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 Introduction: I am not much of a beer drinker, more of a wine and vodka person.  But through getting to know the founders and brewmasters behind these Portland breweries I began a love affair with the whole process as well as the product they created. I wanted to understand the type of person behind a brewery and I wanted to know what it takes to stay on top, or at least, in the running.  I interviewed a dozen founders/ceo’s/brewmasters.  I sat down with each of them, face to face for about an hour and asked a series of questions I felt were pertinent to their industry and to their involvement in it. I interviewed Kurt Widmer, one of the founders of Widmer Brothers Brewing, Brian McMenamin of the Mcmenamins  chain, the founder of hair of the Dog, Alan Sprints, also John Balfe and Scott Barnum, the CEO of Pyramid Breweries and Mactarnahan, Karl Ockert, the Brewmaster and founder of Bridgeport Brewing, Ron Gansberg the founder of the Racoon Lodge and Mike De Kalb the founder and owner of the Laurelwood Brewing Co.  and a few others.  I have found them to be incredibly intelligent, kind, humble and witty.  It is exhilarating talking to people who truly love what they do.

Scott Barnum, CEO Pyramid Brewing; Portland, Oregon, 2006

1.Clarification of the mergers, in short.
Hart Brewing was acquired by a group of investors in the late 1980’s who renamed the company Pyramid Breweries after one of its brands after Hart Brewing was acquired.

2. In what direction do you think the microbrew industry is going. 

We call it the craft beer category. We project that the category should continue to grow at high single digits for the next several years.  Consumers are trading up to better more fuller flavored food and drink and the craft beer category is a beneficiary of this.  Importantly, today’s 21-29 year old beer drinker, the mainstay demographic of the beer market, is much more educated today than ever before.  They are more educated about beer and beer styles and have a more educated palette – having been exposed to lots of fuller flavored consumables by their Baby Boomer parents who have been seeking more premium and interesting tasting products.  There will be 4+ million 21 year-olds coming of legal drinking age each year for the next several.  This should help the craft category by having more craft-beer-ready drinkers in the drinkers pool than ever before.

3. Would you say there is any competition for you in the market and why. 

Of course there is competition… the beer market is one of the most competitive consumer products categories there is.  But, competition is good.  Whether it is from someone local down the street or one of the “Big Three” commercial brewers or a larger brewer from outside of the USA, the more the diversity of high quality fuller flavored beers offered the more beer drinkers the more exposure they will have.  Ultimately, they will at least try many new products and many will evolve their palettes and their preferences.  This is what has been going on for the last few years and the craft beer category has been a beneficiary of this.

4. What would you reveal as the secret to your success. 

That secret is locked away deep in the caverns of one of our breweries!  But what I will say is that the consistently high quality of our beers has a big role to play, our alehouses provide us with a great opportunity for branding/brand awareness and trial exposure for our products and we have a top-tier sales organization that is second to none for a company of our size.

5. How do American Microbreweries or Craft breweries compare to traditional breweries in Europe.

There are a lot of similarities and yet there are many differences too.  Many of the craft brewers in the United States have taken inspiration and indeed beer making training from the Europeans. English Ales from the Brits, Stouts from the Irish, Fruit Beers from the Belgians, Pilsners from the Czechs and Hefeweizen from the Germans are but a few style examples that American craft brewers have emulated.  Still, Americans by their very nature and culture are creative and like to do things their own ways.  There are many examples of hybrid styles or American versions of traditional European styles (e.g., Pyramid’s Hefe Weizen)have been developed and have been very successful.

6. What does it take to stay on top.

Make sure there are plenty of folks on the bottom!  ☺ 

No great secrets here… Great beer made consistently each and every day.  A smart, passionate and diverse organization.  A very solid wholesaler network with whom you have a strong partnership and relationships.  A good operations and financial infrastructure.  And finally, great sales and marketing capabilities coupled with a strong dose of entrepreneurialism.  

7. What is your personal favorite type of beer.

Should a father have a favorite child amongst his children?  Truth be told, I highly admire Belgian beers, particularly Belgian Wits… which is probably why I like Pyramid’s Weizen beers so much. 

8. What is your opinion on going green and are you involving your company in it.

Pyramid is positively involved in the communities where we do business and we are part of these communities: Portland, Seattle, Northern California and to some extent all of the places where we distribute. On the environmental side, we try to do what we can locally and are more sensitive than ever before about what we should be doing as an organization.  As a small local example – last December we gave part of the money raised at our annual Snowcap Ale party at the Pyramid Alehouse in Seattle to the Surfrider Foundation’s Snowrider Project, aimed at protecting local mountain-based watersheds, which affect everything from clean drinking water to the health of ocean fish.  We obviously have responsibilities to our shareholders, but to the extent possible, we try to help out locally with worthwhile causes like this one and we fully realize the importance of taking care of our natural resources. 

9. Oregons beer production grew at a rate of 16.5 percent in 2006, how did that reflect within your own company in terms of growth. 

Our Pyramid brand business, led by our Hefe Weizen, was up more than 27% in 2006.  In Oregon our packaged Hefe Weizen (majority of Pyramid’s Hefe sales in Oregon) was up more than 100% and draft Hefe Weizen was up 14% for 2006. 

10.  What in your opinion is the trend for beers in general in the next decade or so in terms of style. 

Certainly over the intermediate term, I think we’ll see more and more consumers embrace unfiltered beers like our Weizens and we’ll see more trade up to “bigger beers”, i.e., higher hopped and spiced beers as consumers palettes become more beer savvy and sophisticated. 

11. Do you see any of your beers changing drastically in the future and in what direction.

 Not in the near term, but we read consumer behavior and usage patterns.  If necessary, we’ll take our cue from what the market is telling us.  For right now, the market thinks were in a pretty good place!

12. Is there something that you are hoping, wishing for, dreaming about for this company in the future.  A vision that may seem unreachable now.

Well, how about the dream that every Portland Monthly reader will buy a Pyramid HefeWeizen each and every day for the rest of their lives!  If that, somehow, doesn’t come to fruition, we do expect to be one of the more vibrant and exciting craft brewers for some time to come… You can be sure that we will be taking advantage of the window of opportunity that is now in front of us… We’d love to see HefeWeizen become a mainstream beer style in the US as it is in Germany.  Hopefully, history will be so written…
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Interview with: John Balfe, Pyramid Breweries, Assistant Marketing Manager, Pyramidbrew.com

MacTarnahan’s Taproom

John: 

The brewery in Seattle is a pirate brewery, for Pyramid for all our test batches and brew for our various pubs and restaurants.  We have 5 pubs, in Seattle, Portland, Berkeley, Walnut Creek, Sacramento.

What is the future of the craft beer industry?”

As people step up, for example in the coffee industry, people are willing to spend more money on a quality product.  You’ve seen it in cheeses, in wines…

Do you consider yourself still a Microbrewery?

We are still a craft brewer.  We do over 200,000 barrels a year. Back in 1997/8 a lot of craft brewers washed out because of inconsistency of quality.

Do you think Oregon has some of the best craft beer in the country?

I would definitely say that.  We have access to clean water, most of the ingredients are here from the Northwest.  90% of all hops grown in America are grown in Oregon and Washington.  The people here are willing to try new things. Searching out new and better products.

Is there a lot of competition in you market and your niche?

Everybody in the beer category is competition.  Even the small brewpub guy, but it’s still a fairly friendly competition.  

What kind of a beer do you think a New York City person would be impressed with locally?  It’s the variety, everything from barley wines to stouts…

Who do you think nationally, is the biggest competitor to the craft breweries?

Coors produces Blue Moon, it’s a hefeweizen type beer that’s going after our market, Widmers as well.  I think it’s doing fairly well.

What is the key to their marketing strategy?

In each wholesaler, they are number one or two beer brand, so they have a lot of money behind them.  We have to sell it to a wholesaler, who sells it to a retailer, who sells it to the public.  So our number one customer is our wholesaler but if there are 10 beers that they make money off of their preference is for those guys.  

What is the best way to introduce a brand?

The classic way is word of mouth.  We do a lot of sampling at the grocery store chain level.  We try to use our restaurant, to get people to try our beers.  Today’s generation is overloaded and doesn’t want to see ads…

How would you convince someone on the other side of the country to drink your beer?

It’s tough because we are on the I-5 corridor, but the farther you get away from your home town, your resources are smaller.  No sixpacks on the shelf, only one.  We do on premise promotions, in bars and restaurants, festivals, etc…

Is your Mac Ale your strongest performer?

Pyramid Hefeweizen is our strongest performer. We also do Pyramid Apricot, which is the nation’s leading fruit beer. We also do well with our seasonals, Curveball and Snowcap are the current ones.

Sockeye Creative redesigned the look of the Mac beer. Why did you choose them?

I interviewed several different agencies but none wanted to do the packaging except Sockeye Creative.  They love the brand so much they decided they would do the packaging.  They did whatever it took.  They were college friends of mine anyway.  I had known those guys for years.  The whole process took about a year.  They continue to be our agency of record.

We use caramel malts in the Mactarnahan beers. 

What is Cascade dryhopping?

We take the hops and once the beer is made and it’s in the fermentation tanks for a specific time, they put some hops in a net and let it sit in the mixture and so that adds a lot more hop flavor and aroma.

It is really hard to get shelf space on the grocery store shelves, it’s illegal to pay for shelf space for alcohol.   How do you get those guys to carry your product?  It’s really tough.  The smaller guys that are making 30,000 barrels should merge with someone who is making more and then you can solidify your shelf space.

How do American microbrews compare with traditional brewing techniques in Europe?

They’re really similar.  The big guys could produce what we produce if they wanted to, some of them are using whole hops and its really a hands on thing.

What does it take to stay on top?

Consistent product is huge.  You’ve gotta be fast and nimble in terms of your marketing, wholesalers need some “customer service”, you have to provide a good product on time.


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