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Schlafly’s Responds: Why They Decided to Contract Brew (and Not Build)

The great thing about being a loudmouthed moron is that sometimes smart people respond to your buffoonery with interesting information.  Such is the case with my post yesterday about Schlafly’s plans to expand their brewing operations using contract brewers.

The obvious answer to why they chose this route is financial prudence.  Why take on a load of debt to expand in a marketplace that is growing so rapidly that it’s practically unstable?

Well just because this reasoning makes sense, it didn’t stop me from speculating (as a moron will) that it also might have to do with the fact that Schlafly’s is essentially for sale, and adding fresh debt to the balance sheet might make it unattractive to potential investors.

This was enough to prompt Schlafly’s Communications Director Troika Brodsky (who started off delivering kegs and now does lots of the design and writing for the place) to reach out and tell me what we already knew – I’m a moron!  Here’s what Troika had to say:

I can assure you our choices have nothing to do with the succession planning of our owners, nor is it entirely about overextending ourselves financially (although that is a prime reason). Because our breweries were built in the middle of a city, we literally have no room to expand on our existing facilities (unlike a brewery like New Belgium that is essentially in the middle of a giant field and can just keep adding). So what that means, is that if we were to build a brand new facility in St.Louis, it would have to be really big (like 20-25$ million big) to future proof us for growth and it would also immediately make our Bottleworks redundant.

We would also essentially have to commit to creating something, that would take roughly 5 years to design, build and get up and running, that would cost us about twice what our entire company is worth (including the fact that about half our sales still come from our two restaurants), and it’s size would have to be entirely based on very loose guesswork as to what our capacity needs might be 5-10 years from now. That’s a pretty ridiculous and frightening prospect for a company our size.

Add to all of that…the overall economy is in the dumps. We really don’t know what our growth is going to look like going forward, and we don’t want to make any decisions that suddenly put us in a position where what we brew is dictated by a massive bank note. Even more importantly, our owners don’t want to make any decisions that were they to go south, would put Schlafly jobs at risk. Obviously we want people to drink Schlafly Beer, but we’re not out to take over the world, nothing is more important to us than making sure our employees feel secure in their jobs.

What we’re doing really isn’t contract brewing. We don’t own these breweries, but to an extent, they are built similar to our specs, with our own expertise and we’re using our own people to oversee the brews. We are very much considering the capacity we’ll get from Nashville and Iowa as coming from satellite Schlafly breweries. This is pretty great for us because it allows us some time and wiggle room by accessing an extra 10k+ barrels with low risk and it allows us to help our friends get up and running as well.

As you can imagine, getting a huge bank loan these days to open a new brewery isn’t easy, and being able to tell your bank you already have a guarantee of capacity from a large brewery like us really helps. And…if and when we bottle at either place (as for now, it will just be kegs of one, maybe two styles), I guarantee you won’t see a “Brewed In Saint Louis” logo on those bottles (I’m personally hoping to see “Brewed In Nashville” and “Brewed in Coralville”) . We intend to be completely transparent with what we’re doing and are completely committed to making sure the quality is as spot on as its always been.

Thanks for the great write up, support and the kind words.

So there you have it, right from the mothership.  I think it all makes good sense, except I found one bit disappointing – when Troika said “we’re not out to take over the world…”  Why not?!  If you can manage to keep the quality up, I think the America would be a better place if 49 of the 50 states were brimming with Schlafly’s brews.

Everywhere except Idaho.

Sorry Don.  🙂

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Categories: Beer, News

Author:Jim

Craft beer nerd, frequent beer blogger and occasional home brewer.

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20 Comments on “Schlafly’s Responds: Why They Decided to Contract Brew (and Not Build)”

  1. johnking82
    August 23, 2011 at 11:26 am #

    Further evidence that you still suck Jim.

    • August 23, 2011 at 12:10 pm #

      As if more was needed?

  2. August 23, 2011 at 11:48 am #

    It’s so refreshing to see a level-headed, coherent and well-written response out of company spokesperson.

    • August 23, 2011 at 12:20 pm #

      Yeah, usually they just call me an a-hole. 😉

  3. johnking82
    August 23, 2011 at 11:57 am #

    I’m counting down the days until the Pumpkin Ale is released.

    • August 23, 2011 at 12:22 pm #

      I haven’t seen that in these parts, only the Irish Stout and the Reserve stuff around here. I bet it’s good. 😦

      • johnking82
        August 23, 2011 at 3:37 pm #

        best I’ve ever had.

        • August 23, 2011 at 3:49 pm #

          I think they’ll be sending me some. Turns out Troika is a-okay!

    • August 23, 2011 at 4:19 pm #

      Ha! I finally stole a march on you guys! I just bought a sixer of Schlafly’s Pumpkin Ale this morning–had one with lunch. It was really, really, good–mmmm-mmm! Since I’m in MD, I figure Joisey ought get their supply in about 6 weeks or so.

      • August 23, 2011 at 4:24 pm #

        Aw man! I’m really looking forward to tasting one. I think Troika (the fella who responded) is going to send some my way. Fingers crossed…

        • August 23, 2011 at 5:01 pm #

          Has anyone on list tried their Oktoberfest seasonal yet? I was tempted to pick up a sixer of that too, but already had a bomber of New Belgium’s Fat Tire, a sixer of Oskar Blue’s Old Chub Scotch Ale, plus the Punkin’ ale, in my shopping cart.

        • August 23, 2011 at 5:31 pm #

          LOVE the Old Chub!

  4. Clayton
    August 23, 2011 at 12:22 pm #

    I just came back from Oregon with a bottle of Shlafly 2008 Barleywine… 😀

    • August 23, 2011 at 12:23 pm #

      Good stuff! For a while there I could find their 2008 Reserve stuff on the shelf, even in 2011. It’s great to have the beer “pre-aged” like that.

  5. August 23, 2011 at 1:57 pm #

    That is really cool that they took the time to respond. As a St. Louisan, I feel fortunate to have them as a resource here. They make it really easy to like them. The Tap Room is one of my favorite places in the city to dine. It has a really awesome STL city flair to it.

    If only I hadn’t consumed waaaaay too much of their product last night.

    • August 23, 2011 at 3:19 pm #

      Oh boo-hoo! That’s what you get for turning 35 – can’t drink like you used to.

      Well you can, it just hurts more. 😉

  6. John J
    August 23, 2011 at 6:36 pm #

    Let me know when thy’re entering the Chicago Market. Oh by the way very Sam Adams of them to produce beer that way. And I don’t mean that as a bad thing.

    • August 23, 2011 at 8:46 pm #

      I’m guessing that comment was written on a mobile phone – stupid autospell!

      And yes, it’s a similar model, just more anal retentive!

  7. August 24, 2011 at 2:07 pm #

    We were discussing this on the Facebook group for our beer club. Our local Schlafly rep filled us in with the following assurance:

    We started by working with the brewers on the selection of a site,
    equipment, etc to ensure that we can follow the same process and have a
    standard of equipment that can achieve the same standards. These are
    new breweries so we are not having to work with existing equipment but
    specific equipment that we know will work. Then we will have staff on
    site. Then we will ship in all our raw materials as opposed to making
    do with their malt, for example (in fact they are using our contracted
    malt supply.

    Then, we identify the critical control points for each beer and work
    through the process, step by step. It is very methodical. It would be
    no different if we were installing a new brewery next door to our
    existing brewery. We go through this every day between Bottleworks and
    The Tap Room.

Trackbacks/Pingbacks

  1. It’s Good to be a Whiny Blogger! | Beer & Whiskey Brothers Blog - September 29, 2011

    […] The wheels got turning when I put up a post about Schlafly choosing to use contract breweries instead of expanding their capacity in St. Louis to keep up with mounting demand for their products.  Troika read the post and crafted a really smart reply.  So smart in fact that I gave it a post of its own. […]

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