The Business of Beer
Making a living brewing craft beer requires precision, science, business savvy, and more than a touch of zaniness.
It’s Friday evening, right around happy-hour time, but Evan Williams ’08 looks more ready for a marathon than a drink. Decked out in blue shorts and a jersey picturing the Cascade Mountain Range, he’s addressing a crowd of 15 or so runners on Rainier Avenue in Seattle’s leafy Columbia City neighborhood. After thanking everyone for showing up, he describes the route they are about to run, warning about a confusing tangle of streets in the second half of the five miles.
Evan’s brother Tyler ’06, as sturdy as Evan is stringy, flanks him on the left. “Are we ready?” Evan shouts. “This might hurt a little,” Tyler mutters as he begins jogging away. Evan gestures in Tyler’s direction. “All right—let’s go!”
To a passerby, it might appear that the Williams brothers are in the business of coaching. But at the end of the jaunt they’ve organized—which wends past soggy soccer fields, under blooming cherry trees, and around Lake Washington, with its glowing house lights strung like baubles around the water—sits their real venture: Flying Lion Brewing. The Williams’s thousand-square-foot microbrewery pours a rotating collection of six original beers, painstakingly crafted and brewed by Evan’s and Tyler’s brother, Griffin.
Getting the small operation off the ground was a family effort. Evan, drawing from his Middlebury physics major, wired the control circuit and helped design the bicycle-powered barley mill. Griffin built the bar and tables with excavated wood from the building. And Tyler, an MIT-trained economist who works for Amazon, sketched a business plan and now does much of the accounting. (Their father, a food chemist, has helped the brothers experiment with home-brew recipes, while a fourth brother, Conor, lends support from afar; he’s a policy researcher in Washington, D.C.)
When Flying Lion opened in October 2014, it joined hundreds of other microbreweries, which are becoming as ubiquitous as hipster coffee shops in urban and rural locales alike. Yet even as these operations proliferate, they can’t seem to keep apace with a growing population of beer evangelists thirsty for the latest offering. For the first few days that Flying Lion was open, “people were standing in between the kettles and tanks” because it was so crowded, says Evan. Just months in, “we are having to turn down distribution deals with restaurants because we need all of our supply for the tasting room.”
Craft breweries—independent outfits that produce fewer than six million barrels annually—make up a modest but quickly growing slice of the market. In the late 1800s, these small alehouses were as commonplace as corner stores in American cities, a time when hop barons were as powerful as today’s corn farmers. But the industry nose-dived during Prohibition, ushering in an era of relatively bland suds mass-produced by the likes of Anheuser-Busch. But when a San Francisco entrepreneur named Fritz Maytag bought Bay Area favorite Anchor Brewery in 1965, he opted to keep it small-scale and focused on producing his favorite beer, Anchor Steam, which was as bold in flavor as Big Beer’s offerings were weak. Maytag’s decision in turn influenced home brewer Jack McAuliffe, who in 1976 opened the hyperlocal New Albion Brewing Company in Sonoma, California—credited by many as the modern era’s first microbrewery.
Soon a restless group of do-it-yourselfers on both coasts began to revisit the idiosyncratic beers of the pre-Prohibition era. Books like Michael Jackson’s World Guide to Beer and The Complete Joy of Homebrewing by Charlie Papazian (who still heads the Brewers Association) helped catalyze the renaissance. Flavors grew bolder as the hop-crammed West Coast India Pale Ale emerged; ancient fermentation methods were dusted off, and brands began to dabble in “extreme beer,” incorporating spices and quirky materials into their brews in order to rebel against the previous decades’ “industrialized, monochromatic beer,” as Dogfish Head founder Sam Calagione described the weak brew.
To help harness the movement, the board of the Brewers Association voted in 2005 to define a craft brewer as someone whose operation produces fewer than two million barrels annually (now six million); is less than 25 percent owned by a non-craft-brewer; and uses traditional processes and ingredients, generally including malted barley.
For nearly four decades after Anchor Brewery reopened, craft beer businesses made up just a sliver of the industry. But in the last few years, Big Beer’s hold has started to slip: in 2014, for the first time, craft brewers reached over 10 percent of the overall market share by volume. “When you ask younger beer drinkers, one of the most important parts of why they choose certain beers over others is whether they are local and independent,” explains Bart Watson, the lead economist for the Brewers Association, the craft industry’s main trade group. The number of craft barrels produced nationally more than doubled between 2010 and 2014, pumping $33.9 billion into the economy in 2012. In the foodie mecca of San Francisco, the number of craft ventures is expected to double by 2016. New York saw 67 new breweries open in 2014 alone; the state of Washington welcomed 83.
Evan and Tyler Williams aren’t the only Middlebury alumni to take the leap into craft beer. Well before Flying Lion, there was Allagash Brewing Company in Maine, started in 1995 by Rob Tod ’91, who recognized the dearth of Belgian-style beers west of the Atlantic. And then there’s Matthew Osterman, who sidestepped law school after graduating from Middlebury in 2006 in order to pursue a career in suds. This past January he opened Sleeping Giant Brewing Company, the first contract-only brewery west of Minnesota. Different brands commission contract breweries to make extra batches of their product when space is tight. Sleeping Giant is the first one to cater specifically to craft shops, and it aims to help small brands like Flying Lion grow.
Using a liberal arts degree from a prestigious college to spend hours mucking floors and stirring large vats of wort to make beer wasn’t always in the master plan for these alumni (nor in their parents’). But then again, at its best, craft brewing requires an unusual blend of creativity, scientific mastery, business savvy, and deep reservoirs of persistence and zeal. As the Brewers Association will tell you, it’s about more than a malty beverage—craft brewers are highly skilled artisans who “tend to be very involved in their communities.”
I visited Flying Lion in February, just a few months after it had opened its doors. Columbia City is a picturesque neighborhood wedged between low hills in the Rainier Valley south of downtown Seattle, and it prides itself on being one of the most diverse zip codes in the United States. On Rainier Avenue, the neighborhood’s main thoroughfare, bakeries and pizzerias alternate with Senegalese eateries and Vietnamese bánh mì shops. A sign in a bookstore window reads: “We stand behind the family of Michael Brown.” Flying Lion Brewing, down the road, counts among its neighbors the Hummingbird Saloon (“Food served late/Beer to go”), Full Tilt Ice Cream, Discotera Los Tres Reyes, Bilaal Mini Market, a boarded up Vietnamese billiard hall, and a restaurant dishing up Kenyan cuisine.
When I opened the glass front door of Flying Lion, I was hit by a smell resembling warm molasses cake—the brothers were brewing. Small wooden tables and a bar sit at the front of the narrow building, but it was easy for me to see all the way through to the back where the squat boiling and fermentor tanks are housed. On the wall, painted a rusty red, Griffin’s kayak hangs like a massive frozen swordfish. And above the bar area, with its seven stools, rests a chalkboard boasting the pints on tap, $5 a pop. That day: Single-Hop Pale, Another IPA, Red IPA, Robust Porter, Chili Chocolate Porter, and a Belgian Quad.
Griffin, 25, the youngest brother and head brewer, is a slender 6’4”, with closely cropped black hair and a brooding look. I found him intently sweeping the floor, and he paused only for a moment to meet me before resuming the task. Evan, 29, slightly shorter and more muscular, has dusty auburn hair, jade green eyes, and a flattened nose. He’s effusive and sociable, and prone to launch into detailed explanations of the scientific underpinnings of his surroundings without much warning. He hustled over to meet me and within minutes was rattling off the steps required to brew.
Griffin has been perfecting this process for at least five years. Though he did well at Carleton College, he found himself more interested in brewing beer for his friends than studying. After working as a geologist in Minneapolis for a stint, he traded in the post for a job in a home-brew shop. He harbored dreams of opening his own place where he could make beer in larger quantities and witness people savoring his creations. Evan and Tyler had always joked about opening a family brewery; they both lived in Seattle at the time, and they lured Griffin out west with a promise to help him open Flying Lion.
Tyler, 30, was already well established in Seattle. After earning a PhD in economics at MIT and playing semi-professional rugby in Boston, he’d moved out with his wife, Julie (Gross) ’06, to start a job as a strategist at Amazon. A barrel-chested man with twinkly eyes and chestnut hair, he shares his flattened nose with Evan and has a slight lisp, which comes off as charming when combined with his ever-present smile.
Tyler hit up two friends from his Middlebury rugby days to invest in Flying Lion. With more cash from the Williams’s parents and some money secured from the crowd-funding site CrowdBrewed.com, the brothers raised under a quarter million dollars and got to work on the space in 2013. “The beer was the least of our worries,” says Tyler. The brothers already knew that Griffin would churn out a quality product. Indeed, when it comes to Griffin’s beer, remarks Flying Lion’s bartender Captain Clark, “we’ll get guys in here who’ve been in the industry for 10 or 15 years who’ll take a sip of it, look at it, look at Griffin and see how young he is, and shake their heads. His recipe formulation is just phenomenal.”
Opening a brewery isn’t just about fermentation and microbiology, explains Justin Gerardy, owner of Seattle’s Standard Brewing, who gave the Williams some precious tips when they first started out. “There are building codes, so many agencies to report to, tax rates—you have to become an expert in 10 different fields to make it happen. It’s a very difficult process; anyone who gets into it earns my respect.”
The brothers filed for permits and prepared all of their operating documents themselves. When it finally opened in October 2014, Flying Lion celebrated by perching bluegrass musicians on the loft where hops and grain are stored to serenade its new customers.
Though by definition craft brewers adhere to the traditional brewing process, they often get wacky with flavors. According to the Brewers Association, “the hallmark of craft beer and craft brewers is innovation. Craft brewers interpret historic styles with unique twists and develop new styles that have no precedent.” Jim Koch, the founder of the Boston Beer Company and creator of Samuel Adams beer, once told the New Yorker, “When you’re trying to create new brewing techniques and beer styles, you have to have a certain recklessness.”
The Williams, especially Evan and Tyler, like to flirt with the edge. “We do a lot of goofy shit,” Tyler says, whereas Griffin’s more likely to edit and improve their recipes until the quality’s right. During one of the brothers’ annual home-brewing competitions, Tyler put so many serranos, habaneros, and jalapeños in a porter, “one girl choked as she was judging it.” The beer came in dead last. “There’s a reason I’m not the head brewer,” Tyler concedes.
One of the brothers’ porters requires about 200 pounds of sweet potatoes, which equates to a quarter of a pound per pint. Griffin convinced nearby Columbia City Bakery to let him roast the potatoes in the restaurant’s industrial ovens. The tuber serves beer well; its high starch content converts easily to sugars and therefore alcohol, and the potatoes also possess the same enzyme as barley. Other unusual ingredients they’ve incorporated include cacao nibs, ginger, birch wood in an imperial rye stout, and locally gathered spruce tips.
Flying Lion has tried to make a name for itself by focusing on porters and stouts. “We wanted more dark beers in Seattle,” Tyler notes. “We were tired of hunting around.” Yet their best-selling beer remains their Another IPA. “Aren’t you focusing away from IPAs?” I ask Griffin. He laughs and shakes his head. “You can try, but people drink the heck out of IPA.” Indeed, of the 10 or so Flying Lion beers I tasted, the Another IPA was one of my clear favorites—crisp and fruity with just the right balance of bitter Simcoe hops.
After we finished the tasting of coffee stout wort, Griffin got busy hosing out the mash tun and mopping the floor. Dressed in black muck boots and camel-brown cords, he cleaned with a methodical rhythm gained from caring for this equipment every single day, six or seven days a week. Every so often, the former competitive kayaker would kick a lever without even needing to look at it while simultaneously switching off a hose with his hand. Evan admired his brother from a few feet away. “He has an athletic brewing style, doesn’t he? There’s a coordination and choreography to it.”
If Griffin’s the highly skilled workhorse of the three, Evan’s the zealous dreamer. Enrolled as a master’s student at the University of Washington, he spends fewer hours at the brewery than Griffin, but frequently tests new recipes by brewing 10-gallon batches at home. Evan’s physics background propelled some of the brewery’s core operational functions. He pushed for the Raspberry Pi Linux computer system and helped Griffin create the glycol chilling system by hacking an old air-conditioning unit. His pride and joy is the barley mill, which is powered, like a hamster wheel, by the force of human feet—the mill is connected to a bicycle, and grinds through the 270 pounds of grain needed to fuel one batch of Flying Lion’s beer in roughly 25 minutes. “There’s so much demand from our customers to help us mill, we hardly pedal it ourselves,” he boasts. (Do the customers get a free beer for their labor? Not yet, but Evan says he’s been meaning to hop on the bike with a heart-rate monitor and figure out how many calories it takes to mill. “Then we would compensate the same number of calories in beer. I like to abide by the conservation of energy law.”)
Evan never fails to appear on Friday nights for the five-mile brewery run he organizes, which is free and open to the public. He’s designed the route to appear from above like the perimeter of the Flying Lion logo—a lion with wings.
At the end of that week’s jog, we convened to stretch in front of the brewery and then all tucked inside, beet-cheeked and glistening from rain and sweat. Over pints of porter, I struck up a conversation with shaggy-haired Eli Gardner, a RISD-trained architect, who recently moved to Columbia City from the East Coast. He and his girlfriend were enjoying the neighborhood well enough, except “there are not a lot of young people here,” he said. Flying Lion was one of the few nearby locales still buzzing on a Friday night. Eli describes its beers as “meaty.” He’s a fan of the brewery’s darker offerings, especially the chili chocolate porter he was drinking that night. Sure, the potent brew was a draw, but for him, being there was “less about the beer and more about the hanging out.”
In the few months it’s been open, Flying Lion has already become a gathering spot. Though I watched plenty of flannel-clad 20-somethings populate the taproom, I also noticed punks in black leather, middle-aged couples, pony-tailed joggers, dudes on Macbooks, and families with toddlers relaxing in the small but welcoming space. Cycling clubs, book clubs, and knitting clubs meet there, and a nearby food bank hosts its monthly board meeting on the premises. “The beer brings people together,” says Evan, and it helps “brainstorming and action begin for all things in the neighborhood.”
Around 9 p.m., most of the runners had drifted off or gone to change clothes. Evan eyed his empty glass, and then glanced at the bar, where Griffin was rapidly refreshing pints for the crowd. Rather than interfere to refill our glasses, Evan ran to the back and retrieved a reserve growler of pitch-black beer, a Coconut Maple Porter. “We still haven’t figured out what the owner drinking policy is,” he said sheepishly, “or whether we should drink our own beer at all.” I tasted the porter, and the nostalgic flavors of an Almond Joy flooded my mouth.
Unlike most of the taprooms in the city, which close as early as 6 p.m., Flying Lion stays open until midnight. That night, a group of customers hosting a going-away party for a couple moving to Duluth squeezed around a table heaped with Vietnamese spring rolls. Tyler’s adorable curly-haired toddler, Augie, raced his toy ambulance all over the chalkboard table, unfazed by the clamor around him.
There was finally a lull, and Griffin came over to take a break. “This week’s making me a little nervous,” he said, rubbing his eyes. “I can’t brew fast enough.” Columbia City drinks 150–200 gallons of Flying Lion’s offerings a week. Griffin hasn’t ever run out of any of the six taps, “but it’s been close lately.”
Though Flying Lion’s making money and quickly finding its place in the neighborhood, the brothers understand that their situation is still precarious. Griffin must pour all of his waking hours into the operation, working 12-hour days just to brew fast enough. Sometimes he can’t sleep at night because he’s worried about where he’ll source hops, the furry green flowers that give beer its bitterness and aroma. He purchases the buds on the spot market, which can be frustratingly unpredictable. “I never expected I’d spend so much time online looking for hops,” he says. Prized Centennial hops are already all sold out until 2016.
As Tyler puts it, a business this small-scale has its struggles. “Right now, we run a six-hour brew day,” he explains. With more hands and better equipment, “we could make five to 10 times the amount of beer in just a seven-hour brew day.”
Rob Tod remembers a similar predicament—one that lasted an entire decade. Tod first broke ground on his Portland, Maine-based brewery, Allagash Brewing, in 1995. Allagash produced 120 barrels the first year, but after 10 years, it had only grown enough to spit out three or four thousand. “Relative to what’s happening today, that’s extremely slow growth,” Tod says. Those first years “were a grind, to say the least.”
Part of the reason Allagash first faltered—and likely also the reason it ultimately thrived—was Tod’s insistence on being different. No one was doing Belgian-style beers on the East Coast before he took the leap. His first brew became his flagship: the Allagash White, a white or “wit” ale, made with wheat instead of barley and drawing on notes of coriander and orange peel. Allagash’s Dubbel Ale drew on techniques from Trappist monks and used seven kinds of malt and a proprietary strain of yeast. The resulting brew poured a hazy amber color, with hints of fig and a “wine-like complexity,” as one reviewer noted. But funky flavors aside, Tod wasn’t the only brewer to suffer during the 1990s. More than 700 craft breweries had opened in the U.S. during that period, but the lack of distribution and confusion about the new elixirs caused many of them to fizzle out.
Undeterred, Tod kept plugging away at the essential things: making high-quality suds, deepening relationships with customers and distributors, and educating people about the beauty of the wide-ranging and eclectic Belgian varieties, from lagers to lambics to tripels. In 2001, he started experimenting with bottle conditioning—adding yeast and sugar into the bottle before sealing it, causing the beer to ferment naturally and allowing its flavors to evolve over time. A few years down the line, he tried his hand at wild yeast fermentation, whereby wort is left uncovered and attracts natural microorganisms that colonize and ferment it into beer, as with blue cheese. For our overpasteurized and sanitized society, these techniques seemed like heresy. But thanks in part to pioneers like Tod, Americans are growing fonder of the sour fruits of fermentation—from kombucha to kimchi to pickled garden vegetables and unfiltered wine.
After limping along for a decade, Allagash turned a corner around 2005. Tod can’t think of one specific thing that changed: “We just kept hammering away and finally got traction.” The company now pumps out 75,000 barrels of beer a year to taps across the country and expects to double that after its current 18,000-square-foot remodel. (By way of comparison, New Belgium Brewing produces around a million barrels a year.) In 2015, Tod celebrated Allagash’s 20th anniversary. And after barely making a profit for years, the company donated $240,000 to the Maine community last year through its Tribute Series, which allots a dollar per beer sold to local nonprofits.
A University of Maine study predicts that craft beer will quadruple its presence in the state over the next four years. Tod enjoys the company and competition, though he’s somewhat glad he didn’t start a brewery during today’s boom. “A lot of those breweries haven’t been through the tough times. From the moment they open their doors, there’s been a rush of customers wanting to drink their beer,” he says. New brewers might not face anything akin to Allagash’s 10 long years of solitary dabbling and stubborn growth. But Tod’s far from bitter: “I look at it as a blessing for us, because those times teach you discipline.”
Breweries who find patrons lining up outside their doors—and worrying about having enough beer to go around—Tod might as well have been describing Flying Lion. “We are selling about three times the amount of beer we expected to,” Evan tells me. The Williamses plan to keep their operation small for now. But not all new ventures are content with maintaining a modest presence in the face of such demand. Those needing to scale up quickly can now turn to Sleeping Giant, the contract brewery out of Denver run by Matthew Osterman.
After teaching for a few years after college and toying with the idea of applying to law school, Osterman found that what most interested him was beer. (An interest many young grads have, yes, but Osterman’s was as intellectual as it was recreational.) He almost opened his own brewery in Steamboat Springs with a friend, but quickly realized he was getting in over his head. So he took a step backward and got a job running operations for Boulder-based New Planet, a brewery specializing in gluten-free brews, and picked up back-to-back medals at the Great American Beer Festival during his tenure.
To make enough beer for the growing number of gluten-intolerant ale enthusiasts, New Planet relied on contract brewing—which is essentially renting out a larger brewery’s services and space to make beer using your product’s recipe. “A lot of brewers are growing rapidly, but are capacity constrained,” says Brewers Association economist Bart Watson. “Partnering with a contract brewer can be one way to increase your capacity and get a foothold in the market.”
While at New Planet, Osterman noticed how unfair contract brewing could sometimes be for the smaller fish, because a large beer company would always prioritize its own beer. “Your house brands are your top priority—they are worth more to you emotionally and financially,” Osterman explains.
He also remembers a valuable lesson from a J-term class at Middlebury. “There are two intelligent approaches to entrepreneurship: either innovate or create,” he says. “Improve upon an existing solution or figure out a problem without a good solution and create it.” There weren’t any companies west of the Mississippi dedicated solely to contract brewing, nor only to craft. Osterman had found his niche. He hired two longtime Coors employees to manage the brewing side of things and invested in a 70,000-square-foot warehouse in southwest Denver. The space now houses a quality lab, 11 fermentation tanks, an exquisite Italian GAI bottling line, canning equipment, and a mash filter press—a sleek machine whose purpose is not unlike a coffee-geek’s Aeropress; it forces hot water through barley in much less time than gravity would, using less water and in essence doubling Sleeping Giant’s efficiency.
Since Sleeping Giant opened in January, Frisco’s Backcountry Brewery, Venice, California’s House Beer, and roughly 20 other brands have signed on. With additional equipment, Osterman expects to double the brewery’s production to 65,000 annual barrels by September.
As of the first quarter of 2015, brewers are peddling nearly 12,000 craft brands in bars, restaurants, and grocery stores across the country. Some worry that the market is becoming saturated; peak craft could be nigh. But the Brewers Association remains cheerful, boasting that “there has never been a better time or place to drink beer than in the U.S. right now.” Standard Brewing’s Justin Gerardy echoes the enthusiasm: “Everybody in the brewing community is incredibly open and helpful; we’re all learning from each other all the time, and we’re all excited about where it’s headed.”
Since February, Flying Lion has hired a new full-time bartender: Captain Clark, the baker who used to let the Williams brothers roast sweet potatoes in the oven at Columbia City Bakery. Because of his experience with bread, says Evan, “Captain has a lot of knowledge of how wild yeast and sour beers might work—he might help us make the leap into that side of brewing.” Hiring Clark full time has also allowed Griffin more normal hours. “I think he even has a girlfriend now—it’s been good for him,” Evan adds. Local restaurants recently started serving Flying Lion’s brews, and one bar down the street has them permanently on tap.
The brothers do dream of one day expanding their operation, and not just to increase their output. “We’ve been kicking around the idea of opening a brewery where people can come in and learn how to brew their own recipes on a big system,” explains Tyler. “Then we put the beers on tap so you can bring your friends in to try it out, along with other people’s efforts.”
In the meantime, Evan just helped Griffin install a new chilling system and build a sidewalk patio where customers can cavort outside. He’s still home-brewing in his spare time; his latest experiment doubles as an energy drink. “I wanted to make something that might make me feasibly faster if I stopped to drink it during a marathon or a trail run,” he tells me over the phone, a day before running the Eugene Marathon in 2 hours and 41 minutes. He based the “PNW Ultra” beer, as he’s calling it, on the Mexican Tarahumara of Born to Run fame, who sometimes down a weak corn-based beer before taking off on their epic 200-mile hauls. Evan’s beer includes cornmeal and caramelized barley, making it light and sugary, tempered with a healthy dose of Pacific Northwest hops. “Its malty sweetness would hopefully give you energy to run farther,” he explains, and “the alcohol content might numb you for the remainder of your run.” He’s thinking about adding a pinch of salt to the finished product for electrolytes.
“That’s quite an experiment,” I tell him. There’s a pause on the line. “It’s not very good yet,” he concedes. “But it could be worse. We’ll get there.”
Maddie Oatman ’08 is a San Francisco-based writer and senior research editor for Mother Jones, where she covers food, culture, and the environment.