Brewing Success

Beer sales are falling, but craft beers are bubbling up in a big way. Breweries are opening all over the region.

by Rick A. Richards

The oldest known beer recipe dates back 3,900 years to Samaria. For craft beer aficionados in Northwest Indiana, that's not surprising. Beer – long a human staple – is becoming a booming business in the region.

No one knows if the recipes so carefully concocted in garages, laboratories and kitchens in Northwest Indiana will show up on a tomb wall thousands of years from now, but there is little doubt that the popularity of beer will persist.

The Brewers Association says the number of craft breweries in the nation rose to 2,336 last year, up from 1,949 in 2011. At the same time, the association reports that more than 1,500 craft breweries are in some stage of pre-production and could be up and running in the next two years.

In Indiana, craft beers have grabbed about 6 percent of a market that saw consumption drop 1.3 percent in 2011. But even though overall beer sales in Indiana fell, the craft beer market rose 13 percent.

“Craft beers are super-hot right now,” says Sam Roule, a partner in Four Horsemen Brewing Co. in downtown South Bend.

Roule, who lives in LaPorte, grew up in a beer family. It owned LaPorte County Beverage and later Metro Beverage, regional beer distributing companies. In 2010, the family sold Metro Beverage to Indiana Beverage in Valparaiso, setting the stage for Roule and his brother, Ben, and their father, Robert, to acquire Mishawaka Brewery in 2011. It was best known for its Four Horsemen label, but Roule saw a big opportunity with that name.

It turns out that Four Horsemen wasn't trademarked by the University of Notre Dame, so Roule moved to do just that. He says there has been some back and forth with the university about the name, but the company is moving ahead.

“We know the beer business, but we didn't know how to make beer. We had to find a brew master,” says Roule. Through a friend, they got in touch with master brewer Stephen Foster, whose pedigree includes work and study at the The Bavarian State Brewery Weilhenstephan School of Brewing in Germany and at breweries in South Africa and around the United States.

“Our personalities just clicked,” says Roule. By acquiring Mishawaka Brewery and its equipment, Roule says the family was able to start quickly.

“We invested heavily in equipment to get into this,” he says. “We're distributing the beer locally but we hope to be able to move into the Chicago area and Michigan sometime in the future. I'd like to be a regional brewer in five years, distributing throughout the Midwest and out East.”

When Roule started, the company had eight 15-barrel fermenters. Now, the brewery has seven 30-barrel fermenters and a 5,000-gallon water holding tank.

In 2012, Four Horsemen produced 1,000 barrels of beer (the equivalent of 13,500 cases). This year, the company has the capacity to produce 3,500 barrels.

“It takes an enormous amount of money to get a brewery like this going, but that wasn't a problem for us because we had money from the sale of our previous business.”

For Chuck Krcilek, the owner of Backroad Brewery in LaPorte, brewing beer has been a lifelong passion. He opened Backroad in 1996 after brewing small batches of beer at home for six years.

“When I opened, people thought I was crazy,” says Krcilek. “I've always liked beer. When I was a kid, I had a beer can collection. When I got older, I wanted to try making it myself.”

He spent $80 for a beer-making kit and that small investment set him on the path he is today.

“There wasn't a lot of good beer out there back then,” he says. Krcilek says craft brewers set themselves apart from mass brewers like Budweiser and Miller by sticking to all malt beer. “We don't use corn or rice; it's all malt.” The reason large brewers use corn and rice is because it's cheaper than malt.

When Krcilek was ready to start his business, he wrote letters to the state and the ATF asking what permits and rules he needed to follow. He got quick replies, jumped through all the right hoops and started his business.

“I didn't really have many problems with either,” says Krcilek. “I was going to pay my taxes and as long as I do that, they're happy.”

Today, Backroad Brewery sells about 500 barrels of beer a year, mostly around LaPorte, Michigan City, Chesterton and Valparaiso.

His Backroad Ale is the most popular beer and he gets requests all the time on where to buy it. He says he's also getting calls from farmers about the possibility of growing hops to supply the growing number of craft brewers in the area. “I don't know if the area is suitable for hops, but people are asking.”

Tom Uban was in the computer consulting business in 1990, but always in the back of his mind was the desire to brew beer. He had been brewing beer at home since 1985, but wasn't sure if it was something he could do as a business.

Three years ago, he took the plunge, and with brew master Mike Lahti, opened Figure 8 Brewing in a small building just outside of Valparaiso. The beer was a hit and now, the brewery has moved to larger quarters in the heart of downtown, complete with its own restaurant.

Uban explains that Figure 8 is a knot used in sailing and rock climbing. He says that aside from good beer, rock climbing is one of his passions. The knot is used to tie the safety rope to the climber's harness. The name Figure 8 is a way to join both of his passions, says Uban.

“I guess I've always had an entrepreneurial desire,” says Uban. “This is a part of that. I think what we have done rounds out downtown quite nicely. The mayor has been instrumental in keeping downtown vital and we're glad to be a part of that.”

Figure 8 opened in a former Sears auto garage and Uban says it took a lot of work to convert it into a brewery and restaurant.

Both Uban and Lahti create recipes for Figure 8, and right now he says the most popular label is its Rao Shampo. He describes the taste as “robust and hoppy.”

“When you get into this business you really have to be determined,” says Uban. “There is a lot of paperwork and the government doesn't always help you through it.” He says it's a full time job keeping up with the paperwork to make sure the various permits needed to brew beer are kept current.

“I don't want to get too big,” says Uban. “I think the space we're in is big enough. We've got some room to grow and I think we'll be at our high water mark in three or four years.”

The adjoining restaurant at Figure 8 has room for 160 people and its menu focuses on sandwiches, mac and cheese and salads. “We worked hard to think outside the box on this,” he says.

At Bulldog Brewing Co., which opened in 2011 in Whiting, the passion for craft beer is obvious in owners Jeff Kochis, Bob Fausto and Kevin Clark.

Kochis says Bulldog was created to celebrate the blue-collar worker who has been the foundation of Whiting's industry for more than a century. Kochis, who also works as a Hammond firefighter, says the opportunity for a micro-brewery was too good an opportunity to pass up.

“We all have a boat and we used to sit around at the marina on our boats talking about beer,” says Kochis. “We finally decided, ‘Why not?'”

The three partners looked at several buildings before deciding on a building on 119th Street because it was in the heart of the downtown revitalization that was taking place in Whiting. “We wanted to be a part of that,” says Kochis.

“Before we opened, we talked a lot about the potential pitfalls. But craft brewing has shown such a tremendous growth over the past five years that we decided now was the time,” says Kochis.

Each of the partners has a considerable personal investment in the business, and to keep renovation costs down, they did a lot of the remodeling work themselves. “We knew the restaurant was the key to our success. We also were lucky because Whiting has liquor licenses available.”

Bulldog produces 27 different labels of beer. As production ramps up (it's already surpassed 1,000 barrels a year), Kochis says the next step is to figure out what steps need to be taken for distribution.

He says that is the biggest hurdle for many micro-breweries. While craft beer makers know how to make beer, figuring out how to get it to the people who want to drink it isn't easy. A small brewery, says Kochis, can't afford a fleet of trucks to deliver its own beer.

“A lot of small brewers self-distribute in the immediate area, but you have to do some homework to have the ability to move the beer. That helps you keep up with demand and that's one of our biggest concerns,” he says.

Getting beer into consumer hands is where Indiana Beverage of Valparaiso comes in. John Lynk, craft brand manager, for the company, says the concerns of a few years ago that craft beers would be detrimental for distributors has turned out not to be true.

“It used to be there weren't a lot of craft beers out there. There used to be a concern about market share, but right now, craft beers make up only about 5 percent of the market,” says Lynk. “That's not much when you think about how much people drink.”

Still, it's enough that Indiana Beverage is actively recruiting – and being recruited by – craft beer makers. “We've going from supplying 35 brands to supplying 75 brands in the blink of an eye. We're still learning about the craft beer market. It's a lot different. We will sell it by the pallet, by the case or even the bottle. It's that competitive.”

Before getting into it, Lynk says the company discussed if it was the right move. Once the decision was made, it meant creating a whole new sales force to keep on top of the market.

“Craft beers have created a lot of excitement in beer marketing today,” says Lynk.