Brew Talks CBC 2023: Out-of-State Opportunities: Strategies for Opening Multi-State Taprooms

Speaker 1 [00:00] Very, very.

Speaker 2 [00:15] So let's get rolling here. Many breweries are looking outside of their home states borders for taproom expansion opportunities. More than 90% of craft breweries rely on at the brewery sales, according to Brewers Association chief economist Bart Watson. In addition to providing an avenue for higher margin sales, taprooms allow breweries to interact directly with drinkers, curate a branded experience, and tap into real-time consumer feedback. For breweries who open taprooms in new markets, those ventures can establish deeper roots in new communities. Our panelists today will share their strategies and tips for opening out of state taprooms. So let's welcome our panelists, starting here with Jeff Heck, the co-founder of Monday Night Brewing in Atlanta, which outside of Georgia operates taprooms in Nashville, Charlotte, and Birmingham. Thanks for being here, Jeff. My pleasure. On the end we have Adam Charnick, co-owner of High Wire Brewing in Asheville, which outside of North Carolina operates taprooms in Tennessee, Kentucky, and Alabama and soon to be Ohio. Although I think, no, you've already got, I got that right. Come on,

Speaker 3 [01:24] Justin, keep up with things. Ohio's open.

Speaker 2 [01:26] You only have 11 taprooms, so you know it's a little hard to keep track here. Finally, last but not least, we have Marcus Baskerville here in the middle, co-owner of Weathered Souls Brewing in San Antonio, which also operates a brewery in Charlotte. So thanks for being here, Marcus.

Speaker 4 [01:45] Thank you for having me. So

Speaker 2 [01:51] we have a text line too. That number is 617-336-8560. That's 617-333-36-8560. If you have questions for them, send them. I'll try and get you some answers, but let's start with the obvious question, and that is why. Why is expanding to an out of state market with a brick and mortar space the right opportunity? And I'll start with you, Jeff.

Speaker 5 [02:18] Well, I think the answer is it's not necessarily the right thing for anybody, um, and you were talking about some of the reasons to do it, and I think we start with the reasons of why, what are the wrong reasons to do it, because, uh, a brick and mortar location is not a silver bullet, nor is it easy. It's actually a very different business than than a distribution business. So we distribute in Georgia, Alabama, and Tennessee. That's 70 to 80% of our volume, um, but for us, what those brick and mortar locations. do are really two things. One, they help to further our purpose, which is not just about putting beer on the shelf, but to really deepening relationships in the markets that we serve. And two, they help to build brand awareness and connectivity to the brand in markets that that we don't, we haven't had a physical presence in before. So we've seen that that wholesale sales typically get a pretty significant double digit boost when we open a taproom in a market that we already sell and distribute into.

Speaker 2 [03:18] Marcus, you went from 1 to 2 breweries. Why was that the right decision for your business?

Speaker 4 [03:25] Yeah, um, I won't say it's necessarily the right decision, um, but being that we're in San Antonio, San Antonio is a market that, um, is very overly saturated with Hispanic drinkers and is very much the Modelo Dos Equis capital of the world. So being said that, um, we had an opportunity to expand our outreach outside of the San Antonio, Texas market. Yeah, so. Dealing with that, it was kind of the situation that made it right for us within the Charlotte market as they're a very welcoming emerging craft beer scene, and so for us it was more so about the outreach of getting out of San Antonio and be able to hit multiple markets.

Speaker 2 [04:09] So Adam, you like courting complexity. So why, why is 11 taprooms the right business model at this moment, you know, and I'm sure you'll add more down the road for Highwire.

Speaker 3 [04:23] No, I have a big announcement that we are not opening any more taprooms after Nashville opens in a couple months. Yes, but, yes, yeah, we just Saw what Jeff was doing on Monday night and just figured we'd just copy whatever he was doing basically. So just, you know, four cities in the South and uh um no, for us, we looked at how do we differentiate ourselves. We started our brewery in 2012, 2013, um, and I mean it's wild to think that at 2500 breweries at the time, it was an extremely crowded marketplace. Now it's quite Drupal that, um, but we saw success in our taprooms. We saw challenges in the distribution model. We saw them not getting easier but getting more challenging for a brewery that wasn't quite a legacy brewery and didn't quite have sort of that slam dunk number one winning beer, our portfolio sells across several different products, um, so, um. Uh, that was the impetus for, for opening up tap taprooms outside of Asheville, but the other part of it is we are in a pretty small metropolitan area. Asheville's a quarter million people in the metro area. Um, so it's, it's nice to, um, to be a bigger fish in a smaller pond, uh, but I think ultimately if we wanted to expand our scope, you know, the way to do that is to kind of branch out some tentacles, um, and, uh, tentacles, and in, um, You know, so we started off expanding into Durham and then into Wilmington and kind of saw success. It was sort of a proof of concept and so expanded out of state. So, um, you know, I think that was a big part of it is that, is that ultimately being in such a small market, um, if we wanted to reach our ambitions and reach the scope that we were looking for, we needed to kind of, kind of find another way to achieve some scale. So we found some markets where we had some brand loyalty and just kind of put our money where our mouth was, basically.

Speaker 2 [06:20] Marcus, let's go through some of the complexity of going from one operation to two. What was that like, you know, basically, you know, you're doubling your complexity right off the bat there.

Speaker 4 [06:35] I'm still figuring it out. So we, we've been open since the 2nd location has been open since November, um, and so it's definitely been a work in progress because. They're two very different markets, um, and so with our San Antonio location it's very much taproom driven outside sales, but then you look at the Charlotte location and they have so many different options when it comes to craft beer versus San Antonio. So you have to. Have things that are going to highlight your brand outside of just having beer, right, because there's multiple amazing breweries there. Um, so for us it's been about trying to highlight some of the fantastic beers that we bring from the San Antonio location. Um, we've also expanded into cocktails, so bringing in a top mixologist in the country really to curate our menu and create some fun cocktails, but then also on the restaurant side trying to build a synergy. And so we've brought on a 4 times James Beard nominee to run our. Chef or run the kitchen as far as the chef stuff, so trying to create the upper echelons of synergy between food, beverage, and beer and working that angle and trying to create something different from what we've had in our normal San Antonio market.

Speaker 2 [07:55] Jeff, when you go from Taproom 2 to taproom 3, to taproom 4, and so on. What do you? What's, what, what have you learned? Have you gotten it down yet, you know, or, you know, what, what's the challenge there?

Speaker 5 [08:10] There's just one, no, there's a lot of challenges. I mean, one of the things we've learned is there are dozens of ways to go wrong, um, and so I think we've learned so many things. I, I should write a book like Sam and Garrett here about that, um, about all the mistakes we've made, but look, I mean, I think the reality is that The, the real key for us has been to try to make sure that the locations we open are one, commensurate with the quality and the hospitality experience that we want. We want to have our brand well represented. One of the things we talk about a lot is that each taproom needs to have a reason to exist, um, and it needs to have a reason to exist just like any of our beers needs a reason to exist. It needs to be a place that like, what's the reason this needs to exist, not just for us, but for the community that's, that it's a part of. Um, Is it consistent? With the quality that we that we come to expect from our beers, um, so that's, that's been a huge learning. And then the other thing I'd say is that the biggest learning has been people are everything, you know, people are everything. Our general managers, especially in the outlying markets that we aren't in every day, are the standard bearers of our brand and our experience and our culture. So we started brewing beer in my backyard on Monday nights, um, you know, 15 years ago, and people would literally for 4 years, 2000 people. Came through my house when we were homebrewing and what happened when they came through my house is that they're my guests, like, so I care so much that every person that walks into our taproom has the experience like they're walking into my house, that they're coming in, that they're welcome, that they feel comfortable and safe. So that means that I, I can't be in Charlotte or Birmingham or wherever, so we need to make sure that those GMs, we give them a ton of training, they like live and breathe our culture and that they're absolutely the right cultural fit. So that's probably the biggest learning I've had from all of it.

Speaker 2 [10:00] What do you think that folks underestimate when they're opening an out of state taproom, Adam?

Speaker 3 [10:06] I mean, there's more than meets the eye, you, you know, even if your brand sells well in the market, I think that's a good reason to consider opening a taproom in a market, but there's so much more to it. I mean, Marco was talking, you were talking about in Charlotte. Charlotte is like, I mean, I just went there for a few days. I mean, I go there often, but I went there to do like an audit or like a drop in and kind of just evaluate how. How are taprooms competing in the market. I mean, I was just drunk walking in the streets thinking to myself like this is the New York City of beer market of taprooms. Like Charlotte is insane. Like it honestly is the most competitive craft beer market for taprooms, I think, in the country that I'm aware of, at least. I mean, so you've got to step up your game, people, I mean, level up, I guess is the term. You really got to like. You know, you know what you're doing, and I think adapt. So I think I forgot your original question, but the point

Speaker 2 [10:55] what people underestimate when they open out of state. Yeah,

Speaker 3 [10:58] I mean, I think the best laid plans are a guidepost, and I think that's true not just in taprooms, but in the crappier business in generally. I mean, if you're not pivoting often, I think you're probably a step behind if you're not a step ahead is the way. I like to think about it, um, and so I think in taprooms it's, it's plan and, and see how you're, for us it's been how can our taproom be competitive and different and find a niche, but then also evaluate what we're doing and, and if certain things are working great and if others aren't, well then we need to kind of adapt and, and figure out how to, how to maintain, um, you know, what makes us special and why people wanna come to us.

Speaker 2 [11:35] Marcus, I, I think you said that you opened in November. You know, you've had some time now to sort of get settled, but what do you wish you had known now or then what you know now about opening that new location?

Speaker 4 [11:51] Um, I think the biggest thing is being aware of your local laws, um. Because I just mentioned in a manager's meeting, uh, not too long ago that Texas is definitely the wild west. So there's a lot of things that we get away with or just generally don't have to worry about in the Texas market, especially when it comes to the restaurant side of things. But then going into the Charlotte location, it's like, wait, you can't do that, you can't do that, you can't do that, you can't do that, you can't do that. And it's like, well, we did not know that, um. So I would say the, the biggest fault to us is uh the education portion of local laws, local processes, uh, the different things that you're allowed to do on the restaurant end, the different things that you're allowed to do on the beverage end, uh, because all of those are things that are gonna help you, uh, progress in the long run, but they could definitely set you back if you're not familiar with what's going on in the area that you're opening.

Speaker 5 [12:50] That's a great, I mean, that's a great point, and I think, so we have, we have taprooms soon to be in 4 states, and I mean we almost shop by shop the states depending on what the laws are. I would love to open more brew pubs or taprooms in Georgia, but in Georgia, we have to have, there are very strict production laws that mean we got to spend at least an incremental half a million dollars to comply with the with those laws, um, which sucks. But then North Carolina is totally different, and so that's actually, I would really, really, I mean, before you do anything. Understand how those state laws work. Hire a good attorney who understands the state laws. It's worth every penny that you'll spend every dime.

Speaker 2 [13:29] I'm guessing that

Speaker 3 [13:30] factor I'll second all that. I mean, I could just say ditto and it'll pretty much, you know, encompass what these guys said, but yeah, find local attorneys has been super helpful for us. The laws are so id idiosyncratic in every state, and yeah, I mean we don't have a tap room in Georgia, and you know, Jeff kind of highlighted one of the main reasons why, but it's really, you know, I talked it out of him

Speaker 5 [13:51] because I didn't want him to come infringe on my

Speaker 3 [13:53] backyard. Look, look, we can't copy your business model entirely, right?

Speaker 2 [13:59] Let's talk a little bit about market selection. When you're looking to expand to another, to another location, what are the top factors in choosing not only a city but a space? And I'll start with you.

Speaker 3 [14:12] Sure, I mean, we, we look at where our brewery has relevancy and if and where we can, we can stand out, um, you know, there are a lot of craft. There are a lot of cities in America that are extremely. Competitive craft beer environments and it's very difficult even if we're popular there and sell a lot of beer there, it can be extremely difficult to stand out and we've chosen to enter some of those markets, but you know it's also better sometimes to be, I mean, some of our smaller markets that we're in that are have a less developed craft brewery scene, we actually see better performance than in more than larger markets that have more competitive craft brewery scene if you. Caught what I just said there. I kind of confused myself, but, um, yeah, so I think understanding the market dynamics is number one. And then 2, you know, I think part and parcel of our brand is we like being in locations that are, it's kind of a core belief of our, of our company and our ownership is wanting to be in town. So it's very essential for us, um, and it may not be for, for other people's breweries, and that's OK. I mean, you have to understand what your niche is. So, our niche is, we, we like being in, in up and coming areas, like it being in kind of closer to the heart of town. We like helping to improve neighborhoods and, um, and repurpose buildings where we can. We're being in kind of vibrant districts and so, um, that's dictated. The second part of your question is kind of how we dictate, how we decide what location to go into is, is a big part of it is, is, um, it's just kind of who we are and what we want to be part of, so.

Speaker 2 [15:36] Jeff, I'd throw the same question to you, but what, why don't you hit that real quick, you know, city and space, you know, how do you, how do you determine

Speaker 5 [15:44] it? I mean, we want to be in markets that are adjacent to, we, we think about, uh, so my background, I spent a lot of years investing in like multi-unit consumer retail businesses. So it's the whole idea is you've got to expand concentric circles. No offense, Marcus, you've got good reasons to be in Charlotte. But for us that's been a part of our, our strategy is just where do people know our brand, where, what are the cities and geographies that we know and understand, which actually was part of what drove you guys to do Charlotte, um, and then how do we find spaces that are, uh, we're similar to Adam, we want to be in, in sort of in town, uh, densely populated areas. We've made some mistakes on some of those as well. We've made some mistakes on some of those choices as well, but, uh, but that's our, that's really our, our goal. The other thing I'd say is like we want spaces that are super unique, that, um, you know, that aren't cookie cutters. Every single one of our spaces, we have spaces from 3000 square foot to 15,000 square feet with different, different programs and structures and programming and so again, everything has a reason, needs to have a reason to exist. I'll maybe come back to that.

Speaker 2 [16:48] Charlotte kind of sells itself, Marcus, but you know, what was it that was attractive about the space there? This, I'll, I'll let you say the city, but you know, we kind of know that it's a mecca.

Speaker 4 [16:59] Yeah, uh, so for us we actually toyed with opening in Charlotte for our original location 7 years ago, uh, but I wasn't moving to Charlotte at the time, so that didn't happen. Uh, but now we've been able to kind of expand our outreach and I don't have to move. I spend a few weeks there every month, but I don't have to move. Um, so being said that, for us it was again something that was completely different from the market that we're currently in. Um, Obviously we have a fantastic stronghold in the San Antonio. Craft beer market, but one of the things for us is, uh, especially because my my business partner spent about 25 years in Charlotte, was, uh, expanding past that, um, plus we have a relevancy as far as our beer, uh, for the Charlotte market, and there's certain issues within there that we've seen a gap in at the time, so it worked out for us to be able to open, um, but then also dealing with the specific location that we opened, uh, Charlotte is a very expanding. Market currently, so it's interesting because both of us are actually opening about 1.5 miles away from each other

Speaker 5 [18:02] and Adam's like 2 blocks away from us. He's like 2 blocks away all open Charlotte locations within 12 months of each other.

Speaker 4 [18:08] So we're again, yeah, 12 months of each other and we're all within like a 2 mile radius of each other, so it's looking within those markets that are growing, expanding, the demographic scenes are growing there and different things like that, and so it just made sense at the time.

Speaker 2 [18:24] Adam, how do you weigh the price paid for being in a more densely populated area versus one that's cheaper but a little less populated?

Speaker 3 [18:34] Um, before I answer that question, can I give a shout out to our socks? I feel like we've got a really good,

Speaker 5 [18:38] we got a sock game going on. I

Speaker 3 [18:40] just like got distracted for a moment by the socks. I'm like, man, this is a, we may not be the best looking bunch, but our socks are pretty good. I'll take that as a win. Maybe it's the dogfish head talking. I don't know, but, um,

Speaker 2 [18:54] get, we got a rival Bart Watson. Bart Watson has the best socks in the business, so I mean,

Speaker 3 [18:59] I've met Bart, but not a sock, so I'll have to pay attention to that next time. Um, the, um, how do we, uh, we, when we, um, our, our, our first location outside of Asheville was in Durham, which for us was an approachable size market, and then we moved to Knoxville, which is, um, kind of also a more. size and eventually we worked our way up to to bigger markets like Charlotte, Nashville, Cincinnati, Louisville. So I think for us it was proof of concept in what we felt is more attainable markets and then finding the confidence to kind of spread ourselves out and not overextend ourselves. So, um, and it's, it's interesting, you know, it's not always the bigger the market, the bigger the returns for us, and it's, this isn't all about like. The performance of each taproom, it's about building a brand and, and putting our money where our mouths are and being local where we kind of already feel local and putting a brick and mortar in, but, um, but also it is, it is, you know, part of the puzzle is that as the cities get bigger, generally, um, there's more opportunity there. So I guess long answer short is it was proof of concept in in smaller to medium sized metros and then kind of um find that confidence and, and, and build from there.

Speaker 2 [20:10] Jeff, you, you've sort of leaned on it or you, you mentioned it a little earlier, but you sort of focus on more densely populated areas, right? Yeah,

Speaker 5 [20:20] that's, that's been the more recent focus, and a big part of that has there's a trade-off, right? You're going to pay higher rent and and have higher build out costs for more densely populated areas. Just prepare for it, which means you have to have more sales. I'm not this is like 101 stuff, but it's shocking how easy it is to forget. You got to have higher sales and you've got to manage your costs to be able to pay for it. And so we always start when we're thinking about a location with with like what's our pro forma look like we're doing as much research as we can to figure out like what what do we think is a reasonable like low side revenue. We manage to the downside on most of these things to make sure that we don't get up. Down, I mean that's, that's where he starts. So the other thing is that managing additional taprooms is especially out of state, takes a ton of work and focus and institutional energy and cultural energy. And so our approach has also been we want to have locations that are actually going to be pretty meaningful contributors from a financial perspective in order to necessitate the kind of investment that we need to make as a leadership team resource. In our folks, we want to be able to, so it just doesn't make sense, even if it's going to be a profitable, even if the ROI makes sense on paper. We want to be able to take bigger swings at fewer spots. So that's been a part of what's contributed to that strategy.

Speaker 2 [21:38] Marcus, you've just opened Charlotte, but is that the end for weathered souls, or do you sort of think, well, you know, maybe 3, maybe 4, you know, maybe another market.

Speaker 4 [21:50] Yeah, um, no, that's not it. Um, we're actually about to open another location or another taproom in Charlotte, uh, inside the Spectrum Center, uh, with the Hornets, um. Thank you. Yeah, um, and we're working on a couple of other little potential locations. I can't say what yet, um, but hopefully the goal is to get like these two gentlemen next to me and open a few different locations over the next few years.

Speaker 2 [22:16] Awesome. Well, let's, let's talk a little bit about real estate and landlords because everybody loves talking about real estate and landlords. What considerations do you need to make when considering a lease, and I'll start with you, Jeff.

Speaker 5 [22:29] Uh, this is the boring stuff that's super important and will come back to bite you in the ass. Um, so I mean, I really do think that your landlord, your lease, um, how you structure it, how like if you don't, if, if unless you're a real estate attorney, hire a good real estate attorney to help you walk through this stuff. It's super, super important, um, and there's a lot. One thing I would just say too is that for A lot of in our experience, one unique thing about being a craft brewery is that you bring something really special and unique to a landlord. A couple of our taprooms are part of larger developments, and so that's given us some leverage when, when negotiating with our landlords about flexibility or the investments that they make. And so a lot of times we've found that actually landlords will be pretty flexible and open to some creative ideas don't. Just bend over backwards. Don't just say no. Landlords oftentimes have a very rigid idea of how they think about like it's $10 a foot and we give you $10 in build out money and you have a 10 year term, and, but the reality is we have several deals where we've structured things as percentage rents or partial percentage rents, or we can renew in 5 years at a market rent or we can pay you back for the money that you've given us to help build. Out is in a different so there's so many different creative ways to structure those leases that align, but it really starts actually with not just knowing what do you want, but also knowing like what is the value you bring to this landlord. They are betting, they're betting on your credits as a tenant. They all they want to get is do is get paid, which makes sense because they're giving you a space that they could someone else. So I really think understanding what your landlord's motivation is also helps as well.

Speaker 3 [24:09] Um, yeah, I'll, I'll echo what Jeff said, you know, um. Having, I can't underestimate the value of having qualified professionals help you out. Um, or, or if you have that capacity yourself, as Jeff mentioned, your background, you said worse in consumer product goods or something like that. I mean, and that probably informs a lot of your capacity, natural capacity to do a lot of what you do. Similarly, I have a background in commercial real estate, and so I think that kind of informs my worldview that something that I think of, uh, I think I can think of something a little bit differently than than somebody who doesn't have. That background and experience, not better or worse, just differently. So I think though if you don't, if your background doesn't happen to be in these, in these in these areas, then hire, have work with good people. You mentioned the real estate attorneys. I'll throw in a good real estate broker is, I mean, probably the most important thing. So you know if What Jeff said overwhelms you of all the different opportunities and ways to negotiate a real estate transaction is overwhelming. Like, it doesn't need to be your ideas. It needs to be your real your real estate broker's ideas. Um, uh, you know, we work with top-notch real estate brokers that we can't speak highly enough and they help not only find space but then also be creative and negotiating solutions for you as well, so.

Speaker 2 [25:29] Marcus, what have you learned in negotiating that 2nd lease, and now it sounds like 3rd and 4th and so on? Yeah, I mean,

Speaker 4 [25:36] I'm going to echo what these gentlemen said. You definitely want to have a good lawyer in hand and definitely a good broker. So luckily I haven't had to deal with too much of that. But being able to work with your landlord in a cohesive type of situation where they're going to be able to help you out when you need assistance and stuff like that is going to be very important. So building up those type of relationships is definitely going to kind of garden you in the long run.

Speaker 3 [26:01] Let me tell you one build on one other thing Jeff said too is. Breweries at a lot, uh, you know, we, we always talk about how we're building community. Um, I, I think most of, most brewers in the room can say that about their business is you're building community. You are, and you're bringing people to a community, and so you, you provide a pretty big asset for a landlord, and landlords, smart landlords will notice. That and see that and value that appropriately. So, just again, um, well, you know, they're the big bad boss who has the space that you want, you're also providing a great resource for them and you have a lot that you're offering uh for them and their goals as well, and that's important to remember.

Speaker 2 [26:44] Let's talk a little bit about brand. Let's let's bring it home to that because craft fans have been enamored with local, and these are markets that you're new to in a lot of ways. So when you're entering a new market, you know, how do you build a brand reputation in those markets to consumers who have been largely local seeking? I'll start with you, Adam.

Speaker 3 [27:07] Yeah, sure, I'll just dive in. We spent a lot of time and energy. I mean, we, these are markets we are. Felt local enough in, so we just put our money where our mouth is and our word where our mouth is. We host a lot of nonprofit nights at our taprooms to build the communities that we want to be building in. Um, we also have a lot of programming, um, so I mean, we have a calendar of events at all of our taprooms and it's probably full more than half the time, um, whether it's a drag bingo or a silent disco or even like a puzzle night or, um, you know, a pop-up thing going on or. Um, you know, there, there's kind of always something going on, um, that kind of is additive to, to, to, to what we're doing. Um, and then the last part is, is just kind of having our taprooms being true to who we are. We're a fun brand, uh, meant to be a good time or like good beer, good times is on our cans. That's what we're trying to spout. So when you come to our places, there's games, there's, there's amazing hand-drawn murals. It's just, we're trying to kind of embody who we are and, uh, um, and I think that's what makes them unique.

Speaker 2 [28:14] Marcus, how do you bring that Weathered Souls experience to your new markets?

Speaker 4 [28:19] Yeah, um, well, obviously it's about branding, um, but then also getting to kind of know your local marketing community. Um, so for us with our brewery, we have a lot of community out. Reach and a lot of community support, um, so even then, um, you know, looking at the quality of styles that we're releasing with a particular branding, I mean we're more known for stouts and Charlotte hasn't been a big heavy heavy stout market and so that's been a niche for us that we've been able to go into, um, but dealing with us, it's more so kind of about also attaching yourself to the community, attaching yourself to the people around you, um, and we've been able to do a pretty good job of that.

Speaker 2 [29:00] Jeff, when you're bringing the Monday night experience to a market like Charlotte where you know you've got competitors on down the line, you know, how do you bring that unique experience?

Speaker 5 [29:10] These guys right here, um, no, I actually, I think that, um, I think one thing that has changed, so we've, we've been open for 12 years now. One thing that's really changed in the industry is that I think local means something different now. I think our consumers care a lot more about our engagement. With employment of connection to our local communities than that it was founded by somebody that lives within a 5 mile radius. I just think that is a different ballgame. Um, so I think I'd echo what these guys said like knowing your knowing your local market. One just additive thing I'd say is training. Training is huge, um, higher, so we really will. Really, really want to hire local GMs, local assistant managers, local staff, people that know the neighborhood, that know that when their neighbors come in, they know them and can connect with them. But then we also want to really immerse them in the Monday night culture. So our GM for Nashville or for Charlotte, uh, which is opening in about 6 weeks hopefully, um, has spent spent 3 or 4 weeks. In Atlanta, then in Nashville with our GM in Nashville, in Birmingham with our, and then back in Atlanta and then back to Charlotte, and then every week we've got somebody going up. So that is so, so, so critical to make sure that they are, you're, they are connected deeply to their community, but also that we're giving them the training to understand what does it mean to be Monday Night Brewing in this local community.

Speaker 2 [30:33] How soon do you make that hire?

Speaker 5 [30:35] So we hire a GM. We're usually hiring them like 3 months out, which is a lot of time. So they have about 1 month of training that's really we're not expecting anything from them. Sometimes it's even more than 3 months, but we don't expect anything other than just to be a sponge, which is expensive for a good GM. Um, and then, and travel and all that stuff, and then they're really developing a plan, hiring an onboarding. We, I think it's super important that a GM be allowed to hire their own team, but only after they've really become immersed in our culture. You want people to have the autonomy to pick their team, um, but know and understand how you pick that team.

Speaker 2 [31:13] So you've opened multiple locations. Uh, I'm sure you all get the question like why not just franchise? Why, why not do that? Why?

Speaker 5 [31:24] Uh, is my short answer. So I, I worked, I worked in a, uh, for a private equity firm that invested in franchise business, and franchising is a beautiful business model because you basically take a box and you replicate it 10, 100, 1000 times in strip malls across America and then the world. And the beauty of franchising is the operations are simple, they're codified. And actually there's no room for deviation, and that is the furthest thing from what our industry is and from what we are as makers. So I really am a deep believer that things like handing over the reins of your brand to anyone other than you is a horrible mistake and will end up backfiring because I think consumers are smart enough to see through kind of the bullshit of that.

Speaker 3 [32:12] I, I, I mean, I, I don't think I could have said it more eloquently, but I, I think I'll add a couple more sprinkles on the cupcake of, you know, people aren't just buying your products, they're buying your experience. So if you're selling your experience, you ought to be in control of that experience as much as humanly possible. So, I think long and short, that's it.

Speaker 2 [32:34] If you have questions, 617-336-8560. That's 617-336-8560. Marcus in Charlotte, um, you're starting the Harriet Baskerville, Baskerville incubation Program, which is aimed at creating opportunities in the beer industry for minorities and women. Tell us a little more about that program and how you expect it to help introduce your brand, your brand to new drinkers in the city.

Speaker 4 [33:02] Yeah, um, so a few years ago I found out that my grandma used to actually brew and distill. Um, so one of the things that, uh, the Black Brewers Association really didn't talk about is the historical relevance of black and beer, right? Um, beer came from Africa. We'll just keep it real. So, being said that, uh, it's very much been in our history as a people, but then over the course of time, you figure you deal with, uh, the trans. The progress of the way beer has gone, and we won't go too far into details, but that's where it's gotten diminished from the black community and then the lack of marketing, the lack of being able to receive financing, to be able, the lack of housing, and etc. etc. etc. all of these things have led up. But one of the amazing things is that I found out that my grandma and great grandfather used to brew during Prohibition. Um, so being said that, also my grandma owns a Church in Compton, um, and so very much community driven, very much has been about, uh, her city for years upon years. She's 93 years old and as of last year was still doing, uh, Sunday school. Um, but being said that, um, after Black is Beautiful, I kind of grew complacent, right? We did this amazing thing, raised $4.5 million had all of these breweries support, um, in support of social justice. Reform and I grew complacent because we did such an amazing thing and it was like what's next? Um, for me, being the type of individual that I am, I'm not a very complacent person. um, and so I was on a Peloton ride and was listening to Day and she was talking about passion and purpose. What isn't always your passion isn't always your purpose, what's always is your purpose isn't always your passion, um, but I realized within that conversation that. Uh, social work, um, being the forefront of wanting to give back isn't necessarily my passion, but it's definitely became my purpose. And I've put myself in a situation dealing with Black is Beautiful, dealing with, uh, you know, our brand, um, to where I can go and ask for money or I can go and ask for resources or ask for all of these things that the normal individual like me hasn't been able to get access to. And so I realized within that that. Hey, if I can go ahead and give back, then I guess that's going to be my job to go ahead and do so. Um, so Harriet Baskerville Incubation Program is named after my grandma. Uh, one of the biggest disparities of what they talked about is we're at less than 1% ownership, right? There's over 9000 breweries in the United States and there's less than 70 black owned breweries. Um, but then also going into women ownership, it's not that great either, right? Um, so being said that, um, you look at how, um, Mentorships work and different things like that, and it's always cool to put more foot soldiers into the masses, right? But we know where real change is given is the people that have creativity, the people that have ownership, the people that have the decision making, and that's where the disparity is when it comes to black ownership. Um, so with the incubation program instead of gearing towards building more brewers or building more taproom employees, uh, we're gonna focus on the ownership end. Uh, so we brought in some of the top businesses dealing with RA, White Labs, um, Yakima Chief, uh, Jagermeister. Even though they're not beer, but they do fantastic at marketing and sustainability, uh, we'll be working with SBA and loan officers and all of these things to start building individuals into ownership, so they'll start working with some of these brands as far as how to operate the business end of it, how to work with them on the supply chain, and they'll go and work with different marketings to learn about sustainability, how to grow their brand. We'll pair them with SBA loan officers on the. Financial side, uh, working with some banks, uh, so we're building a partnership with Bank of America right now where they'll be able to work with some of the people in business banking to learn how to go ahead and ask for money or go ahead and secure money on different ends, but the main goal of what this incubation program is, is to change that narrative of ownership. And you look at the first year, right, I'm hoping out of the 12 people that we bring in 4 people go to open a brewery, that's already a 60% increase in the amount of ownership that there is. And so you look at that, those are those real changes that we're looking for, right? You can always have the small things that are going to happen, but the real ones are going to be within the ownership and, uh, so working very hard to build that program up, uh, we just brought in a fantastic education director uh to start working with that um. Realize that I can't manage this program on my own, uh, so I just brought in a full-time employee for the nonprofit, uh, but hopefully we'll have our first cohort at the end of June to start out and hopefully start building from there. Um, so, you know, like the goal of the Michael J. Jackson Foundation is to build more brewers, more individuals that are going to grow within the craft beer. This is going to be more towards the ownership side and trying to build more ownership within beer.

Speaker 2 [38:15] Let's wrap this up with an audience question. Uh, when you open a taproom in a new state, are you also looking to have representation in the off-premise in the same market? Is that an expectation that factors into selecting taproom location? So, I'll, I'll start with Jeff here.

Speaker 5 [38:33] We have done, we've done several different ways. In Alabama. We had been operating in wholesale for years before we launched in Tennessee. It was within a couple of years of each other. In in Charlotte, we will actually open a taproom before we have wholesale distribution. We're hoping to do it like right around the same time. We don't really think about the. The specific this real estate in light of what the off-premise or on-premise looks like, it's just they're they're separate, they're separate pieces, um, but we do think about like on the margins we'll think about what the impact is to our wholesale business in terms of the lift that it could provide, but generally it's a farther reaching concentric circle or circle on the wholesale side.

Speaker 2 [39:19] Marcus, how important are distributed sales to, you know, building up the taproom? Um,

Speaker 4 [39:25] it's definitely important because it's what's going to give that community recognition to your brand. Um, so for us we actually distributed in North Carolina, Charlotte prior to opening the taproom. Now the majority has obviously been the taproom and we've stopped distribution. Currently, um, but it's definitely important as far as building the brand, building that brand recognition and at least getting the community familiar with your brand prior to opening. I mean, you take a random brewery and they're like, Oh, who's weathered souls? So obviously you need to have some type of market sustainability there before you actually physically open.

Speaker 3 [40:03] Yeah, and we, we were, we were, we distributed, had distributed sales in all of our markets before we opened the taproom. As I mentioned earlier, we're in a small market, so a big part of our business strategy from day one when we were more focused on, well, when we were almost exclusively focused on the distribution side was to kind of expand out and branch out and be relevant and sort of be kind of a first mover in a lot of different markets, um, and so we sell our beer in 9 states. It's been. That way for about 3 years that we've kind of been stopped at 9 states, um, but then we've kind of come back and backfilled with the taproom. So for us, you know, as our business model as the market evolved, our business model evolved, uh, and whereas at first it was, uh, get out in front on the distribution side to kind of catch up to a lot of the brewers who've kind of been paved the way and been doing this for a long time, uh, and then once we had our distribution out there, now we've kind of back. Filled it with our taprooms.

Speaker 5 [40:53] You know, one other thought, Justin, is that I'll tell you like in a year whether we're idiots or geniuses in terms of North Carolina of opening a taproom around the same time as distribution. I will say it's really changed in terms of new markets. Our ability to even a brand as big as Monday night, we have a, we have a, we're, you know, we're only in 3 states, but we do really, we're really deep roots in those 3 states. Uh, the, the conversations with distributors were way easier once they knew that we were opening a taproom in Charlotte. That was not the case years ago. It was, oh well, you're going to piss off our on-premise accounts and you're going to compete with them, and, and that is, that whole narrative is completely flipped. For us, so we actually have got like conversations with distributors that we probably wouldn't have gotten otherwise because of our taproom, which is a totally different thing than what it was, yeah, 5, 10 years ago.

Speaker 2 [41:44] Well, I think that's a good place to leave it. Adam, Marcus, Jeff, thank you for doing this. Thanks. Thanks to all of our speakers for coming out. Thanks to the National Black Brewers Association, the Tennessee Craft Brewers Guild, our presenting sponsors, Dogfish Head and Ollie by Next Glass. Other sponsors Arrive Distribution, the e-premise Group, En Compass Malt Europe. Pneumatic scale Angelus, Reyes Beverage Group and Strike Visuals. Again, thanks to all of you for attending Brewals. We'll do this again at CBC. We're gonna do this July 12th in Boston, so look out for more information on that, and that's Brewal. So we'll see you around CBC. Let's get some beers.