Expansion - Gallows Hill Brewing Co

Expanding a bootstrapped sideline business is a tricky and challenging affair. Despite the challenges it is actually a rewarding and fun experience.

On top of that it is also a serious learning process. Learning involves a little bit of everything… From plumbing and electrics all the way through to financing and taxes.

Since we have been building Gallows Hill Brewing Co at our own pace (we intend to stick to this going forward) and not always with the same exuberant fervor as others, I have decided to put in more effort to document and share our journey. Pretty sure there will not necessarily be weekly or more frequent updates, but there will definitely be more effort being put into documenting our expansion and progress with the brewery.

You may be wondering where we are heading with the brewery… As a start, let’s clarify what is important to us:

The brewery is a serious business, but it is by no means a “get rich quick” scheme. (Anyone getting into the beer business with that in mind should seriously reconsider their position.)
We aim to build the business in a manageable way into a sustainable small endeavour that suit our lives. Those lives involve young families and serious day jobs. Juggling all the responsibilities will be no easy task. We have to accept that this juggling may result in things at the brewery not always going as planned or at the pace originally intended.

We are local. Our operation is based in a gritty part of town undergoing a slow revival. Despite the issues of crime in our area we intend to stick it out and be part of building up our bit of the city. Breweries all over the world are contributing to uplifting rundown neighborhoods and derelict industrial areas.

In South Africa alcohol producers are too easily painted with a tar brush and depicted as the source of evil in our society. We accept that the country does have an alcohol abuse problem, but the mass consumption market is not really the market we are aiming for. Breweries, bakeries, butchers, green grocers, etc. are essential components of a properly functioning society. In our opinion a world without good quality beer is not worth living in.

Being a bootstrapped, small scale & amateur brewing operation (none of us studied fermentation sciences or went to brewing school) we will surely make a number of mistakes along the way, but our eternal strive will be to produce high quality beer our way. We are going to be honest about our products and we take everything about our beer and brewery personal. It is part of us. Due to running our brewery the bootstrapped way, some things we do will be a little unconventional.

The brewery is self-financed! We have no big financial backing or external investors at this point. It is simply a case of investing our own resources and income from our day jobs into the business. We are lucky to be able to do it this way. On the one hand it adds a certain amount of pressure to make it work and forces you to work smart and to make compromises in certain areas. On the other hand it gives us the freedom to do whatever the hell we want to. We do not have a banker or other investors breathing down our necks drooling for payback or returns on the investment.

We have day jobs and young families. On the one side we have two doctors and a little one who is not even six months old. On the other side we have a chef, a structural engineer and a 3 year old toddler. The doctors have crazy & haphazard working hours. My work can be sporadic, often riddled with deadlines, travel, corporate bullshit and having to manage people and projects across the country and around the globe. On many occasions family commitments and work demands forces brewery related tasks and plans to play second fiddle or to take a rain check for a couple of days. Having the brewery is a creative outlet for all of us. It keeps us sane to some extent, I think.

We are still fairly young. Even if we are completely on the wrong path and it does not work out, we will be OK. There is still a lot of life and living left. At least we hope so, right!

Back to where we are heading…

As a start. We are going to make beers that we enjoy drinking. At the moment that is to a large extent Pale Ale, India Pale Ale, Porter, Stout and Barrel Aged Beers.

Variation will probably be the norm. The perfect beer is something we haven’t brewed yet. Maybe we can get there… One day…

We are not in the game of pushing high volume, low flavour beer. We will also not participate in the price war game.

“Pay to Play” is unethical and wrong. We will not do it.

Our initial growth will be fairly slow… This is largely due to demands from our day jobs for the next 6 to 8 months, but also because we would prefer to ramp up gradually. There is still a lot of learning and figuring out required.

This is probably a good time for a bit of a recap…

After a burglary mid 2015 - that cost us quite a bit of stainless steel kit - we got to the point of having to decide between plodding along as we were doing at the time, or taking it more seriously and expand the business. After a lot of deliberation, arguments, back-and-forth, etc. we decided on a brewhouse size, selected an equipment supplier and decided on a broad outline of how we planned to run things.

By a stroke of luck I tracked down a guy in our big-ass firm (one of the perks of working for a Fortune 500 multinational) running a small brewery in New Zealand with his best mate. After a couple of emails we learnt a lot from like-minded folks who’ve gone through a similar situation and managed to track down the actual manufacturer of the equipment we were going to buy through a middle-man. With a slight setback in time, scoring about 30% off the equipment cost and getting the opportunity to customize our brewhouse for very little additional cost, we pushed the button on the manufacturing of our new brewery.

Late in 2015 our 3 main brewing vessels arrived. Unpacking was a bitch in the scorching Cape Town summer heat.

Thanks to our bootstrapped approach the expansion is not a case of simply unpacking a couple of containers or crates, and paying a guy to fit the jigsaw together. We had to do it all ourselves. Sourcing all the additional pieces to turn 3 main stainless steel vessels into a functioning brewery is a mission. It is a real bitch when you factor in the generally poor service provided by most South African firms. It takes quite a bit of time to pin down good suppliers with who you can build a relationship and then work together to build a business. (More about that on another day)

Where we stand now there are a couple of small items still missing and a bit of tweaking that needs to be done before we can move into full steam production. At least we managed to run the necessary testing required, proper initial CIP and passivated the tanks.

This was followed by our first big kit brew day. Surprisingly the brew day went pretty smooth. Obviously there were a couple of process related issues. Mostly in terms of timing and a minor boil-over incident… Gladly nothing that cannot be sorted with some better planning.

At least we can confidently say we are now in the home stretch before we start brewing again in earnest.

Day 1 - 2016

The first of January is probably a good day to start full speed with the intention of writing more regularly. Surely it is a bit of a cliché thing to do on New Years Day, but who cares anyway...

Pretty sure most people are - to some extent at least - mulling over thoughts related to what 2016 will hold. For some it will probably be a bit hazy due to their hangovers resulting from their attempts to drown out the sorrows of 2015. 

It would be fair to say 2015 was a bit of a rough year. The following things stand out. 

Our country and economy is a mess. For this we have only two things to blame:

1. A ruling party with its head in the sand clutching to concepts that died with the fall of the Berlin Wall. (Our public service is too big, inefficient and too expensive. We have too many people on government grants and effectively we are creating a nation of beggars too lazy to work. It is impossible to create jobs if you cannot fire people... It may sound counterintuitive, but it is akin to the concept in racing... To go faster around a track you need the best brakes available.)

2. The sheer amount of stupid people who keep voting the most corrupt people back into power. 

On a more personal side quite a couple of things left a sour taste...

Burglaries!

Not only did we have a burglary at our brewery, but we also had a break-in at our house. I refuse to accept that burglary happens because of poverty and the inequality in our country. It is due to laziness, a lack of basic morals & education and a justice & law enforcement system that is crumbling. 

Corporate life!

Being absorbed into a global monster firm resulted in a roller coaster ride of 3 years now. Serious restructuring; shit taking forever to resolve; dismal financial performance due to our crappy economy; and the difficulties of having to manage staff and projects when everyone is demotivated took its toll. I can seriously do with a more upbeat year in 2016. How I managed to be this patient over the last 3 years I do not know... I am inherently impatient. Being able to maintain this patience much longer than a year or two will be impossible. Things need to change.

Managing people is not easy... Not being trained to manage people makes it even more tricky. Being a bit of a perfectionist and an insensitive hard-ass takes it to another level. (Which often results in doing things yourself, retracting into your own world, and not delegating task and responsibilities to others.)

Juggling too many balls:

Trying to balance family life; personal time; some health and fitness time; a demanding corporate day job; and starting a sideline brewing company is madness. As I said before... The only explanation can be that I like making myself suffer. Another to add is that I probably have some form of A.D.D. Somehow I cannot just stick to a couple of things, I have to overload my fork.

Unfortunately it does not help to dwell on the past and sulk about what happened. We simply have to forge ahead, put our heads down, make plans and carry on...

So... What will we focus on to get right in 2016?

(Better) Balance:

This will certainly not be easy. Each part of life will be allocated certain time slots. What does not get done will be done after hours or will simply have to wait. Tough!

It will also mean that some of my subordinates will have to step up their game...

Corporate life:

Somehow I will figure out ways to be more in control of our projects and the teams running them. Therein lies the crux of the matter... The teams need to run the projects, not me. They need to own them and deal with the responsibility that comes with it.

Structural Engineering:

I think this is the year to start with a mind-shift. We are not only an engineering office anymore. We are in the business of Building Information Modeling (BIM) or Virtual Construction. Others are not ready for it, but we are going to take the lead and piss off quite a load of people in the process. Fuck it!! I do not care... To make an omelette you have to break a few eggs. 

Brewing:

2016 will be the year we turn the hobby and quasi-business of Gallows Hill Brewing Co into a proper business. The business will not survive if we half-ass it. No doubt it will take serious commitment, time, money and probably a load of friction between the four business partners.

We will get our new brew house online and ticking over our way... and we will have to start employing people and learn quite a number of new skills along the way.

We will make the beer we want to drink; price it as we see fit; and generally do things our way and at our pace.

May 2016 be another fun ride...

And the end of 2015 takes a nosedive...

Just as we thought the year was winding down rather gracefully and without too much crisis management old JZ drops the bomb. Now the whole country is bending forward, grabbing their ankles and we just have to take it from behind.

The past 24 hours can simply be classified as a tumultuous day. From our fairly competent Minister of Finance getting fired to having to deal with unreasonable & overreacting people at work it was a pretty crap day.

Today did not start well. As always I checked all my social networks this morning... Guess what... The Thief in Charge calling himself the President of South Africa decided to sack the Minister of Finance for no proper reason. I must confess... When Mr Nene was appointed as Finance Minister I was quite skeptical. His falling off a chair incident a couple of years back did an injustice to his competence. The poor guy actually did a stellar job in the horrible conditions he inherited. The poisoned chalice he received was filled with wanton looting and corruption to please JZ and retain loyalty + votes.

Thanks to this our currency tanked and I am pretty sure numerous South Africans and companies are making plans and organizing to get as much money out of SA as quickly as possible.

The deteriorating exchange rate is not the kind of development you want when working in the construction industry and when you are expanding a small sideline business that relies on numerous imported items... Stainless steel components, speciality malts, yeast, hops, etc.

Even though this is a scary situation and will surely result in numerous sleepless nights and worrying, it is quite exciting to try and make things work when the deck is stacked against you.

Packing out large stainless tanks, arranging them in line, sorting out tri-clamps, valves & thermometers and planning the interesting year ahead is weirdly exciting and interesting. It is at that point when you realize that running the sideline we have is one of those things that keeps us sane... That one thing that makes you say: "Fuck this shit... We'll do it our way... The way we want to do it... And we are going to give it our best."

In order to avoid listening to the news while driving today, I opted for a podcast... Thanks to The Brewing Network (Justin Crossley you are a legend) and the guys from Scratch Town Brewing Co, the following got stuck in my mind: We area still young. We are in our mid thirties. Even if we do stuff up, there is enough life left to recover. Real life is about the little things we enjoy. At this moment that enjoyment is making beer. The best thing about beer is the way it makes people feel and act. Beer makes people happy. One of the best things about being in the beer industry is that fuzzy feeling you get when someone tastes the product you give them and their eyes glaze over with pleasure. 

At this point I can honestly say... I get more joy and appreciation out of someone enjoying a simple glass of beer than successfully delivering a complex building to an ungrateful client...

Since this is supposed to be a blog more related to brewing and not an outlet to bitch about real life, corporate bullshit and the general hassles of growing up I have to get back to beer, brewing and stainless steel.

To say the least 2016 is going to be an interesting year...

We have to master our new brewing system and try to stay on top of managing the cost increases of imported ingredients & products we use.

We have to strike some kind of balance between family lives, day jobs and our sideline business.

We have to differentiate our products in a market that is blindly going down the wrong road... Chasing high volumes and maximized margins akin to the modus operandi of the mega-brewers.

We have to drive the quality of small scale beers to a new level.

And we will have to deal with not always having enough beer...

2016 will most probably also be quite insightful in terms of the direction beer is heading in South Africa. Will it be more Session oriented, more Belgian, more hoppy or more bland + dumbed down yellow lagers...? Who knows!

Given the economic difficulties we face... Thanks to bright-spark JZ... Some breweries will be facing financially challenging times. The questions are: Who will fail and how will the remainder manage to weather the storm?

October 2015 - Holiday & Brewery Expansion

Time off is always a great thing. Getting away from the daily grind with the constant chasing of deadlines and targets is always pleasant. It takes me a couple of days to switch off and clear my mind. Not thinking of work and personal projects is a well deserved luxury. Unfortunately just like taking a couple of days to switch off, my brain kicks into overdrive about 5 or so days before the end of the holiday.

With our brewery expansion project in progress there are more items to get to than possible in the available time with the resources we have. As everyone tells you: It is close to insanity to start a brewing company when you have a toddler at home or starting a family; while at the same time all parties involved juggle crazy schedules at their day jobs.

To some extent I think we are suckers for punishment and rarely pick an easy route. In the end it certainly creates great stories and opportunities to learn. Adversity is a breeding ground for innovation and can result in achieving results against the odds provided you are willing to put in the effort required.

More on the struggles and brewery expansion in a bit… Back to the holiday first.

Travel is essential to broaden ones outlook on life; to figure out what is important and what not; and to learn more about yourself and the people traveling with you. Getting to experience far off places and remote unexplored territories is an added bonus when included in the trip.

We were lucky to be offered an opportunity to join a trip from Vancouver up the British Columbian coast. It is a vast area. BC is larger than California, Oregon & Washington State combined.

The first leg of the trip comprised the circumnavigation of Princess Royal Island on a sailing vessel. 16 people in a confined environment helped create memorable experiences. On the numerous stops along the way we got to see a great array of wildlife, including the bears we came to see as the main focus of the trip. We had awesome sightings of Black, Grizzly (Brown) & Spirit Bears. The latter being the elusive white version of the Black Bear.

The second leg of the trip was spent at the Great Bear Lodge where all our time was focused on watching Brown Bears catching salmon along the river.

Two days ahead and two days after the expedition was spent rambling around Vancouver. Vancouver is an awesome little city. Compact and filled with great shops, restaurants and of course a good selection of breweries.

As always we manage to fit in quite a bit of beer ’research’ on our trips. With Vancouver being in the Pacific North West the selection of hop-forward beers alone makes the trip worth it.

Based on the beers tasted it is safe to say that quite a few of our South African beers are on par with those available in BC. Sadly the majority of breweries in SA need to do a LOT of catching up. Some of our breweries are also losing the plot a bit… trying to play the volume game by pushing dumbed down beer to compete with the mega-brewers. It is a bad idea that will lead to a bad ending!

I am most definitely biased, but I think our beers & brewery are on the right track. The beers still needs some tweaking and as a brewery we have a lot to still figure out. Most importantly I think our beers can stand tall with some of the best we’ve tasted on the trip.

By now the holiday is a distant memory...

Back to the daily grind.

Back to the adventures (and lack of sleep) due to the addition of a new member to the family. (Welcome Hadrian!)

Back to dealing with the art of juggling limited funds while ordering pumps, fittings, tanks, equipment & importing a new brew house.

Ramping up a bootstrapped brewing operation is no easy task. Especially when you decide to say "Fuck it... We are doing our own way and figuring it out as we go." At least we have (we hope) resolved most of the issues and only have a couple of outstanding items to be resolved in the coming weeks.

By early to mid November we will be able to put our grubby little paws on a new custum brew house. If everything goes to plan we will be able to fire it up and start churning out beers before the end of the year.

It has been a long-ass and tricky journey up till now. Pretty sure the coming couple of years will be even wilder... A proper roller coaster ride is very likely. At least I hope the ride has a good ending and does not finish in a flaming ball of twisted metal.

2015 - Quarter 1 DONE !!

WOW... I just realized we are through the first quarter of 2015. It was actually a bit of a blur to tell the truth, but I guess that is just the way life is. Especially  when you want to juggle too many things at once. The constant feeling of actually flying by the seat of your pants is tiring, challenging, exciting + rewarding all at the same time.

To tell the truth we are not quite where we planned to be by now. There are no new shiny brewing vessels on a boat to Cape Town, well at least not yet. I guess that is also fine as we took a bit of time and again changed our plans. It has been quite an interesting dynamic between my brother and I. Initially it started with me being on the bigger is better side of the fence. He was a proponent of a small, bootstrapped approach. In a year it turned round... I was leaning towards a smaller system size being used harder, while he was going the bigger route. Finally we have settled somewhere in the middle. Our brewhouse will be not too big and not too small, yet flexible and capable of taking abuse. A lot of it will still be a bootstrapping operation. At least we have a plan.

I reckon the motto of a family friend always rings in the back of my mind: "Running out of money is not a problem, but not having a plan IS a problem!"

We have a fairly solid idea of what we want to do now; we have cleared a couple of hurdles already and we have a hit list of items to resolve. The following couple of months are going to be riddled with logistic and cash flow hurdles.

Pretty sure this first real expansion will be challenging to say the least, but in a couple of years we should be able to look back with at least one of the following possible outcomes:

Option 1: YIKES...!! It actually worked and we pulled it off.

Option 2: Oh boy, did we fuck this up or what... !?!? At least we had loads of fun and learnt tremendously valuable lessons along the way. (And we had loads of beer on hand along the way)

When everything is running we will focus on two things... OK, maybe three.

Slowly solidifying our current footprint with additional production capacity, and when we have ironed out the first wrinkles of the upgrade a steady organic growth plan.

Focusing on QUALITY! There are quite a number of areas where we need to and can improve.

Trying new things and expanding the horizon of beer in Cape Town. Sticking to the way we like things and making what we like to drink. If you want to make the lowest common denominator beer to satisfy everyone you will be doomed.