Every couple of months or so, a new brewery’s name starts to dot about the NYC beer community and cause a kerfluffle. Emails start flying, tweets start chirping and one literally feels the buzz turn into a hum.
One such brewery that sparked a fire of interest is Nebraska Brewing Company. Nebraska, I first thought? Jesus, what’s in Nebraska? Corn? The band 311? Omaha stylee? But the drumbeat grew more intense. Rumor had it there was some sick, sick beers coming out of a small town called Papillon (population 18,894), a suburb of Omaha. And they were going to be distributed in New York City…game ON.
Fast forward a month or so and a random thing happened. You see, I often hang with a group called Brew York (a collection of local homebrewers and beer bloggers), who get together once a month and share the rarest, most obscure, most spine-titillating beers we can come across. Well, there we were, on our way to our undisclosed, monthly meeting spot, when I hear, “You know, Paul Kavulak, the owner of Nebraska Brewing Co. is coming with his wife, Kim…” I was dumbstruck. Why would he choose to hang with us?
Well, I was soon to learn Paul and Kim are crafty businessfolk. They were in town for NYC Brewfest and had made a decision: spend the night bouncing from bar to restaurant to say hello to their various accounts (a common route for visiting brewers or winemakers) or go hang out with a bunch of homebrewers and beer bloggers…they chose the latter. Perhaps we’re more their type of people. Or perhaps they’re just savvy and knew that their visit would befriend people that would champion their beer to the online world and beyond. Or perhaps they just wanted to drink some damn good beer.
So, there we all were, surrounded by the finest brews we could get our hands on. It was there I tried my first Nebraska beer, a French Chardonnay barrel-aged IPA called Hop God. Wow. The hype was justified. Soon, we began presenting our various homebrews to Paul for feedback. He didn’t hold any punches and his analysis was critical, spot-on and helpful. All ears perked up. Yeast strains were discussed, grain properties analyzed, the geek talk was flying. At one point in the night, I nervously presented him my wife and I’s Green Chili Saison. He sipped, paused, asked a couple of questions and then said he loved it. Ah, a sweet small taste of victory. But I digress…
I recently interviewed Paul. An ex-marine and die-hard homebrewer, he has traveled the route many of us amateurs have dreamed of. He’s gone legit. And managed to keep his integrity and creativity along the way. I was intrigued how he did it… This is Paul Kavulak.
When did you open Nebraska Brewing Company?
We opened in late November of 2007. Seems like a decade ago.
My wife Kim and I both grew up on the South side of Omaha and I guess there were a couple reasons that were central to choosing Papillion. First, from a business perspective and since we were going about opening a brewpub, Omaha already had 6-ish locations that you could essentially equate to a brewpub (2 were brewpub chains but didn’t actually make beer onsite). Papillion and the southern area had no brewpubs to speak of which made the area somewhat logical – it also presented more of an uphill perspective in that we were working hard to educate vs. simply opening the doors in a mature Craft Beer space. And second, Papillion was a natural for us given this is where our family is located. We spent a lot of time South of Omaha and we wanted to bring our brewpub to those who knew us best.
What role do you, Kim and Tyson Arp (Lead Brewer) all play at Nebraska? Who is responsible for what?
Well, if you take a really big company and make it really small from a revenue perspective but all of the job functions remain – that’s sorta what it feels like sometimes. Kim is our brewpub General Manager but our titles don’t really convey the extent of what we wind up doing day-to-day. While Kim is focused primarily on staffing, payroll, events, the shifts, and the guest-facing aspects, she also winds up working the forms for becoming, and staying, legal in 10 States, travel coordinator and more tasks than your article can probably afford space to.
Tyson is our Lead Brewer (we actually gave him that title before we had 2 brewers so we always had fun with it). Sounds like it should also be pretty simple but when we think small again, he also is our chief mechanic, logistics, shipping head, scientist, oak barrel surgeon, and chemist. And whatever else sticks.
So what the heck is left over? Well, I guess I wind up focused on strategy, outside sales / briefings, package / label design, contracts, setting pricing, vendor management, Omaha sales, media, menu design, point of sale programming, IT, telecommunications, electrical, plumbing and whatever I tend to step in. I don’t think I’ve ever put all of that in print – I guess the easy version would be GM, Brewer, and Sales.
What profession were you in previously to the beer business?
I used to run IT for a rather large corporation. Telecom and Systems Management was what brought home the paycheck but at nearly the same time I put myself on that path I began home brewing.
How long had you been homebrewing?
I started brewing in ’92 with a kit and Papazian’s book. You know – the “don’t worry” one… Anyway, after a day of getting ready to brew, brewing, and then pitching my packet of dry yeast on top of the foam – it was pretty discouraging when the bubbling never started – at least not on queue.
What was the trigger for “you know what, it’s time to turn this hobby into a business!”?
Actually, I can remember that moment quite well. After working in a truly scientific way and changing one variable at a time to observe results – the Cardinal Pale Ale was nowhere near where I wanted it to be in terms of aromatics – after batch after batch after batch. So, I finally got so disgusted with it after work one day that in a moment that teetered on the edge of dumping, I took this rather large bag of Cascade hops that I was using and just dumped it into the fermenter – game over. A few weeks later, I came back to clean everything out and thought it smelled pretty damn good. I went through the motions to filter it and bottle it and I can remember holding it up to the light and thinking “I’ll bet I can sell this.” The business plan didn’t exactly emerge immediately but the fuse was lit – there was no turning back.
What type of research did you do before opening?
I tore through everything I could get my hands on. Census data, demographics, going price per pint of craft beer in the area, types of beer that sell here, menus, satellite photos – really geeky stuff. We took a business plan framework and typed it up and over the course of nearly 18 months just continued to refine it and add data. We tracked the number of revisions and when we finally stopped going back to it – the counter read 189 revisions. Took me a lot of beer to get that far.
What was the most intense/nerve-racking part of starting your own business?
Every business is different, I’m sure. For us, it was a combination of getting the right people in the right positions and truly wrapping your brain around EVERYTHING and really knowing first-hand how to steer the ship. As a first time owner, I think the biggest pain was the realization that even when you trust people to get the job done for you – it all comes down to you.
A lot of people look at making beer for living as being all fun, all the time. What are some of the grittier aspects of the business that many don’t realize?
It’s rewarding in the sense that it is what you make of it. I’m thinking everyone stands up initially and says they are ready for the work and the commitment but until you’ve been through it, I doubt many truly understand the depths of what something like this requires. We laugh and say that the day we opened the doors is the day the economy checked out. It probably isn’t too far from the truth. When the world began to change, the hop shortage dropped in, commodity prices were climbing, fuel was skyrocketing, and so many variables were way outside of our control – the business plan was out of date almost immediately.
Adaptation was truly the key – and it wasn’t like we knew adaptation was the path to immediately take. It takes a little time to determine which factors were going to continue on their course and which might self-correct. But at the end of the day, if we truly didn’t grab control of the variables we could control we might not get a second chance. Staff had to be cut, operational practices modified, conservation kicked off and the mandate was to do it all without sacrificing quality. Did we make mistakes? Definitely. It also forced us to be incredibly creative and in some ways, our barrel aging program grew out of adversity. We were making some damn good beers – but not much of them. So… in the middle of all of this adversity, uncertainty, and daily change – we made the decision to invest in additional capacity. Pretty freakin’ tough.
Is it tough to make a comfortable living as a brewery owner?
If I ever do – I’ll write back to your column.
You are a former Marine (which came out in conversation when I warned you to be careful walking around New Jersey alone at night). What lessons did you learn in the service that are helpful to you today?
I think a combination of the Marine Corps and running a team of nearly 450 people later on provides a great underpinning when it comes to working with a team. There are times when I can lose my patience but what matters most is leading a team in a direction where they truly feel as though they are a part of what we’re doing – not punching a clock. There is one of those damn cliché phrases I hate going around along the lines of “who we are today, is not who we’ll be tomorrow” (I’m sure I bludgeoned it but something stuck) and from our Chef and the food to our beers, we are constantly re-evaluating and asking ourselves if we’re truly proud of where we are. Constant refinement and continual improvement got stuck in my head in the Corps – it’s still with us today.
What is the craft beer scene like in Nebraska? I believe there are around 10 breweries in the state now. Has the preferences of the average beer drinker in the Midwest changed over the years?
Definitely. We have 11 operating breweries today and 3 more in planning. Going back to just before we opened our doors we had one of those beer geeks that thought they knew everything tell us we’d never sell an IPA in our market. And looking back, IPAs were something we wanted to bring on. There were a few bottle shops back then and a decent selection but over the past few years, specialty stores, upscale restaurants, more bottle shops, the brewpubs, beerfests, beer & food pairings, tastings, media and on and on have helped to change the tide. Sure, we still have a larger pool drinking macro stuff but the craft beer side has come on strong. And that IPA we’d never sell in our market?? At the moment, we have an APA that looks like some IPAs, a West-Coast style IPA, a Cascadian Black IPA, and our Belgo-American hybrid IPA on tap at the same time. Oh, and the IPA is sold out!
What markets/cities is Nebraska Brewing now distributed?
From a state perspective, we’re about to enter California which will essentially run us out of capacity. We were already in Oregon and the obvious two: Nebraska and Iowa– plus Wisconsin, Pennsylvania, Massachusetts, Rhode Island, New York and North Carolina. The one we get asked about a lot is North Carolina – why? The answer was pretty easy really – they can mail-order out. We grew our ability to get beer moved around indirectly through NC – that, and they’ve got a solid Craft Beer fan-base.
A lot of breweries find NYC a tough market to do business in due to regulations, distribution challenges and supply & demand? What has your experience been like here?
We’re small. I’m not sure people realize it but we find ourselves adherents to a simple philosophy – a little beer in a lot of places (Patrick Rue of the Bruery stated that in an interview and it meant something to us). New York was really the first, large, outside market to take us in. We’ve hooked up with a great distributor (Union) and I think they know how to manage things pretty well for us relative to expectations. You won’t find us in chains or in extremely high-volume locations but you will find us in places that understand and appreciate a quality product in smaller quantities. We don’t wind up priced exactly where we’d like but we have to deal with shipping, higher base costs and other factors that plant us a little higher up. I’d love to be cranking out liquid at a much lower cost per ounce but we’re small – and our costs are higher. New York seems to understand this and we’re selling.
How much of the year are you away from home promoting your beer, holding meetings, etc?
It’s an interesting question, given we are in our third year. We’ve spent most of this time attempting to gain distributors who can understand and sell our products without us being there all of the time. That said, California will be the last state before we set our sights on making more product – during this current year, I expect to be making the rounds to meet people firsthand and helping the sales teams do what they do best.
What are some everyday demands in the brewery (small or large) that you didn’t foresee you’d be dealing with? ie equipment problems, understaffing, electric bills, etc
We’ve got a very nice, second hand, feature-rich brewing system and given the number of bells and whistles – when it breaks down, fixing it isn’t easy – or cheap. It doesn’t break down too often, but when it does, it’s stressful. Having your glycol temp rise, a mash mixer break, a main pump motor seize, or motor controller burn out REALLY makes for a bad few days. Equipment aside, when it comes to staffing, we find ourselves filling in wherever necessary. For instance, last Valentine’s Day, Kim was filling in for a Manager who couldn’t cover the night shift. It happens.
What is your advice to other home brewers looking to go pro?
Study yourself and consume information. I love to say it’s easy to make beer – it’s very hard to make very good beer. Are you satisfied with what you’ve made? Don’t rest on what you’ve done in the past. Learn new techniques – oxygen saturation, pH control, stepped mashes, adjuncts. Keep pushing. I guess I didn’t realize it at the time, but every time I attempted to master a new aspect of homebrewing, the beer got that much better. Challenge yourself and don’t stay comfortable.
I think you made a very smart move when you came to NYC last year. As opposed to the traditional visiting of accounts, you chose to attend a geek night with a bunch of beer bloggers and homebrewers. Why did you do that?
When we sell beer, we do it in the hopes that all who help us move it, can appreciate it – that said, bloggers and home brewers are who we are. We are exactly the same people. It’s where we began – the passion burns so damn bright in these people and they, in turn, influence others and ultimately the entire craft beer movement is elevated. We had an opportunity to hang with a group of people who love the company of others, who live in what they enjoy most. Wasn’t much of a choice for us – you invited and we jumped – plus you had some DAMN good beers that night!
How do you see social media as a part of your business? Is it necessary in today’s world?
Social media is absolutely a part of whatever communication we choose to undertake. We find it is where we can be ourselves and carry on a conversation in near real-time with others who choose to pay attention. That whole IT thing I mentioned earlier – I was actually deep into innovation. I was heavily involved in interactive computers, cellular communication aspects, QR codes and quite a few other forms of communication, so it’s easy to see the methods that will emerge. It’s hard to beat the combination of ubiquitous access, low barriers to entry, and the simple fact that most of us are already banging away on our keyboards looking for something to talk about.
What are your proudest accomplishments today as owner of Nebraska Brewing Company?
Damn. I really dislike this one. I literally got stuck here for minutes. I was going to say that however we did it, we kept our heads above water through a very difficult period, but there are really so many things that all have come together. A rebuilt menu, we’ve gathered a great team, we’re building a great brand. But when I got unstuck I realized that we’ve done some great things with our beer. We’ve become a part of a community that we’ve admired from the sidelines for a good portion of our lives and we’ve done it in a way that we can feel good about. 2010 saw wins at The World Beer Cup and The Great American Beer Festival along with 17 other medals in various competitions for us – we’re very proud that we can say we’re making products that not only make us happy – they seem to make others happy as well.
Where do you see your operation going in the next five years?
Well, I think I’ve learned that it’s tough to see that far out, but we are actively working through the basics of what it would take to get a nice packaging brewery tucked in a warehouse somewhere. We’ve got a great distribution network and as we sell draft and 750 mL bottles only – we basically exist in a 20% market share. Off-premise and 12 oz. products are the next logical step. Oh – and an expansion of some sort related to our Reserve Series.
If you can go back and do anything differently for your business leading up to today, what would it be?
Hindsight is an ass-kicker sometimes. This one is tough. I think early on I would have taken more direct responsibility instead of hiring some people to take that on for us. There are a lot of families and great people who work for us – they count on us to move ahead.
Is it better to work for somebody else, or to work for yourself? What are the positives and negatives of each?
When I was working for that larger company, there were so many people to delegate to, so many people to make a portion of a decision, it was a great environment and there were so many people to carry the load. I’d say that working for myself is much more difficult in the sense that it drives decisions so far into the “what-if?” realm. There is no safety net.
What are your favorite breweries, both domestic and international?
I think, for a variety of reasons, I enjoy breweries like Green Flash, Avery, Freetail, Cigar City, Fat Head’s, Blind Tiger, Red Eye, Boulevard, & Metro. Some off the beaten path, but making some cool stuff.
Where do you look for inspiration?
At some level, it comes down to a familiar connection. Maybe that’s a little vague but I’ve found that when contemplating a new direction or a solution for a beer pairing, the brain tends to go where it’s already been. When we hit upon the whole Chardonnay barrel aging vein, it was over-rationalizing what we were experiencing in a Strong Belgian Blonde – really cool tropical fruits, pineapple, etc. At some point the aroma of Chardonnay was there and gone again in an instant – and before you know it, we were chasing the marriage of the two. I think the key for us is that we all tend to keep asking “what do we enjoy and how do we bring that to our beer?”