, this fast.

The Evolution of a Recipe

On Dec 17, 2012 - 9 Comments - Beer

Victories tend to get lost in the endless swirl of stress that characterizes the brewery start-up process. There is such a constant need to solve major, project-threatening problems that lingering on the rare successes isn’t really an option.

But Modern Times had a major success recently, and I want to dive-in to how it happened. The success: we brewed a really great beer. A beer that I think is going to be huge for us. A beer that will likely be a big part of our identity.

From my earliest days as a beer geek, I’ve thought about the beers I would make if I ever started a brewery. It’s the subject of near constant threads on BeerAdvocate, and I played the game almost every time. My lists have evolved as the hardcoreness of my beer geekdom has intensified: from introductory-level craft beers, to high-gravity sledgehammers, to complex sessionish beers, which is where I am now. When I actually started working on the brewery, I used my most recent list to decide what we’d brew. Near the top of my list was a hoppy wheat beer.

As you’re probably aware, soon after leaving my job at Stone, I recruited Mike Tonsmeire to work with me on recipe development. Since that major victory (now almost a year ago), Mike and I have exchanged 807 emails, the vast majority of them hashing-out recipes (the two in-person visits we’ve had probably spared us at least 200-300 additional emails).

It typically works like this: I give Mike the concept for a beer (in this case, “a hoppy wheat beer with loads of Citra, kind of like a cross between Gumballhead and Zombie Dust”) along with a few recipe suggestions (“around 50% wheat and a touch of some medium crystal; Hopshot for bittering”), and then Mike comes back to me with a specific recipe. In this case he suggested Amarillo along with the Citra/HopShot and perhaps hef yeast, to which I responded with the unfortunate idea of replacing Amarillo with Calypso and splitting the batch to try out both yeasts.

Mike then brewed the beer and sent me 6 bottles of it. The Calypso didn’t work out, either because it’s a weird hop or because the hops we got weren’t good quality. I tasted a fantastic sample batch of Stone IPA dry-hopped with Calypso, so I lean towards the latter (something I’ve learned from working in the beer industry is that homebrew hops are often terrible by comparison). We haven’t ended up experimenting with hef yeast.

After we agreed to ditch the Calypso and return to Citra/Amarillo, Mike made some changes to the crystal malt and began using the HopRocket (a homebrew hopback) I sent him, an apparatus I’ve been pushing hard. Unfortunately, the second batch ran into some fermentation issues, and ended up finishing too dry. The resulting beer was thin and a bit astringent and also lacked the vibrant burst of hop aroma we both wanted.

For the third batch, we agreed to up the crystal a bit (Mike was hesitant but preferred more CaraVienne to the Melanoidin I suggested; he won since that was all he had on hand) and increase the already heavy hop bill.

When I tasted the resulting beer, it was immediately obvious that this concept was worth all the back-and-forth. I had been a little discouraged when the second batch didn’t seem any closer to my original vision than the first. The third version, though, is outstanding.

Mike called it “a real beer nerd session beer”, which is exactly what a Modern Times beer should be. The beer isn’t 100% final, but it’s almost there; the HopShots I’ve been pushing don’t seem to produce a totally satisfying bitterness. A dash of Columbus should fix it.

Nonetheless, tasting such a successful beer feels like a real vindication of the collaboration between Mike and I. The recipes really are the product of us both, along with many influences from the great commercial beers we love.

So far, it seems to be working. I can’t wait to produce enough of this beer to share with a wider audience.

How Much Does It Cost to Start a Brewery?

On Dec 10, 2012 - 28 Comments - Start-Up

In September, I wrote a post for Beerpulse about how I’d raised $1.25 million to start the brewery. Last week, when I asked Modern Times’ Facebook fans for suggestions on my eventual Kickstarter video, a few people were like, “Whoa, whoa, WHOA there, Mr. Moneybags, what do you need a Kickstarter campaign for seeing as you already got all that sweet, sweet money? Eh, Lord Bountiful?”

It may sound ridiculous, but it never occurred to me that anyone would think $1.25 million was a huge sum given the task at hand. If you found it in a suitcase, yes, it would seem like a lot, probably because you’d start thinking about how much coke you could buy with it. If it were your annual salary, then yup, that’d be a lot too, even though you’d probably have an absurdly distorted sense of your own relative wealth and deny it like a jerk. But if that’s all the money you have to start a 30 bbl brewery, then no, that is not a lot of money.

Can you start a 30 bbl brewery for less? Absolutely. There are all kinds of ways you can compromise quality, sacrifice worker safety, put off crucial purchases, make yourself inefficient, and worsen the consumer experience that will save you money.

That statement may make it sound like I have unreasonably high standards, but trust me, I do not. Some perspective: there are many, many new breweries that have smaller brewing systems, smaller buildings, and smaller ambitions that have raised a lot more than $1.25 million. And spent it all. And needed more. The difference is that most people won’t tell you how much money they raised, so you don’t get to question their fundraising choices.

My general approach to start-up expenses is pragmatic. I don’t care if something is used or looks like shit or isn’t hyper-efficient from the get go. Initially, the brewery just has to function well enough to make beer that meets reasonable standards for quality while being a decent place to work and visit. The basics.

But what are “reasonable standards”? Some would argue that a brewery couldn’t meet “reasonable standards” of quality without a laundry list of items that others would consider decadent, sinful luxuries.

I, for instance, consider a 3-vessel brewing system an unholy luxury, but there are oodles of start-ups that feel a need to have 3 and 4 vessel systems. Some people consider a North American made brewing system an absolute necessity; I do not. Hell, some people see sloped floors as a luxury (and there are large, successful breweries with floors that are goddamn stinking pietri dishes of multi-colored molds and fungi who still make excellent beer, so clearly it can be done), but I do not consider sloped floors a luxury. And that will end up costing me over $50,000.

So each day, I have to decide what standard I can set with the budget I have. Rest assured, it is not an excessively high standard. A grain silo, more sloped floor space, a third 30 bbl fermenter, a spent grain removal system, a separate mash mixer, a well-equipped lab, a decently sized pilot brewing system, and a tasting room cold box are all items I’ve said “no” or “maybe” to recently because of budget concerns.

The absence of those things will impact the consumer experience in one way or another. I could afford all of them if I’d raised twice as much money. But I didn’t.

So when you see me launch the Modern Times Kickstarter campaign, it will be those kinds of things that generous donors will be asked to finance. Things that will make their experience of the beer and the brewery better. Because whatever those things are, I can’t afford them right now.

Starting a Brewery is Mostly Not About Beer

On Dec 3, 2012 - 10 Comments - Start-Up

Work on Modern Times has finally gotten to the point where it makes sense for me to start offering regular progress updates. Now that I have a building, there’s more or less a defined series of steps between here and opening day. That is a good thing.

For those of you familiar with the “I’m-starting-a-brewery” genre of blogging (and I am über-familiar, having read countless such blog posts as I ramped up this project), it’s pretty well-tread ground. So I’m going to take a slightly different approach. Rather than just updating you on the minutae of construction and licensing schedules, I’m going to dive a bit more deeply into one aspect of the process each Monday.

Today’s theme is beer, or rather, the absence of it. One of the remarkable and frustrating things about starting a brewery is that, for the most part, there’s very little beer involved.

Most of the issues I work on would be the same whether I were starting a brewery or a cardboard box factory. The first stages, fundraising and entity formation, have almost nothing to do with beer. An LLC is an LLC regardless of what it does, and money is money regardless of what it’s used for. So that was a solid 6 months during which beer was almost exclusively the provenance of my email exchanges with Mike, in which we’d hash out the recipes for the test batches he’d be brewing. That occupied about 2% of my time.

Finding a building was similar. There are the specific and somewhat exotic logistical requirements for a brewing facility (clear height, utilities, etc.), but every factory has certain needs. There was the small consideration of the tasting room but—other than occasionally asking myself, “Would anyone in their right mind come to this place for a beer?”—it wasn’t the driving force behind the location search. Finding a suitable, affordable building was far too difficult to be picky about things like ambiance or architecture. (Alright, maybe I was a little picky.)

Ordering the brewing system was probably the most beer related thing I’ve done yet, both because of the self-evident fact that it’s what we’ll make the beer with, but also because the details of the brewing system are driven in large part by beer style choices. Critical issues like lauter tun diameter, platform design, tank mix, port location, and a million others are driven by the kinds of beers that will be made on the system. (That these decisions also have many tens of thousands of dollars in immediate consequences adds some, uh, gravity to the process.) (Terrible, terrible pun.)

I’ve almost finished hashing out these issues with the help of half a dozen very knowledgeable and skilled brewing folks, and while it’s been stressful (as everything is), it’s also been quite fascinating. The good news is that tanks are set to arrive in mid-February and the brewing system in early-to-mid March. How long it will take to get the doors open after that is anyone’s guess.

Construction is next on the horizon, and while it will occupy a huge amount of time and money, it will not be particularly beer-related. Sure, the building will need to house a brewing system, but most of the struggles will undoubtedly be related to things like building codes, which are mostly the same regardless of what a business does. For instance, whether I was starting a brewery or a trapeze academy, I would have to spend a great deal of time and at least $15,000 making my bathrooms handicapped accessible.

The reality is that I work on issues like recipe formulation and test batch brewing—the tasks about which I am most passionate and enthusiastic—as a break from my “real” work, i.e. the work of starting a factory.

If all of this makes me sound like a Debby downer, my point is just to warn others who might want to start their own brewery. If your goal is to immerse yourself in beer (non-literally), consider that I spent far, far more time thinking about beer as a homebrewer and beer trader. Opening a brewery to devote yourself to beer is like opening a hospital to devote yourself to surgery.

Mercifully, the closer Modern Times gets to actually existing, the more beer-related my work becomes. Running the brewery will, of course, include countless non-beer related issues too, but hopefully by that time I won’t still be the only employee.