Opinion: Last pour: Brewing businesses make the list
BY: Eric Olson, Editoreolson@sbj.net
Posted online March 4, 2019 | 11:42 am
We brewed up something new for readers last week. For the first time, Springfield Business Journal published a list of the area's largest breweries.
We'd seen business journals in other markets tap into the growing industry, and with the local surge of seven microbrewery startups in seven years, it was time we research it.
Here's what we found: Mother's Brewing Co. is way out front, based on barrels produced annually. Crunching the numbers the breweries self-reported for our list research, Mother's Brewing made almost four and a half times as much beer as the second-largest brewery, veteran Springfield Brewing Co.
In case you missed it, here are the 2018 barrel counts: Mother's 11,712 to Springfield Brewing Co.'s 2,670. White River Brewing Co. LLC, a contemporary of Mother's, rounded out the top three at 1,500 barrels, and newcomers 4 by 4 Brewing Co., Tie & Timber Beer Co. and Lost Signal Brewing Co. are bunched up in the 300-600 barrel range. However, it's fair to note Tie & Timber only had nine months of production since it opened in April 2018. Also, business models and distribution strategies vary widely, so these counts alone don't speak to the success within each establishment.
But it is telling as to how far Springfield has come in the brewing business.
With the deep roots for making beer in St. Louis, I compared the microbreweries there with the Springfield players. My takeaway: Mother's is to Springfield what Schlafly Brewing Co. is to St. Louis. That's not saying the breweries rival in barrel production; they don't. Schlafly, the city's craft beer leader, churns out 50,000 barrels a year, according to St. Louis Business Journal research. But that volume is more than double the next largest, 4 Hands Brewing Co. (24,000 barrels in 2017) and Urban Chestnut Brewing Co. (21,000 barrels).
However, in straight barrel production, Mother's peer in St. Louis is O'Fallon Brewery. Citing the St. Louis Business Journal's latest data, O'Fallon produced 9,000 barrels in 2017. So, in the St. Louis market, Mother's likely would rank No. 5.
The trend line for the country's roughly 6,300 craft breweries shows 5 percent annual production growth, according to the Brewers Association. In 2017, almost 1,000 craft breweries opened; Springfield was responsible for two of them. One more is on tap this summer: Hold Fast Brewing at an old fire station in center city.
Here's the carrot dangling before these small, independent brewers: Craft beer sales reached $26 billion nationwide in 2017, an 8 percent annual increase and now 23 percent of the beer market, according to the Brewers Association. By comparison, the total beer market dropped 1 percent by volume. The association typically updates the industry's annual stats at the end of March.
All stacked up
Shifting gears to another manufacturing segment, Jack Stack had a busy February.
The founder, president and CEO of SRC Holdings Corp. was in presentation mode – addressing three groups within days of each other, all in the name of entrepreneurship. He hosted a group of nonprofit executives learning open-book management at Great Game of Business, delivered a keynote at the Missouri Association of Manufacturers' annual conference and was the featured speaker for 1 Million Cups' five-year anniversary in Springfield.
I attended two out of the three. Here are excerpts from my live-tweet of Stack's keynote at the MAM event, a surprisingly open view at the way SRC does business and how it's planning for the future. Stack should be applauded for the transparency among his manufacturing peers and for practicing what he preaches in his open-book management model.
• On challenges: "Even as we have this incredible economy in front of us, we still have this drastic shortage. And that's people. We've got a shrinking group of people to draw from in manufacturing."
• On the start of SRC Holdings three decades ago: "We owed $8.9 million on the first day. Interest rate was 18 percent. We just thought it was a number we had to go out and beat. We didn't have all the answers."
• On weaknesses: "We realize right now our biggest weakness is the ability to attract and retain employees. Our critical number is now people."
• On problem solving: "When you make something your critical number, you have passion to figure out how to fix it."
• On onboarding: "We forget how nervous you get the first day on a job. … We learned it's really hard to do an exit interview when they don't come back from lunch."
• On baby boomers: "We don't let people retire anymore. Seriously. The only way to stop these baby boomers is to not let them leave."
• On attracting millennials: "Have a culture."
• On perception of the industry: "It's cool to make stuff. We need to go back and educate the youth on this. They don't know what we have."
• On his retirement plan: "It lasted seven days."
Seems baby boomer Stack is getting the same treatment as others in the retirement bracket at SRC.
Springfield Business Journal Editor Eric Olson can be reached at eolson@sbj.net.
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