Beer School: Bottling Success at the Brooklyn Brewery
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Beer School: Bottling Success at the Brooklyn Brewery
304Overview
"A great city should have great beer. New York finally has, thanks to Brooklyn. Steve Hindy and Tom Potter provided it. Beer School explains how they did it: their mistakes as well as their triumphs. Steve writes with a journalist's skepticism-as though he has forgotten that he is reporting on himself. Tom is even less forgiving-he's a banker, after all. The inside story reads at times like a cautionary tale, but it is an account of a great and welcome achievement."
—Michael Jackson, The Beer Hunter(r)
"An accessible and insightful case study with terrific insight for aspiring entrepreneurs. And if that's not enough, it is all about beer!"
—Professor Murray Low, Executive Director, Lang Center for Entrepreneurship, Columbia Business School
"Great lessons on what every first-time entrepreneur will experience. Being down the block from the Brooklyn Brewery, I had firsthand witness to their positive impact on our community. I give Steve and Tom's book an A++!"
—Norm Brodsky, Senior Contributing Editor, Inc. magazine
"Beer School is a useful and entertaining book. In essence, this is the story of starting a beer business from scratch in New York City. The product is one readers can relate to, and the market is as tough as they get. What a fun challenge! The book can help not only those entrepreneurs who are starting a business but also those trying to grow one once it is established. Steve and Tom write with enthusiasm and insight about building their business. It is clear that they learned a lot along the way. Readers can learn from these lessons too."
—Michael Preston, Adjunct Professor, Lang Center for Entrepreneurship, Columbia Business School, and coauthor, The Road to Success: How to Manage Growth
"Although we (thankfully!) never had to deal with the Mob, being held up at gunpoint, or having our beer and equipment ripped off, we definitely identified with the challenges faced in those early days of cobbling a brewery together. The revealing story Steve and Tom tell about two partners entering a business out of passion, in an industry they knew little about, being seriously undercapitalized, with an overly naive business plan, and their ultimate success, is an inspiring tale."
—Ken Grossman, founder, Sierra Nevada Brewing Co.
Product Details
| ISBN-13: | 9781118046234 |
|---|---|
| Publisher: | Wiley |
| Publication date: | 01/31/2011 |
| Sold by: | JOHN WILEY & SONS |
| Format: | eBook |
| Pages: | 304 |
| File size: | 2 MB |
About the Author
TOM POTTER cofounded the Brooklyn Brewery in 1987. He served as its CEO and chairman until his retirement in 2004. Previously, he was an assistant vice president at Chemical Bank, where he financed the acquisition of assets valued in excess of $1.5 billion. Potter graduated from Yale and has an MBA from Columbia.
Read an Excerpt
Beer School
By Steve Hindy
John Wiley & Sons
ISBN: 0-471-73512-4Chapter One
Steve Tells How Choosing a Partner Is Like a Second Marriage
My head was thumping and I was drenched in sweat when I was jolted awake on a fresh sunny morning in May 1984 by the blasts of two mortar shells in the parking lot outside my second-floor room at the Alexander Hotel in East Beirut. Lebanese hotel workers were inspecting the damage to the cars in the lot-shattered windows and punctured tires. None had caught fire. No one was hurt. The mortar shells were a Beirut wake-up call from the Palestinians and Lebanese leftists on the other side of the nearby Green Line that divided the city. Nothing like a mortar blast to make you forget you have a hangover. Mawfi mushkila-no problem-the uniformed deskman would tell me when I trudged downstairs for breakfast with David Ottaway of the Washington Post (who would later play a major role in the Brooklyn Brewery). Well, no problem, unless your car was hit. I walked outside and picked up a piece of shrapnel from the parking lot-a fitting souvenir of my five-year assignment in the Middle East for the Associated Press.
I keep that shrapnel fragment in my office at the Brooklyn Brewery as a reminder of my last day in Beirut.
THE LIFE OF A FOREIGN CORRESPONDENT
My wife, Ellen Foote, had declared a month earlier that she had had enough of being the wife of a foreign correspondent in the Middle East. She had spent two years with me in Beirut, giving birth to our son, Sam, in May of 1980, and three years in Cairo, where she delivered our daughter, Lily. Ellen had endured many dangers in Lebanon. There had been machine gun fire through the thick wooden door of our 140-year-old home in Beirut. Rockets had landed right beside the house, and often flew over the house and into the sea. Once, when I was away covering the Iranian revolution, guerrillas fired rocketpropelled grenades at the American embassy, just across the street from us. A month before the birth of Sam, I was abducted while traveling with a United Nations patrol in south Lebanon. Two Irish U.N. peacekeepers with me were tortured and killed in what turned out to be a vendetta. A third was tortured and released, and I carried him to safety. In my five years, I also covered the hostage crisis in Iran, the Iran-Iraq War, the Israeli invasion of Lebanon, and the massacres in the Beirut refugee camps. Ottaway and I were sitting in the grandstand behind Egyptian president Anwar Sadat when he was assassinated at a military parade in 1981. It was not a career for the faint of heart, and Ellen endured this life like a real trouper. But she firmly declared "no" when AP offered me my next posting in Manila, Philippines, where President Ferdinand Marcos was facing growing popular opposition.
So ended my career as a foreign correspondent. After nearly six years, I decided that my family and their safety meant more to me than my career as a journalist. Besides, there were not many foreign correspondents I admired or wanted to emulate. The best of them, like Ottaway, Tom Friedman of the New York Times, and Robert Fisk, then of the London Times, combined some sort of scholarship with the grind of daily journalism. They had studied the Middle East and their work reflected the historical context of the events unfolding before our eyes in the 1980s. They wrote books. Most correspondents, including me, were rogues and adventurers addicted to the Big Story. Most were divorced, getting divorced, or getting remarried. Most drank too much, or took drugs, or stopped drinking and became real psychos. We all started out thinking we knew who the good guys were and believing we were on their side. My personal goal, never stated in the presence of my colleagues, was to foster understanding and make the world a better place. But the more wars I covered and the more I learned of the roots of conflict, the less sure I became of who the good guys were-and the less sure I was of the nobility of my role. Journalists, particularly war correspondents, are in a grueling competition to see who can tell the best story, and sometimes that is incompatible with doing good. Except in rare cases, as they get older, war correspondents become insufferable, cynical windbags.
MY LIFE AS AN ENTREPRENEUR
My career as a war correspondent, however, did much to prepare me for my next career-as cofounder of the Brooklyn Brewery. The determination, focus, and endurance required to get a story is similar to the single-minded determination required to start a business. The necessity of responding quickly to unexpected events is similar to the flexibility the entrepreneur needs to respond to problems-and solving problems is the entrepreneur's trade. The distance journalists need to establish from the stories they are covering is similar to the distance entrepreneurs need to maintain between themselves and the pressures they are under. Journalists need to maintain a kind of buoyancy in the same way entrepreneurs need to maintain a sense of optimism about their venture. The overarching goal in business-to make money for yourself and your investors-certainly is not as noble as the journalist's goal of making the world a better place, but it is more attainable and, with a special effort, it can bring some good to the world.
THE ART OF HOMEBREW
In Cairo, I became friends with Jim Hastings, the inspector general of the Cairo Office of the Agency for International Development, which was responsible for spending $2.3 billion in aid to Egypt annually under the terms of the Camp David Peace Accords between Egypt and Israel. Before Egypt, Jim had been in Saudi Arabia and had acquired a fascinating hobby; homebrewing. Jim made beer at home. In Saudi Arabia, alcoholic beverages are forbidden in a strict interpretation of the Muslim holy book, the Koran. King Saud banned alcoholic beverages in 1954 when Americans flooded into Saudi Arabia to develop the oil fields. At the same time, Aramco-the Arab-American Oil Company-issued a pamphlet to its employees explaining to them how to make their own beer, wine, and liquor at home. I since obtained a copy of this crudely mimeographed guide to homebrewing from a former Bechtel Construction Company executive who was one of the ringleaders of this bootleg operation and, years later, invested in a start-up microbrewery in California.
The tortuous title of this recipe book is:
PERFECTED TECHNIQUES ON THE EBULLITION OF SUGAR, WATER & SUITABLE CATALYST TO FORM AN ACCEPTABLE ARAMCO ASSIMILATIVE IMBIBABLE POTION APPROPRIATE FOR CONSUMPTION
I can only guess it was thus named to dampen any suspicion about its contents, perhaps as an inside joke about the flowery, convoluted indirection often employed by Arabic speakers. Whatever the background, Hastings and his friends made very good beer. It was dark and rich and hoppy, and had much more in common with the great beers of Europe than the fizzy massmarket beers of America.
Thus I developed an enthusiasm for homebrewing, or at least for drinking homebrewed beer. I could not yet make my own beer because I had no source for ingredients. Jim and other American diplomats got their malt extract, hops, and yeast through the diplomatic mail. My hobby had to wait until I returned to America.
RETURNING HOME
In 1984, Ellen, Sam, Lily, and I settled into a two-bedroom apartment in the Park Slope neighborhood of Brooklyn. With two children, Ellen and I could no longer afford our old Manhattan neighborhood on the Upper West Side. I took a job as assistant foreign editor at Newsday. My colleagues at AP bought me a homebrewing kit as a going-away present, and I began making my own beer at home.
My first batch was a disaster. The tool for capping the bottles was a crude metal gadget called a "hammer capper." The hammer capper fit over the uncrimped bottle cap. The brewer then hammered the capper, crimping the cap onto the bottle. I broke 30 of 48 bottles in my first batch. At one point in the frustrating process, I became enraged and began striking the capper with far too much force. The kitchen floor was covered with shards of glass. I was cut and bleeding and tired and angry. Ellen took the children to the back of the apartment while I swept up the mess. The beer that resulted had an unpleasant malt character, as if someone had slipped a few drops of cod-liver oil into the batch. But I stuck with my new hobby, comforted by the mantra of homebrewing guru Charlie Papazian, author of The Complete Joy of Homebrewing (Harper Resource, 2003): "Relax, don't worry, have a homebrew."
Homebrewing enabled me to approximate the world of great beer I had experienced as I traveled through Europe-the malty ales of England, where the beer was served at cellar temperature; the wholesome, almost food-like lagers of Bavaria, which seemed perfectly appropriate at noon. In my college days, I was puzzled by the bad taste of American beer when I reached the bottom of the bottle or can. Why should the last ounce taste different than the first? English ales and German lagers tasted great to the last sip. Could it be that American beers only tasted good when they were cold? In 1984, Beck's was my favorite commercially available beer, but even it seemed metallic compared to my homebrewed concoctions. I became an adequate homebrewer, learning to brew with raw ingredients, malted barley, and flower hops, as well as malt extract and pelletized hops. Apart from a few accidents-such as a five-gallon carboy exploding on top of our refrigerator, spewing sticky unfermented wort onto the ceiling and sending it cascading down the sides of the fridge-I learned to make good beer. Like all homebrewers, I craved approval. Beer must be shared. I served my beer to my friends and neighbors and, on Saturdays when the top editors were not in the office, to my colleagues at Newsday. On weekends, my kids helped me sterilize the bottles. The pleasures of homebrewing are a lot like those of cooking, but the product is even more uplifting than food.
I subscribed to the homebrewing magazine Zymurgy and began to read about the small breweries on the West Coast that were producing, on a small, or micro, scale, all-malt beers like those I was making at home. I read about Jack McAuliffe and New Albion, the first of the microbreweries. I read about Fritz Maytag, scion of the washing machine family, who had revived the Anchor Brewing Company in San Francisco, and Ken Grossman, a former bicycle repair shop owner who had built a brewery in his garage to make Sierra Nevada Pale Ale. I met Bill Newman, a former state budget office employee who started Newman's Albany Amber in an English-style brewery in Albany, New York. In 1982, in New York City, Matthew Reich, a former banker, had started New Amsterdam, a rich malty lager beer that he brewed under contract at a regional brewery in Utica, New York.
I was happy in my job at Newsday while growing more successful at my hobby of beer making. Being an assistant foreign editor seemed like a dream job-I could work with Newsday's nine foreign correspondents and travel a couple of times a year on special assignment. But it lacked the adventure of my years abroad. I was restless. I also envied those guys starting breweries. Starting a brewery ... what an incredible enterprise. Why couldn't I do that? w As a young man in southeastern Ohio, I had run a very large newspaper delivery route. I had won a statewide newspaper and magazine sales contest, becoming "Most Popular Newsboy in Ohio" and winning a two-week trip to Brazil. I won every candy and greeting card contest my church and the Boy Scouts held. I won my high school golf championship in upstate New York. My dad had worked for big companies all his life and ended up bitter about being replaced by "college boys" and put out to pasture before he was ready to retire. My two grandfathers both ran businesses-a supermarket and a cinema-and I was always envious of their confidence in themselves. I hadn't been to Harvard Business School, but I always harbored a conceit that I could succeed in business if I put my mind to it.
But, really, what did a journalist know about starting a business-let alone a brewery-in the most competitive beer market in the country, if not the world? Clearly, I needed help. And help came from a serendipitous source: my downstairs neighbor in Brooklyn, the best customer for my homebrew, banker Tom Potter. As I look back on the evolution of the Brooklyn Brewery, I am struck by the role serendipity-or as some would say, dumb luck-played in the development of the company. David Ottaway would eventually become our biggest investor, and his two sons would join the company and eventually become my partners. The chemistry that developed between Tom and me was a critical piece of luck. Our relationship was vital to the sound development of our company. My enterprise, drive, and activism always were balanced and tempered by Tom's patient, calculating, and analytical mind. All of our best decisions were the result of a dialogue between our very different ways of approaching problems.
In retrospect, the ideas Tom and I developed in the early days of the company were crucial to our success. Our relationship began as a friendship. My wife, Ellen, an editor, and Tom's wife, Gail Flanery, an artist, had become friends through their involvement in the local public schools attended by our children. In 1985, Tom and Gail purchased the two-bedroom apartment below ours in a cooperative apartment building on Eighth Street, on the block bounding Brooklyn's wonderful Prospect Park. The Park Slope neighborhood of Brooklyn was being revitalized by a flood of young couples like us, many with young children, who had been priced out of neighborhoods in Manhattan. Eighth Street was on the far edge of that revitalization. Today, it is in the heart of a prosperous neighborhood. Property values have increased five times since we bought our apartments.
FRIENDS BEFORE PARTNERS
Tom and I quickly became close friends. Tom was 29 years old and I was 36. We shared a passion for reading. He had majored in English at Yale, and I at Cornell. He was very articulate and thoughtful. We ran together in the park. We played tennis and golf together, and we raised our kids together. On summer weekends, it seemed Tom and I always shared child care duties. Tom was not a beer enthusiast, but he liked my homebrew. Neither of us was making much money, and homebrew was cheap. In the summer of 1986, I was brewing beer about once every two weeks. We would sit in Tom's backyard drinking homebrew and watching the Mets on a beat-up black-and-white television set. Unlike many summers, that was a fun summer to watch the Mets, because they were on their way to a World Series championship. My children, Sam and Lily, and Tom's son, Billy, played in a sandbox.
In 1986, I was following the progress of New Amsterdam Brewing Company, one of the first start-ups in the East. Founder Matthew Reich had gotten lots of publicity for his venture. His New Amsterdam Amber Beer was delicious. Reich had started out in 1982 brewing beer at the F.X. Matt Brewing Company in Utica, New York, a 100-year-old regional brewery with a lot of excess capacity. His elegant black-and-gold label depicting New York's original name and proud heritage as a seaport was showing up in supermarkets and restaurants. Reich was raising money to build a brewery in Manhattan. His confident, smiling face appeared in articles in the New York Times and New York magazine. About the same time, the Manhattan Brewery, a brewery restaurant, successfully started up in Soho. In Albany, Bill Newman's four-year-old Newman Brewing Company was thriving. All these ventures seemed to be successful. They were developing a new market for domestic beer brewed to the standards of imported beer-100 percent malted barley, no corn or rice, lots of rich and flavorful hops, resulting in richer-colored and -flavored beers.
It seemed to me that Brooklyn, with 2.5 million inhabitants and a proud, storied history, would also support a brewery. Tom was skeptical. He had recently completed a master's degree in business administration at Columbia University. Among other things, I think they taught him that you should never start a business based on your upstairs neighbor's hobby.
(Continues...)
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Table of Contents
Foreword.Preface Steve and Tom Introduce the Brooklyn Brewery.
Acknowledgments.
Chapter 1. Steve Tells How Choosing a Partner Is Like a Second Marriage. Lesson One: Even a Dog Can Shake Hands.
Chapter 2. Steve Discusses the Importance of Building a Solid Team. Lesson Two: Is It a Business or a Family Business?
Chapter 3. Tom Talks about Creating the Business Plan: A Money-Raising Tool and More. Lesson Three: The Business Plan Won’t Be Graded on a Curve.
Chapter 4. Tom Asks, “What’s the True Mission of the Business?” Lesson Four: Being Flexible If the Mission Statement Becomes “Mission Impossible”.
Chapter 5. Steve Discusses the Keys to Successfully Motivating Employees. Lesson Five: Feeling Good Is No Substitute for Prudent Controls.
Chapter 6. Tom Tells the Story of Their Dot-Com Revolution: Fishing for Finance and Failing. Lesson Six: Chasing Money Is Not a Business Strategy.
Chapter 7. Steve Talks about Building a Brewery in Brooklyn. Lesson Seven: Sometimes You Stand Alone.
Chapter 8. Steve Discusses Publicity: The Press Wants You! Lesson Eight: A News Release Can Go a Long Way.
Chapter 9. Steve Reveals How the Revolution Kills Its Leaders First. Lesson Nine: Hiring and Firing.
Chapter 10. Tom Talks about Cashing Out and Reinventing the Business, Again. Lesson Ten: Only You Will Know When It’s Time to Sell.
Chapter 11. Tom Wants to Know If You Have What It Takes. Lesson Eleven: There Are No Entrance Exams for Entrepreneurs.
Timeline.
Index.