Jeff and Jon talk with a local brewer, Lee Robinson, Founder and Co-Owner of Bentonville Brewing Company.
Q: What is the difference between nano and micro-brewery?
A: It’s based on volume production, what you can do annually. How many barrels a year - in Arkansas it’s 500 barrels a year is a micro-brewery. However this number increases every year, the bar keeps on raising for what can be considered as micro-brewery.
Q: How do you sell your beer?
A: We self-distribute and we don’t go through distributorship because that means a lot more costs,a lot more kegs and lot more inventories to get a good percentage of the keg.
Q: Your run your own tap room? Where is your tap room?
A: Yes, we run our own tap room. Its over here at 1000 Southeast 5th St in Bentonville, Arkansas.
Q: What is your background? Is that where you met Gavin Edwards (co-owner)?
A: My background is actually finance and real estate. Yes, we have worked together in real estate over the last few years, he was a realtor and I was a loan officer. He came into the brewery a little bit later in the game. It was me and another friend of mine who started it.
Q: About your brewmaster, how long he’s been doing it?
A: About 2 or 3 months now. But before him, we brought in a guy who is experienced so it is from that person where our current brewmaster has taken his technical background from.
Q: When you guys decided that you wanted to do this, how did you come to an agreement? Who’s gonna do what? What does the partnership look like and all that fun stuff?
A: A lot of handshakes and verbal. We do have a new operating agreement now but that’s probably one thing that we should have defined more clearly early on. We should have written out in detail what and whose role should it be because many would not do the roles they said they would do.
We did some other things, trading equity for work and build-out and stuff like that but it didn’t quite go as we planned but we all got it done in the end. I did all the licensing with the TTB and ABC, a lot of stuff, I didn’t know about. You can read all that stuff online but depending where you live at, you will have different circumstances to go through in getting a license.
Q: Now that you’re in the game, are you getting a little more confident with all that works, getting the traffic, getting the brand out there and all that?
A: Yes, we’re very excited how things are going so far. Our first brews were actually very good beers.The first time we had a bad batch, they got messed up, we got the wrong yeasts and we just flushed it down the drain.
Q: What do you think the outlook is for craft brew?
A: I think it’s very positive right now especially here in Benton County and in the Little Rock area, there is a lot of growth happening, there are a lot of breweries coming out.
Q: How has it been so far? Did it meet your expectations? Exceeded?
A: It has met my expectations. Right now, we’re paying the bills so that’s pretty good. We’re not really into real profit yet.
Q: When you get to capacity, what’s the plan? What will you do to expand?
A: That’s where it gets a little risky to me. We can add a little more areas and space but we will soon outgrow that space and that’s gonna be the next challenge - what we are going to do, should we stay in this small craft brewery or do mid-size brewery and that is where the risk will come in. It is something we should plan and think about thoroughly.
Q: Are you going to can as well?
A: If we decide to go, we need to move to another facility. That maybe an option for us.
Q: What do you think about some of the labels that are out?
A: Sometimes more is less, that is my personal opinion. I would like to keep it simple and basic and focus on the beer.
Q: What’s keeping you up at night?
A: Right now we are trying to maximize production and also manage accounts, making sure to keep all accounts that we have. And also, what beer to produce.
Q: How many different types of beer that you have now?
A: We’ve got 5 different types.
Q: Do you guys offer anything other than your own beer?
A: We have some wine in our brewery. We have some brewed coffee from Airship coffee. We’re looking at local root beer.
Q: Are you having fun?
A: Yes, I really enjoy starting business and running them day to day
Q: What about cleaning and water quality?
A: The whole brewing process is cleaning. Brewing is not difficult, it's a lot of hard work, taking good notes so you’d know what you did right, what you did wrong. And making sure that everything is very clean so you don't get infections. With the water quality, we run it through a carbon filter and we treat it with different salts to balance the water to the beer that we’re gonna make.
Follow Bentonville Brewing Company on Facebook
Our contact info:
In this episode, we are joined by Startup Junkie consultant Jayshica Amargos. She joins us in a fun conversation about business partnerships.
Our contact info:
In this episode we talk about the business of craft beer. NWA is seeing a lot of new nano breweries opening and we will more than likely continue to see more open in the coming months and years.
History of Beer and Beer Business
The craft beer business includes nano-breweries and micro-breweries.
Northwest Arkansas is the home of a lot of very tasty craft breweries.
Samuel Adams, one of the biggest brands in US craft brew industry, resurrected the movement towards beer with taste in the late 1980s. The millennials are aging into the stage where their interests are on things that are hand-crafted and not mass produced so the growth in craft brewing has increased while the overall mass-produced beer market has flattened out.
The Business of Beer
The brewing business is not easy. Having a qualified brewmaster is part of the equation and this is so because in all cases, the beer has to be great.
Craft beer can be a high margin business but understanding the brewing process, and the numbers that drive the operation are essential.
For example one in every five or six batches has to be tossed because it did not work right. Beer brewing involves chemical engineering process and it pays to have a smart business person, the brewmaster, and even a chemical engineer to ensure efficiency.
The Demand for Beer and Development of Beer Business
The penetration of craft brew particularly in the southern United States is low but the demand is there. So as the demand increases, more and more craft breweries are expected to open.
Innovations in unique flavors have also kicked in (e.g. putting in chilli peppers and chocolates in beer) and it is working.
Canning. Many craft breweries are canning beers because it actually keeps the beer better because it keeps the beer from being exposed to ultraviolet light that could contaminate the beer.
Brand Labeling. The childlike, cartoonish designs of beer logos indicate that the designers may have gone too far on designing the labels. Brand labels must be improved to easily differentiate the brands. The traditional retail competition for shelf space sorts itself out for this micro booze.
Venture Capital on Beer Business. It is a growth sector, it has an 11% annual growth rate whereas large and established national breweries or brands are flat and declining. Consolidations are expected and it is better for the large players to buy out brands that are bigger rather than risk in coming up with something new.
Capital Expansion, Strategy and Distribution. The approach and level of regulatory complexities are different per each state and even locally within states. This makes expansion across state lines a tricky proposition.
Words of Wisdom/Tips for those who would want to venture into the Beer Business
Be an APPRENTICE. Go find a solid craft brewing operation and work for them for 6 months to a year. Understand all about the business - how to brew a great beer, how to be compliant with regulatory issues, and what point of sale system is best. Being an apprentice sounds like a big commitment but it will save a ton of headaches and possibility of failure. The timeframe of being an apprentice will help a new operator see what is bad or good about the business and if it is really a good fit.
Be an EXPERT. Craft beer is a hard business but it can be profitable with solid research, customer development, attention to detail, and focus on quality..
In this second episode we talk about ideas and funding startups. Jeff talks about how easy or difficult it is funding validated ideas vs unvalidated ideas.
We discuss funding, consulting and small business support resources.
In this first episode Jeff and Jon talk about what to do with your business idea. More importantly, they talk about how to test if your business idea is a good one or a not so good one.
They continue on with some detail about starting lean, planning lean and minimizing your startup risks. Also, Jeff answers the question "What is the typical age of a successfull entrepreneur?"