Locals Breaking-Out!
There are two small
Massachusetts breweries that are edging up toward a
break-out point – Berkshire Brewing, in South Deerfield, and
Wachusett Brewing, in Westminster, passed the 1O,OOO bottle
a year mark in 2OO3, and both are sustaining steady
growth.
Interestingly,
both have reached that mark largely within the state
borders, and ardently desire to stay here, seeing the state
market as one that has plenty of room for them to grow. This
is a story that is being repeated across the country as
small brewers dig deep in their home turf and find
surprisingly strong support.
I talked to Ned LaFortune
of Wachusett and Gary Bogoff of Berkshire about where
they’ve been, how they got to where they are, and where
they’re going.
LEW
BRYSON How did you
get started, and why did you do it?
Ned
LaFortune We opened
in 1994. We opened because I had two perfect partners to
found a business with, Kevin Buckler and Peter Quinn, and we
were extremely passionate about making beer. We love beer.
We loved beer in college, we loved beer outside of college.
We were interested in it, fascinated by it. We bought beers
from stores that had the interesting stuff, we got to be
known there. We’d pop in the door, do you have this or that?
We started homebrewing because of our interest. We weren’t
content with just brewing a five gallon batch on the kitchen
stove, we built what was essentially a pilot system for
recreation purposes, so we could make enough to make it
worth our time. It was all on my parents’ farm, here in
Westminster. That’s how we ran the well dry, and got kicked
off the property.
I had a lot of experience
with mechanics, which was directly applicable to brewery
construction. We were able to design a lot of our own
original equipment, and build it, which kept the overhead
low and still created what we need to make a quality
product.
Gary
Bogoff We went into
the public market on October 1, 1994. My partner, Chris
Lalli, and myself were avid homebrewers and loved beer. I
had always worked for myself as a general contractor. Chris
had been a laser technician, working with welding lasers –
he used to make pacemakers, things like that.
We both loved beer. We were
brewing 10 gallons at a time, and that wasn’t enough. We
first thought we’d open a brewpub, then realized that
neither one of us had ever been a restaurateur, or a brewer.
We figured, well, let’s do one, and then if it works, we’ll
try the other. We started off with a little 7 barrel
brewhouse, and in the past ten years it’s been nothing but
constant state of change. As we speak, we’re doing our third
major renovation. We’re doubling the size of our facility,
and we should be able to triple our brewing capacity. We’re
expanding tanks and giving ourselves more production area –
our brewhouse is still the same 20 barrel brewhouse.
LB
What beers do you brew, and why those beers?
NL
Wachusett Country Ale is our flagship. It’s our best seller,
what most people get when they order a “Wachusett”. We
designed it as our first beer because we thought it was a
beer we could sell in our local area, and it’s proven to do
so, it’s one of the best-selling ales in central
Massachusetts. Our newest beer has had a huge impact for us
– Blueberry Ale. Blueberry has just been an unbelievable,
phenomenal performer for us. I didn’t expect it – I’ll be
honest, I didn’t expect this beer to come out as good as it
did.
It’s very drinkable, it’s a
good combination, and it’s a point of differentiation for
us. It’s our biggest seller in North Shore, South Shore and
the islands. It’s something different. We get tons of
reactions like this: people don’t want to try a fruit beer,
blah blah blah, then they try it, and they say it’s
unbelievable. It’s got serious staying power.
Black Shack Porter is our
darkest beer, definitely one of our most complex beers,
designed for those that are really looking for something.
And from my perspective, it’s just a phenomenal porter. It
is of the caliber of a Deschutes Black Butte, but there’s
such a small porter market in Massachusetts. We’re going to
invest in the brand to try to keep it cruising
along.
We spend a lot of money on
our IPA. It’s dry-hopped in the tank, and it ages longer
than the other beers. It’s our most special product. We’re
seeing about a 50% increase in that beer this year. People
are starting to understand it.
Summer Breeze is our summer
seasonal, a wheat-based beer. It’s our biggest selling
seasonal, which I think is typical, it’s the longest season.
Oktoberfest is ridiculously short, but it sells well, it’s
worth doing it.
GB
Our number one seller is our flagship, Steel Rail Extra
Pale. We did that as our original beer – an American-style
extra pale – and in 1994, people on the East Coast weren’t
real familiar with what a micro or a craft beer was. We knew
if we did something like a pale ale, or something amber,
we’d just turn a lot of people off, just because of the
color of the beer. We did an American-style ale, we
basically tried to bait and switch them. We got them into
drinking our light beer, so to speak, the Extra Pale, and
then we started adding styles. Now we have about 15
different styles, ales and lagers, all the way from a
kolsch, which is really our Berkshire light beer, to an
imperial stout, barleywine, beers of that nature. We try to
do something for everyone. There’s a tremendous amount of
diversity there, and we try to keep them all very separate
in their flavor profile so that people are getting a good
representation of what that particular style of beer should
be. It’s sort of like a bit of juggling, to keep everything
in inventory and on the shelf. But we’ve gotten pretty good
at it.
The retailers enjoy it.
They’re always looking for something new. And what’s really
different about us from most of the other people on our side
of the industry is that after 10 years we still continue to
bottle in the 22 ounce bombers and the 64 ounce growlers.
We’ve stayed away from the six-pack market. If you walk into
any of the local package stores you’ll see anywhere from six
different beers to the whole Berkshire family there on the
shelf. It’s quite a nice sight to behold. We often think
that to do that with six-pack facings we’d need twice as
much space as they’ve given us now. Space is always an issue
in off-premise sales.
LB
Wachusett self-distributed for a number of years, Berkshire
still does. Why did you make that decision?
NL
I feel it was absolutely necessary to establish the brand.
We couldn’t have realistically expected a wholesaler with
large, profitable brands in their portfolio to take on a
start-up. It was our responsibility to grow the brand. We
needed to understand distributing, we needed to learn to
sell beer, because we didn’t know any of this stuff. We’ve
been there now, we know how incredibly difficult wholesaling
beer is, we can relate to that to the core, with all the
guys who are doing sales calls. We self-distributed the
whole state from 1994 to 1998. Then we said to ourselves,
“This is something valid.” When I called Joe Salois at Atlas
Distributing, five years, almost to the day, after we
opened, and said it’s time for us to talk, he called me back
in under two minutes. That, right there, was an indicator
that Atlas was the right company. You have a whole other
aspect of your business. You have all the responsibilities
that a wholesaler has – equipment to get it there, staff,
billing, collections – all of that. We did it for five
years, for the maximum that this building allowed. We ran a
profitable distributorship out of here, but it got to the
point where we had to make a decision: keep doing both the
brewery and distribution business or not. The facility was
the limiting factor.
Right now we ship two to
three trailer-loads a week. We have five refrigerated
trailers, soon to be six. As we brew, we’re loading these
trailers with the orders we have. We ship beer out every
week, and on Fridays there’s almost no beer here. Often our
retail store is out of beer, the wholesalers get it before
we do! It’s great, it actually works out well. It’s not
ideal, but. Today we’re bottling. All that packaged product
will go in the trailers, and by Friday it will be hauled out
of here to the wholesalers. We only keep a one to two week
inventory at the wholesalers. Some of the imports send
multiple containers, and they’re in the warehouse a long
time.
GB
It was a big decision, but at the time, with our economics –
and because I kind of grew up in the trucking industry – it
wasn’t anything new to me. I was able to get it out
there.
It was kind of funny. Back
in 1994, instead of having salespeople go out and knocking
on doors, we telemarketed to 95% of our customer base, and
we were able to kind of make our introduction over the
phone. When Chris and I went out to deliver the beer, that’s
when we made our real sales call. We did it a little bit
backwards, something the industry wasn’t quite accustomed
to, but it’s worked really well for us over the
years.
We were also eliminating
that middleman, and not necessarily from an economic
standpoint, from a business relation standpoint. We’re still
connected right to the heart of our customer base, so if
there’s a problem with anything, whether it’s a broken
bottle, a bad cap, whatever, we’re right on top of it. It
doesn’t get lost in the loop of going through a distributor
and coming back to the brewery, we’re right on it all the
time. If someone’s beer isn’t flowing quite right, or
somebody says there’s something wrong with the beer, we’re
right there to check it out.
We do use wholesalers in
some markets. We’re in the state of Vermont, which we
entered about a year and a half ago, and we also have a
small distributor in the metro Boston area that we’ve been
working with for about a year now. But we sell 95% of all
our beer within a 60-mile radius of the brewery. That was
the original plan. We adopted the European mentality of the
local brewery. When we came here in 1994, and we told people
what we were, a lot of the response was, “well, gee, we
don’t have that micro beer, or any of that stuff.” We said,
“don’t think of us like that, think of us as your local
brewery.” That’s what we’ve always tried to be, western
Massachusetts’ local brewery.
LB
Eventually you’ll have to start moving out into other
markets. Few people outside central Massachusetts know your
brand. How do you launch a brand that’s almost dominant in
its home market and practically unknown outside of
it?
NL
What do we do in a new market? Get a qualified wholesaler to
distribute our brand in an effective manner. Once you get
your draft lines, they’ll get your product there and supply
solid sales support. We’re about one-quarter of one percent
of the total Massachusetts beer market. We have no reason to
go outside Massachusetts. If we get to 1%, we’d be a 40,000
bottles a year brewery, that’s four times larger than we are
now. That could take us 30 years! I don’t know, it could
take us ten, it could take us five, but I’d still like to do
it all here if we can. How do you get people in new markets
to know about us? There are still plenty of people in this
state who don’t know about us! Why would I want to put beer
on a truck and ship it out somewhere that we can’t watch
over it and keep it fresh?
GB
We use the ‘pebble in the center of the pond’ philosophy.
It’s not how far away we go away from the brewery – we’re
trying to get as many places between here and the farthest
one out. The farther people from their home location, the
more energy it takes, the more marketing money it takes to
get yourself introduced into the market. We do very little
advertising. The majority of our advertising is word of
mouth. That’s pretty much how it’ s worked for the past ten
years.
We’re looking at the I-91
corridor in Connecticut. We’re getting a lot of people from
Connecticut who know our product, we’re right on the line
there. We’ve got the “Connecticut Connection”, the guys who
run up to the border liquor stores and take stuff home, so
we do have a little bit of recognition. We’re getting calls
from restaurants who would be interested in carrying us if
we got there.
LB
A lot of small breweries haven’t made it. Why did you do so
well?
NL
We’ve designed beers for the palate of Massachusetts. No
styles with crazy ingredients and incredibly high hop
contents or billion percent alcohol. It’s incredibly fresh,
flavorful beer to be sold here. We don’t really fit in all
that well in the circle of the geeks. It seems like right
now it’s a constant barrage of hops and alcohol levels in
that circle. That’s not what we do. I do feel that this
portfolio of nine beers is a good one. People ask us when
we’re going to make something new. With the growth we have,
why do we need to?
I’ve been to the Yuengling
Brewery (in Pennsylvania), I’ve met Dick Yuengling, and that
is the brewery I have the most admiration for. That’s what
we look at as the true successful brewery in this country.
Locally, they outsell Bud in their home market. They make
what sells, people love it, and they’re behind it. We feel
like we’re the mini-Yuengling of Massachusetts. There’s
passion behind it, Dick’s committed, and it sells. That’s
what we do, that’s the example we follow, not the breweries
that do the crazy stuff.
As we go along, things
become more clear – this is what we do. If people want
craziness, they’ll have to look elsewhere. That’s a struggle
for us, because we’re also passionate, we appreciate the
same things they do, we are geeks. But it’s not a sound
business decision for us to make those beers.
GB
Anyone in business has to be smart. We’ve been fiscally
prudent, very conservative in the way we’ve gone about
expanding. Our debt has always been manageable, which I
think is a critical aspect of any business. We’ve also been
basically putting every nickel back into the company instead
of taking it out. So we’ve been growing Berkshire Brewing
from within. As a result, I know that Chris and I have given
up certain things – we joke that we have enough sweat equity
in this place to float the Titanic.
Our motto is “No Hype, Just
Good Beer”. The beer comes first. We’ve never pushed
anything out of here that we wouldn’t drink ourselves. We
are very quality conscious. If the customer is coming back
to us, he expects what he had the time before. So we’re very
conscious about trying to maintain good quality control over
all our beers, all the time.
It’s sort of like raising a
baby. At the beginning you have to really take care of it,
nurture it, you know. Then it learns to crawl, and then it
learns to walk, and then it learns to run. We’re kind of at
that point, where we’ve developed this entity that’s
beginning to move on its own. Everybody is still working
really hard, but there’s this energy that’s kind of built in
to Berkshire, an energy we feel is starting to take us along
with it. If we play our cards right, there’s a tremendous
opportunity here. It’s a great feeling. It’s a very humbling
experience.
