Oskar-Caliber

Amidst all of the exhibitor meet-and-greets and media conferences one had to figure out how to shoehorn into one’s understandably jam-packed schedule at Brau Beviale last November was a special tasting event hosted by an internationally renowned beer sommelier that wasn’t to be missed. Sure, it’s Nuremberg, Germany and beer tastings of one sort or another tend to be par for the course at the trade fair. But this one was fairly non-traditional as far as the predominantly European audience was concerned. All of the craft beers poured by sommelier Fritz Wülfing were American. And all were from cans.

Just a few years ago such a high-end tasting would’ve been beyond unheard of. Never mind the fact that until relatively recently American beers were scoffed at among Europe’s beer making and consuming elite. We have U.S. craft brewers—as well as the Brewers Association’s Export Development Program—to thank for turning that perception around. But the notion that high-quality artisanally crafted beers can be enjoyed from what was just a handful of years ago considered a less prestigious package has become a phenomenon that is beginning to cross oceans.

Ask European connoisseur Wülfing what’s responsible for such a mindset shift and he doesn’t waste any time naming names: Oskar Blues Brewing Co.

Late last year the Longmont, Colo. craft brewery celebrated the 10th anniversary of ushering in what it playfully refers to as the “Canned Beer Apocalypse,” when the then-five-year-old operation decided to single-handedly break a craft segment taboo and put its flagship Dale’s Pale Ale in cans. And now there are a few hundred craft brewers doing the same and they’re getting the attention of the old-world global brewing community. And no one’s more surprised by that development than Oskar Blues founder Dale Katechis.

“That’s awesome,” he laughs when told of the tasting at Ball Packaging Europe’s pavilion at Brau Beviale and how his brewery’s impact is a topic of overseas conversation. “I’d better get over there.”

But a company that just finished 2012 with 52 percent volume and 49 percent revenue growth—in the ballpark of where it’s been over the prior few years—bringing its tally to about 85,750 barrels, is no laughing matter. It now distributes in 30 states and, in the last weeks of the year, it opened a new brewery a good 1,500 miles away from its Rocky Mountain headquarters. The new site in Brevard, N.C. started producing on Dec. 12, 2012. More on that in a bit. First, let’s talk aluminum.

The Apocalypse Begins
Katechis recalls that when Oskar Blues first started putting its beer in cans, he never envisioned a time when his craft-brewing peers would so widely embrace the package.

“Back when we started doing it I don’t think we looked too far out,” he remembers. “There’s a lot that’s happened that I don’t think we really foresaw. But we did know that it was a superior package and that there were benefits.”

Among the chief benefits: Cans are lighter weight than glass, which translates to all sorts of logistical cost savings. Less weight on the truck means less fuel expended in the fleet. And then there’s the quality control element: Cans are completely opaque and therefore an impenetrable shield against light, one of the biggest enemies of good beer.

But with those benefits came some risks—primarily the prospect of being dismissed as a gimmick, with the product being overshadowed by the package that housed it.

“I had brewers laugh at me in the early days and call me ‘the can guy,’—it was a joke,” Katechis admits. “But, you know, it was kind of funny to us, too! We laughed about it.”

But the Oskar Blues team chuckled for a different reason.

“We were laughing because we knew that we were just small enough that we were able to risk this project,” he reveals. “At the end of the day we were like, ‘You know what? If this thing doesn’t fly, we’re going to have a bunch of canned beer that we can drink.’ And that’s the way we attacked the project.”

Then the laughter stopped.

“[Things changed] once the barrier or the consumer perception myth was pulled away and the brewers felt a little more comfortable putting their beers into what had historically been considered an inferior package,” Katechis says.

While the extent to which other craft producers now package in aluminum may surprise Katechis, what doesn’t is the fact that they do it in the name of protecting the fruits of their labor. “It doesn’t surprise me because as craft brewers, that’s all we’ve ever really done is sold quality,” he explains. “We base our souls on the quality of our ingredients. If there’s a way to safeguard that with packaging as it sits on the shelf, then it’s a no-brainer.”

However, doesn’t more craft operations canning their beer mean more competition for the brewery that was there first? Maybe so, but Katechis welcomes it with open arms.

“I’m less concerned with them taking my market share, since we’ve come from a place where, at one time, we were the only ones in the [canning] category—we created the category,” he offers. “When you wanted a good craft beer [in a can] the only place to go was Oskar Blues; now you’ve got hundreds of choices and I think that’s great…I surely didn’t predict it but it’s great to see because the more brewers that are canning their beer, the more it helps legitimize the package. And it’s going to benefit us all.”

Expanding Distribution
In the early days, it was just retailers and consumers Oskar Blues had to sell on the can concept, as the brewery, at that time, was 100 percent self-distributed. It’s a common practice among new breweries, mostly because many wholesalers wait until a brand establishes itself before they let it in their houses. It was even more of a necessity a decade ago before the vast majority of distributors found religion about craft beer. Katechis, however, says self-distribution was an intentional, tactical move on Oskar Blues’ part.

“We knew we had to be the ones to deliver the beer to the retailer,” he notes. “We wanted to look them in the eye and crack open a can to get their reaction—and we knew they were going to laugh. We also knew that we had to be the ones to educate them and stand there in their store until they tasted the beer. We made it a rule that any time we dropped off samples, we stood there until they drank it. If they didn’t have time to drink it then, we would come back. We wanted to be able to describe to them our beer, why it was in a can—and we did it one at a time.”

That was back when Katechis himself was canning the beer two at a time on a Cask Systems manual canner in a barn adjacent to the original Oskar Blues brewpub in Lyons, Colo. He’d then put it into cardboard flats and drive it from location to location. Of course, things started to really take off for the brand and it was time to work through a network of distributors—ones, Katechis says, that would allow the brewery to educate them on the package.

“To be honest with you, it was kind of easy,” he remembers. “Once we started seeing some success, distributors wanted us in their books because we added a point of difference. Even though we were the only ones in the [canned craft] category, we were the leader in the category. And distributors want the leaders of categories in their portfolios. Getting distributors has never been an issue for us and I’m thankful for that.”

Even so, the brewery has tried not to be too hasty about opening new markets. It recently just ended a four-year territorial expansion “hiatus,” as Katechis calls it, during which time it focused solely on existing markets.

One of the new markets it opened in the past year held personal significance for Oskar Blues’ founder: his home state of Alabama. “I had been getting calls from high school and college buddies for years as to why we weren’t selling beer in my home state,” he says. “Alabama was more of a touchy-feely launch to satisfy some buddies. We have just great distribution partners and a ‘get ’er done’ mentality all around.”

It also opened Ohio and has found considerable success there as well. Just prior to launching those territories, it opened one of the most formidable markets in the country: Chicago. So, how did that go?

“It’s been incredible,” raves Bob Collins, president of Aurora, Ill.-based Windy City Distributing, which in September 2012 rolled out Oskar Blues’ brands in the eight-county Chicagoland area, including the city proper. “It was probably one of the most exciting and successful craft beer launches in Chicago ever. They came out of the box and we did just shy of 70 different promos and tastings. It was awesome.”

But the fanfare around the launch was only a small part of the story. “As exciting as that kickoff was and all the products that we put in the market, equally exciting is the consumer reaction,” Collins adds. “It all pulled off the shelves, off displays and literally every single customer reordered.”

Collins reveals that Windy City’s goal is to move about 60,000 cases of Oskar Blues for calendar year 2013.

The Chicago launch was an empowering moment for Katechis and his team. “It gave us some confidence to say, ‘You know what? Wow, we can go into a big market like this and launch it and support it and supply it.’ We were in the middle of getting ready for the Brevard opening; we had capacity and we needed a home for it.”

Which brings us back to that new Brevard, N.C. brewery.

Oskar Blues found itself at a capacity crossroads. It had hit the limit at its Longmont, facility and it essentially had to choose among three options: build a new facility in Longmont, add on to its existing building—the company had just recently completed a $4 million improvement project in Longmont, adding 14 additional 200-barrel fermenters and two 400-barrel bright beer tanks and a new 300-can-per-minute KHS can line—or build a brewery on the East Coast to capitalize on shipping savings. After all, 45 percent of its beer is sold in the Eastern U.S.

“The only place I was willing to travel to was this area, Brevard, which is at the base of the Pisgah National Forest,” he says. “We didn’t really shop for locations, we just went to Brevard and said, ‘Well, if we’re going to build a place on the East Coast, this is where it’s going to be.’”

Katechis spends about three or four days each month at the 30,000-square-foot Brevard location, the opening of which made Oskar Blues the first of a trio of well-known craft breweries to open new operations in the region in and around Asheville, N.C. Both Sierra Nevada and New Belgium are building new production facilities in the area. The region’s got a thriving craft beer scene, with Asheville having been thrice-named “Beer City, U.S.A.”—the third time sharing the honor with Grand Rapids, Mich.  

Katechis reports that Oskar Blues has received a warm welcome from the existing brewers in western North Carolina.

“That brewing community is no different than the one we experience and have out here in Colorado,” he observes.

Most of the existing brewers aren’t worried about higher-profile (by craft beer standards) operations potentially stealing any of their thunder. “The general feeling is that [Oskar Blues] will make Asheville and the surrounding area even more of a craft beer destination than it has already become,” says Win Bassett, executive director of the North Carolina Brewers Guild. “Oskar Blues’ beers have been prevalent in the state for quite some time, and the new brewery is not here to take away shelf space or tap handles from local brewers. It’s here to distribute fresher beer on this side of the country.”

Oskar Blues actually is working on a collaborative brew with nearby Asheville Brewing Co. Doug Riley, head brewer and owner of that Asheville-based brewery, is looking forward to the imminent release of their joint brew—an imperial coffee brown ale—and is pleased to have Oskar Blues’ new operation in nearby Brevard, which is about 35 miles from Asheville. “Their beer’s been here a while, so I don’t think it’s going to affect the local brewers at all, really,” Riley says. “It’s great that they’re coming to the area; it just adds validity to our little town.”

Leah Wong Ashburn, vice president of Highland Brewing, also in Asheville, notes that her brewery would be open to a collaboration with Oskar Blues’ Brevard team as well. “Overall, Oskar Blues is part of the wave of big [craft] brewers coming in and that’s going to raise the profile of Asheville as a beer town exponentially,” Ashburn says.

With Brevard up and running, the company expects to produce close to 130,000 barrels next year, an increase of nearly 50 percent. It’ll brew about 80,000 of it in Colorado and the other 50,000 in North Carolina.

That’s quite an evolution from the brewpub that hand-canned in an aging barn not too long ago. What a difference a decade could make. So what about the next 10 years?

“I get asked that a lot,” Katechis says. “I certainly couldn’t have predicted the past 10 years, nor did we have a road map or a game plan, other than just working hard and doing what we love and having fun doing it. We’re just dealing with bigger numbers now. What that’s allowed us to do is really get into areas that are fulfilling about the job—the things that we didn’t [used to] have the luxury of, like providing for a large staff of people and becoming a way that they’re earning their livelihood.” The company also now pays 100 percent of its employees’ healthcare coverage and offers a 401(k) plan and extensive wellness program.

“I hope that we would be able to continue, year-in and year-out to create a better place to work. That’s what it takes to attract good people. Good people want to work for companies like ours,” he says.

And, most importantly, it’s an ongoing learning experience for everyone involved. “We love this university of craft beer and we’re getting better at it every day and that’s still fulfilling,” Katechis notes. “I hope the next 10 years look something like the past 10 years. We’re getting to make beer and put smiles on people’s faces.”

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