Home hobbyists dream of operating microbrewery in Latrobe
Two men who enjoy drinking and brewing beer are trying to raise $30,000 to make their dream of operating a craft brewery in Latrobe a reality.
Mark Pavlik, 27, of Latrobe and Christian Simmons, 30, of Unity hope to move Pavlik's home-brewing operation into a 6,000-square-foot warehouse on Mission Road, where they want to operate by next spring a microbrewery to produce four craft beers and a dozen seasonal beers that will be sold in kegs and growlers, a customer's personal half-gallon beer container.
The men have discussed the idea of forming a business from Pavlik's home operation since the fall of 2011, Simmons said. They formed Four Seasons Brewing Co. Inc. last month, using Pavlik's Latrobe address as its offices, according to state Corporation Bureau records.
“I think what kick-started Mark was a lot of people started telling him how good his beer was,” Simmons said.
Because Four Seasons does not have a liquor license, Pavlik and Simmons are not permitted to sell their beer. Friends and family get to taste it, and the two have taken it to beer tasting events, such as they did last week at D's SixPax & Dogz in Monroeville.
“Some of them were local people who actually knew what they were talking about,” said Pavlik, who has worked with brew masters at All Saints Brewing Co. in Hempfield and Full Pint Brewing Co. in North Huntingdon.
“They taught me a lot. They have the ability to fine-tune and not cut corners,” he said.
Before Pavlik can move his brewing kettles and fermentation tanks out of his garage and into the warehouse, there is the matter of raising enough money to make a tasty hobby into a money-making business.
Rather than taking their business plan to local banks and asking for a loan, Simmons and Pavlik are attempting to raise $30,000 by Nov. 1 through a website, Kickstarter, which offers startups a 30-day fundraising platform. With just a week remaining until their Kickstarter fundraising drive finishes, Four Seasons has pledges totalling just $2,160 from 12 backers.
Four Seasons is offering several incentives to get supporters to make pledges ranging from $10 to $2,500. A $10 pledge will get backers a sticker; a $25 pledge earns a bottle opener; and donors making a $50 pledge get a pint glass with the Four Seasons logo. Those willing to pledge $2,000 will be treated to a catered dinner at the brewery, and anyone pledging $2,500 can get to design, brew and name one of their seasonal brews.
The advantage of this method of raising capital lies in that the men do not have to give anyone a stake in the company, Pavlik said. The pair can retain 100 percent ownership.
The downside is that all their pledges will vanish if they do not reach their goal by Nov. 1.
‘A lot of good faith'
The owners say the $30,000 would be used to cover legal costs necessary to obtain a Pennsylvania Liquor Control Board permit to produce and sell beer, insurance coverage, a brewing system, inventory — such as kegs and growlers — and ingredients like hops and yeast.
“It also would show a lot of good faith for any of the banks” that might consider loaning money to the venture, Pavlik said.
Loan officers seeing such support might think “maybe we should really, really look into these guys even a little bit more (because) obviously they have all these backers,” Pavlik said.
The problem with seeking traditional financing, Simmons said, is that banks likely would want collateral for any loan. Neither man is willing to offer his house as collateral.
They do have a fallback plan in case their web fundraising effort fails. The two said they will approach family and friends for the necessary investment, and even consider giving a large investor equity in the business. They said they also would approach the Progress Fund, a Greensburg-based community development organization that lends money and provides technical assistance to under-served entrepreneurs.
While neither Simmons nor Pavlik intends to give up his day jobs as a construction worker and electric utility technician, respectively, Pavlik will be the brew master and Simmons will handle sales and marketing. They are trying to get their business up and running by the end of the first quarter because beer sales are highest in the second and third quarters, Simmons said.
“It's OK to follow what you love to do. I love good beer,” Pavlik said.
‘Quality over quantity'
In concentrating on making craft beers, the pair are focusing on “quality over quantity,” Simmons said. They have selected a segment of the industry that has shown the most growth and is becoming more crowded.
The Brewers Association, a Boulder, Colo.-based trade group with 30,000 members, said 250 breweries opened in 2011, with 174 of them microbreweries. There also were 37 breweries that closed last year, 12 of them microbreweries.
A beer industry veteran, Pittsburgh attorney Cris Hoel, who once represented Pittsburgh Brewing Co. and Rolling Rock brewer Latrobe Brewing Co., said the craft beer segment offers the possibility of success for Four Seasons.
“Being good and being novel are rewarded by the drinkers going after craft beer,” Hoel said. “There is an enormous opportunity for a beer maker with a dream and a sack of hops.”
The craft brewing industry grew by 13 percent in volume last year and 15 percent by dollars, compared with 2010, according to the Brewers Association. Craft brewing sales accounted for 5.7 percent of all beer sales by volume last year, with an estimated 11.4 million barrels of beer in 2011, up from 10.1 million barrels in 2010.
Western Pennsylvania has a tradition of supporting craft beers, Hoel said, pointing to the success of Penn Brewery in Pittsburgh's North Side, Church Brew Works in Lawrenceville, Rivertowne Pour House in Monroeville and the new All Saints Brewing Co. in Hempfield.
“It's not a fluke anymore. They're barking up the right tree,” Hoel said.
Brewing once a week
Tim Bates, a business consultant at St. Vincent College's Small Business Development Center who helped Simmons and Pavlik with their business plan, said those seeking to start a microbrewery have a good idea, but their success lies “in the implementation of the idea.”
“In this particular industry, you can't be everything to everybody, at least not in the beginning,” Bates said. “The challenge is trying to keep the focus on what the original intent is … to keep the focus on what is your market niche and who are your clients.”
Pavlik said he intends to brew once a week once the business starts growing. So far this year, he has brewed beer 71 times in 5-gallon batches. He has ramped up production in the past two years, brewing different beers almost on a weekly or biweekly basis.
If they get their business off the ground, Pavlik said, the building the men want to lease has sufficient space for canning or bottling. They envision creating a taproom where customers can sample their brews as well as buy growlers. Simmons said he has talked to beer distributors in the region that would carry their kegs, along with some local taverns.
“There's a very good potential for customers spending money on craft beer,” Bates said.
Joe Napsha is a staff writer for Trib Total Media. He can be reached at 724-836-5252 or [email protected].