Timothy Otooles is a top account locally for Founders Brewing. Recently we sat down with co founder Dave Engbers and Brewmaster Founders Jeremy Kosmicki to learn more about their devastating lineup of year round beers and what it was like in the early days of this now wildly successful international brand.
Founders feels like a local brewery You guys always seem to be in town or hosting a righteous event.
Local is such a fluid term these days. We feel local in Chicago, then there are some towns we visiting in Michigan and they tell us “ oh, well, you guys are an hour away.”
We’re here at Timothy Otoole’s in Streeterville, a bar that I love. But it’s a strange animal, right? Number one account locally for Founders, Sam Adams and Sierra Nevada A top three account for Three Floyds, then they fucking crush it with 96 kegs of Miller Lite on St. Paddy’s Day weekend.
Are their bars like this back home in Grand Rapids that moves volume on both ends of the beer spectrum?
Actually one of our top accounts back home sells a lot of domestic premium. We’ve got 9 permanent handles there. 9 out of 40 so 25% of the tap handles there. They believe in supporting local and they bring craft to a new audience when doing it that way.
I can remember vividly walking two winter miles to Binnys in Highland Park for a 4pk of KBS. This was back when Binnys would hold beer for you, it was out of season so I called off work to make this purchase happen. I’m a huge fan of what you guys do but I’m not sure I know about the early years at Founders.
Mike and I were college buddys and homebrewers. After college in ’91. I went into teaching. In ‘93 Mike went into video production. I realized I didn’t want to spend the rest of my life with three months off every year. Our 3am pipedream coming home from the bar was to open a brewery. Bells was in Michigan and one other brewery up in Detroit and that was it for the area.
From day one we put in the business plan that we need someone that has done this professionally. It’s a big jump from 5 gallon to a 30 barrel brewhouse.
Then you guys called Jeremy?
No we called our first brewmaster Rich Michaels He was a super smart, classically trained brewer from upstate NY by way of the Siebel Institute in Chicago. Rich always wanted to brew by style without much experimentation.
He very was mechanically inclined, worked at a brewpub before but never a packaging brewery. We struggled a bit early. As soon as we opened our doors Atwater, New Holland, Robert Thomas, Rafe a number of breweries soon followed.
Our beers were well balanced, but unremarkable beers. Beers designed for a large demographic. All the breweries near us were doing these cookie cutter beers and one of them needed to taste like Bells Oberon.
After a year or so there wasn’t a big enough consumer base and we looked for ways to differentiate ourselves.
We started a new approach that began with a lager, we listened to our distributor. We sold a lot of it on draft but couldn’t give it away in package. A scotch ale followed that ultimately ended up becoming Dirty Bastard. That is the beer that put us on the road to doing everything no holds barred.
Is Dirty Bastard the only beer that made it from the old days?
Well there was Founders Porter as well. It’s a little different from Rich’s Porter. I joined the team around 2000 on the manufacturing line with no professional experience. We started changing recipes the following year for Centennial IPA and Porter. We hired an assistant from New Holland; they had the same brewhouse as us.
Our original brewmaster then left to brew at Disney in Florida.
We never made pilot test beers but we did start making beers just for the taproom. As those beer gained in popularity, we all decided to take these on the road. Those beers were Red’s Rye and Dirty Bastard.
It boiled down to the fact that our IPA didn’t have the aromatics that we thought it deserved.
We challenged Rich a little via blind tastings with 5 or six local beers against our Centennial IPA. You could pick ours because it lacked aroma. When Rich left Jeremy took that beer from half-pound dryhop per batch to 10lbs. immediately our philosophy shifted to not sparing any cost when it came to recipes. We stopped looking at cost of goods.
I can say its been dream as a brewer. I know they struggled for 10 years as a before company. But they never restricted my use of raw materials in anyway at all.
Speaking of your IPA, a conversation came up this year at Founders Fest about their being a connection between Bells Two Hearted and Founders Centennial IPA?
There’s no connection other than Two Hearted is the reason I make beer today, I will say that. That beer is a Centennial base, it’s the aggressive, floral Midwestern style that’s not to dry or cloying, both of those beers exemplify that.
It’s a double-edged sword having one of the best breweries in the world (Bell’s) an hour south of you. I remember in my sales days going bar-to-bar to retail accounts as a new brewery in ’98, ’99 and having them try Centennial. They would all take a few sips and say ”It’s not a good as Bell’s” (laughter)
It makes you better at what you do, that’s the benefit. They started in 1985 we started in November 1997. They had a 13-year head start.
They are a huge inspiration. When I first got into brewing I wanted to make a beer that tasted like theirs. Back in those days we would wear Bells T shirts to work.
We had three tshirt designs back then , one read “ Building Bigger Beer Bellies Since 1997.” But we still wore the Bell’s shirts. If Bells weren’t there I would have never even began drinking craft beer.
What separates you guys from most breweries in the region and the country is the Backstage Series alongside a lineup of killer year round offerings.
Have you ever done a party with all the Backstage Series beers?
No way. We sell all the Backstage Series until they are gone.
If we did that I’d want to brew all those beers at once to release them all for the party.
2011 was the first year of Backstage. It’s a great way to stay creative and relevant. We are driven by volume at this point. IT helped us to avoid becoming perceive as a one trick pony with All Day IPA, we need Backstage.
Recently I’ve stepped away from being day-to-day head brewer to focus on recipe development.
Who’s naming these beers and creating the artwork?
It used to be a roundtable. We’d come up with three names an hour. Now we have a fulltime marketing team. All of a sudden we have a naming committee.
What’s your relationship Mahou San Miguel like?
Well they own 30% of Founders. It’s a symbiotic relationship. We’ve been on this growth rate of 65% for the last five years. We grow aggressively and what we brew here in North America is influencing they way people drink globally.
We’ve have had some frustrations with shipping the beer. By the time it gets overseas its 50-60 days old. It’s not as clean and bright as we would like at that point.
Mahou San Miguel believes what’s happening here with craft will change what people are drinking in and around Europe, Asia and Africa and they wanted to do it authentically, so they took an interest in us, they wanted to learn.
We are currently in 34 states, in next few years we‘ll complete our national footprint and at the same time we wanted to learn from them. We’re still young and maybe we can learn from them and become the first global craft brewery.
I feel like there are countries 10-15 years behind in appreciating what the craft beer we are making can be, it’s a huge opportunity. They guys at Mahou San Miguel are curious, open-minded, excellent at what they do and know how to make a lot of quality beer.
We send beer across the pond but to make it there will be so much better.
When you read the label on Founders Bolt Cutter Barleywine it hints at the doors to the brewery possibly closing forever.
That period of uncertainty lasted about a decade. Even when we financed the moved in Nov ‘07 into our current facility, we were just breaking even. The beer was great and it was selling but we created a fucking train wreck behind us.
At the time Mike and I both owned maybe 2% of the company. We asked ourselves why do we keep doing this if we’re gonna make $34,000 per year, if we get paychecks at all.
It’s like, why are we doing this? We went to our investors and said we need some sweat equity for the last 10 years of our lives.
You’re the first person to ever asked how it impacts my family. All my family got for Christmas 12 years in a row were Founders t-shirts and hats.
One of our customers visited the taproom last week. I sold him my kayak because was the gas in the house was about to get turned off. I needed a hundred bucks, I sold him a 400$ kayak for one hundred twenty bucks! I had my gas turned off too many times at home. We had some dark day that lasted about 10 years.
Even after moving into the new space Mike says “ We shouldn’t we doing this unless we’re getting a bigger share of the company.” We were fortune enough
The company is doing well and we get a lot of exposure. We tend to forget of our team members now probably don’t know that Mike, Jeremy and myself we all would bartend, work the bottling line and make the six packs by hand back then.
You’re an international player now; Can you recall a turning point when you thought things would all finally be ok?
The persistence to keep the company alive came from the respect we had for the liquid. That was the driving force, calling it quits wasn’t a good option. At that point our debt load was near 5M$
What are you tapping at Sheffields?
Angelic Revenge brewed for GTMW
Reds Rye Firkin w cinnamon, vanilla and clove
Backstage Series 2015 Entry 2 Redankalous Imperial Red Ale
Rubaeus on Nitro
Looking back on your journey, what advice would you give new breweries just starting up? Nowadays college kids have access to world-class beers. It’s a brave new world
I hope not to come across as the old guy but there’s really no reason to start one (a brewery) anymore.
Someone asked me recently who will be the next brewery to go from a regional player to a national one. I don’t know if there is. There are breweries the size of Founders that will continue to grow. But I don’t think there will be a startup brewery in this climate to become a national brewery. There is already too much great beer out there.
As more consumers are entering the craft beer category, if you are going to survive you need to enter a distribution chain. We basically lived for 10-12 years off of specialty stores supporting our brand.
There will continue to be room for people who want to start brewpubs. There will always be a love for supporting your local brewery. But getting into the world of packaging and distribution is a different animal.
If you don’t do it right, and a lot of people don’t, you are doing the brewing community a disservice. There is only so much room on the shelf.
Something that may differentiate Founders from other breweries is that we built our reputation from a wide portfolio of brands. Now All Day IPA is our highest volume brand and more that 50% of our volume. But we can back that up with Centennial IPA, Dirty Bastard, Porter and Breakfast Stout.
We were growing at a rate of 16% annually before All Day IPA. We rode on the back of Dirty Bastard and Centennial. Those brands were 22% and 23% of our sales.
We grew with no flagship beer. Instead of having one popular beer and convincing people to try the others. We started with those other beers and now have a flagship that people dig.