Innovation Destination Hartford Website Curator Nan Price met with Michael McManus, Owner of Powder Hollow Brewery, to find out how he turned a homebrewing hobby into a successful Connecticut brewery.
NAN PRICE: Most breweries start with a homebrewing story. Did yours start that way too?
MICHAEL McMANUS: As a child I remember my grandfather always made wine at home. When I was a little older and I was in college, I enjoyed beer more than wine and I thought: Wouldn’t it be really cool if I tried making my own? I bought a homebrew kit, bought every book I could, and just really ran with it as a hobby.
NAN: How did the hobby become a business idea?
MICHAEL: When I graduated college, I got an awesome job at this huge engineering firm in Baltimore, MD. On day one I said: This is not going to work out. Immediately, I went home, started planning, and decided to open my own business.
NAN: At what point did you realize your beer was truly marketable?
MICHAEL: I was in college when I started brewing and of course all of my friends thought my beer was great. A few years after that, when I was still in Baltimore working as an engineer, that’s when I decided: All right, if this is truly going to happen then the product needs to be perfect.
I would invite my friends over and tell them they could drink as much free beer as they wanted. But I wanted an honest opinion, so I created a blind taste test—basically set up a bunch of different beers that made by professional brewers and me. I had people choose which one they liked so I would know if they were truly telling me whether it was good or not.
When I first started it was 50/50 my beer versus others. I kept brewing and brewing until more than 300 batches in everyone started picking mine every time. That’s when I saw that my homebrewing had gotten to the point where I could actually do something with it and I started raising the capitol to build a brewery.
NAN: How did you fund the startup once you decided to launch?
MICHAEL: I funded most of it myself and then I came up with a return program that I offered to other businesses in the area. About four restaurants gave me capital to help me get started. So I remain 100% owner in the company and the restaurants that invested basically get a percentage returned until their loan is paid back. This way it’s more of a business loan that’s not through a bank and the restaurants know it depends on the business succeeding. They pretty much invested in me, not the company.
NAN: Where did you get that kind of business background?
MICHAEL: I think it was always kind of in me. The way I think just makes sense for business.
But I also had some training in college. I went to a very small school in Vermont. One of the biggest things it takes pride in is teaching you that you can do it on your own. So I took a lot of business classes and financial classes and a lot of classes that taught you that you don’t need to depend on others, you can do it for yourself.
NAN: It seems like that kind of shaped your business and entrepreneurial mind.
NAN: Did you work on generating a buzz before you opened?
MICHAEL: The day the town of Enfield approved my location is the day I made all my social media. I put the word out about who we were, what we were going to do, and where we were going to be. Within two weeks we had more than 3,000 followers.
Social media is a huge bonus for anyone starting out. You can get people to know who you are and what you’re going to do before you even break ground. And that’s something we really couldn’t do on a budget 20 years ago.
NAN: Powder Hollow Brewery opened in 2014. Tell us about the growth and business reach.
MICHAEL: The first eight months we only operated in our tap room. People came, sampled the beer, and bought their pints and growlers to take home. Before we started, I knew I wanted to do distribution. I wanted to be able to have our tap room and send beer out throughout all the different restaurants and liquor stores. However, before we did that, I wanted to ensure that our product was proper and we didn’t bite off more than we could chew.
NAN: Your beer is available in dozens of liquor stores and restaurants.
MICHAEL: We’re in about 200 locations right now.
NAN: And those are all in Connecticut?
MICHAEL: Yes. All in Connecticut.
NAN: Do you plan to expand out of the state?
MICHAEL: We can barely keep up in Connecticut! But the master plan would be to go as far as we can.
We’ve gone from a team of three people to 15 people—and we are family here, so why wouldn’t I want to extend it out, hire on more people, and go out as far as we can?
If you look at the bigger breweries, like Dogfish Head Brewery, you can see how they grew and built their team and how they operate. That’s exactly what I want. I want to have this huge team under us where everyone works together and we can just do our thing.
NAN: The brewery does a lot of local collaboration. Are you finding that’s helpful for marketing?
MICHAEL: If we’re going to sell our product to a restaurant, why not work with that restaurant? We certainly didn’t come up with the idea of working with restaurants in the brewery, it’s just a perfect fit. We like to make beer. We don’t want to make food. Why not let the people who love making food showcase what they do in our location? It’s the exact same concept, the restaurants basically bring in an outside product and sell it. So we’re just kind of reversing the roles and working together.
NAN: We talked a little bit about the future. Do you have a two- to five-year forecast?
MICHAEL: It’s very difficult to have that kind of forecast with a brewery. Some breweries operate the way they are, and that’s great. And other breweries are in a never-ending expansion—and thankfully we’re in that never-ending expansion.
From day one, every penny we were making we were saving up for a bigger brewing equipment. We went from an 80-gallon brewing system to a 300-gallon brewing system in the first eight months we were opened. Right after that we immediately saved up and bought a canning line. Right after that we immediately saved up and bought a bigger fermenter—because with the amount of cans we were selling, we couldn’t keep up anymore.
So the two- to five-year year plan is in my head, but it’s always happening faster then you’re prepared, which is great. It’s a lot to manage this much growth so quickly.
NAN: How do you deal with those challenges?
MICHAEL: You take a deep breath, take a step back, look at all your options, and see which one works best for the company. Do we want to invest $50,000 in new tanks? Or do we want to invest in new equipment? Or do we want to hold back and have a bigger safety net for ourselves?
When you really look at your business as a financial engine, not just a brewery, it’s easy to make those decisions. You can say: Well, in an average month we can spend x dollars on grain, we can spend x dollars on hops and growlers and glassware. So in the worst case scenario how much money could I spend in one month? You better double that and keep that as your safety net. If there’s one month that I could potentially spend $50,000 because the hoodies, t-shirts, and glassware ran out, you have to have all of that. Because if not, 15 people don’t have a job anymore.
So when you just look at it as numbers, it’s much easier to make those decisions and say we’re ready to buy this now because there’s excess money in the company, or we are not ready because what if it’s not worth it?
NAN: Any additional advice for those starting out?
MICHAEL: The biggest message I can give to people who want to start something up is: You can do it on your own. You don’t have to hire lawyers to file your paperwork, you don’t have to go through the state’s process, and you can do it however you want to. I was 24 when I did it and it’s only been two years, but two years is a long time when so many businesses fail in their first few months.
NAN: Do you plan to you enter any beer competitions?
MICHAEL: I love the community of beer. I don’t send our beers out because I’m not into that type of competition. If I put a beer in front of someone and they love it, they love that moment and that brew right then and there, I don’t need a gold medal to tell me that.