To the uninitiated, 40 gallons might sound like a lot of beer. But compared with the 10 million gallons Sierra Nevada will make in Mills River this year, or the 1,500 gallons Highland can brew in one go, 40 is only a drop in the bucket.
Still, for Jay Schutz of One World Brewing, Asheville’s smallest brewery, cooking up 40 gallons at a time just might be enough.
Schutz was a stonemason until 2010, when a down economy and increasing competition forced him to carve out a new niche. His mother-in-law suggested he go pro with a decadelong passion for homebrewing.
“People always seemed to like my beer,” he recalls, “so she asked, ‘Have you ever thought about brewing beer for a living?’ and I said, ‘Hell, no. You’d probably need $1 million just to start a brewery.’”
But it turns out that you don’t. Jay and his wife, Lisa Schutz, opened One World for $375,000, which is actually on the high side for nanobreweries. Over in Black Mountain, John Garcia launched Lookout Brewing for a mere $75,000. Usually classified as no larger than 3 barrels (93 gallons), nanos constitute a workable entry point into what’s become a lucrative industry.
After Prohibition was repealed in 1933, the federal government established a three-tiered system for alcohol — producers, wholesalers and retailers — that’s still in place today. Brewers brew, wholesalers find homes for those beers in bars and on shelves, and retailers peddle them to customers.
The system has its pros and cons, notes Jeff Irvin, brewmaster and brewing instructor at A-B Tech. Consumers get more variety, but the beer goes through two 30 percent markups.
On the other hand, he continues, distributors “have the team and the transportation, and you’re not in the trucking business or the logistics business: You’re in the beer-making business. So the profit margin’s higher if you distribute yourself, but you have to have much more staff, and you have to figure out the logistics.”
Nanos, though, have no choice. The only way they can make money, says Irvin, is to handle distribution and sales in-house. And in North Carolina, breweries that produce less than 25,000 barrels annually can take a do-it-yourself approach to wholesale and retail. So successful nanobrewers quickly learn to do it all.
Survival of the fittest
Garcia sold audiovisual equipment until the economy made high-end electronics a tough sell. After that he started tending bar, brewing beer in the kitchen in his spare time. But his wife encouraged him to do what he loved, so in 2013 he founded Lookout Brewing on a half-barrel system.
It was a family affair from the start. Garcia’s wife also thought up the brewery’s best-selling recipe, Alison’s Front Porch Pale, and his parents helped with renovating the space. They’ve since opened their own nano, Good Hops Brewing in Carolina Beach, and the two breweries now swap recipes.
But the family dynamic doesn’t end there. “If you were to come back tonight, there’ll be 50 or 60 people in here that all have a personal connection with me and my family,” says Garcia. “They know Asher and Lilly and Naia, my kids; and that’s the best side of what I do. You’re building this thing together.”
Burial Beer Co. co-founder Jess Reiser agrees. For the first year, the three owners were the only employees.
“I think people seeing the owners behind the bar and interacting on that level has been really meaningful,” she explains. “They know our family, they’ve seen my baby grow up, and that’s why we’re so thankful to have been able to grow in this organic way.”
And grow they have. After 18 months on a 1-barrel system, Burial upgraded to 10 barrels last November and plans to start canning next month. But it hasn’t been easy. Jess and her husband, Doug Reiser, had their second child just three months after the brewery opened.
“I was washing glassware with him attached to me two weeks after giving birth,“ she recalls. “We didn’t even have a dishwasher for the first year and a half, so I would carry these trays of glassware with the baby on me. It was just a survival thing, you know?”
There were other issues, too, Jess remembers. People would ask if they were just homebrewers, and the question often felt judgmental. Head brewer Tim Gormley had been professionally trained, working at places like Lazy Boy Brewing and Sound Brewery in Washington state before helping found Burial, but there was still a stigma attached to small-batch beer: It was viewed as glorified homebrew, and homebrew as nothing but swill.
Brewmaster Norm Penn of Thirsty Monk calls those perceptions unwarranted and unfair to homebrewed beers, which have gotten really good. And brewing them on a larger system, he continues, isn’t as different as people might think. So as part of Thirsty Monk’s new nano project, Open Brewing, Penn is helping amateur brewers scale up their recipes to 1-barrel volume. His efforts to legitimize them make sense — after all, he brewed at home for 20 years before going pro himself. And most professionals, he guesses, started out the same way.
Add John Lyda, the brewmaster at Highland Brewing Co., to that list. His mom bought his first brewing kit at a church rummage sale while he was still in college, and though Lyda eventually went on to the Siebel Institute of Technology, he says homebrewing played a key role in his progression, as it still does for many professional brewers. It helps them develop their palate and learn what does and doesn’t work.
Besides, when you make just 5 gallons at a time, as most homebrewers do, it’s easy to try new things: If something comes out sideways, it’s not a big loss. Lyda praises nanos for taking a similar approach, piloting new recipes as they go, though balancing risk and reward can be challenging.
“I think the ones that make it will be better off for starting out that way, because they’re acting like homebrewers, which means they get to experiment,” he observes. “That’s going to make them well-rounded as they get larger.”
But getting bigger is no small feat. In One World’s first year, Jay Schutz brewed 550 batches. That’s 22,000 gallons of beer, 40 gallons at a time — roughly two batches a day, Monday through Friday, and that doesn’t include the time spent on marketing, distribution or anything else. It’s a frantic pace that’s also a necessary evil at the nano level.
“I still love it as much as I used to: I really do enjoy it,” says Schutz. “But you know, brewing is my job, so sometimes, like anybody, I’m not that excited to go to work. At the end of the day, it’s an amazing job: It’s just not what I do to relax anymore.”
He may have ruined a perfectly good hobby when he opened his brewery, but thanks to people like Schutz, who start small and work hard, the American dream just might have a pulse in craft brewing.