Case Study: Great Notion Brewing | Brewing Industry Guide

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Case Study: Great Notion Brewing

Thanks to a commitment to growing deliberately and strategically even when faced with outsized consumer demand, Great Notion Brewing had an amazing first year and is headed into the next phase in a long conversation that started in a garage not long ago.


The origin story of Great Notion Brewing sounds like the premise for a running bit on Portlandia. Three middle-aged family men who all live on the same block in suburban Portland, Oregon, get a little tipsy on homebrew in one of the guy’s garages one night and decide to start a brewery together.

On the show they’re likely still sitting in the garage, their schemes getting progressively more elaborate as their opinion of the beer gets progressively better. But in real life, the guys behind Great Notion not only follow through with their plans; they have also pioneered turbid New England–style IPAs in Portland; were named the number four best new brewer in the world at the 2017 RateBeer Best festival; won a silver medal at the 2016 Great American Beer Festival in the American-style sour ale category; and are nearing completion on a new 20,000-square-foot brewery, restaurant, and taproom.

“It’s been a pretty amazing first year,” says Great Notion Brewer and Cofounder James Dugan, with just a touch of understatement.

Great Notion has succeeded, in large part, thanks to its three founders’—Dugan, along with Andy Miller and Paul Reiter (above on our cover)—commitment to growing deliberately and strategically, especially when faced with outsized consumer demand. While some may have shifted strategy to prioritize rapid expansion to capitalize on as much growth as possible, Great Notion’s owners are steadfast in their measured approach and in their dedication to the company’s core values of family, creativity, and quality. It’s by these metrics that all decisions are measured. To hear them tell it, the build-out of the new brewery and restaurant isn’t driven by the desire to sell more beer as much as it is about better serving Great Notion’s customers through exactly the same methods as they’re operating under now, namely keeping the brewery’s tap lines supplied with inventive, well-made beers while also self-distributing packaged beers through frequent release events.

“The biggest thing for us is selling directly to customers and side-stepping the whole three-tier system with distribution and retailers,” Reiter says. Says Dugan, “We’re taking the model that seems to be working really well for a lot of breweries back East and in Southern California. Even then, we’ve had to limit total crowler sales for every beer we make to about 250, which is about a third of a batch, and we still sell out in a few hours with lines outside the door. We’re moving through batches of beer incredibly fast, and Andy and I are always playing catch up just trying to keep our core brands on tap.”

Dugan says it’s not unusual for he and Miller to leave work on a Friday with full serving tanks, only for them to be empty again by Monday. Moving from the 7-barrel system that they have now to a 30-barrel brewhouse will not only help to balance the brewery’s production schedule—most of Great Notion’s beers take at least two weeks to make, yet the majority of batches sell out in just one week—it will also free up Miller and Dugan to expand their barrel-aging program and experiment with new recipes. The addition of a 4-head canning line will also allow Great Notion to package and sell 16-ounce 4-packs, giving its crowler machine a much-needed break. “Our No. 1 goal is to keep [flagships] Juice, Jr.; Ripe, Blueberry Muffin; and Double Stack on all the time, which is impossible for us to do now,” Miller says. “I’m also looking forward to having the tank space to do some stuff that may bring some other people in, too, like saisons, table saisons, and bottle-conditioned Brett saisons.”

It’s almost as if Great Notion’s brewer- driven, quality-first approach is modeled after a scaled-up homebrew operation, which is not entirely by accident. “That’s all we know,” Dugan says.

Scaling Up

Dugan and Miller were both active homebrewers who happened to live across the street from one another. Being a good neighbor, Dugan agreed to store Miller’s brewing equipment when Miller and his family temporarily moved out of their home during a remodel. Miller would come over for brew sessions, and that’s when the pair got serious about going into business together. Dugan and Miller had a number of unique recipes between them, including an early version of what would become Double Stack, a “Northwest breakfast stout” aged on Vermont maple syrup and locally roasted coffee beans. Dugan was also adept at brewing New England–style IPAs, early batches of which he fermented using yeast cultivated from cans of Hill Farmstead beers and The Alchemist’s Heady Topper.

Dugan and Miller were all-in on the brewing side but were unsure about how to proceed with regard to securing funding, organizing the business, and navigating many of the legal and financial aspects of starting up. That’s when a fortuitous encounter with neighbor Paul Reiter brought the third partner into the fold. Reiter and his family were walking home from a pizza restaurant one evening, when “one of the guys said, ‘Hey, come have a beer and let’s let the kids play for a bit,’ ” Reiter recalls. One beer led to another (it was Double Stack, if memory serves), and talk turned to plans for the brewery. Reiter, who has an MBA and a diverse business background, expressed an interest and offered his assistance in managing the regulatory and financial aspects of the operation.

“I have a passion for sales and marketing, James has a creative focus to brewing, and Andy has more of a science and research skill set,” Reiter says. “Having three of us with different specialties and focuses is a major differentiator.”

The guys met Wednesday evenings at a local taproom or beer bar to work on their business plan. Whether to rent or buy a space was one of their first big decisions. They spent nearly a year looking for the right spot in which to set up shop—everything from large warehouses in industrial parts of town to smaller, older facilities that needed a lot of work—when a connection in Reiter’s professional network came through with a tip about an existing brewpub that might be for sale.

Even though a brewpub wasn’t in their original business plan—they were going to bring in food trucks and focus on the beer—the opportunity to purchase the only brewpub on a busy street in Portland’s popular Alberta Arts District was too good to pass up. Plus, it was a turnkey operation.

“The day after we purchased the place, there was revenue coming in,” Reiter says. “That doesn’t happen for a lot of startups.”

The partners finalized the purchase in July 2015, but would have to wait until after they received Alcohol and Tobacco Tax and Trade Bureau (TTB) licensing and permits to open as Great Notion Brewing and serve their own beer. In the meantime, they focused on improvements such as updating the decor, bringing in an array of guest taps, tweaking menu items, and otherwise getting to know the business and its employees.

“Every day we did something a little better to keep the place moving in the right direction until, on January 1, 2016, we were able to open as Great Notion Brewing,” Reiter says.

Although they initially didn’t plan on having a restaurant, operating as a brewpub has proven to be a valuable and consistent revenue stream for Great Notion and has helped bring more customers through the door and introduce them to the brewery’s beers. New Chef Ryan O’Connor has also made his mark in the kitchen. The burger is a crowd favorite, for example, and Great Notion also won a local award for its fried-chicken sandwich.

“It definitely keeps people here drinking longer if you have good food, too,” Reiter says. “It’s cool to be known not just for great beer but also as a great place to bring your family and have dinner.”

Where revenue from food sales typically makes up at least half of a brewpub’s business, and in many cases more, Reiter says beer sales account for the lion’s share of revenue at Great Notion, to the tune of about 60 to 70 percent of total sales, including to-go beer.

Self-distributing through the brewpub also allows Great Notion to realize an even higher profit margin on its beers, which—in addition to packaged beers—are served as either 10.5 oz or 13.5 oz pours, with most priced at $5 or $6.

“If you compare us to other breweries across the country, I think we’re right in line, but if you compare us to other breweries in Portland, we are a little bit on the higher side,” Reiter says. “It’s not because we can; it’s because we put a lot of effort into our beers and we do spend a lot for high-quality ingredients. The amount of hops we use is probably triple compared to what most people use in their IPAs, and we go extremely heavy on the dry-hop process, also with the fruit ingredients.”

Taste the Rainbow

Great Notion’s core lineup is built around distinctive, well-executed beers that lean toward styles and flavor profiles that aren’t widely available in the Portland market. There are culinary-inspired beers such as Blueberry Muffin, a sour ale with additions of blueberries and other adjuncts; the brewery’s Zest Berliner Weisse series made with various citrus fruits; Double Stack; and French Toast. The brewery is also continually evolving and experimenting with its award-winning barrel-aged sour ale program.

“You should see our flight; it looks like a rainbow,” Reiter says. “It’s beautiful.”

But the gold at the end of Great Notion’s rainbow has to be Ripe; Juice, Jr.; and J.B.—three examples of the brewery’s juicy, turbid New England–style IPAs that have since taken the town by storm.

“That was our main goal,” Reiter says. “Bring that style to Portland and blow everyone’s mind but also have some awesome sours and fruited beers.”

Some doubted that New England–style IPAs would succeed in a beer landscape dominated by hoppy Northwest-style IPAs. Reiter recalls that one early customer demanded his money back and declared that the style would never fly in Portland. The bulk of Great Notion’s customers disagreed, however, and the beers quickly gained a local following. Earlier this year, Willamette Week named Juice, Jr., as its 2017 Oregon Beer of the Year.

“They said we changed the whole Portland beer scene,” Reiter says. “It’s funny because now, sixteen months later, there’s probably a dozen breweries in Oregon that have a hazy IPA on tap. When we opened, there weren’t any.”

To be sure, the success of Ripe; Juice, Jr.; J.B.; and the brewery’s other hazy New England–style IPAs helped put Great Notion on the map and generated a ton of interest. It takes more than one hot beer style to justify a new 20,000-square-foot facility, however—about 80 percent of which will be dedicated to production, while the rest houses a large brewpub and retail area. An investment like that represents a belief in the lasting strength of the core business and, for Great Notion’s founders, the next phase in a long conversation that started in a garage just a few years ago.

“We don’t think that style is going away, and as long as we’re seen as first or the best at it, then we’ll succeed,” Reiter says. “We’re also not a one-trick pony. Everyone thought we were best at making hazy IPAs, but then we took home a silver medal in American sour ales at GABF. We won the second best sour beer in the whole country.

“We’re also in our forties, and we each have two kids. It’s time to go big or go home,” he says. “We’re not looking to have ten more careers after this. We’re determined.”

Tom Wilmes October 17, 2017

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