Over the past decade, Wyoming’s Roadhouse Brewing has built a reputation for dedication to both quality and sustainability—and earlier this year, it acquired neighboring Melvin to form a new group called Pure Madness. Here, the Roadhouse cofounder talks about confident growth, the challenges of integration, and saving green by going green.
CBB // Give me the two-minute history of Roadhouse. What drove you to launch a brewery where you did, making the kinds of beers that you now do?
CC // We started in 2012 as a brewpub. We didn’t get into production brewing until 2018, and we started the brewery mainly out of pure passion. I grew up in the brewing world—worked at Dogfish Head when I was younger, I’m from Delaware—so I kind of saw that progression in the mid-90s, then got way into homebrewing and entering competitions, things like that. So that led to the idea that I wanted to start a brewery. But I didn’t want to do it unless we did it as the brewpub model. That’s how I teamed up with [cofounder] Gavin [Fine]. I actually approached him back in 2011 and said, “Hey, you’ve got an existing restaurant here. It’s a cool concept, but I think if we built a brewery inside the restaurant, you could handle the food, I could handle the beer, and I think it would work well for both of us.” And so that’s kind of the origin story of Roadhouse.
CBB // What pushed you into production brewing in 2018? By that point, craft beer was already getting pretty constrained compared to the 2015, 2016 halcyon days of “We’re gonna grow forever.” That seems like a daring time to undertake a capital-heavy expansion into a production brewery.
CC // We don’t necessarily model our business based on macro market trends. We take them into consideration, of course. I can’t ignore the economic conditions that are out there and the trends in beer. But ultimately, our goal is to outperform the trends. So, in 2017, when we were planning the expansion into production brewing, we had seen so much robust growth at Roadhouse, and we were capped—we just physically couldn’t make more than 1,000 barrels [a year] at our old facility. So, it was really a decision to better serve our local market, Jackson Hole, and be able to actually get our product in a lot of places that were asking for it and throughout the state. Wyoming is small population-wise [but] large geographically, so we have to sell beer into other states—and frankly, that’s been great for us. We’ve done very well in Colorado, Utah, Idaho, and Montana, and our surrounding area. So, it wasn’t necessarily us reading the tea leaves and seeing some huge market opportunity. It was, “We see demand for our product, we see it growing, we think we make a very good product and that people want it if we can get it in their hands. So, let’s try to do that.”
CBB // When you started to launch the production side of the business, how did you decide on a scale for what that was going to be? Obviously, you don’t want to launch an entire new brewery that is undersized for what you could eventually accomplish, but you also don’t want to create a ton of excess capacity either. How did you make those kinds of calculations?
CC // There’s a lot of financial models involved, in terms of the various economy-of-scale points that are necessary to achieve profitability and [to] support a staff that is necessary in order to have a regional sales team and some of the other back-office support. We didn’t want to get stuck in between two business models. We didn’t want to essentially have a production level that required significant resources, but [where] we didn’t have the sales volume to actually pay for them. So it was partly based on an understanding of what we felt like a reasonable growth assumption would be over a five- to seven-year period, and then also, where did we need to get to, to create a successful company from a scale standpoint.
Our first threshold was we need to get to 10,000 barrels in a relatively short period of time because below that, you’re kind of struggling with people and resources. But we also wanted enough growth beyond 10,000 that when we were making the initial investments, we weren’t having to go through huge costs and expense of, let’s say, ripping certain things out of the brewery in order to redo them and scale up. So, for us, 20,000 barrels was the capacity we wanted to build. I think we did 2,700 barrels our first year, over 2018–19. We did a little over 10,000 last year. So, we’ve grown close to 400 percent in that window of time, and we’re continuing to grow. And we have the capacity for it, with or without the Melvin acquisition.
CBB // So, let’s talk about the Melvin acquisition. Melvin as a brand is certainly one that rode the cusp of IPA through the past decade, pushing flavor, pushing contemporary brewing techniques, and building a brand that was pretty outrageous in a lot of ways—a company that grew fast and had its own challenges because of that fast growth. I’m curious how an acquisition like that happened. If I were to look at Melvin being acquired by another brewery, I would have thought that it might have happened with a larger brewery than Roadhouse. What drove you to then push for this acquisition? What made it make sense?
CC // Yeah, what we saw was a strong brand, quality products, a great facility in terms of their physical assets, equipment. And great people—they’d hired a lot of really high-quality people as well. So the bones were all very good. I think there were quite a few larger breweries interested in acquiring the company. I don’t know who they were or all the specifics about it, but I know we weren’t the only [company] trying to buy Melvin. So, it attracted us in terms the quality of their brand, their distribution network, their people, their products. But also, there were a ton of synergies. We have a very strong leadership team at Roadhouse at the executive level—COO, CFO, production manager, brewmaster. The incremental cost of running another brewery only 35 miles away from where we are … Let’s just say the two operations together were significantly more efficient than they would have otherwise been. So there were tremendous economies of scale in terms of our people and our leadership, lots of shared resources, distribution network. While we overlapped in quite a few states, they also were in about 15-plus states that we weren’t in, and we’re kind of slowly turning some of those on right now. Roadhouse just opened up Texas; we have moved into the L.A. market; we’re moving into Georgia and pretty near-future [into] Illinois. But the most important thing to us when we looked at the company was the quality of their products, the quality of the brand, and ultimately the people who were there.
CBB // Merging these two has to be an interesting challenge. Talk to me about working toward that integration and some of the ways that you all have made that integration more successful.
CC // At Roadhouse, we’ve always been a values-led organization, so we have a couple of core values that guide us. And we think that they’re somewhat universal—meaning, we didn’t think there was going to be huge objection. When we started to integrate some of these values into Melvin, they’ve been embraced with open arms. Merging cultures is difficult, and it takes time because the primary factor is trust, and trust takes time to build. So, we’re in the process of doing that. And it’s going well, but any time you come into a company that’s been operating for seven or eight years, and you try to shift an organization culturally, it requires a couple of things—trust, but it also requires patience, right? So, we’re asking for the people in both of our organizations to trust us, then our job as leaders is to exercise a little patience in that process. But it’s going well.
You know, sustainability is a core value of ours. Having fun is a core value of ours—if you can’t enjoy showing up and doing what you do, then we’re probably not the right place for you. We want people who are passionate about their work and really get joy out of their craft. Pride is another one … just being proud of what we do, the products we produce, and the space that we play in. So, we’re not talking about sweeping, crazy concepts here. To me, this is pretty basic stuff that people in any organization should be able to embrace and get their arms around.
CBB // Let’s switch gears and talk a little bit about sustainability. Roadhouse is a B Corp. This kind of focus on sustainability and being a good corporate citizen is something that you have committed to. Talk to me about that as a core component and how that fits into the challenging margins that the beer industry presents.
CC // The B Corp certification was certainly nice to get. It wasn’t something that we targeted specifically. We didn’t say, “Hey, let’s go do the following things so we can become a B Corp.” It just so happened that a lot of our core values created Roadhouse the way that it was, and we found out after we learned about the certified B program that we already qualified, like with 95 percent of the categories. So that was an easy transition to make. And a lot of these things are just tried-and-true. I equate sustainability with efficiency. So, I don’t necessarily see it as a give-up in any way. All of the things that we do for sustainability at our brewery, whether it’s CO2 recapture or cooling our cold storage with outside air seven months a year, nitrogen generation, solar—all of these things actually save us money and make us more efficient. They have the added benefit of being sustainable.
We’re not here to try to beat our chest and say, “We, did X, Y, or Z, and our environmental footprint is less because of it.” I mean, yes, that matters to us because sustainability is a core value of the company. But it also has to make sense financially. And, oftentimes, those two work really well together.
This interview has been edited for clarity and length.