When I started reading this article, I was skeptical about posting it to the blog. Initially, I did not think that a start up brewery in Georgia was relevant enough, until I read their story.
Terrapin Beer company, founded by Brian "Spike" Buckowski and John Cochran, opened their doors as a brewpub serving craft beer and food, while contracting their beer production to Frederick Brewing Co. This is interesting to me because Frederick Brewing Co is the Brewery that Flying Dog purchased and recently announced that they will be using as their head quarters. Say no more, I'm hooked :)
It is an interesting business model and I believe that it's a great plan for someone wanting to break into this market. Rather than spending time and money on a production facility, they located a quality facility to produce their product until they had the capital to brew their own.
I hope you enjoy.
Sean
2Beerguys.com
Drink Craft Beer, You've Earned It!!
Terrapin takes next step as it opens own breweryBy Don Nelson | don.nelson@onlineathens.com | Story updated at 8:03 PM on Saturday, February 9, 2008 Like the tortoise of Aesop's fable fame, Terrapin Beer Co. partners Brian "Spike" Buckowski and John Cochran have taken a plodding and purposeful pace in pursuing their dream of opening a craft beer brewery in Athens.
"For us, it's been a long, straight road, and (like a turtle) we just keep plugging along, slow and steady," said Buckowski, who serves as the brewmaster at Terrapin.
Buckowski and Cochran decided 10 years ago while they were both working at the Atlanta Brewing Co. that they wanted to open their own beer making facility in Athens. Last week, their dream was realized and Terrapin Beer Co. officially began brewing its craft beers in a building on Newton Bridge Road.
Since 2002 when Terrapin introduced its first beer, Rye Pale Ale, the Athens-based company has been contracting with other breweries to make its beer, most recently getting its bottled beer done at the Frederick Brewing Co. (now Flying Dog) in Frederick, Md., and its draft brew with Zuma brewery in Atlanta. The Rye has become Terrapin's flagship brew, said Cochran, who is a brewer himself, but spends most of his time on the management and sales end of the business.
Following up on the success of the Rye, Terrapin has created two other year-round beers, a Golden Ale and India Style Brown Ale. The Rye and Golden, both award winners in major craft beer competitions, are available by bottle or draft in several states, and the India only is available as a draft in Athens and Atlanta, so far.
Terrapin's first Athens-brewed beer, which initially will be produced only as draft, will be ready to ship out in kegs near the beginning of March, Cochran said.
"We hope to start bottling in a month or so," he said. "It depends on the assembly of the bottling line, which is not complete."
With the draft production under way, Terrapin now can stop its contract draft brewing in Atlanta.
"The plan for this year is to make all our beer here except for excess Rye Pale Ale bottles, which will be made in Maryland," Cochran said. "We expect to do some Rye bottles here, and those will be sold locally, but all our other products, draft and bottle, should be coming from this plant within the next three months."
Once Terrapin gets cranked up for production of both draft and bottled beer, the brewery is expected to make 10,000 barrels of bottled and draft beer a year. That translates to about 20,000 15.5-gallon kegs that Terrapin will make at home, but the company also will continue having the brewery in Maryland make 3,000 to 4,000 barrels of its Rye Pale Ale in bottles.
To give that some perspective, the Samuel Adams brewing company generates close to 2 million barrels, and Sierra Nevada brews 600,000 a year, Cochran said.
"So we're just getting started," Cochran said. "We're on the low end."
Besides its year-round beers, Terrapin makes seasonal brews under its Monster Beer Tour, through which Buckowski has produced Big Hoppy Monster, Wake-n-Bake Coffee Oatmeal Imperial Stout, All American Imperial Pilsner and Rye Squared, sold in specialty four-packs. Buckowski also will work on what the brewery is calling the Side Project, where every two months or so, he will create some "wild" new brew, Cochran said.
Getting their plans off the ground after deciding in 1998 to build a brewery in Athens wasn't easy, Buckowski and Cochran said. They spent six to eight months developing a business plan, one that a consultant with the Athens Small Business Development Center said was one of the best he had seen.
Still, that wasn't enough to sell investors or bankers, who were too taken with the high-tech frenzy.
"It was depressing," Buckowski said. "At that time back in 1999, it was all about the Internet, and if you weren't looking for $30 million and didn't have a computer in your basement, you weren't getting any money."
Asking for $1.2 million to $2 million dollars for a brewery that didn't have any product to show drew laughs from bankers, he said.
"We spent three to four years of trying to raise funds before we were actually able to release our first beer," Cochran said. "What we finally realized was we were not going to get the capital we needed to open a facility right off the bat, so that's why we started contract brewing."
The two based their company in Cochran's basement and began visiting a friend they had at the Dogwood Brewing Co. in Atlanta.
"Spike and I pooled our resources together, bought some kegs and asked if (our friend) would turn it over to us to brew our own beer," Cochran said.
Buckowski was able to create the Rye Pale Ale, which Terrapin introduced in Athens at the Classic City Brew Fest in April 2002. Later that year, the Rye won the American Pale Ale Gold Medal at the 2002 Great American Beer Festival. The beer only was available in draft form in about 15 Athens bars at the time.
That notoriety churned up considerable interest in Terrapin, with people calling from across the United States asking where they could get the beer, Cochran said.
"Because of that medal we went into the Atlanta market, and the place where we were brewing couldn't handle our increased production plus what he was doing," Cochran said.
So Terrapin sought another brewery in the Southeast to handle their increased volume and found the Frederick Brewing Co. in Maryland.
The Maryland plant had a lot of excess capacity, a nice lab and was very quality oriented, Cochran said. The brewery also allowed Buckowski to come in and supervise the Terrapin brewing, an important part of the contract, Cochran said.
Buckowski takes a strong hands-on approach to his brewing, and he possesses an artistic skill for his work, Cochran said.
As Terrapin continued the contracting brewing, Buckowski and Cochran kept seeking some investment capital to build their own facility.
The partners were working with a local financial consultant on a plan to sell stock in the company in the fall of 2006, when eight private investors stepped forward and expressed an interest in investing in the business, Cochran said.
Terrapin was able to get an infusion of $800,000, not enough to build a brand new brewery, but enough to buy the equipment and lease the building to start making beer. The investors weren't corporate types, but Athens people who liked beer and the concept of an Athens brewery, Cochran said.
Terrapin moved into the Newton Bridge Road building last March and were set up and ready to begin brewing by August. The final license came through in December.
Terrapin's short-term goals are to get the brewing operation up and running and to become profitable, Cochran said. Buckowski agreed.
"The short-term goal would be to definitely get out of the blocks and put Terrapin on the map as Athens' local brewery and get this off the ground as a viable business ," Buckowski said.
Producing 10,000 barrels of beer will help get them there, Cochran said. The company also would like to get more fermentation capacity and Cochran expects that to happen within the next year.
In the long term, both partners want to build Terrapin's reputation as a premiere brewing company.
"I would really like to see Terrapin viewed as one of the premier craft breweries in the U.S.," Buckowski said.
"It's not necessarily about the volume," Cochran said. "What we have said we want to do is to become known as the most experimental brewery in the Southeast, and that entails making a lot of different styles of beer."
The craft beer industry is a growing market, but to remain competitive, breweries need to make new tastes, Cochran said.
"The craft beer industry is all about what's new," he said.
In the past few years, the craft beer market has become more mainstream, with people who previously only drank domestic beer trying more of the craft varieties, Cochran said.
Grocery stores expanding their displays of craft beers and larger beer companies such as Anheuser-Busch buying up small microbreweries lends evidence to the growth in the craft market, Cochran said.
"We had a distributor from Florida call us and said that Publix is getting ready to do bigger sets with craft beers," Cochran said. "Kroger in Georgia does a great job with craft beers."
The growing market for craft beers and the reception Terrapin's products have gotten, especially in Athens, makes Cochran feel comfortable about Terrapin's future and about taking the gradual approach to opening the brewery in Athens.
Terrapin could have opened a brewery in Atlanta a year or two sooner, but Buckowski and Cochran were committed to Athens.
"We're in Athens for the long haul," he said. "Part of the reason it's taken so long to get open is we were committed to coming to Athens. This is our town absolutely."
Beginning Monday, Terrapin will offer regular tours for people to visit the brewery, check out its gift shop, taste the beers and get a first-hand look at the brewing process and equipment, Cochran said. Tours will be held from 5-7 p.m. Mondays and Thursdays and from 2-5 p.m. the second Saturday of each month.
For more information, call (888) 557-2337.
Published in the Athens Banner-Herald on 021008
Link to article.
