It’s a familiar refrain from brewers across the country: Once the doors open on the first day, it’s rare that they ever go back to look at the original business plan, except for nostalgia. The beer industry is growing at a breakneck pace, and often what was forecasted modest growth moves at an accelerated pace. All brewery owners can do is keep up with demand, seek out the right opportunities for growth, and take risks when necessary.
Jacob McKean knows this all too well. An avid homebrewer and former employee at Stone Brewing Co. in Southern California, where he worked in the communications department, he founded Modern Times Beer in San Diego five years ago. During the start-up period and throughout the brewery’s run, he’s often chronicled life behind the scenes, posting essays on the troubles and endless hard work that goes into an entrepreneurial venture to employee staffing. His honest, bare-it-all takes helped forge the brewery’s reputation even before it opened.
Recently, he took a few minutes to reflect on the past five years and what he called “a truly insane past few months” during which he saw the opening of The Dankness Dojo in Los Angeles and the Belmont Fermentorium in Portland, Oregon. These join the Lomaland Fermentorium, the original location in San Diego, and the nearby Flavordome, a taproom. For a small business rooted in Southern California, it makes sense that a San Diego brewery would expand into Los Angeles.
The city has seen a beer explosion in recent years, with new breweries coming on line monthly, a robust area-driven guild, and outposts from other established breweries, including Firestone Walker Brewing Company. Plus, it’s an easy enough (traffic depending, of course) drive from the home base.
Portland is a different story. Almost 1,100 miles to the north, the city has a deep-seated beer culture, loyal patrons, and a history of shunning brewers who could be seen as carpetbaggers.
But McKean says he was looking for a space up there because he’s long been a fan of the city, thanks to its varied and diverse food and drink scene as well as its progressive politics. “Early on in the dream phase [of the business], Portland was on my mind. I love it as a person and as a beer drinker, and I knew I wanted to be a place with a strong beer culture.”
Being based in San Diego, however, he opened Modern Times there, but always kept an eye to the north. So when the owners of The Commons Brewery—a much loved and celebrated brewery—announced that it was closing for a variety of reasons, the owners reached out to McKean, asking if he’d like to take over the space in a largely turnkey transaction.
“We talked over the course of a few months, and I kept thinking there would be some snag that would come up and make this not make sense, but that just never happened,” he says. “It was an opportunity to help a friend and accomplish something for Modern Times.”
From start to finish, the opening of the Belmont Fermentorium took just ten months. By comparison, the Los Angeles location took two and a half years.
“On the spectrum of building things, moving into a space that is already a brewery rather than converting a warehouse is preferable,” he says wryly.
As for feeling out of place, he says that in the weeks since Modern Times opened in Portland, the reception has been overwhelming.
“We’ve already quickly established that we fit in pretty well. It was something we gave a lot of thought to early on because a lot of people told us it can be tough for out-of-town breweries that come in, but everyone we talked with thought we could be the exception. They cited things such as our design aesthetics and commitment to local art. And certainly on the beer side, we have some unique things that didn’t already exist. Also, people like our progressive company values, such as that we’re employee-owned, and our commitment to environmental stability—two things that fit in well in Portland.”
Last year, Modern Times adopted an employee stock ownership plan (ESOP), and right now 30 percent of the company is owned by employees, McKean says, noting that it was his proudest moment as an owner, so far.
“I didn’t set out to start a business for the sake of doing it. I was convinced that I could mesh my personal values and my business values. I believe in transparency, warts and all. It was the right thing to do because it allows us to have an honest dialogue with the public, and that’s a tremendous value to the company. We have so many rock-star employees, and with an ESOP, we can give people a chance to benefit because they are the reason we have grown.”
One other benefit is a two-month paid sabbatical that employees who spend five years with the company are eligible to take. As employee number one, McKean says he’ll be taking his sabbatical in July, with others to follow afterward.
Recharging the personal batteries sounds like a good idea, especially with all McKean has planned for the coming years. Modern Times is working on an almost 32,000-square-foot Anaheim, California, location that is being called Leisuretown. It’ll be a foeder-heavy facility with a restaurant, as well as food stalls from local restaurants, and a hotel-style pool complete with a bar, movie screen, and “sweet floaty toys.”
Beyond that, McKean says he’ll be announcing new restaurant and tasting-room concepts throughout the brewery’s footprint in the coming months.
Modern Times made 50,000 barrels of beer last year and has a distribution footprint throughout the West Coast into Nevada, Idaho, and a few other spots. Going forward, he doesn’t plan to send beer into new spots.
“We’re not growing distribution. Our wholesale side has seen enormous growth, but it makes sense to throttle that back and focus on the tasting rooms. All evidence is that it’s the right strategy because it’s going to be hard to be a national, or even super-regional, player these days. But there is demand for unique spaces that focus on the hospitality side.”
He notes that even in the five years since he opened, the competition has become more fierce and that focusing on the consumer experience is now more important than ever, along with diversification.
“I prefer a competitive environment—it takes friction to sharpen a knife. I regard the work that others are doing as innovations that are keeping us all relevant. Competition can be friendly, and I respect the work others are doing. If anything, it’s allowed me to be part of an industry that is constantly striving to get better.”
It’s not just beer that he’s focused on. While beer is associated with afternoon and evening drinking, McKean is also looking at the morning hours. That’s playing out with his Modern Times Coffee line, something that he describes as an impulse decision during his initial build-out. Homebrewing as a hobby had become too time-intensive, but roasting his own coffee beans was something he could do quickly. So he bought a roaster for the brewery, and since then, that side of the business has taken off and allowed him to get the brand into new areas.
With all these plans in the works and irons in the fire, McKean says that listening to the customers is still important, giving them what they want and listening to their encouragements and criticisms.
“It’s hard to know where everything will go, but it’s not our goal to be the biggest, having growth for growth’s sake,” he says. “I feel good that we don’t have our eyes on world domination.”