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For the love of brewing: For the next wave of Oregon brewers, brewing is an art and a lifestyle

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Oregon has over 200 brewers, 80 in Portland alone. Predictions of market saturation have been made for years. Yet, new breweries open regularly. The number of breweries in the US passed 7,000 in 2016, with over 1,000 new ones in 2016 alone. What drives this next wave of brewing entrepreneurs?

We talked with three breweries that are part of the next wave. Each of these three has a different origin story, but for this group, brewing is a craft, a lifestyle and a family and community-based business. In some cases, owning and operating a brewery comes first and in others, brewing beer comes first, but for all of them, if the brewery can grow to be self-sustaining, it’s all the success they need.

Gateway Brewing – Commitment to the local community

Founded in 2015, Gateway Brewing is based on a shared passion for beer brewing, family and community. Karen and Joel Sheley, the owners and brewers of Gateway, saw a shortage of breweries in their Portland Gateway neighborhood east of I-205, and a shortage of family-friendly breweries city-wide. Veterans of the early days of craft brewing in Portland, Karen and Joel each have of years of experience working at breweries. Joel and Karen even met and married while working at craft brewing pioneer Widmer Brothers.

Joel, whose father was a home brewer, had always been interested in brewing. After a trip to Germany, Joel came home with a recipe for banana wine. Wisely, his father pointed him back to brewing. Good thing – the world still may not be ready for banana wine.17951450_1871154439831170_107767640390767468_n

Joel started his career in the beer business at Nor’wester Brewing. He started at the bottom – cleaning kegs – and over time, learned all about the brewing business from the production side, attended brewing school, and eventually wound up at Widmer.

Karen’s love of brewing also came from a trip to Europe. She visited the hops growing region of the Czech Republic, and began her business career helping to transition state-owned Czechoslovakia-era brewers to private ownership. After briefly working in health care in Kentucky, Karen chose to follow her interest in brewing and relocated to Portland. Landing a job in production management at Widmer, Karen met Joel.

Joel and Karen soon drifted away from brewing. Joel, who missed the entrepreneurial spirit of the early days of craft brewing, started a bicycle delivery service, riding up to 80 miles per day hauling packages and ferrying the couple’s young daughter back and forth to school. Karen continued to work in production management outside of the brewing industry.

In 2015, Karen and Joel made the commitment to convert their garage in the Gateway neighborhood of Portland into a brewery. They missed the beer industry, and determined that a brewery that was family-friendly and emphasized neighborhood ties would resonate in their neighborhood, which is home to many young families. Joel chose to devote full time to developing the brewery; Karen also works in the family brewery business while maintaining her job at a technology company.

13510770_1724550064491609_7161255818461738076_nKaren and Joel consider themselves “beer people” and members of a close-knit community of Portland craft brewers. Part of the allure of the business is the people they meet in the industry, especially other brewers. Even with the competitiveness of the market, Joel and Karen know they can count on other brewers for expertise or even if they need to borrow some ingredients. It’s a big extended family.

Gateway Brewing beer is currently available in five restaurants in Portland. Joel and Karen also continue to explore new ways to bring their beer to more taps, especially in their Gateway neighborhood. For example, in summer 2016, Gateway sold beer through a pop-up at a local bike shop, and Joel and Karen are also active supporters of the under-construction Gateway Skatepark.

 

Leikam Brewing – Community-Supported Brewing

For Theo and Sonia Marie Leikam, brewing is all about family. Leikam Brewing is Portland’s first community-supported brewery (CSB) – think of a farm share program, but for beer. It’s also the only kosher-certified brewery west of New York.

Before starting Leikam, Theo and Sonia Marie were looking to gain more control over their lives. Theo, an accountant, traveled frequently for business, and they had three small children. Sonia Marie comes out of the non-profit world. Tired of the travel required of many accountants, and tired of working on other people’s finances, Theo and Sonia Marie considered several alternatives. For Theo as a home brewer, starting a microbrewery was an attractive option, allowing him to develop his craft brewing expertise, while permitting the couple to be close to their growing children.13268590_1107235882655671_5450285294665805200_o

Although it started as a part-time venture, Leikam has become a full-time business for Theo, while Sonia Maria still divides her time between the brewery and a local non-profit. Like many nanobrewers, Theo and Sonia Marie divide the responsibilities of the business. Theo is the principal brewer, while Sonia Marie is responsible for sales, social media and branding.

Theo has always had neighborhood support for his brewing, and it seemed almost natural for the couple to build a brewery in their backyard. Early on, they introduced a Community-Supported Brewing program which allows their subscribers to pick up beer at the brewery. It’s a good way for Leikam to forecast at least part of their sales in advance and even out their cash flows. The CSB also builds the sense of community that is integral to their business. Customers pick up beer at Leikam’s backyard brewery, and sometimes will even just leave an empty growler as a not-so-subtle hint that it’s time for a refill.

15027542_1244066908972567_8235372076985256556_nLeikam also sells beer through more traditional channels. With a passionate customer base, Leikam’s reputation has grown beyond their community. Customers have spread the word, and Leikam’s beer is available at restaurants and taprooms across the Portland area. Their ability to brew small batches of beer has helped too, and they have been asked to create custom beers for John Gorham’s Mediterranean Exploration Company and Shalom Y’All.

Theo and Sonia Marie also cite support from the Portland craft brewing community as being critical for the success of their business. They have found the other brewers to be willing to meet and to share their successes and failures. Sonia Marie has found brewers who are women to be especially supportive, and was part of the Pink Boots Society of women beer professionals from an early stage.

Leikam is meeting the plan they set for their growing business, and they are looking at what’s next. Given the competitive brewery landscape in the Portland area, they know it will take time to become the next craft brewing success story, but they’re committed to it.

De Garde Brewing – It’s About the Beer

Trevor and Linsey Rogers’ award-winning De Garde Brewing is proof that craft brewers can be successful and maintain a balanced lifestyle. De Garde sells beer mostly from their brewery, hidden away near the Tillamook Airport, with limited distribution outside of the area. Their wild fermented beers are sought after by beer connoisseurs and despite the location; there’s frequently a line of de Garde fans at the door when they open their taproom to customers. De Garde was recently named seventh-best brewery in the world at the RateBeer awards, alongside top breweries from across the US and the world.

The brewery has become so successful that de Garde is opening a second tasting room in downtown Tillamook, where it will be easier to find them, although that’s never been an issue for devoted De Garde drinkers.Screenshot 2017-05-21 21.21.31

For Trevor and Linsey, De Garde started out as being all about the beer. Trevor was working as an Assistant Manager at the original Pelican Brewing in Pacific City, while Linsey was in business management at Tillamook Cheese. With his work at Pelican as inspiration, Trevor became an avid home brewer. He and Linsey tried lots of different brewing styles, but wild fermentation was the one that they liked the best, and they committed de Garde to making the best wild fermented beer around.

Trevor and Linsey opened de Garde Brewing in 2013. After testing locations up and down the Coast, they carefully selected Tillamook as the best site for brewing their wild fermented beer. Whether it’s the salt air, the moisture or the nearby Tillamook Dairy, their natural yeast grew better there. De Garde’s wild barrel-aged ales became immediately popular. The beers are sessionable, with low alcohol content. De Garde’s wild barrel-aged ales became immediately popular, and Trevor and Linsey never looked back. Linsey stayed at her prior position for another year, but as demand and the brewery grew, she took the leap and started working at the brewery full time. They now employ six people.

With success came new challenges. Early on, funding for the brewery was scarce. Despite their best efforts, Trevor and Linsey were unable to obtain outside financing, and de Garde was launched through a lot of personal debt. Those days are fortunately behind them. But the brewery’s growing fame raised the question of what’s next.

The beer’s distribution has been limited regionally, with availability only in Oregon, Washington and northern California. Trevor and Linsey have chosen to keep prices reasonable, so that their beer that doesn’t have to be reserved for a special occasion.

17342509_1574205745953554_6594047386455690380_nTrevor and Linsey enjoy brewing beer and operating the brewery, and it’s important to them to be actively involved in the process. De Garde beer is critically praised, and the brewery could develop to be another in the long list of Oregon breweries that have been bought by larger companies. For the time being, Trevor and Linsey are simply committed to making the best beer they can and doing what they love – working in the brewery.

The three breweries – Gateway, Leikam and de Garde – have different origin stories and different trajectories. Yet all three share a passion for good beer and the benefits to family and community that a smaller brewery can bring. Their next steps might differ as well, but all are dedicated to the proposition that, with focus and hard work, they can balance their values with the success they seek.

For more information visit, www.leikambrewing.com, www.degardebrewing.com, and www.gatewaybrewingpdx.com.

Localvesting in ice cream and craft beer

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The Silicon Valley has nothing on its little sister to the north when it comes to innovative laws for connecting small businesses with the investment they need to make a big step. Deep within Oregon’s Silicon Forest, laws passed earlier this year have opened the flow of investors to varied businesses throughout the state.

Hatch Oregon, a nonprofit incubator founded by Amy Pearl, worked with state lawmakers to develop Community Public Offering (CPO) rules that promote innovative, online investing engagement, similar to crowdsource funding that has become all the rage. Hatch Oregon’s CPO is similar in that the far reach of numerous small investors can mean significant investment dollars for Oregon businesses looking to grow. However it’s unique in that investors aren’t donors; they are given a return on investment either through loan repayment or equity in the company.

Screen Shot 2015-06-30 at 9.53.31 AM“It’s just a more balanced approach to economic activity,” Pearl said during a gathering of the first wave of businesses seeking funding through the new program. “The CPO creates a real stakeholder economy.”

Under the law, Oregon businesses can raise as much as $250,000 through crowdfunding on the Hatch Oregon site. Each individual investor can donate a maximum of $2,500. Like the company itself, the investor has to be based in Oregon. It’s Oregonians investing in Oregon business at the purest level.

Taking the leap

Two Eugene-area businesses that represent the state’s ethos of local sustainability—Red Wagon Creamery and Agrarian Ales—are among the first round of companies seeking funds through Hatch Oregon.

Red Wagon Creamery Co-founder and Director of Sales and Marketing Stuart Phillips said the investment program beats the traditional lending model of “going hat in hand to the bank and taking its terms.”

“The difference between this and traditional lending,” Phillips said, “is you get to decide if you want to do debt or equity or combo thereof. The entrepreneur is the one driving the train. Also, the entrepreneur is the one to set the terms of the deal.”

10382071_666903713378547_1731539791957626672_oThe owners of Red Wagon Creamery, an exploding ice cream company that started with a cart and is now developing expansion plans into southern California, wanted to limit debt during the large expansion of its operation. Taking on small investors allowed that, while also boosting local interest in the company’s success.

“We will end up getting more than a hundred Oregonians becoming brand ambassadors of our ice cream,” he said of those who have bought CPO shares. To date the company has raised more than $70,000 toward the $120,000 sought.

“They have invested in us and own a little piece of the company. They have a vested interested in our success. We like that. It ties into our local food ethos,” Phillips said.

Agrarian Ales has also gotten off to a strong start in its CPO. To date the company has raised about 36 percent of the $165,000 offering that the unique farm-based brewery will use to build the region’s first micro-processing facility specific to the brewing industry.Screen Shot 2015-06-10 at 7.56.47 AM

“We are ready to put down even more roots in Oregon by setting the stage to revitalize on-farm, micro-processing to make our endeavor absolutely local,” the company states in its offering document.

A strong start

Since launching at the end of January, Hatch Oregon has topped more than $200,000 in total investment. Though not the first, Oregon’s CPO has quickly become the model to follow compared to other states that have yielded more lackluster interest and investment.

“Oregon may not be the first state to pass such a law—it followed at least thirteen other states that have allowed investment crowdfunding within their borders. But it’s easily the fastest out of the gate,” wrote Bruce Melzer in an article on Locavesting.com

The secret sauce may well be the spirit of the businesses more than anything else. Those seeking funds are steeped in the cultural ethos of best practices, local investment, local vendors and healthy products.

Riding the wave of its initial success, Hatch Oregon will host a nationwide conference in September in Portland to help spur other states based on what’s working in Oregon.

Made in Oregon

Ever since the migration of Californians fleeing urban commutes and exorbitant real estate prices a generation ago, pride of place in Oregon has been a staple. Oregonians still discuss with a small measure of pride the famous quote in the 1970s from then Gov. Tom McCall who encouraged Californians to visit but, “for heaven’s sake, don’t move here to live.”

The often mythologized statement spawned a bumper-sticker and T-shirt craze stating, “Welcome to Oregon. Now go home.”

Most of the businesses to use Hatch Oregon’s funding platform are similarly old school – they are product, not tech, driven—but cutting edge with the type of products they offer. They want to scale, but do so with a focus on sustainability.

“We are not only buying our ingredients locally and supporting local farmers,” Phillips said of Red Wagon Creamery, “but now our profits are going to Oregon investors.”

Red Wagon started when the owners recognized the value of the growing interest in food carts and trucks, which Phillips says “was just becoming a thing.” It dovetailed nicely with the model of Ben and Jerry’s Ice Cream—in its early, privately owned years, Phillips stresses—who started selling artisan ice cream in Vermont.

“They took their traveling road show around to get Vermonters to invest. We really liked that. We liked that part of that story,” Phillips said.

The company’s ice cream cart has grown to a retail store in Eugene, two carts, a tricycle that sells popsicles and Oregon’s smallest certified dairy plant, which is just 200 square feet.

Revenues grew from just under $100,000 in 2011 to more than four times that in 2014. But the former lawyer turned ice-cream vendor says the true value of the business remains the joy of the product itself.

“There aren’t a lot of jobs you can have where you give someone the product and they immediately look happy,” said Phillips.

Rather than expand its distribution network to ever increasing distances from the Eugene operation, Red Wagon has decided to re-create the entire operation in other locales so as to both invest in the local business climate and community — and to reflect the local flavors. Since Eugene covers Oregon and Washington, the company will next expand into southern California.

“We did a lot of brainstorming on how we can take what we’re doing and essentially scale local food and have it still be local,” Phillips says. “An ice cream company back East makes local ice cream then ships it all over the country. By the time it gets out here you’ve kind of lost that local connection.”

He calls the added expense a “necessary sacrifice of profit to make the company what it needs to be, which is really a showcase of what’s local.”

In Palm Springs, California, the company has already identified its local farmers, the farmers markets it will sell from, and the products that will offer distinctive local flavors not offered in its Oregon location, like avocados and citrus.

The five-year plan is perhaps five locations along the West Coast.

“Beyond that, we just gotta see,” he says.

Central to that plan has been the public offering through Hatch Oregon. He encourages other businesses to pursue it, but to understand the work that’s involved, which includes crystallizing your company’s vision and promoting that at all times. Phillips says he talks up Hatch Oregon while scooping ice cream.

“It’s a great program as long as you come into it with your eyes open,” he says. “It’s a rare business indeed where people are lined up willing to give you money.”

Red Wagon now has 25 employees and a goal to create hundreds of jobs moving forward.“It’s daunting for us as we think back to two of us in a kitchen,” Phillips adds, which wasn’t all that long ago.

Farm-to-Pint brewing

It’s hard to get more “old school” than an Oregon farm and it’s hard to get more Oregon than craft beer making. But it’s truly trendsetting when you take those two elements and combine them on the same location, creating what may be the first completely local farm-to-pint brewing operation.

11393640_889764841102421_2562466777791118830_o“Agrarian Ales has solidified our position as one of Oregon’s most unique breweries, growing 100% of the hops, herbs, fruits and vegetables used in our beers and sodas,” states the company’s public offering. “In time, Willamette Valley farm-grown crops will comprise 100% of the raw ingredients processed at the facility…Oregon’s first, true estate brewpub (and potentially the first in the entire country).”

In addition to a working farm, Nate and Ben Tilley spent the past eight years renovating the old barn on the property that dates back to World War II into a vibrant microbrewery. The operation now includes a “table-at-the-farm” restaurant, as they refer to it, which is open Fridays, Saturdays and Sundays and touts a menu “comprised of 98% Oregon-grown ingredients, most of that within five miles of the brewery.”Screen Shot 2015-06-10 at 8.03.01 AM

“When I met the Tilley boys and came out to this farm for this first time it was kind of a dream come true,” says brewer Tobias Schock. “The driving philosophy behind the creation of this business is to keep a family farm alive and well and thriving into the next generation.”

Nate Tilley started brewing in his garage and said the growth from sales of the beer took off through word of mouth praise.

“It seemed very simple to take that to the next level,” Nate Tilley said. “My dad proposed the idea of using the barn. We hadn’t had the thought of putting a brewery out here in this rural setting.”

It’s an innovative idea that works as the farm has turned into a similar destination experience not unlike people who venture into rural areas to visit a winery. In short, it’s very Oregon, which is the point of the CPO from the outset and perhaps the most telling reason why the CPO has, at least so far, become the envy of states all across the country, including the Silicon Valley itself.

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For more information on Red Wagon Creamery, visit www.redwagoncreamery.com, like them on facebook, and follow them on twitter

For more information on Agrarian Ales, visit www.agales.com, like them on facebook, and follow them on twitter and instagram

For more information on Hatch, visit www.hatchthefuture.com, like them on facebook, and follow them on twitter