How I Became a Contract Brewer
Karl Bremer talks about the birth of St. Croix Brewing
February, 1996by Karl Bremer
Homebrewers are a lot like amateur musicians. Sooner or later, they begin thinking how much fun it would be to take their hobby to a professional level.
Some dismiss such thoughts almost as quickly as they entertain them. Others consider it a little longer and then, after realizing there's a not-so-fun business side to it, abandon the notion.
But a few actually find a way to do it. And judging by the phenomenal growth rate in the craft brewing industry--over 40 percent a year--there appears to be room for more for several years to come.
There are three ways to enter the world of commercial brewing: open a brewpub, start a microbrewery or establish a contract beer company. All have their own advantages and drawbacks. However, all share one common denominator if they are to succeed: quality beer made by reputable brewers.
After lengthy consideration of all three routes--and a few detours along the way--I chose contract brewing to bring St. Croix Maple Ale to market in 1995.
Beyond having a spouse who is willing to back up your dreams with a real and regular paycheck, there are three key elements to producing a successful contract brew: a proven, well-balanced recipe; a skilled, quality-conscious brewery; and outstanding packaging.
The Recipe
A pretty label or clever name can't hide a bad beer. It's what's in the bottle that counts, and it all begins with a good recipe.
St. Croix Maple Ale was derived from a recipe I developed over five years of homebrewing and teaching homebrewing classes. Like most homebrewers, I experimented with a wide variety of beer styles and ingredients. In the process, I discovered that maple syrup added some unique characteristics to beer when used as a fermentable sugar in the brew kettle.
The hands-down favorite recipe was a "steam" style beer brewed with maple syrup, thus the original name "Steamaple Ale." But more on that later.
Steamaple Ale had broad appeal among friends and homebrewing students. Variations on the recipe were tested with equally positive results on a wide range of all-too-willing subjects. And the favorable judges' scores in brew competitions offered another measure of quality.
When the final recipe was settled upon, a pilot brew was scheduled to bring the formula to the next level. We called on Briess Malting Company's Mary Anne Gruber in Chilton, WI. Along with Bob Rowland, owner of Rowland's Calumet Brewery in Chilton, Mary Anne calculated the formula for a three-barrel test batch of Steamaple Ale.
After cleaning out the local grocers of their maple syrup supplies, I drove to Chilton with a carboy half-full of yeast slurry that I had cultured up from several packages of homebrewers' Wyeast. Brewmaster Rowland was ready bright and early the next morning and our pilot brew was off and fermenting by that night.
The pilot brew was kegged and bottled just in time for our first public tasting: The Twin Cities Reader Beer Festival at the Mall of America in May. The overwhelmingly favorable response to the pilot brew at the Twin Cities Reader Beer Festival confirmed our belief that we were on the right track, at least as far as the recipe was concerned.
The Packaging
Even the best of beers will gather dust on the shelf if the packaging is unappealing. A number of common threads led us to Minneapolis artist John Hanson, who has been a key part of the St. Croix Beer Co. team since its inception.
Hanson's stunning hand-crafted work was already well-known throughout the Twin Cities music community and for his work for the New Orleans band The Radiators. He also designed the classic "Trout Stout" label for Santa Barbara homebrewer Glenn Kincaid that now is brewed by Olympia, Washington's Fish Brewing.
After studying the St. Croix River's rich steamboat tradition, Hanson designed St. Croix Maple Ale's label around an illustration of a 19th century side-wheeler that was built just south of Stillwater, MN, on the St. Croix. The label illustration is historically accurate, visually striking and truly original-- all of which contribute to its appeal.
The Brewery
The 136-year-old August Schell brewery in New Ulm, MN, has been described by Michael Jackson as having "the prettiest location of any in America." But it was the quality of the Schell's beers that we had been drinking for years that drew us to this small, family-owned brewery in heavily German southern Minnesota.
August Schell's reputation for brewing outstanding beers both under its own labels and under contract for others has spread far beyond the Midwest. Today, the 30,000-bbl/year brewery has become one of the most sought-after in the country by contract brewing companies.
Schell's was our first choice to brew Steamaple Ale. Unfortunately, it was also everyone else's, and the brewery had no excess capacity at the time we began our search in early 1994.
Phone calls to Schell's went unreturned. We met with other breweries in the region, all the time hoping that Schell's would free up some brewing capacity for us. But after many months, we were still a beer in need of a brewery.
Over a year later, Schell's president Ted Marti finally agreed to hear our pitch and we headed for New Ulm with homebrewed samples of Steamaple Ale in hand.
After some deliberation, Ted agreed to make room for St. Croix Maple Ale at Schell's. The first 100-bbl brew was scheduled for June 23, so now it was time to get legal.
The Paper Trail
We incorporated as St. Croix Brewing Co. in 1994. But that was before the federal Bureau of Alcohol Tobacco and Firearms (BATF) decided in 1995 that contract brewing companies couldn't call themselves brewing companies if they didn't actually own a brewery. The beer-drinking public, the BATF determined, might be confused or mislead by such names.
So, notwithstanding the fact that there were already dozens of contract brewers with "brewing" or "brewery" in their name, we were forced to reincorporate as St. Croix Beer Co. in order to obtain our federal basic permit to sell beer.
But our name-changing problems weren't over.
We heard through the grapevine that the notoriously litigious Fritz Maytag, president of Anchor Brewing Co. in San Francisco, was preparing his lawyers for battle over our alleged infringement of his "Steam Beer" trademark. In a move that many in the industry find disheartening, Anchor Brewing in 1982 trademarked the term "steam beer" for Anchor's exclusive use, thus privatizing what until then had been a long-used and very public name for the only true American beer style.
Anchor is well-known for its propensity for taking legal action against anyone who uses the term "steam" in relation to beer or brewing. That evidently included "Steamaple." After a few quick calls to other victims of Anchor's legal department--and they are numerous--we decided the odds of challenging a deep-pockets brewery over the name was a losing battle either way and, hence, St. Croix Maple Ale was born.
We had tried to head off any glitches with our federal label approval by taking advantage of the BATF's "preliminary approval" process. This is an informal process that's designed to alert you to any potential problems with your label before it's submitted for final approval.
But despite a green light there, we hit another roadblock when we applied for our final label approval. Since we take the unusual step of adding pure maple syrup to the brew kettle when making St. Croix Maple Ale, the BATF said, we would have to get a "statement of process" approved first, something the agency failed to mention the first time around. That could take weeks, or even months.
No amount of explanation could convince the BATF that maple syrup was no different than corn syrup or malt syrup in the brew kettle. It wasn't on the agency's approved list of adjuncts so this was a matter that had to be studied awhile.
After bouncing back and forth between officials in the BATF's Washington, DC office and its regional office in Cincinnati--both of which had to sign off on our label approval--we were able to get the process expedited somewhat. It was, however, a severe test of my civility at a cost of a few grey hairs.
The BATF's conclusion after all this? To further clarify the contents of St. Croix Maple Ale for consumers, we must add to the label "Ale Fermented with Maple."
That done, a call was put in to Inland Printing in LaCrosse, WI, to roll the presses on our labels.
First Brew
We secured a supply of pure maple syrup from Grape's Sugar Bush in Holcombe, Wisconsin. Due to a poor maple syrup "harvest," supplies were tight and prices were up considerably from the year before. We were at the mercy of the trees, however.
The temperature soared into the 90s outside the Schell Brewery and was well above that inside the brewhouse when the first 100- barrel batch of St. Croix Maple Ale was brewed June 23.
We drove down to New Ulm to help with the first brew, which consisted of pouring the maple syrup--and considerable sweat-- into the brew kettle. Even if it was someone else's brewery, it felt like quite an accomplishment to have come this far. This was, after all, a brewery with 135 years of history behind it and they don't let just anyone's beer into the brewhouse.
Six weeks later I drove to New Ulm to pick up the first kegs of St. Croix Maple Ale in my rusty old Bronco II. Myself, Ted Marti and Brewmaster Jeremy tapped a fresh glass in the parking lot of the brewery and it was evident we had a winner.
The roll-out party for Twin Cities-area bars, restaurants and retailers the following week confirmed that. And sales since hitting the market are further evidence.
Our broker, Tom Keim, had been pre-selling St. Croix Maple Ale for almost a year, so customers were more than ready for it by the time we rolled out the first barrels. First on tap was Lakeland's own Bungalow Inn, just up the hill from St. Croix Beer Company's riverside "corporate headquarters."
Twin Cities distributors The Wine Company since have added more than a dozen draft accounts and St. Croix Maple Ale in 22-oz. bottles can be found on virtually every retail shelf in the Minneapolis-St. Paul metropolitan area.
The beer has made its way north to Duluth and south to Rochester and Winona. The first shipments into Wisconsin have been very well-received, with draft accounts already established in western Wisconsin.
St. Croix Maple Ale has found a lot of fans in the intensely competitive Colorado market with the enthusiastic support of Dale Elliott of E Corp, our Littleton, CO-based distributor. Our first shipments to Illinois and California went out in November, with North Dakota soon to follow.
Interest from out-of-state beer drinkers and distributors alike was aided by our appearance at Denver's Great American Beer Fest in October. St. Croix Maple Ale played to rave reviews at this granddaddy of all beer events, and we've been fielding distributors' calls from around the country ever since.
Our distribution focus will be chiefly in Minnesota, Wisconsin and other midwestern states, with select markets outside the midwest. The most limiting factor is production capacity, over which we have little control as a contract brewer.
Was It Worth It?
When all is said and done, it's kind of nice to sit in your neighborhood bar and drink a pint or two of your own beer. The fact that it's brewed by someone else is of little consequence when it's in the hands of a brewery as capable as August Schell.
But contract brewing does have its limitations: Your production, especially at a smaller regional brewery such as Schell's, is limited to the brew schedule of others. You must adapt your recipes to the yeast strains already in use at the brewery. And your packaging must conform to the requirements of the contract brewery's equipment.
And then there's the scorn from some microbrewers who look upon contract brewers as some sort of, harrumph, illegal aliens in the industry because they don't brew their own beer. But is there any real difference between contract brewers and songwriters who have someone else record their tunes? In the hands of skilled craftspeople, both are capable of producing quality products in the end. And we're pretty sure beer drinkers will tell us if we've failed in that mission.
The obvious advantage to contract brewing is the lack of the major capital investment needed for a microbrewery of our own. That's not to say a brewery we can call our own won't happen some day. But for the time being, St. Croix Beer Co. is happy to make its home with August Schell high above the Cottonwood River in New Ulm.
St. Croix Maple Ale will be followed in 1996--BATF permitting--by St. Croix Serrano Pepper Ale, brewed with fresh serrano chile peppers. And the recipe file for future brews continues to expand at our "pilot brewery" along the St. Croix River in Lakeland.
We've declared a New Rheinheitsgebot: "Water, barley, hops, yeast and imagination." Expect the unexpected.
(Karl Bremer is president and founder of St. Croix Beer Co. He lives with his wife and vice-president, Chris, and Muddy Waters, a Chesapeake Bay retriever, in Lakeland, MN, on the St. Croix River.)
Search The Real Beer Library For More Articles Related To:
St. croix, Contract brewing
