Business Plan

Aly Young

Good Work Brewing

Longfellow neighborhood

Minneapolis, MN 55406

younga@stolaf.edu

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I. Table of Contents

I. Table of Contents .................................................................................................................................... 2

II. Executive Summary ................................................................................................................................ 3

III. General Company Description ............................................................................................................. 5

IV. Products and Services ............................................................................................................................. 9

V. Marketing Plan ....................................................................................................................................... 11

VI. Operational Plan .................................................................................................................................... 23

VII. Management and Organization ........................................................................................................... 25

VIII. Startup Expenses and Capitalization .................................................................................................. 26

IX. Financial Plan ....................................................................................................................................... 288

X. Appendices ............................................................................................................................................. 29

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II. Executive Summary

Good Work Brewing, a local and sustainable brewery, will brew and market its beer to the people of the

Minneapolis/St. Paul area. Its goals will be to use Cradle to Cradle principles to produce its product with zero

waste and positive emissions: conviviality, good work, and waste-to-food processes.

The Beer

Good Work’s beer will be locally produced from all-local and sustainably grown ingredients, making it the

freshest beer in the Twin Cities. It will be a seasonally rotating lineup of classic, heritage, and innovative

recipes determined by brewmaster tastes and customer feedback.

Cradle to Cradle

Good Work will operate using Cradle to Cradle principles, meaning that it will produce beer that is of high

quality and value to the consumer, operate in such a way as to produce no harmful emissions (air, water, etc.),

and provide ecological and environmental benefits. Good Work plans to do this by selling its beer at its

taproom only, eliminating distribution-related emissions, and by making all glassware that holds its beer (pints

and growlers) completely and infinitely reusable. Initially, ingredients shipping will be through standard

ground transportation such as trucks, but Good Work will investigate ways of making the transportation

process carbon-neutral through alternatively-fueled vehicles or pre-purchased carbon offsets.

At the brewery and taproom, building materials and interior features will be reused and upcycled wherever

possible in order to make the most effective use of already existing materials. And finally, heat, electricity, and

water usage will be carefully monitored and purchased from renewable sources.

Conviviality

Beer has been a great unifier since the dawn of human civilization, and Good Work will honor the capacity of

drink to bring people together by providing an indoor/outdoor taproom in which customers can enjoy their

beer together. Good Work will go beyond the taproom environment to support community events and

projects, from music events to skill-sharing events to the establishment of community gardens. Its brewery

will be based in the Longfellow community of Minneapolis to support existing community building efforts

there and further the development of new projects.

Good Work’s cooperative model enables ordinary community members who want to support the brewery, get

rewards, and share in the business’s success to purchase member shares of the business. Members will get

special discounts, become a decision-making part of the company, and receive dividend checks at the end of

each year.

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Good Work

True to its name, Good Work will provide its all-local employee base with a living wage and engaging work in

their community. As employees of Good Work, people will be able to pursue their passion for good beer and

great communities and support themselves financially by doing so.

Waste Equals Food

Spent brewing grain has a multitude of uses as food for people and other animals. Dried and ground grain

can supplement flour for a nutty flavor in breads, cookies, and muffins, and Good Work will sell this valuable

ingredient to local bakeries so that it can be used to its full potential. Spent hops and yeast sediment are

valuable additions to a thriving compost pile, which Good Work will maintain in Longfellow so that

community members can use it to nourish their gardens.

Room to Grow

A full-scale, 10-barrel (bbl) brewery of this nature will become feasible only after a 2 to 4 year small-scale

experimentation phase. In this phase, homebrewers and beer enthusiasts in Longfellow will share the cost of

purchasing a 7.5 gallon all-grain brewing system. They will purchase ingredients for individual batches

together in a similar shared model, and will develop a repertoire of recipes that are favored in the community.

As brewers gain command of favorite recipes and share their beer with community members, brewers can

begin to reach out to potential investors, proving that demand exists for the product. After a 1 to 2 year

period of gathering funding, community members and brewers can begin the search for a suitable location

within Longfellow and can begin to build the full-scale brewery of their dreams.

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III. General Company Description

Good Work Brewing will brew and sell beer made with local ingredients to the people of the Minneapolis/St.

Paul metropolitan area.

Good Work will provide indoor and outdoor spaces for customers to enjoy their beer, socialize with each

other, and build bonds of community. Since the beginnings of human society, people have come together

around fermented beverages, and Good Work aims to honor that age-old connection between people, drink,

and place.

The beer will be made in 10 bbl batches from local and sustainably produced ingredients. Good Work will

brew a batch 1 to 2 times per week, and will keg finished batches off in order to store and serve more

varieties of beer. Local ingredients—hops, barley malt, and other specialty grains—are becoming more

common in Minnesota. The University of Minnesota’s agricultural department is currently investigating hardy

strains of hops and barley as well as more efficient methods of growing these plants.1

Good Work will be based in the Longfellow neighborhood of Minneapolis for several reasons, namely its

proximity to cultural and dining centers of south Minneapolis; its large population of young people interested

in community development, and its emerging craft beer scene.

Mission Statement

The mission of Good Work Brewing is to support the Longfellow community by providing meaningful work

brewing beer from local ingredients, and to honor the ecological cycles inherent in brewing by managing

resources intelligently.

Goals

Good Work’s goals are to build an environmentally, economically, and socially sustainable business that

supports local growers and builds community in Longfellow.

Objectives

1 Overland, Adam. “Research In Locally Made Ingredients.” The Growler. Vol. Issue 22 May 2013.

http://growlermag.com/the-botany-of-beer/

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Good Work will measure progress towards its goals by keeping track of how many local employees are hired

(with the goal being 100% within the Minneapolis-St. Paul boundary), what percentage of its ingredients are

locally and sustainably grown (with an initial goal of 75%, but an end goal of 100%), and how successful its

community initiatives (gardens, compost program, event sponsorship) are.

Business Philosophy

In business, it is crucial to serve the needs of customers and to provide them with a way for their wants to

serve a greater social and environmental good. In the words of St. Olaf professor Jim Farrell, such a business

“makes it easy for people to be good.” In this case, Good Work meets customer desires for high-quality beer

and a pleasant social environment while providing employees with stimulating work and a living wage.

Revenue from tap and growler sales support growers who are producing hops and grain with sustainable

practices and enable Good Work to continue producing a high-value product that restores the land that

supports it.

Target Market

The brewery will market its beers to Longfellow community members and the Minneapolis/St. Paul area,

with a main focus on high-quality, locally made beer made through environmentally restorative processes.

Inside the Craft Brewing Industry

The craft beer industry has been steadily growing since 1980, when craft brewers sought to break away

creatively and commercially from the giants of American brewing—among them Anheuser-Busch, Coors, and

Miller. While larger breweries focused mainly on the American lager style and competed on the basis of price

alone, craft breweries chose to direct their attention toward fresh, local ingredients; strong malt and hop

flavors; and experimentation with new and heritage recipes.2

While beer’s position in the overall alcoholic beverages market has been slipping since the mid-2000s, the

craft beer industry has demonstrated steady growth at the same time, with dollar sales increasing 58%

between 2004 and 2008.3 In 2013, the industry showed growth of 18% by volume and 20% in dollars;

previously, in 2012, growth was 15% by volume and 17% by dollars.4 The primary components of this

2 Stack, Martin H. “A Concise History of America’s Brewing Industry.” EH.net. http://eh.net/encyclopedia/a-concise-

history-of-americas-brewing-industry/

3 “State of the Craft Beer Industry: 2013.” Demeter Group Investment Bank.

4 Brewers Association | Facts. Brewers Association: A Passionate Voice for Craft Brewers. Updated 17 Mar 2014.

http://www.brewersassociation.org/pages/business-tools/craft-brewing-statistics/facts

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growth were current craft drinkers purchasing more craft beer as well as new craft drinkers replacing their

other alcoholic beverages with craft beer. Five of the ten fastest growing beer brands are craft breweries:

Dale’s Pale Ale, Lagunitas, Ranger, Torpedo, and Shiner Light.5

As of March 17, 2014, 304 new microbreweries had officially opened in 2013 and 20 had closed in the same

year. Many of these brewery closures likely occurred because the businesses were undercapitalized and needed

more funding than they had allocated. There were 2,768 craft breweries operating during some or all of 2013.

The craft brewing industry had a retail dollar value of approximately $14.3 billion in 2013, and it currently

provides an estimated 110,273 jobs in the U.S.

Trends in the craft brewing industry include more hop-driven styles; heritage and unusual recipes including

sour beers and beers fermented with fruits and spices; and experimentation with alcohol content ranging

from high-alcohol brews (sometimes called barleywines) to low-alcohol “session” beers. In order to

experience desired flavor and mouthfeel characteristics, many current craft beer drinkers, especially

Millennials, favor choosing beer by style first, then brand. The barley industry in Minnesota is poised to grow,

given increased research by the University of Minnesota’s agricultural division into disease-resistant and high-

yield barley varieties. According to Paul Kramer, Vice-President of Malting Quality at Rahr Malting in

Shakopee, locally grown barley could save malters and brewers $1 per bushel in transportation costs.6 The

increased attention paid to the barley industry as well as the popularity of hop growing from commercial to

community hop farms suggest that locally-grown ingredients will become more readily available to satisfy

consumer demand for all-local beer. Good Work will be poised to capitalize on these trends by staying

connected with customers and homebrewers to learn what styles are in demand and by building a strong

relationship with local growers to obtain the highest-quality ingredients.

Core Competencies

The brewery’s strengths include its zero-waste, positive-emissions structure; by offsetting its carbon emissions

with credits, transporting ingredients by alternative means, and repurposing its waste to nourish biological

and technical cycles, Good Work stands out as a completely unique Minnesota brewery.

5 “State of the Craft Beer Industry: 2013.” Demeter Group Investment Bank.

6 Overland. “Research In Locally Made Ingredients.”

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Further strengths include Good Work’s ability to adapt brews to seasonal and regional ingredients and tastes

with its small brewing capacity; locally-hired employees who are connected to and invested in the life of their

community; cooperatively-owned structure that enables community members to have a stake in the company

and share in its success; and close proximity to the market (customers who live in South Minneapolis and the

surrounding area).

Legal Form of Ownership

The brewery will be classified as a cooperative corporation in order to allow for community ownership. I

have chosen this form so that community members can become literally invested in Good Work, become more

enthusiastic about the workings of the business, and share in its success. For a one-time purchase of a $50

share, people can become members of Good Work to receive special membership discounts and patronage

refunds at the end of each year.

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IV. Products and Services

Good Work will produce a seasonally rotating lineup of three to five beers made with local ingredients. Initial

styles will be within the following range:

Kölsch: A light, dry, and bready ale with mild hop bitterness. (Year-round)

Stout: A dark, robust, relatively bitter ale. Smooth and full-bodied; a meal in a glass. (Winter)

Brown Ale: Malty, slightly sweet, and medium-dark. (Autumn)

Lambic: A Belgian-style beer that gets its unique character from fruit added during the fermentation process.

The brewery’s lambic will be made with locally grown fruits to celebrate fresh seasonal produce. (Summer)

American Pale Ale: Floral hop character, medium body, and crisp bitterness. (Spring)

These are initial ideas, but they have been chosen because they blend familiar standby recipes with unusual

and innovative brews. Customers can expect some degree of familiarity when they visit Good Work for the

first time, but this familiarity is a vehicle for introducing them to just how comforting and pleasurable a

positive-emissions company can be. Eliminating waste doesn’t have to be strange and unfamiliar to

customers; done right, it takes place with no negative impact on the final product.

Competitive Advantages/Disadvantages

Factors that give the brewery competitive advantages include:

All-local and sustainable ingredients- stand out from other small breweries

Zero-waste, positive emissions structure- unlike any other Minnesota brewery

Close to market- building community relationships and customer loyalty in Longfellow

Building and supporting community initiatives- helps support Longfellow community beyond

customer base

Goal to hire all-local employees- support community and build positive relationships with locals

Location in South Minneapolis- near some other bars and taprooms but away from the nucleus of

Northeast taprooms

No need to distribute- growler and tap sales only

Competitive disadvantages:

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Many microbreweries in Minneapolis-St. Paul area- will require concerted focus on local/sustainable

ingredients to differentiate

Pricing Structures

The pricing structure of the brewery will be $4-6 per pint of beer, with smaller 10 oz “snifter” pours available

for $3-5. The price will depend on the density of ingredients used in each beer; “heavier” beers with

significantly more malt or hops by volume will be priced higher than less ingredient-intensive beers. The

upper limit also takes into account potentially higher prices of the locally grown ingredients. Good Work will

also sell 64 oz glass growlers of beer to be filled only at the taproom. 64 ounce growlers will be priced at $15-

17 and $10-12 for refills. The initial growler price includes a $3-5 deposit for the glass bottle.

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V. Marketing Plan

Industry Facts

The craft beer industry produced 13.7 million bbl/year of beer in 2012. Good Work Brewing will not have more

than a very small share of the craft market, as its scope and reach are narrow and focused more on building

deep relationships within a core customer group than on reaching out to a broad audience.

A number of recent developments have come to characterize the craft beer industry. The recent increase in

numbers of microbreweries, taprooms, and craft beer-focused restaurants gives craft beer lovers a sociable

way to connect with each other over new and favorite beers. This change has prompted beer lovers to share

what they’re drinking and learn about new craft breweries they might not have heard of otherwise.

Technologically, the brewing industry has changed for producers as well as consumers. At Red Hook Brewing in

New York, a new computerized brewing process allows recipes and brewing processes to be digitally

programmed. Brewers can now have real-time monitoring of each step of the process, leading to greater

ingredient efficiency and faster production time. 7 Smartphone apps, like UnTappd, and social media sites

allow people to rate beers, bars, and breweries and spread information by word of mouth.

Politically, changing state laws have resulted in greater freedom for breweries and taprooms. In Minnesota,

the 2011 passage of a bill known popularly as the “Surly bill” allowed breweries to operate taprooms and sell

growlers to be filled on the premises. North Carolina passed a similar law in 2013, and many other states have

similar laws.8

Since the craft beer renaissance in the 1980s, homebrewers and “extremist” breweries like Rogue, Dogfish Head,

and Deschutes have led the industry in ingredient and technique innovation.9 Current trends within the industry

include beers with a strong hop presence, ranging from the classic India Pale Ale to the more aggressively

hopped American Pale Ale. Some brewers have subscribed to the philosophy colorfully described as the

“hops arms race,” in which as much as100 pounds of hops are added to the beer during boiling and

7 “Technology a Game Changer for American Craft Beer Brewers.” American Craft Beer. 16 Apr 2012.

http://americancraftbeer.com/item/technology-a-game-changer-for-american-craft-beer-brewers.html

8 Gleason, Patrick. “Politicians Foster A Craft Beer Renaissance By Not Acting Like Politicians.” Forbes. 26 Jun 2013.

http://www.forbes.com/sites/realspin/2013/06/26/politicians-foster-a-craft-beer-renaissance-by-not-acting-like-

politicians/

9 “State of the Craft Beer Industry: 2013.” Demeter Group Investment Bank.

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fermentation. Further trends include the exploration and development of heritage and unusual recipes

ranging from sour beers to beers fermented with fruits and spices. Finally, brewers are also experimenting

with alcohol content, producing beers as high as 20% alcohol by volume (%ABV), also known as

“barleywines,” along with 3-5%ABV “session” beers.

The craft beer industry demonstrated growth by 15% in dollar value and 13% in volume in the first months

of 2013.10

More locally, breweries and taprooms in the Twin Cities, such as Surly Brewing, Indeed Brewing, Fulton Brewing,

and Dangerous Man Brewing have all been expanding dramatically in recent years. Surly is currently building its

$20M “Destination Brewery” in southeast Minneapolis.11 Indeed is expanding its operations into growler sales

after a recent bill passage raising the production cap on breweries allowed to sell growers,12 and Dangerous Man

is barely keeping up with demand for pints and growlers.13

Barriers to Market Entry

Barriers to entering the craft beer market include high capital costs; equipment for starting up a brewery is

expensive, and this can be remedied by purchasing used equipment from other breweries.

Rent for commercial, brewery-ready space is also costly, and can be managed by searching diligently for an

affordable and ideal location. Further, owners can offset the rent price with USDA grants or other credits for

adopting sustainable energy generation or resource use practices.

Shipping costs are also high, taking into account both fuel use and the risk of transporting heavy liquid in

sometimes fragile containers. Good Work’s solution to the distribution issue is to sell its beer at one source

only, the taproom, and to avoid distribution entirely.

10 “Is the craft movement set to benefit from some empowering legislation?” Euromonitor. 25 Nov 2013.

11 Moore, Janet. “Surly breaks ground on $20M destination brewery in Minneapolis.” Star Tribune. 29 Oct 2013.

http://www.startribune.com/entertainment/dining/229733621.html

12 “Growlers are now available at Indeed!” Indeed Brewing. 11 Sept 2013. http://www.indeedbrewing.com/growlers-

are-now-available-at-indeed/

13 Interview with Maggie Pearson, assistant taproom manager, Dangerous Man Brewing. 11 Mar 2014.

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Changes in government regulations pertaining to taprooms could have an effect on Good Work’s operations; a

restriction in taproom laws is not likely, but an expansion of them may result in more Twin Cities taprooms

that would compete with Good Work for customers, which can motivate innovation. A change in the economy

could also have an effect, but despite the economic recession beginning in 2008, the craft beer industry has

continued to grow year by year. Craft beer seems to experience relatively inelastic demand in this regard. And

finally, a change in the beer industry could affect Good Work; a new shift of focus away from small craft

brewers could occur, which would threaten the brewery’s business, but given craft’s steady upward climb, this

is unlikely.

Product Features and Benefits

From a customer’s perspective, Good Work will provide locally sourced and produced beer from sustainably

grown ingredients. Customers are likely to perceive it as great-tasting, average-priced beer that supports local

farmers and community members—in short, a want that serves a greater need. The lineup of beers ranging

from basic staples (American Pale Ale, Stout) to more unusual styles (Lambic, Kölsch) allows customers to

compare common styles to other breweries as well as try unfamiliar beers. In addition to the pride of

supporting local business, customers will experience the benefit of inclusion in a vibrant community.

Service Features and Benefits

Good Work will provide a variety of seating options, from bar stools to small modular tables to outdoor patio

seating. The taproom area provides customers with a place to gather and socialize with other members of the

community, and since taprooms are not permitted to sell food in Minnesota, customers can carry in food

from other eateries (such as Gandhi Mahal, Midori’s Floating World Café, the Anchor Bar, etc.) or bring food

from home to complement their drinking experience.

Beyond the consumption experience, Good Work will support Longfellow community initiatives such as

community gardens, skill-sharing events, and communal resources such as tool sheds. Good Work will survey

employees and customers in order to find what sorts of initiatives are already happening and which ones

community members would like to start..

Customers

The Microbrew Target Market

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According to the 2006 edition of Best Customers, key customer groups for purchasing beer at bars and

restaurants (referred to as on-sale) include householders under 35 and households in the Midwest.14 Further,

single customers comparatively spend the most on on-sale beer, followed closely by married couples without

children. By education, the top customers for on-sale beer are those who have completed a bachelor’s degree.

And finally, unsurprisingly, the amount of money spent on on-sale beer increases as annual salary increases.15

In general, 46% of new craft beer drinkers are Millennials (coming of age after 2000).16 84% of craft beer

drinkers change what beer they drink depending on the season.17

From these data, it can be determined that the target market for Good Work is 21-35 years of age, single or

unmarried without children, college-educated, and middle to upper-middle class. Finally, it will be important

for Good Work to provide a seasonally rotating lineup of beers to satisfy customers’ desires for variety and

connection to place through seasonality.

The Longfellow Neighborhood

The ZIP code 55406, which encompasses the Longfellow neighborhood as well as surrounding

neighborhoods, has a population of 32,896. The median age is 39 years, and median income is $49,100. The

area is populated by the following PRIZM groups:

American Dreams

Younger than 55 and in the upper-middle class with a median household income of $56,067, this group is

mostly urban, has higher than average income-producing assets, and is predominantly composed of

homeowners (some of whom have children). This group is generally college-educated and professionally

employed, and is comprised of white, black, Asian, Hispanic, and mixed races (with non-white races making

up just under half of the group).

14 “Beer and Ale at Restaurants and Bars.” Best Customers. 2006.

15 Ibid.

16 Clarke, Jim. “Who is The New Beer Consumer?” Beverage Media Group. 1 May 2012.

http://www.beveragemedia.com/index.php/2012/05/who-is-the-new-beer-consumer-brewers-ready-to-say-ihola-and-

more-to-expand-reach/

17 Crowell, Chris. “Craft beer consumer stats: how will they affect your business plan?” Craft Brewing Business. 20 May

2013. https://www.craftbrewingbusiness.com/business-marketing/craft-beer-consumer-stats-how-will-affect-your-

business-plan/

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Qualities that make this group a desirable market include a young median age, upper-middle class income,

and college education.

Close-in Couples

Older than 55 and owning homes in urban neighborhoods, Close-in Couples are in the lower middle class

with a median income of $41,435 and above average income-producing assets. This group is ethnically diverse

and populated by white, black, Asian, Hispanic, and mixed races. Most Close-in Couples are retired empty-

nesters with high school educations.

This group is less likely to seek out craft beer and taprooms due to their age cohort, lower median income,

lower education levels, and home-based hobbies.

Money & Brains

Members of this urban group are wealthy, with a median income of $87,139, “elite” income-producing assets,

and advanced degrees. Mostly in the age range of 45-64, some members of the group have children at home,

generally own homes, work in management positions, and belong to racial categories of white, black, Asian,

Hispanic, and mixed.

Qualities that make this group a desirable target market include high income and high levels of education.

Children at home and higher average median age make it slightly less likely that members of this group will

patronize Good Work, but they are still a worthwhile market.

Multi-Culti Mosaic

Members of this urban group are in the lower middle class with a median income of $35,770 and moderate

income-producing assets. Ranging in age from 35-54, some members of this group have children at home,

and most are homeowners. Most members work in service industries and have some college education.

Members fall into the racial categories of white, black, Asian, Hispanic, and mixed.

A quality that makes this group a desirable target market is their relatively high levels of education; however,

with a relatively low income, childcare concerns, and slightly higher age cohort, it is unlikely that members of

this group will patronize Good Work.

The Cosmopolitans

Upper-middle class with a median income of $56,913, members of this urban group have above-average

income-producing assets and are generally homeowners. Cosmopolitans are mostly 55+ empty-nesters with

college degrees and white-collar jobs, and are members of white, black, mixed, and Asian racial groups.

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Members of this group enjoy going out to socialize on a regular basis and include ample time for leisure in

their lives. 18

Qualities that make this group a desirable target market include higher median income combined with higher-

than-average leisure time and the desire to spend it out at restaurants and bars.

Major Competitors

Fair State Brewing Cooperative (taproom, co-op, locally made)

2506 Central Ave NE

Minneapolis, MN 55418

Dangerous Man Brewing (taproom, growlers, locally made)

1300 2nd St NE

Minneapolis, MN 55413

Harriet Brewing (location, taproom, growlers, locally made)

3036 Minnehaha Ave

Minneapolis, MN 55406

Fulton Brewing (taproom, locally made)

414 6th Ave N

Minneapolis, MN 55401

Indeed Brewing (taproom, growlers, locally made)

711 15th Ave NE

Minneapolis, MN 55413

Table 1: Competitive Analysis

FACTOR Good Work

Brewing Strength Weakness

Fair State Brewing

Cooperative

Dangerous Man

Brewing

Importance to

Customer

Products Local,

sustainable x

Locally produced

Locally produced

2

18 Zip Code Look-up, 55406. My Best Segments. The Nielsen Company.

http://www.claritas.com/MyBestSegments/Default.jsp?ID=20

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FACTOR Good Work

Brewing Strength Weakness

Fair State Brewing

Cooperative

Dangerous Man

Brewing

Importance to

Customer

Price

Average to slightly higher

x (conveys high quality)

Average Average 4

Quality High Equal to

competitors High High 1

Selection Small x (easy to change lineup)

x (fewer beers to try)

Small Large 2

Stability

Goal of long-term

community integration

x

Community owned,

therefore more stable

Integrated into

community 4

Company Reputation

High, positive

x High, pre-

opening buzz High,

positive 1

Location Ideal (south) x Northeast Northeast 3

Appearance Inviting,

comfortable x Unknown

Comfortable, sociable

2

Advertising

Logo stickers, print and

online media, The

Growler, website/blog

x Website/blog, logo apparel, The Growler

Logo apparel, growler

customers, The Growler

3

Image Responsible,

fun x 1

I envision small, taproom-focused breweries like Dangerous Man and Fair State Brewing to be Good

Work’s major competitors. The two will have a competitive advantage due to their earlier entrance into the

market (Dangerous Man began in 2012, and Fair State is scheduled to open in June 2014), although my brewery

focuses on local and sustainable ingredients to a degree that the other two do not. This will be advantageous

to Good Work. Both of these competitors are located in Northeast Minneapolis, somewhat removed from

Good Work’s location in the Longfellow area of Southeast Minneapolis. However, Harriet Brewing, a

nanobrewery, is located in northern Longfellow and will prompt customer exchange and product innovation

between the two taprooms.

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Niche

Good Work Brewing’s niche is providing a small, rotating lineup of high-quality beer made from local and

sustainably produced ingredients. It will market its products to customers who value building community and

supporting local and cradle-to-cradle farming and malting. Its cooperative structure will attract customers

who are passionate about brewing and want to have a greater stake in the business by becoming member-

owners.

Strategy

Growth Plan

In order to build a business with a solid base of quality beer recipes, community support, and financial

feasibility, Good Work will begin as a home-operated, community-owned brewing operation. Interested

community members will divide the cost of producing a 5-10 gallon batch of beer, experimenting with recipes

and production methods in a small-scale, low-risk fashion.

Of all beer brewing methods, all-grain brewing offers the greatest degree of control over the finished product,

and starting a brewing cooperative will require the purchase of an all-grain system. Such a system would

include the following:

All-grain brewing tanks (hot liquor and mash) with insulation and false bottom- $219.99 at Northern

Brewer homebrew supply

Stainless steel boil kettle and propane burner- $114.99 at Northern Brewer (20 lb propane tanks

available for $29.99 at Lowe’s and can supply BTUs for 3-5 brew days)

Wort chiller- $59.99 at Northern Brewer

Fermenting bucket- $16.99 at Northern Brewer

Wide-mouth glass carboy- $43.99 at Northern Brewer

For starting on a small scale, 7.5 gallon batches are a reasonable size and would produce approximately 63 12-

ounce bottles of beer. Therefore, the containers listed above are 7.5 gallons in capacity. All of these startup

materials would cost $485.94, and would be split evenly among community shareholders. If just 20

community members purchased a share in the neighborhood brewery, start-up equipment would cost only

$24.30 per person. The ingredients for a 7.5 gallon all-grain batch of beer range from $50-70 in price. By

going in together to purchase shares of a batch of beer, community members can purchase high-quality beer

for a low price and support the brewing innovation in their neighborhood. If the aforementioned 20

members shared the cost of one batch, it would cost each of them only $2.50 to receive an average of 3

bottles of beer. Fewer members would mean a slightly higher price for slightly more beer per person.

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In this environment, Good Work can build customer demand, a database of favorite recipes, and capital for a

larger, 10 bbl brewing facility and taproom. Failures at this scale are inevitable, but they will be far easier to

remedy than failures at the 10 bbl scale, and the stakes are much lower. After 2-3 years of experimentation at

the 7.5 gallon scale, brewers can begin to share beer with potential investors to encourage them to offer

capital for the larger facility.

Growth Timeline

Year 1: Assemble homebrewers and interested community members to purchase start-up equipment. Share

cost of each batch of beer and take turns finding, brewing, and bottling recipes. Drink together and find out

what recipes resonate with community tastes.

Years 2-3: Develop list of favorite recipes. Host potlucks and other gatherings where the beer is served to

gauge what the broader community thinks, and learn what others want to try. Reach out to potential

investors, displaying the potential for a successful brewery given proven demand and reliable recipes.

Assemble capital for full-scale brewery and taproom in Longfellow.

Years 4-5: Seek out ideal space in Longfellow. Continue assembling capital and begin recruiting cooperative

members. Select who in initial group wishes to hold positions within the brewery. Begin to search for more

employees through farmers’ markets, street fairs, homebrew supply shops, and co-op groceries.

Years 5-6: Construct full-scale facility and begin operations as a brewery/taproom.

Five Years Out: Full-Scale Facility

Fig. 1. American Brewers Guild Site Assessment Survey.

Page 20 of 34

Promotion

Good Work will advertise through The Growler, a free quarterly about the Minnesota brewing industry; through

sponsorship of the public radio station 89.3 The Current, a press release in the Minneapolis Star-Tribune, an

active website and blog, and sponsorship of farmers’ markets and summer concerts. These channels will

enable Good Work to reach customers who are enthusiastic about high-quality beer, local and sustainable

growing, and community activities. Additionally, low-cost methods of promotion include encouraging

customers and employees to tell friends and neighbors about the brewery, as well as having special drink

discounts for first-time patrons. Good Work’s image will be one of warmth, hospitality, stability, and

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responsible resource use. It should call to mind the heritage of the brewing and labor traditions and appeal to

a wide array of ages, cultures, genders, and abilities.

Good Work will establish a customer loyalty program (with promotional rewards such as stickers, free growler

deposits, free beer, hats, and shirts) for members and repeat customers.

Promotional Budget

Good Work will spend 7-8% of its annual revenue on promotional tools, as suggested by the Small Business

Administration.19

Pricing

Good Work’s prices for pints ($4-6), snifters ($3-5), and growlers ($12-15 new, $10-12 refill) will be on par with

other taprooms in order to match the price that most customers feel comfortable paying. Rather than

competing on basis of price, Good Work will compete by brewing with the freshest local ingredients and by

connecting itself to the life of the community.

Proposed Location

Location is important to Good Work’s customers and employees, because it is in keeping with the brewery’s

mission to hire local employees and be located near where customers live, work, and play; in this case, this

will be the Longfellow neighborhood of Minneapolis. The brewery will have a small parking lot if possible,

and at the very least, on-street parking. Bicycle parking will be plentiful, thus encouraging cyclists to patronize

the brewery and accommodating more people with fewer expenditures for parking space. The location will be

consistent with Good Work’s image as a locally driven, cradle-to-cradle brewery through its use of repurposed

and upcycled building materials, warm and inviting interior space, and convivial patio area. Customers who

want to bond over the beer they’ve purchased at the taproom will find a pleasant environment to do so,

whether they spend the time inside or outside. Main competitors, namely Fair State Brewing Cooperative and

Dangerous Man Brewing, are located across the river in Northeast Minneapolis, and it is ideal for Good Work to

be located in Longfellow because South Minneapolis currently has fewer microbreweries and taprooms than

the fairly saturated Northeast market. Customers who want to patronize a local taproom can do so without

traveling to Northeast.

19 Beesley, Caron. “How to Set a Marketing Budget that Fits Your Business Goals and Provides a High Return on

Investment.” SBA.gov. 4 Jun 2012. http://www.sba.gov/community/blogs/how-set-marketing-budget-fits-your-

business-goals-and-provides-high-return-investmen

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Distribution Channels

Good Work will only sell its beer on tap at its brewery and taproom. Customers can purchase 64 oz growlers

of beer for off-site consumption during taproom hours.

Sales Forecast

At the peak of Good Work’s operations—that is, once the brewery has established itself in its full-scale

facility—the taproom is projected to be selling:

25-30 growlers/day, 15 customers/hour, 1.5 pints/customer = 1952 oz/day = 15.25 gal/day

15.25 gal/day x 5 days/wk = 76.25 gal/wk = 5 half-barrel kegs/wk = 2.5 bbl/wk, 130 bbl/year

These levels of growler sales and beer consumption are based on data from Dangerous Man and Indeed Brewing’s

current sales levels, which are at a level that Good Work aspires toward.

Indeed Brewing, another Minneapolis taproom, has revenue estimated at $110,000/year. The taproom is open 3

days a week, and therefore 157 days/year. That means revenue of $700/day; figuring on an average purchase

of 1.5 beers per customer, and assuming a rotation of 15 customers per hour, $8 x 15 x 8 = $960 per day.

Good Work will be open 4 days a week, and therefore 209 days/yr. At similar revenue levels of $960 per day x

209 days = $200,640 per year.

At projected sales levels of 20 growlers/day, 75% of them new, and 25% of them refills, 15 (13.5) + 5 (11) =

202 + 55 = $257 from growlers. Annually, Good Work can estimate 257(209) = $53,713 from growler sales.

Total Projected Revenue = $254,353 per year.

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VI. Operational Plan

Production

Good Work’s beer will all be produced on site in the brewery/taproom. Brewing will occur 1 to 2 times per

week in the 10 bbl system, and the company will make weekly orders of only as much raw material as is

necessary for one to two batches of beer. Prior to brewing, the ingredients will be stored in the taproom

during non-business hours. The brewmaster and assistant brewmaster will test samples of beer at multiple

stages of the brewing process for correct gravity, unwanted flavor compounds, and contamination.

In order to inform future brew days, the brewmaster, assistant brewmaster, and all other Good Work

employees will make a practice of exploring various styles and brewing methods through visiting other

breweries in Minnesota, as well as occasionally across the U.S. and beyond. Good Work will also survey its

customers to learn what styles they’d be interested in trying.

Location & Space

From an operations perspective, Good Work’s location needs to be close to the highway in order to facilitate

easy delivery of raw ingredients. Easy walk-in and bike-in access for customers and employees is also crucial;

thus the brewery should be located near bike- and pedestrian-friendly paths. The square footage of the space

should range from 550-1200 ft2, with 12-14’ ceilings in the brewhouse to accommodate fermenters and 9-10’

ceilings in the fermentation and taproom areas. The space needs to be zoned as a taproom with liquor license.

Water supply should be 60 psi @ 25 GPM, with dedicated water flow to the brewing operation. Hot and cold

water will be necessary, especially in the kegging area of the brewery. Drains in the floors of the brewhouse

and walk-in keg cooler will be necessary, and if possible, a ¼” sloped floor would help liquid drain. The

floors, walls, and ceilings will be made washable. Exhaust flues will be placed to vent steam and other gases

from boiling and firing the boiler, and air conditioning will circulate fresh air into the brewhouse. 20

Cost

20 “Building Requirements.” Specific Mechanical Systems Ltd. http://specificmechanical.com/products-

services/brewery-systems/building-requirements

Page 24 of 34

Estimate your occupation expenses, including rent, but also including maintenance, utilities, insurance, and

initial remodeling costs to make the space suit your needs. These numbers will become part of your financial

plan. (down in Startup Expenses)

Business Hours

Good Work’s taproom will be open to sell beer on tap and by growler from Tuesday through Saturday, 4

PM-12 AM. Brewing will occur twice a week from 5 AM until the active brewing is finished, and brew days

will be set at the discretion of the brewmaster.

Personnel

Good Work plans to eventually hire 12-14 employees, including a brewmaster, assistant brewmaster, marketing

director, social media director, taproom manager, accountant, and 4-6 taproom employees. In order to find

the right employees, directors plan to canvas the Longfellow neighborhood; place informational posters in

co-ops, taprooms, liquor stores, and homebrew stores; and post an opening for job applications on Good

Work’s website.

Good Work will pay its employees a living wage, with health insurance and retirement plans available for full-

time employees. Loyalty to the brewery will be rewarded with salary increases.

Inventory

Good Work will order only enough supplies to brew 1-2x per week (to keep stock fresh), and will store kegs of

finished beer in order to free up the brewing system for different varieties of beer.

Suppliers

Rahr Malting Co.

Shakopee, MN

Hippity Hops Farm

Forest Lake, MN

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VII. Management and Organization

The manager of day-to-day operations at Good Work will need the following qualities:

clear vision of the company’s zero-waste, positive-emissions goals

ability to communicate with brewing, serving, marketing, and accounting staff

ability to break down Good Work’s overall goals into manageable increments

desire to innovate and lead craft brewing market in Minneapolis-St. Paul area

Further, the entire Good Work team will need to possess:

ability to work constructively in teams

desire to communicate Good Work’s mission to the Longfellow community general public

passion for environmental, social, and economic sustainability

attitude toward exceptional customer service

ability to form strong bonds of affinity around great beer and resource-minded brewing

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VIII. Startup Expenses and Capitalization

According to Sound Brewing Systems, Inc., a brewery generally costs between $125 and $350 per barrel of

annual brewing capacity to build and support. For a 10 bbl system that brews on average 1.5 times per week,

that cost ranges from $97,500 to $273,000.21 Below is a breakdown of the expenses that make up this overall

cost.

Brewing supplies- the price of a new 10 bbl system varies, but a new system from Glacier Tanks, LLC costs

$62,287.05.22 Brewers have shared that used systems are far more affordable and are often sold by breweries

that have outgrown the 10 bbl capacity. After spending time within the brewing industry while outreaching

for capital, the Good Work team should be able to make a connection with another brewery willing to sell its

equipment for a better price than new.

Rent- In Minneapolis, the average for office spaces is $13.42/sq ft/yr.23 That x 1500 is $20,130.

Ingredients

Grain: $0.61/lb, 561 lbs (basic recipe) = $314.76/batch

Hops: $33.47/batch (but need 88 lb contract purchase)

Yeast: $195.00/batch

Mineral Additions (calcium chloride and calcium sulfate): $0.50/batch24

Excise tax = $.15 per gallon, so $47.25 per batch.25

Total cost of 1 batch: $590.98; $59.10/barrel; $1.88/gal; $0.015/oz

21 “Industry Info, Standards, Statistics, and Conversion Factors.” Sound Brewing Systems, Inc.

http://www.soundbrew.com/standards.html

22 “10 BBL Complete BrewHouse STEAM Tank System.” Glacier Tanks, LLC.

http://www.glaciertanks.com/Brew_House-10_BBL_Complete_Brew_House_STEAM.html

23 Minneapolis, MN Market Trends. Loopnet. http://www.loopnet.com/Minneapolis_MN_Market-Trends

24 Mitchem, Michael P. “An Ounce of Beer- Ingredients.” Brewing in the Woods. 1 Oct 2012.

http://brewinginthewoods.blogspot.com/2012/10/an-ounce-of-beer-ingredients.html

25 Biggerstaff, Andrew, and Joel Michael. “Alcoholic Beverage Taxes.” House Research: Short Subjects. July 2013.

http://www.house.leg.state.mn.us/hrd/pubs/ss/ssalbvtx.pdf

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Since this sample recipe is for a cream ale, a per-batch cost of $590-780 will be allowed to account for

“heavier” (more ingredient=intensive) beers and less readily available ingredients.

Low end cost of brewing/year: $590 x 2 x 52= $61,360

High end: $780 x 2 x 52 = = $81,120

Average: $71,240

Employee salaries- $15/hour for taproom employees (plus tips), will cost $49,920/yr to pay 2 taproom

employees. Ideally, Good Work will employ approximately 8 taproom employees, plus a CEO,

brewmaster/assistant brewmaster, accountant, marketing director, social media director, and taproom

manager. Salaries for all of these employees will be dependent on brewery sales and individual job

responsibilities, and cannot be projected this far in advance.

Marketing- 7-8% of revenue. Projected revenue: $254,353 per year. Marketing budget: $19,076 (7.5% of

revenue)

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IX. Financial Plan

During years 2-5 of Good Work’s nascence as a small-batch brewing collective, brewers and community

members will seek out potential investors and encourage them to support the brewery becoming a reality.

Some of this start-up capital will ideally be in the form of donations and grants and will not need to be repaid,

but some of it will be in the form of small-business loans. In order to raise capital, Good Work representatives

will hold tastings at farmers’ markets, give public presentations about the brewery’s community and

environmental goals, and solicit the attention of “angel” investors. One of these is Dr. Stephen Naylor of the

Mayo Clinic, who has expressed interest in Good Work’s mission.

12-Month Profit and Loss Projection

Costs

$71,240 (beer) + $19,076 (marketing) + $20,130 (rent) + $49,920 (taproom employees) + unknown (other

salaries) + unknown (brewing equipment) = $160,366, not counting salaried employees and brewing

equipment, both of which will become more clear as the full-scale brewery becomes a reality.

Revenue

$254,353 per year (see Sales Forecast).

First year profits: $93,987, not counting salaried employees and brewing equipment. Due to the expense of

employee salaries and equipment, these profits will be much smaller.

Break-Even Analysis

In order to break even so that Good Work is operating at profit rather than loss, the brewery will need to sell a

bare minimum of an estimated 15.25 gallons of beer per week, or 130 bbl per year. This would supply a

revenue of $254,353 per year, which has been selected as an intermediary point at which it is likely the

brewery will be able to pay for the costs of space, ingredients, salaries, and marketing. Its production capacity,

set at 780 bbl per year, is considerably higher than this bare minimum, which is good news. Good Work will

likely not sell at its full capacity, as it will be prudent to store some beer to age and have enough supply to

withstand temporary brewing problems. However, it will aim to ultimately produce at a higher level than 130

bbl per year.

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X. Appendices

Disambiguation of Terms

“Craft” brewing: As defined by the Brewers Association, a “craft” brewery is small (less than 6 million bbl of

beer per year), independent (less than 25% of business controlled by entity that is not a craft brewer), and

traditional (loosely defined as relying on inventive or heritage recipes for beers, as well as not producing a

significant quantity of non-beer beverages). http://www.brewersassociation.org/pages/business-tools/craft-

brewing-statistics/craft-brewer-defined

Microbrewery: A brewery that produces an annual output of 15,000 barrels (bbl) of beer per year, with 75%

or more of it sold off-site. http://www.brewersassociation.org/pages/business-tools/craft-brewing-

statistics/market-segments Microbreweries fall within the craft brewing umbrella, but not all craft breweries

are considered microbreweries. Samuel Adams, for example, is technically classified as a craft brewery, and

the well-established company produces thousands of barrels of beer per year.

Cradle to Cradle philosophy: As defined by Michael Braungart and William McDonough in Cradle to Cradle:

Remaking the Way We Make Things and The Upcycle: Beyond Sustainability—Designing for Abundance, Cradle to

Cradle thinking aims to “improve the quality of products so that they:

Have an improved consumer quality for the user

Pose no health risk for anyone who comes into contact with them

Are of both economic and ecological benefit.”26

Keeping it Local- Investigations into Local Craft Brewing

Interview, Maggie Pearson, assistant taproom manager, Dangerous Man Brewing, Minneapolis, MN

3/11/14

26 “Cradle to Cradle.” EPEA-Hamburg.org. http://epea-hamburg.org/en/content/cradle-cradle%C2%AE

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I spoke with Maggie Pearson, the assistant taproom manager of Dangerous Man Brewing’s NE Minneapolis

taproom. On a Tuesday afternoon, as other employees prepared the taproom for another busy afternoon and

evening of serving patrons, we chatted over a glass of Kölsch.

The first thing Maggie called my attention to was the pallet of grain that sat in the corner of the taproom.

Dangerous Man receives a similar shipment, enough for one brewing day, one to two times per week. They

order through Brewer’s Supply Group, a large ingredient wholesaler. Some grain is malted locally by Rahr

Malting in Shakopee, the largest malt house in the U.S. Some of Rahr’s malt is locally sourced, says Maggie,

but most is not. The brewery works within the parameters of a 10-barrel brewing system, all housed behind

the taproom bar. The beer is served directly out of the brewing system’s brite tank–the leaders have plans to

keg and store finished beer to increase the brewery’s serving capacity.

Community connections

Dangerous Man, situated in the unique neighborhood of Northeast Minneapolis, has strived since its

beginnings to become a part of its community. 80 to 90 percent of Dangerous Man’s small employee base live

within two miles of the brewery. Speaking of the taproom’s social environment, Maggie says, “This is our

place.” Taproom employees know the names of their regular patrons who come to Dangerous Man

frequently to socialize with each other. Northeast Minneapolis is very tight-knit, and Maggie claims that some

of this can be credited to zoning that allows small neighborhood bars to coexist with residential blocks. As a

result, she says, “people go out a lot” and regularly patronize their neighborhood bars. Dangerous Man

supports patrons’ social rituals by providing a variety of board games to accompany their beers; unlike most

restaurants, Maggie explains, the taproom is not trying to rotate customers through quickly.

The brewery has made the most of its close connection with locals, forming a volunteer crew of

approximately 200 members in the fall of 2013. The crew works mostly on Northeast-centered projects.

About 80 people regularly attend volunteer events ranging from packing lunches for low-income local

schoolchildren, bike cleaning and building days at Free Bikes for Kids, and the Canadian-Pacific Christmas

Train for disadvantaged children. The volunteer events, Maggie says, are staff-intensive, but despite the large

amount of work involved, Dangerous Man staff wants to organize more of them. She says they have helped

the staff and patrons get to know each other better and helped the popular brewery harness the people power

at its fingertips.

Beyond its internal social environment and volunteer activity, Dangerous Man has built connections to its

suppliers and independent organizations by giving spent grains to composting organizations in the Twin

Cities, such as the Women’s Environmental Institute. Since the taproom, by Minnesota law, is only allowed to

serve the beer it produces and not food, Dangerous Man encourages customers to order food from

neighboring restaurants and carry it in. A nearby pizza restaurant only delivers to Dangerous Man, and like

other local businesses, it appreciates that the taproom directs customers to purchase from surrounding

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restaurants. “We’re not taking business away from anyone,” says Maggie. Dangerous Man’s T-shirts,

emblazoned with the taproom’s logo of a silhouetted bearded man, are printed by a local Northeast screen-

printer, and the marketing staff of the brewery encourage patron involvement in the many local arts festivals

in Northeast. All the art that adorns the taproom’s walls was made by local artists, and the tables were made

by friends of Rob Miller, the brewery’s owner, from wood salvaged from a demolished warehouse.

Dangerous Man seeks to provide an “urban third space” for people to gather. According to Maggie, the

brewery tries hard to reflect customers’ interests. Since the taproom is located in a residential area, Maggie

says she feels good about the fact that many regular customers walk to Dangerous Man. The bicycle traffic is

so heavy in warmer months that management is working with the neighborhood association to reserve a

parallel parking space for on-street bike parking.

Growth

When asked whether Dangerous Man plans on staying the same size or growing, Maggie said that current

plans were to stay in the same space and produce at the same level. The brewery’s goal, she says, is to stay a

part of the community, not to move out and distribute. Distribution doesn’t seem worth the effort to

management at Dangerous Man, because the brewery is currently still occupied with meeting the high

demand that exists now for pints and growlers. The taproom sells 25-30 growlers per day, enough to be

keeping up with, says Maggie. Eventually, though, plans are to increase the number of growlers sold per day

and the number of different beers on tap. With the planned move to keg storage, the brewery will be able to

keg off the second half of a batch of beer and put a new beer on tap, allowing for more tap and growler sales.

The bar’s tap system currently has capacity for 15 beers, 2 small-batch sodas, and a water line. Maggie

mentioned the possibility of opening up a space next door to the taproom for beer tasting and growler sales

to streamline the process. Finally, Dangerous Man has chosen not to partner with food trucks at the current

time because there isn’t a parking lot near the brewery for the truck to park to sell food. It would be

prohibitively expensive to buy a permit to allow a food truck to park in a street parking space, and while

Maggie says the staff would love to host a rotating lineup of food trucks like other breweries do, they prefer

to keep it simple and support neighboring eateries.

Relationship to other breweries

The beer industry, says Maggie, is still competitive, but to her and the team at Dangerous Man it seems

incredibly collaborative. The brewery is currently borrowing firkins and glassware from Indeed Brewing, and

Fulton Brewing is storing a cooler until Dangerous Man has space to accommodate it. The brewery owes

much of its positive relationship with other breweries to the fact that it doesn’t distribute, so they don’t need

to compete for tap handles or cooler space. Since Dangerous Man’s business model is to stay in one place

and stay the same, Maggie says, “everyone can play nice with us.”

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Not distributing also means that Dangerous Man staff get to be the ones representing their own beer from

start to finish. That element of control, and the employees’ close knowledge of the entire brewing process,

means that Dangerous Man’s beer is represented accurately to the public. However, Maggie said, being

entirely self-supported can its drawbacks, as Fulton Brewing, another brewery that distributes and sells kegs

to other bars, contract brewed through other breweries before opening their own facility. Since they

partnered with other breweries and gave them partial control of their brewing process, Fulton had brand

recognition before opening their own space.

Sustainability

In terms of water usage, Maggie said that since Dangerous Man’s facility is small, it is by definition less

efficient, with a ratio of 10 gallons of water used for every gallon of beer produced. She encouraged me to

investigate Dave’s Brew Farm, located one hour east of the Twin Cities; it combines a farm with a brewery

with a business model she described as innovative.

Interview, Mark Fitzgerald, owner, Butcherknife Brewing, Steamboat Springs, CO

3/27/14

I spoke with Mark Fitzgerald, co-owner of Butcherknife Brewing in Steamboat Springs, CO. We sat in the

taproom, scheduled to open in May of 2014, rolling a bourbon barrel on the ground with our feet and talking

over the brewery’s hefeweizen.

Sustainability

Mark began the conversation by talking about the brewery’s sustainability goals. Butcherknife seeks to take

advantage of Colorado’s 300+ days of sunshine per year and install solar panels on the brewery’s south side

with help from a USDA grant. The panels have the added benefit of reducing solar heat gain on the wall that

holds the cooling system on the other side. For heating brewing water, Mark looked into a wood pellet-fired

boiler, but at the 1.6 million BTU level needed for Butcherknife’s 30-barrel brewing system, the brewery

would need a huge silo of pellets in order to have enough fuel on hand. The brewery currently fires its boiler

with natural gas. Butcherknife uses several window air-conditioning units in its cooling room. In this room,

the storage temperature is 38-40º F, slightly warmer than the 34º F at which the brewery packages its beer;

therefore, very little cooling power is needed in the storage room.

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Water usage is a top concern for brewers, and minimizing wastewater is a high priority at Butcherknife. In

order to conserve perfectly usable and clean water, the brewery keeps hot water from its wort chiller and re-

uses it throughout the brewery. Mark feels lucky that Butcherknife is the first brewery in the U.S. to use water

coming off the Continental Divide. This means the water needs much less filtration to remove unwanted

mineral compounds, and the energy-intensive reverse osmosis purification process is also unnecessary.

Butcherknife has partnered with local ranchers who are eager to use the brewery’s spent grains as cattle and

hog feed. Steamboat Springs is located in a fairly agricultural area, and Mark feels fortunate that this is so. It

gives the brewery more opportunities to get locally-grown ingredients; Butcherknife has reached out to local

hop growers on Facebook to obtain hops for its early brewing work, and a farmer in nearby Hayden used to

grow barley for Coors and expressed interest in working with Butcherknife. However, getting local barley is

extremely difficult for a smaller brewery—Butcherknife would need to commit to 50 acres, ship the grain to

the maltster, ship the malt back to the brewery, and store it until the brew day. Compared to 20 cents per

pound for standard malt, locally-grown malt would cost as much as $1.50 per pound with these

considerations in mind. Mark has observed that a main obstacle to growing local barley is a lack of knowledge

of malting, and he suggests that if more small maltsters got into business, brewers would be able to malt their

locally-grown grain more affordably. “Why not do it all here?” asks Mark.

Community Connections

Butcherknife has reached out to the Steamboat Springs community by arranging to sell beer at the town’s free

summer concert series; donating logo socks, can coolies, and hats as prizes at community fundraisers; and

putting up stickers around town and on ski lifts at the nearby Steamboat resort. There has been considerable

interest in the brewery within the community. People are reserving tap handles for Butcherknife beer at local

bars, says Mark, because they’re local. Steamboat Springs displays a great deal of loyalty to locally-based

enterprises, and Mark is thankful for that. Butcherknife’s goals are to hire employees from within the area,

and to work with people who are interested enough to seek out the brewery before product is on the market.

Butcherknife obtained a large portion of its equipment, including a kegerator, freezers, bar tables and stools,

speakers, a stereo, sinks, and butcher blocks used from a defunct Chinese restaurant in town. All of this

equipment cost $1800, which is approximately half of what the brewery would have had to pay for just a new

freezer. Staying on the pulse of what was happening with the local restaurant helped the brewery immensely.

Growth

When I asked Mark if Butcherknife had plans to grow, he said that he’d be satisfied, if not happy, if the

business was known as a good local brewery. However, he has plans for Butcherknife to grow beyond that, as

Steamboat Springs has a relatively small population of permanent residents and there are more craft beer

drinkers in greater Colorado. At the end of year three, Mark says his goal is for Butcherknife to be producing

Page 34 of 34

5,000 bbl per year. Butcherknife plans to can its beer for distribution; the advantages, says Mark, are many,

including lighter shipping weight, fresher beer, and a more compact packaging system. A small company in

Colorado operates a mobile canning unit, which allows small breweries to get shelf space at liquor stores

before they purchase their own canning system. The brewery has a strong relationship with a large distributor

outside of Colorado, but Mark says the Yampa Valley, Steamboat Springs’ geographical region, comes first

and that he doesn’t want quality to suffer at the expense of wide distribution.

Mark feels fortunate that he and his business partner were able to finance the entire 30 bbl brewery with their

own money, and that they don’t need to churn out beer at an accelerated pace in order to make enough profit

to pay anyone back. Above all, Mark says he and his team are free to brew what they want and to grow

Butcherknife at their own pace.

When asked about his perception of the craft brewing world, Mark says that he has witnessed a great amount

of collaboration within the industry. “Everyone’s very helpful,” he says. More craft beer is just a promotion

of the industry as a whole, and small breweries aren’t trying to step on each other’s toes. By finding

Butcherknife’s niche as a locally-based, high-quality, and sustainable brewery, Mark hopes to make a place in

the industry for himself and his team.