Alvarium Beer Company Co-Founder Chris DeGasero was brewing professionally when he met homebrewers Mike Larson and Brian Bugnacki. Chris spent some time out of the brewing business working in the “white collar world” but was not feeling fulfilled. He connected with Mike and Brian and pitched the idea of launching a startup brewery.
Innovation Destination Hartford Website Curator Nan Price visited Alvarium Beer Company to learn more about the startup brewery.
NAN PRICE: Chris, tell us how the business got started.
CHRIS DeGASERO: I had brewing experience from my time working at City Steam and Cambridge House, but I never thought I’d be able to work for myself or with friends and open up a brewery. It seemed like such a daunting project.
I love recipe creation and I love the brewing process, but setting up an entire business and worrying about the whole build out really isn’t my cup of tea—I never saw how it would have gotten done.
When I hooked up with Brian and Mike, we knew our recipes were solid. We wondered: Do we have the skills? Do we have the resources we need to make this happen?
Usually you hear stories about a bunch of friends who think: We make great beer so let’s open a brewery. Our story was more like reverse engineering. We already knew how to make the beer. We had to figure out if it made sense for us to actually pursue launching a startup. We realized we did, so we moved forward the idea.
That was about a year ago. We’ve been trying to plow through all the paperwork and get everything built out. We’re hoping to open this spring.
NP: You mentioned it was “a daunting process.” Were you able to lean on anyone as you were getting started?
CD: We actually had a lot of help. One of the great things about the Connecticut beer community is that everyone is willing to help each other out. I made a lot of great contacts when I was working at City Steam and Cambridge House. Among those were Ben Braddock at Hog River Brewing Company and Joe Ploof from Hanging Hills Brewery, two new Hartford-based startup breweries.
We’ve always been able to reach out to each other when any of us have needed help. Joe helped us out with our business plan. He offered some information and ideas from his business plan, which helped us create ours. I’ve been indebted to him ever since.
NP: I’ve heard that time and again from the startup craft brewery community. It’s very collaborative. It’s great that people are working toward making Connecticut a destination for beer and building out the CT Beer Trail.
CD: Right. When I was first brewing, there were nine breweries in Connecticut. It’s just blown up.
NP: Let’s talk about each of your roles. How did your background help? Did one of you have more of the entrepreneurial drive than any of the others?
BRIAN BUGNACKI: I get a bit of the entrepreneurial drive from my family, which owned a meat company that served Hartford, Manchester, and Willimantic in the 1970s. The company went under in the 1980s and then last year my dad retired and brought it back as Bugnacki’s Specialty Meats, focusing on kielbasa.
There was some motivation with my dad having that entrepreneurial background. And now we’re launching companies at the same time, so we’re helping each other. We plan to have the kielbasa here at the brewery to enjoy with our beers and also for purchase to-go.
NP: Brian, have you gotten some tips and entrepreneurial advice from your father?
BB: He shared some general background accounting tips and told us about some mistakes he made so we could be aware of them. Sometimes learning what not to do is just as important as learning what to do.
CD: With regard to the entrepreneurial drive, I pitched the idea of starting the brewery, but I would say Mike has been a driving force. I’m more slow and methodical. I like to plan things. I feel like without Mike really pushing us it might have taken us twice as long to open up.
NP: Mike, do you have a business background?
ML: In a ways, yes, I am a degreed mechanical engineer currently working in the aerospace field, but my father bought into a scrap metal recycling business in the early 1990s. Our family took a company on the verge of failure in 1992 and turned it around completely. When he had sold out of it in the mid-2000s the company’s gross sales were over $3 million.
I had grown up during this time period and learned a great deal about how to build a business, the quick decisions that need to be made, and how to capitalize on a market when the time is right.
For the past 10 years, I have been in a variety of roles related to engineering, project management, and manufacturing; all in the fast-paced world of aerospace manufacturing.
NP: Brian, you’re coming from the sales side, how has your background help to shape the startup?
BB: I’ve been working at Twin Oaks Software Development in Berlin, CT for 10 years. I’m more on the support side, so I launch new clients that use the software to run their gyms and health clubs. At the same time, I’m tied in really closely with the sales team and guide gym owners on how to use our software to grow their business. I often go on site and do sales and demonstrations.
My background has been mainly in support but I also have a sales background, so I’ve learned a lot of tactics there. It’s helped me a lot to know what to watch out for while we launch Alvarium when dealing with vendors of our own.
NP: How did you fund the startup?
CD: New Britain has been nothing but kind to us. We applied for a $140,000 city loan, which bought our equipment outright. So we were thrilled with that. We also got a line of credit through HEDCO, Inc., so that’s kind of our ace in the hole for anything else. The rest has been private investment.
NP: There are three of you now. Once you open, do you plan add staff?
CD: Yes. Between the three of us we have a lot of bases covered. But right off the bat we’ll need servers. Beyond that, Brian will need a lot of sales in the beginning, so he’ll be out there testing the waters and trying to get new accounts. At some point, we’ll have to hire a sales manager and hopefully have a sales team helping get additional accounts.
NP: How did you choose the brewery’s location?
BB: Mike and I were raised in this area of central Connecticut, so we know it very well. We were aware that there was a void of local craft beer in this cluster of towns, and New Britain’s mid-sized city could support the model we wanted to pursue.
ML: When we first sat down and started to talk about building this brewery, location was critical to the success of the business. We looked around at several areas, but knew that New Britain had the aspects we had been looking for: location to major travel ways, a diverse and growing community, and a major transit system. The local government was the icing on the cake; from the chamber of commerce to the mayor’s office, we were welcomed with open arms.
CD: As the driving force, Mike had the connections with property managers in the area and also with New Britain Mayor Erin Stewart, who has been nothing but great to us. She wanted a brewery in New Britain for a while. Mayor Stewart opened up every possible door for us. She’s been in constant contact with us whenever we had a question or needed a connection with the New Britain Chamber of Commerce.
NP: With regard to distribution, do you plan to keep your beer local or will you distribute to other states?
CD: We’ve already talked about how we’re going to expand and grow. In the beginning, we’re going to keep it hyper-local. We don’t want to be opening up, just canning and sending everything out there and trying to get far and wide.
In the beginning, we only need 10 to 15 accounts in the local area. We want to work on building a presence and then slowly get to the point where we are throughout Connecticut and then New England and then hopefully we can go national.
If you talk to Mike, his idea would be having a canning line and really pushing our product out there. My idea of expansion would be going into downtown New Britain and having more of a brewpub where we can serve food, wood-fired pizza, have another taproom and then kind of grow from there.
ML: The canning is somewhere in the end of our one- to two-year plan. Taking the product and making it mobile is key for expanding brand awareness. We already plan on doing this on a smaller level with our crowler canning machine. This basically takes away the glass, preserves freshness, and provides an easy way to transport the product and enjoy it anywhere in a 32-oz can. This will be filled and canned individually right in front of you in the tap room. We will have this product starting day one.
We have a business plan that has been adjusted and revised for over a year. If you talk to us again in another year, it may be a completely different story.
NP: What’s the biggest challenge you’ve faced as a startup?
CD: Finding investors was very difficult. About 90% of the investors we reached out to wanted a stake in the company. That was tough because we really didn’t want to divest any of the company. The three of us have 33.3% and we want to keep it that way. We didn’t want to share anything else. We already put in enough sweat equity.
ML: Funding was a big one, finding anyone to help build your idea is tough. Whatever you’re planning for in building a brewery, double it. It was something I have heard from other brewery startups, and it’s pretty much true.
Logistics of building the brewery from scratch is another one. We didn’t have a general contractor to build this; the budget just didn’t allow for it. My uncles have been in the construction industry for a long time, so help on that end was essential.
I have always been very handy and motivated—naturally I took lead in coordination of the build out. We did what we could on our own and hired contractors for the essential pieces: plumbing, electrical, things that needed someone with the proper skills. It has turned out pretty amazing so far.
NP: Any advice for startup breweries?
CD: Before you even dream of opening up a brewery, work in a brewery. That’s the biggest mistake I’ve seen. A lot of people think opening a brewery will be awesome because they think they just get to brew beer with their friends. It is nothing like that whatsoever.
If you have the guts to open up a brewery and make this your profession, volunteer to do some grunt work at a brewery for a few months before you even start planning.
A lot of people end up doing the manual labor and messy work and they’re done after a week. Try making that your whole life—in addition to everything else you have to do to open up a brewery.
You want to get the know-how and have the hands-on experience. Brewing on that scale is nothing like home brewing.
BB: I would highly recommend going through the exercise of developing a business plan, tearing it down, and tweaking it several times. This phase took us several months and countless hours as a group. It won’t just be a document that is in a binder; it answers almost all of the questions you can think of before you even begin and you gain a much more in-depth knowledge as opposed to reading forums on a website.
Also, be prepared for a ton of “hurry up and wait.” This has been a challenge for me, as I am used to providing ultra-quick customer service; however, this is not the norm whatsoever. Learning how to politely follow up and nudge vendors without becoming a pest is a skill I am still honing in on during the building of Alvarium.
ML: My advice would be to have someone on the team, or yourself, who knows basic mechanical skills. When something goes wrong while brewing or serving, not many people are there to help at any given moment. You need to look at things and find a creative solution.
On a commercial brewing system you’re running pumps and monitoring fluid flow—things will go wrong. Stuck mashes, pump cavitation, clogged pipes or stuck valves, steam valve failures… the list goes on. Knowing what to do and how to react with it are key. It goes back to what Chris is saying, spend some time in a brewery, that time will be invaluable to your success.
Back Alvarium on Kickstarter: Alvarium Beer Company: Crafting New Britain’s Taproom