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Sunday, 09 November 2014 22:00

Q&A: Gary Fish, Founder of Deschutes Brewing Inc.

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Gary Fish, Deschutes Brewing Inc. Gary Fish, Deschutes Brewing Inc. COURTESY PHOTO

Aided by the popularity of beers such as Black Butte Porter and Mirror Pond Pale Ale, Bend, Ore.-based Deschutes Brewing Inc. has grown to be the sixth-largest U.S. craft brewery by volume in 2013. Deschutes started distributing in West Michigan this fall. Company founder Gary Fish, the current chairman of the national Brewers Association and the 2013 EY Entrepreneur of the Year for the Pacific Northwest region, spoke with MiBiz about the growth in craft beer nationally and whether the market can sustain even more startups.

Deschutes just started distributing in West Michigan as part of your national expansion. What’s driving the company’s growth?

There are consumers out there that like what we do and would like to be able to get our beer where they live. We’ve just recently expanded to beyond half the states in the country. We still have a long way to go in terms of growth opportunity in the U.S. … (and) within our existing markets as well.

As a company, how do you balance this growth with still being true to the craft and making quality beer?

That’s one of the real challenges. … We’ve been hitting that 8- to 10-percent number year over year. We expect to continue to hit that over the next few years and we’ll see what happens then. We know that’s a growth rate that we can sustain. We’re not interested in having our beer in every state right away. We’ve never looked at this as though it’s a race. We want to be able to do things that are right for the beer, right for the customer and right for the company.

How big would you like to see Deschutes get?

We don’t have a certain date where we want to get to a certain size, but we know that we want to grow and we know that we want to be better at making the beer that we’re making.

Like other West Coast breweries, Deschutes has announced it wants to open additional brewing capacity in the eastern U.S. Is that a decision driven mostly by logistics?

Yeah. If we’re shipping half or two thirds of a bottle of oil along with every bottle of beer, we can do that better. There’s a cost associated with that as well. Truly, if we think we will be distributed in all 50 states, does it make sense to brew everything in Bend, Oregon to ship to wherever the consumer is? The answer is pretty clear.

Would you consider Michigan for an expansion?

It’s possible. Right now, the primary focus is probably more in the Mid-Atlantic region just because of the logistics involved, but we haven’t specifically eliminated any particular site.

What growing pains has Deschutes experienced and how do you get past them?

We’ve had little else but growing pains. There’s never enough money to do everything you want to do, and I expect that that dynamic will never end.

Deschutes once refused to ship a special reserve batch of Black Butte Porter because it wasn’t up to the company’s quality standards. Do those kinds of decisions get tougher to make the larger your company gets?

Honestly, those are the easiest decisions we ever make. … Our rule is if you ask the question, it’s obvious: You know the answer. We knew the answer that time, too. We stood in the lab, and everybody … asked me, ‘What should we do?’ And I just simply said, ‘You guys know what to do. Do it, and don’t sweat it. Don’t waste time trying to analyze it.’ If you try to equivocate and try to manage the fallout, you will have done the wrong thing. Do the right thing for the consumer and that will drive everything else.

As a seemingly endless parade of new breweries and brewpubs open, people have questioned whether we’re in a craft beer bubble. How do you react to that?

There was not a bubble in the ’90s, and there won’t be a bubble now. What you will see are more businesses coming and leaving the industry. Most of the breweries are restaurants anyway, and the highest failure rate of any business is in the restaurant category. It’s amazing that so few brewpubs have actually closed their doors in the last 30 years. But will every brewery that’s here now be here in five years? No, I would suggest they will not.

It’s no secret that Michigan wants to become known as destination for beer, much like Oregon. How did the business climate there foster the industry’s growth?

We haven’t been afraid of modifications to the law to help facilitate the growth of small companies. We have an independent-minded consumer, first and foremost, and we had some entrepreneurial, independent-minded homebrewers that went pro very early, and the laws allowed them to do that. And, by the way, we’ve typically had a higher percentage of the beer sold in the state be on draft rather than in cans or bottles. That’s really where craft beer started, (on draft) in the brewpub and with on-premise (brewing).

What’s your best advice to anyone looking to break into craft brewing?

It’s a business and it takes a serious commitment. Being a good homebrewer is not what you need to be. … It sounds like a great hobby business, but it is a business, first and foremost. You need to be able to relate to it that way, or don’t do it.

Interview conducted and condensed by Joe Boomgaard.

 

Read 4332 times Last modified on Sunday, 09 November 2014 22:21

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