Hot Dog! We Have Some Big News!

Yesterday I posted about how Nate and I have been presented with an "awesome opportunity that will make this journey a lot easier and cheaper". About an hour after I posted it, Nate called me and told me the deal was approved and we are in business! So what is this deal that we've been chomping at the bit to share? Let's start at the beginning. Once Nate came on board as a partner about a month ago, we started bouncing ideas off of each other as to how to further mitigate our risk. We're both married with mortgages and children and despite our passion for brewing beer, we're not interested in putting any of that needlessly at risk. That meant we needed to seek funding from sources other than just banks and individual investors. Banks are fine and all, but we would have to put up personal guarantees which could put our houses at risk. Investors are a great option but the more investors we bring on board, the greater the risk of someone rocking the boat and expressing dissatisfaction with how the business is going.

So what's left? Well, there are venture capital firms, but those deals require relinquishing control of the business you've built with your heart and soul. That wasn't an option. What we needed was a partner with lots of cash who would let us run the business our way and trust our judgement and vision. Someone who maybe wanted to get a foothold into the craft beer industry but wasn't quite sure how to make it happen, and someone who was based in Chicago.

Well, after mining through many business and personal connections, making about 30 phone calls, and with a heaping dose of blind luck we've found our partner.

Luckily Nate didn't notice the clause in the contract regarding who has to wear the obligatory Vienna Beef Man suit to all events.

Ladies and gentlemen, please welcome Vienna Beef, Ltd to the Panic Alarmist Brewing family!

Wait, what? What do hot dogs and lunch meat have to do with craft beer? Well, perhaps that might seem a stretch at first. Initially it definitely seemed incongruent to what Nate and I are trying to do. Allow me to explain.

One of our mutual friends has a close cousin who is not only a huge craft beer fan, but also happens to be an executive at Vienna Beef. Our friend was at a family gathering and mentioned in passing that she was friends with some guys opening a brewery and they were looking for a business partner based in Chicago. Her cousin's ears perked right up apparently and by the end of the day, Nate and I were on the phone with her discussing our vision for the brewery.

Well, it just so happens that Vienna Beef, founded in 1893 here in Chicago and still headquartered here is looking to branch out from its ubiquitous hot dogs, Italian beef, and deli meat business. The owner, Josef Schulkerstein, is 5th generation of the founding family and still runs the company as a family business.

Two days after our initial conversation with our contact, Nate and I were sitting in Mr. Schulkerstein's office discussing brass tacks. We educated him on the economics of the craft beer industry, the capital requirements for starting up and future expansion, and our passion for brewing beer. Josef (I'm tired of typing "Schulkerstein") was genuinely fascinated by the industry. He freely admitted that he was not a craft beer aficionado but greatly enjoyed new beers whenever the opportunity presented itself. Nate and I shared the same vibe about Josef: a very open minded man with solid business sense. We were hooked. And so was he.

So it's been two weeks now and we, along with our attorney, have been in intense negotiations with Vienna's executive team (and their attorney). As of last night, we've reached a tentative agreement. The contracts need to be drawn up, reviewed, and signed, but all signals are green and I'm 99.999% confident the deal will happen. Josef is equally confident and gave us permission to share the great news!

What does this mean to Panic Alarmist Brewing? Well, it means we'll be starting off with a larger brewery, 30 barrel brewhouse vs 15 barrel. We'll definitely have our canning line, we'll be able to sign a lease on a particular property we've been eyeing, and we can be up and running by early 2014 no problem! But wait, it gets better.

Vienna will actively market our beers wherever they have an existing foothold including sports stadiums, grocery stores, you name it. They will also encourage all the various Chicago "hot dog stands" that carry Vienna Beef products to obtain Chicago liquor licenses so they can serve our beers! That's about 350 outlets in the city of Chicago alone!

But wait, there's even more! Josef is so excited about this whole new world of beer (to him) that he's offered really great ideas for unusual ingredients, many of which Vienna Beef uses in their various products. So Nate and I will be experimenting with Vienna's various spices used in their Italian and Polish sausages! And we're going to brew a special beer specifically for Vienna Beef outlets called "WeinerBrau". It will be a traditional German style lager but spiced with sage, fennel, onion powder and garlic powder. Our idea is to have it taste as much like a delicious sausage as possible. So much so that customers will actually want to buy a Vienna Beef sausage product to go with the beer. And more sausage eating means more beer to drink! It's true honest to goodness synergy.

We have so many ideas in the hopper now so once we have things figured out we'll announce all the great happenings!

So please, once again, welcome Vienna Beef to the Panic Alarmist Brewing family! We are thrilled and honored to have them as a partner in this adventure!

-G

Update: April Fools'

Back To The Beers

I've recently hired these wonderful ladies as recipe consultants. At first I was resistant to using newts in my beers, but somehow they convinced me otherwise. Highly recommend! As much time as I spend thinking about the business part of the brewery, I spend at least as much time thinking about the brewing part of the brewery. That's what this is all about, right? I'm thinking about recipes to the point that it's actually become a stress point in my life. I really, really want to make phenomenal beers but my recipes are just not there yet. To add context to "not there yet", I should cautiously note that I've had many craft beers over the years, both production and brew pub sourced, that I would also describe as "not there yet". I think we all have and I don't want to be one of those breweries making those kinds of beers. That's my biggest fear of this whole business.

Almost all of my brewing starting from the last few months of 2011 through the present has been about recipe formulation and experimentation. Lots of experimentation. Up until the end of 2011, most of my brewing involved making mostly classic styles (usually based on recipes from "Brewing Classic Styles") and honing my processes. Then in late 2011 I began to brew using only my own recipes, no training wheels. It's been incredibly freeing, but equally frustrating. Now here we are in January of 2013 and what have I learned? Well, a lot actually. I've learned a lot about what doesn't work and a few things that do work.

2012 was definitely the most prolific brewing year I've ever had but it also represented the year of more dumped beer than any other. That's one thing I've learned: don't be afraid to dump beer. I only have so much space, so many kegs, and I learned that holding onto a substandard beer just delays the inevitable. So I got VERY comfortable dumping corny kegs of beer that just weren't up to my expectations.

I've learned that yeast doesn't like to be messed with. Once you make a starter, use it, don't store it for a couple of weeks, remember to build it up again, delay more, build again. I brewed a bock/doppelbock at the end of September, 2012. The poor yeast used in that beer (Wyeast Bavarian Lager) was abused as described and then just to add insult to injury, I damn near froze one of the starters which most certainly damaged some of the yeast cells. Did I dump the yeast and start over? No, I had to find out if the yeast would produce good beer. Despite all my usual careful fermentation process, that bock was easily the worst beer I made in 2012. It was fermented precisely at 50 degrees, it was lagered for several weeks, it was kegged, it was tasted, it was given a chance, then it was dumped. Lesson learned.

I learned that dry hopping with U.K. Fuggle hops requires a delicate hand. I dry hopped an English bitter with far too much. Combined with the over bittering of the kettle additions created a completely out of balance ale.

I learned that my hop bittering formulas in my brewing software (BeerAlchemy/BeerAlchemy2) were set incorrectly in preferences. Specifically, first wort hopping was set to below 1.0 x kettle hopping. It should've been set to at least 1.0. I'm now using 1.1 as a multiplier. The consequence of this was what should've been a beautifully balanced, hoppy pale ale became an overly bitter, hop cloying mess. My single biggest disappointment of the year, for sure. As a side note, I'm will be brewing this beer again this coming weekend and it WILL be much improved, come hell or high water.

That brings up another lesson. It's one thing to follow formulas and recipes, it's quite another to use....artistry? Yes, that's it. Artistry. We brewers are artists, are we not? Or at least artisans. It's very easy for me, with my engineering and computer programming background, to look at things very analytically and to not stop, take a step back and ask myself, "does this make sense as a brewer and not a technician?". This, I feel, is my biggest weakness as a brewer, and one I've been working on for months to improve.

I learned that using high alpha hops, like Warrior, has no place in pale Belgian beers. Even if precisely calculated to the correct IBU's. I made a Belgian rye ale that would've been really nice, dry, and tasty, but the bittering just killed it. Why did I use Warrior? Because I had to try it. I was thinking on the pro scale and wondering if using high alpha hops for bittering would work, thus saving lots of money on hops, as opposed to using lower alpha hops classically used by Belgian breweries such as Saaz or Styrian Goldings. Not so deep down, I knew this was a bad idea, but I had to try. Better to do it with 5 or 10 gallons rather than 15 bbl batches, right?

I learned that trying to fix the aforementioned beer by blending with a 2.5 gallon batch with no bittering hop additions doesn't work. Again, I didn't think it would, but I HAD to try. Dumped.

One thing I've very recently started doing is keeping an eye on the BU:GU ratio. I've known about this number for a very long time (first brought to the mainstream by our local Chicagoan, Ray Daniels) but never paid much attention to it. It's not a perfect representation of the perceived bitterness of a beer, but it's a great data point. Again, artistry will trump analytics, but I feel this number helps improve both. If nothing else, it's a sanity check, and one that had I paid attention to more last year, I would've learned a lot about where bitterness should live in a given beer. (Update 1/8/2013: I forgot to include a link to this website I just discovered in the past week. Great chart representation of BU:GU ratios for all recognized BJCP styles. Great resource for sanity checking bitterness. But wait, there's more! The author has expanded on the BU:GU concept with something he calls "Relative Bitterness Ratio" (RBR) which includes apparent attenuation in the formula. There's also a chart for that too!)

I could go on and on but that's the gist of things. Lots of experiments, lots of failures.

But wait, there were successes too! Version V of my Belgian Wit was fantastic. I split a 10 gallon batch into two 5 gallon fermenters and used different wit strains. One was noticeably better in my opinion which just happens to be the same yeast strain that I've always preferred for wits. I brewed my first Russian Imperial Stout and am about to enter it in a large competition here in Chicago. Again, my own recipe, but I did a lot of research first to get an idea of percentages of specialty malts to add. It turned out great (just brewed it in November and will be kegging/bottling today!) and I'll definitely be tweaking it along the way for a debut at Panic Alarmist some day. Some day.

That's all from the beer front. Lot's going on on the business front. More updates coming.

Cheers,

G

There Are Four Main Ingredients In Beer, And Only One Of Them Is Hops.

Still not enough hops! Let's talk IPA's. My friends are giving me shit on my personal Facebook page about the little blurb in the Red Eye about Panic Alarmist Brewing today which says, "There will be no IPA". I had some coworkers also comment on it this morning as well. Well, that is correct, no IPAs for Panic (now named Alarmist Brewing). Allow me to explain.

As I mentioned in a previous post , I love almost every beer style. Seriously. I LOVE them. Even the ones I don't like I love, if that makes sense. Which it doesn't. I've brewed many styles of beer including Czech pilsners, Belgian tripels, English bitters, English mild, English barley wine, Berliner weisse, German hefeweizen, American stout, American brown ale, mead, German kolsch, German maibock, Belgian golden strong ale, Orval type clone, Scottish ale, the list goes on. I've also brewed lots of beers that don't fit into any style, beers that are my own recipes, including the ones I'm working on for Panic (now named Alarmist Brewing).

I've also brewed many IPA's and imperial IPA's. One of my favorite beers on Earth is Russian River's "Pliny the Elder". I love many IPA's. I dislike most. The ones I love most have a few things in common: very dry, very little carmel malt in the grist, blond in color due to lack of carmel malt, and assertive/unique hops in the flavor and aroma such as Simcoe, Amarillo, and Citra. That's not to say I HAVE to have those hops in my IPA to enjoy it, but if I have to choose, I'll take those hops over cascade or centennial every time.

Now there are three reasons why Panic Alarmist Brewing is not going to brew an IPA, at least not initially.

  1. There are too many on the market and the market is getting increasingly crowded.
  2. I think there are far more interesting beers that haven't been made yet.
  3. Unless you have already signed hop contracts, you can NOT get Simcoe, Amarillo, Citra, Australian Galaxy, and some other highly desired IPA hops for 1 to 2 years, maybe more. Citra is not available until the 2014 brewing year, and that's if you sign a contract today! By the time Panic (now named Alarmist Brewing) is ready to brew, who knows what hops will be available? Oh, and of course these highly sought after hops are very, very expensive. Then there's the fact that even if you do have a contract, if the hop harvest comes up short, you still won't get those hops and you'll have to use substitutes and those particular hops just can't be substituted IMHO.

I have a whole post coming up on the current hop market and what I learned from Hopunion last week. It isn't pretty and it's going to directly affect one of my flagship beers (which isn't an IPA ;-) ).

The final thing I'll say about this is that if you consider yourself a "hop head" or you only like highly hopped, bitter beers, do yourself a huge "flavor favor" and explore. The American craft beer movement isn't about any particular type of beer. It's about choice over those shitty yellow watery beverages with bikini girl commercials. Remember that yeast and malt contribute to beer flavor as well. In many styles, their flavors and aromas are easily as powerful and visceral as those that hops contribute, just in a very different way. Go try a Jolly Pumpkin "Bam Biere" if you want to know how delicious yeast derived flavors and aromas can be. Grab yourself a New Glarus "Uff-da" Bock if you want to enjoy the supreme complexities of a malt centric beer. There's room for all of these flavors and aromas on their own and combined together in glorious ways. Rejoice in the choice!

Oh, and if anyone on the West coast wants to ship me some "Pliny the Elder", well, I won't complain.

Busy Week

This will be a quick update.  This week was a bit crazy.  First, I managed to get some firm numbers and technical info on glycol chillers.  They are expensive.  My hope is to find a used one somewhere.  I finally received the latest malt analysis sheets from Country Malt Group, and now I know how to get them anytime I need them very quickly from their website (more on that later).  I entered the new numbers in my spreadsheet so now I have my ingredient costs nailed down very, very tightly based on gravity, efficiency, malt extract potential, hop prices, hop utilization (using Tinseth), and oh so much more. Who doesn't love to save money?

I also received a quote for a used walk in cooler, which is an essential piece of equipment to keep your beer fresh while waiting to be shipped/sold.  I'll cover that in detail later.

I now have a quote from a third brewery equipment vendor which leaves exactly one outstanding request.  At this point, I think I've decided on whom I'm  going to go with, but it's not set in stone yet.

The biggest pieces missing from my business plan numbers are the steam boiler and all construction costs.  I should have the steam boiler cost figured out very shortly.  Next week will be all about construction estimates.  I have a few friends here in Chicago who can guide me in the right direction for various types of contractors.  I'll be nailing down the costs for electrical, plumbing, steam pipe fitting, concrete, and refrigeration.

My next few posts will cover some of the aforementioned items in detail and I'll also finish up part 2 of the brew house.  So much to do and I love every second of it.

Thanks for all the support everyone.  This shit is gettin' real!

Citra Hops, I Presume?

Here's a little tip to anyone attempting to open a brewery: make sure the ingredients for your launch beers are readily available, specifically hops. At the time of this writing, February 2012, there are certain hop varieties that are in very short supply through 2012, 2013,  2014, and beyond. Varieties in short supply include Citra, Simcoe, Amarillo, Galaxy (Australian), and others. Any brewer will recognize these hops as the go to varieties for many IPA's, imperial IPA's and other hoppy beers. David Livingstone

This brings us to another topic which I will just touch on: hop contracts. Because there are relatively small amounts of land on this planet devoted to hop growing, hop farmers need to be able to plan ahead and know how much of each variety they need to plant. There are over 80 commercially grown hop varieties. Some are very common, others more obscure. Lack of acreage, numerous varieties, and increased demand create a perfect storm for hop shortages. To help mitigate this, hop distributors, such as Hop Union, create hop contracts for breweries. The brewery commits to buying a certain number of pounds of one or combination of many varieties at given prices per pound for one or more years. The brewery takes delivery of the hops as needed  (depending on production demands) over the course of the contract. By the end of the contract, the brewery will have purchased all of the hops they committed to. This also somewhat guarantees that the required hops will be in supply for the duration of the contract unless there are severe shortages in which case the hop broker may substitute a different variety. If a brewery does not buy into a hop contract, then it is subject to the "spot market" which means it will pay whatever the market price is (i.e. more $$$, usually) for the hop variety without any guarantee the hop will be available in the quantity required.

Hop contracts are signed well ahead of the brewing year, so any hops a brewery needs to secure for a given year will be contracted months or even years ahead of time. This is especially true for the varieties in high demand.

So how will this affect me? Well, for one recipe, not at all. The hops I plan on using are in good supply. Buuuuuuut....my other recipe would be well served by a few of the hard to get varieties so I'll need to have a backup plan in case I can't get a contract for them. Does that mean brew with different hop varieties or save the recipe until the varieties I really want are in better supply? I don't have that answer yet, but I'm a firm believer in contingency plans, so I'll be prepared one way or another.

For anyone out there who is trying to determine which beers they want to produce in their brewery-in-planning, I would suggest the same.