What are the keys to growing a business in a healthy way without spreading yourself too thin and losing the integrity of your product?
That’s a great question. That is the key, isn’t it… being able to grow, being able to capitalize on the growth of this industry and the marketplace.
We deal with this every day… because we have more opportunities to grow than we can afford. You have to pick and choose. Number one- set real priorities for your business; which is not as easy as it sounds.
Certainly a key priority is to make payroll on Friday, right? I need to pay the suppliers that are sending us product.
Beyond that, you need to decide what’s more important: the qualitative [or quantitative] improvements?
Qualitative investments allow you to improve the quality of your beer. Maybe it’s a new lab, a new lab set up, or lab tech sensory analysis. Maybe it’s a new filter, centrifuge, or something else that enhances the intrinsic quality of the beer you want to produce.
Or maybe it’s quantity. Maybe you need another fermenter. Or maybe it’s something that will make your brew house more efficient and increase the output of product without negatively affecting perceived quality in the product.
Managing the qualitative and the quantitative investments, the so-called return on investment, is really challenging. The financial side of the business needs to be served, as well as the creative side of the business. I think that financial people can easily calculate the ROI on a piece of equipment that increases production and pays for itself. It’s very difficult to calculate the qualitative investments.
Qualitative [investments] improve the perceived quality of our beer and make people love Deschutes that much more. Well, that’s harder to demonstrate by an ROI. That’s why it’s very important to have these conversations internally within your business. Decide what is truly important to the success of your business and the people who are involved in it.
How have you maintained not selling out?
We’ve had to give up some things that we wanted [in order to grow Deschutes in a healthy way]. If we took in more money we could [have all of the things that we wanted]. But the reality is, it has never difficult for me because I don’t want to sell.
I love what I’m doing. I could do this forever. I mean, there are days when I think, “Oh the heck with it” when I get up. But I’ll sleep on it and the next day I’m up and ready to go to work and tackle something new.
I’ve said many times about Bend, but it’s also true about [the craft beer] industry; I don’t know many people who live in Bend because they can’t make more money somewhere else. I don’t know many people in the craft beer business that couldn’t make more money doing something else. They’re very bright, creative, talented, hardworking people. I mean, my goodness, there is a lot of places to make money, but what we make is beer. We love that.
Look, our bills are being paid. I’m not worried about my next rent check. My kids are through college. I’m proud of that. It’s a question of what you need.
Right now, I need to see through the next project for a cool beer. I mean, I don’t make the beer myself, but I know the people who do. We have some terrific conversations about how we’re going to improve it and what we’re going to change and what we want to do in the future. We have enough projects to fill many years to come, and I expect that we’re going to continue to do that.
How and why did you start Deschutes Brewery?
How did Deschutes get to Bend? That’s a great story. I’ve told it lots of times…
I was born in Berkeley, California. I grew up in Northern California. I left there to finish college in Utah and ski.
I’ve been in the restaurant business my whole life. My father was involved in the California wine industry as a grower during its modern renaissance. I witnessed the domestic product evolution from jug wine to high-quality varietal wine.
In the mid-’80s, we began to look to the beer business and see the correlation between what it appeared to be going through and my father’s experience with the wine industry in the late ’60s and early ’70s. We realized that as a brew pub, a restaurant, and beer manufacturer, we could cut out all the middlemen and reduce our raw material input cost enough to justify the capital expenditure for all the equipment and everything else we needed to have.
We thought we could find a place to open a brew pub in Northern California where I grew up; somewhere in that area. [My father’s] business partner’s son, Ed Brown, was in the process of opening a brew pub in Sacramento, called Rubicon Brewing Company. He didn’t know much more about the restaurant business than he did about the beer business. I offered my services to Ed. I’d help him set up his restaurant if I could be there to watch what mistakes he made.
I went down and helped Ed open, meanwhile looking for someplace in Northern California to locate a brew pub, without any success. There was a problem everywhere we looked. We had a real cool community from Lake Tahoe to San Francisco, then from Redding to San-Luis-Obispo. I mean, we looked everywhere and couldn’t find anything that suited what we wanted.
Both my parents were born and raised in Oregon and had come up for a college reunion in Corvallis. They came to visit some friends in Bend afterward. When they got home they couldn’t stop talking about what a neat place Bend was.
We came up one weekend in September of 1987. Bend was reeling from the very, very brutal recession in the early ’80s when the timber industry collapsed. There was still an operating mill in town.
I brought my wife to visit here for our anniversary in early October. At the time she was still living in Salt Lake City. [We immediately decided to move here, so] we rented a house and moved to town before Thanksgiving, and the pub opened the following June.
Things fell together very, very quickly. You couldn’t come close to developing a project that quickly anywhere in Oregon these days; much less Central Oregon. That’s basically how we got to Bend, and then the fun started.
When are we going to see Fresh Squeezed in cans?
Cans is a great discussion. We would love to put in a can line, but we don’t have a building to put it in. That’s the real challenge. We’re trying to manage that. I think we will have one someday. We just can’t say which day that is right now.
Deschutes would love to have Fresh Squeezed in cans too, but we can only do one thing at a time. To the earlier question about “how do you grow?”, you can’t do everything all at once. We’re trying to serve the customers who are here now and honor our commitment to them. Cans will happen in their own time.
-Gary Fish, Founder and CEO, Deschutes Brewery