The thing I’ve always found most interesting about entrepreneurs is the dichotomy between excitement and fear that exists when you’re building something on your own. Once you have the vision, how do you push through all the times of uncertainty to make something great happen? When I sat down with Scott Vaccaro, the owner and founder of Captain Lawrence Brewing Co to ask him why he had the nerve to strike out on his own in the first place, his response was as charismatic as he is, “Fuck it, why not?”.
Knowing he would be the perfect interviewee for the first By The Bootstraps (and leveraging an excuse to spend the afternoon of a workday having a few beers), I visited his brewery in Elmsford, NY where he took time off from fixing a broken centrifuge to talk to me about how he got started, the roadblocks he faced along the way, and the threat of corporate beer to the little guys.
1980s & 1990’s B.C. (Before Captain/A quick background on Scott)
Scott’s pioneer batch of beer was made when he was a sophomore in high school and by the time he opened his brewery in 2006 he had over ten years of experience brewing his own beer. He had also traveled the globe to learn about different brewing techniques and served as a brewer at Sierra Nevada brewing company, along with many other formative brewing experiences. His acumen and expertise have earned him a reputation amongst his peers as a craft beer authority.
2006 A.D. (Always in Debt a.k.a. The Early Years)
As big as Captain Lawrence is now (they’ll produce approximately 28,000 barrels this year), his early days were as humble as any bootstrapping start-up’s. In the tough market of craft beer I asked Scott why he did it, and if there were any dark nights of the soul in those initial years.
By 2006 you’d developed enough of a reputation that you could’ve had a successful career as a brewer in any number of places. What gave you nerve to open your own place?
“Youthful exuberance and stupidity? I don’t know… It’s like being a chef. To cook your own food you have to open your own restaurant. To make your own beer you have to have your own brewery. I said fuck it, why not.”
And were there any dark nights of the soul starting out?
“There’s never been a time when I wanted to throw it all in. I’ve never once said, “Shit, I want to go home.” I love what I do… [But] there are plenty of times when I was nervous about making payroll on Monday, [thinking] I’ve got no money left to pay my bills with.”
Any specific times when you were feeling uncertain?
“When we first started out - the first account I walked into said ‘no’. I walked outta there with such a knot in my stomach. I was like, “I thought this was gonna be a little easier.” It was 30 minutes of, “What did I just do? Is this gonna work?” Luckily the next three accounts said yes.”
Why did you think that people would be interested in the beer you wanted to make?
“I figured if I made a product that people could get behind, and have a sense of pride in, than it would work. I had a business plan and like any business plan a lot of it was crap, just regurgitated crap on paper, but the one key point in my plan was ‘without a local following we’ll never survive’. Without the consumer we’re nothing. You can’t survive without that.”
What were some early marketing successes?
“Early on the most successful thing was growlers. Our tasting room has been our biggest asset since day one.”
Do you want to grow? Do you want Captain Lawrence to someday be in, say, San Diego?
“We’re focused on New York. I’d love to sell every last drop of beer in New York, but that’s not feasible. (I’m interested in) getting to a point where we can run efficiently and run a sustainable business, not just growing for the sake of growth.”
David vs. Goliath
As the craft beer industry booms and the larger players lose market share, companies like AB-InBev (Anheuser Busch) and Miller Coors are snapping up smaller brands left and right. I wanted to know Vaccaro’s experience with interest from outsiders, which, as it turns out, has been considerable.
Is there any interest from outside investors in a brewery like yours?
“I got a guy calling me up at 1 o’clock in the morning, from San Francisco, saying we’re worth a ten or twenty million dollar check… any brewery over fifteen thousand barrels is getting approached…it’s insane”.
And what do you think of that?
“I’m against selling to AB, to the big corporations. [Up streaming] taints the craft beer pool. It brings in another unsavory element, but you know, if people want to get out and make money, I guess this is a business.”
What do the big guys get wrong?
“What the big guys get wrong is... Craft beer as a whole is a very personal thing. So I don’t think it’s possible for a company that large to connect with people the way a small company can. They can never be that and that’s why they’re buying small breweries. They’re trying to buy authenticity.”
How have consumer tastes evolved since you’ve started?
“The taste change has gone to hoppier stuff. The IPA growth is insane. People want hoppy beers. Which is the exact opposite of what big beer makes. It’s like anything. You eat a lot of spicy food and then it’s not that spicy anymore. And then you want to try something else. I honestly think that’s why people drink craft beer. Because people want flavor. And so next week we’re making a new flavor. A grapefruit IPA. We’re gonna try it out. And then maybe we decide, shit, that’s our new beer brand.”
(NB - Scott has a dedicated area in his brewery for piloting new ideas and new flavors. Friends, family, and employees have all tried their hand at making new flavors, many with great results. It’s a very ‘open-source’ way of doing innovation, and it also engages his fans to become part of the brand.)
What do you think is the biggest threat to the craft beer industry?
The biggest threat to this industry is truth in labeling. Blue Moon is made by Coors, Blue Point is made by Anheuser Busch, Goose Island is made by Anheuser Busch - Forget about the quality of the beer, I’m not knocking that, they can make the best beer in the world but I feel strongly that the consumer very much wants to know or has the right to know that every dollar that they spend on Goose Island or Blue Moon is going to Coors or AB InBev’s bottom line, not to some guy like me that’s sitting here working on the centrifuge, it’s going to some massive conglomerate… The consumer has the RIGHT to know... [A company] can brew 90% of their beer in Tennessee, but as long as they brew 10% in Brooklyn, they can put ‘Brewed in Brooklyn’ on every can.”
What’s the future of the market?
“That’s the million dollar question right there… I think the change is permanent. People have found a new product that they like and they’re not going back to drinking bud light all the time. Craft beer volumes will continue to grow.
If private equity keeps flooding in it’s gonna drive prices down. And the bar owners are gonna love it. But that’s gonna hurt people like me. Goose Island is a great example. You know Goose Island? A number of years ago before Anheuser Busch bought them - a keg of Goose Island IPA cost $160 bucks. Now they’re selling $90 kegs of Goose Island here and trying to steal [tap] lines from someone like me who’s selling a $160 keg of IPA. They’re going to a bar and saying, why not pay $90?”
(Often, Captain Lawrence, or any craft beer brand operating at the cost of small business, loses a tap at their local pub to a ‘craft beer’ made by ‘big beer’)
Any last advice for someone who wants to start their own brewery?
When I started this place I had no wife, no kids, no mortgage.
I got nothin’, I got nothin’ to lose.
It takes a long time to get to positive cash flow; start with a lot of money and make it somebody else’s.