JDub’s Brewing Company’s Founder, Jeremy Joerger:

Scaling A New Brewery Quickly & Profitably

JDub’s Brewing Company’s Founder, Jeremy Joerger:

Scaling A New Brewery Quickly & Profitably

“You need to always be ready and persistently showing these retailers the data that will convince them that they can go ahead and take a risk to put you on their shelves.”

In the five years since their inception, JDub’s Brewing Company has grown to produce 12,000 barrels annually and has won contracts with some of the biggest chains in Florida. Jeremy Joerger, the brewery’s Founder, saw an opportunity to seize coveted shelf space in 2014 and rapidly positioned the company to meet the demands of statewide off-premise distribution. In this interview, he spoke with Lilypad about the decision to sacrifice short-term profits to achieve scale without debt, the keys to proving your worth as a new brewery, and their core values in brewing as well as hiring. This conversation is packed with insights for any young breweries with their eyes on regional growth.

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The Interview:

Trey: When did you first start brewing and when was the first official JDub’s beer created?

Jeremy: Personally, I started brewing in around 2003 and the first JDub’s beer was created in February 2014.

Got it, so that means in four years you’ve grown to brew 10,000 barrels a year, is that accurate? Are you higher than that now?

Yeah so actually we’re at about 12,000 right now.

That’s awesome. So I want to start by picking your brain on how that journey has gone. What was the hardest part of getting to 10,000 barrels a year?

Finding innovative solutions in the marketplace to grow and also to convince our distributors that the brands, the production, and the beer, most importantly, was worthy so they would get behind it and get it out there.

So when you talk about convincing the distributors that your beers are worthy, what are some of the boxes you’ve got to check?

Most distributors now have several, sometimes more than a hundred breweries in their portfolio, right? So it’s convincing them that you’ve got the firepower to be a real player. That’s all rate of sales; the market is going to dictate that. But these guys have a lot of breweries and no brewery ever says, “I want to sell less beer this year.” I mean, we all want to grow. You need to show them “this is why.” “We feel we’re putting ourselves in a unique position to attack the marketplace and this is why this beer, in particular, is the right one to do it with and our brewery is the right one to do it with.”

“I mean, we all want to grow. You need to show them, ‘this is why.'”

Do you come with certain metrics outside of rate of sale to those kinds of meetings? Do you need to tell them about your production capacity? Do you tell them about your team? What are some of the other things that you do to really convince them that you’re ready for the big time?

They’ve got to be convinced of a couple of things. They’ve got to be convinced that the liquid is good, but outside of that, they have to be convinced that the liquid’s going to pull, that it’s gonna sell. That’s the first step. Then the second step of that is having the capacity or the ability to scale up and really take advantage of the strength of your brand or brands.

JDub’s core brands, taken from JDub’s Instagram

Can you tell me a little bit about how JDubs proved that you had that brand, what you guys did to grow, and what you did to define yourself in Sarasota and southwest Florida?

Yeah. We got in at a pretty good time. We got in right at the start of 2014, which makes us almost five years old now. When we opened there were only 40 or 50 breweries open in the entire state and that wasn’t just production breweries, that was all breweries. That was your brewpubs, that was your nano breweries, and it was also your production breweries. But when we got in, there were, relatively speaking, very few breweries for this large of a state. So the most important thing was quality. It’s always the most important thing at JDub’s, it’s a given. Quality is going to be there. If we don’t believe in it, we’ll dump it down the drains. We have before. You know, it sucks, but that’s how much we believe in putting only beer that we’re willing to stand behind in market. So it starts with the quality and then from there you have to have the pull through. So the pull through is not too hard to demonstrate if the beer is at the caliber that merits that kind of pull through. The consumer is ultimately going to tell you, and then it’s like, “Okay, how do we strategically do things to convince our distributor that hey, don’t confine us to one space, help us grow outside of our local market and beyond.”

“If we don’t believe in it, we’ll dump it down the drains. We have before. You know, it sucks, but that’s how much we believe in putting only beer that we’re willing to stand behind in market.”

That’s when you have to have production capacity, right? Have quality, you have to have the pull through on the draft lines or on the shelves, and then you also have to have the ability to scale up to wherever your ambition wants to go. And so for us, that’s why our model has been to work with the contract partner, a bigger brewery, to have that production capability to go as big as we want to with any one brand and not be confined to just the 5,000 square foot brewery that we have here in Sarasota.

I’d like to drill down a little bit there. When did you decide that you needed to have this contract partner and how did you negotiate those terms?

So one of the things that I saw early on was a lot of breweries at the time, and with the industry growing at such a rapid rate – I felt like guys were building out new brick and mortar facilities with an expectation of double-digit growth every year, 20 or 30 percent and beyond. Realistically, I don’t think that’s sustainable and I’m sure as hell not gonna risk my livelihood based off of something that’s unknown in the future. So we saw, in my opinion, that there was lot more shelf space at the time than there is now. You’d go into a big grocery chain and it’s mostly national brands with a very small selection of craft brands relatively speaking, particularly Florida craft brands.

So for me, it was important to get on the shelves immediately. So what we did right out of the gate was we started producing our IPA and shortly thereafter our Poolside in cans. So we ran the full gamut. We had a contract canner here. We ended up buying the same model of canning line that the contract brewer had and brought it in house. We outgrew our canning line, which was a three head canning line. We outgrew that in months. I mean, I’m talking a couple of months and then it was, “Okay, well we want to keep growing.” We saw that there was shelf space and we wanted to be able to grow the brand on shelves with the cans. And so that’s when I thought, “I don’t want to go look for an investor or try to go the bank loan route.” I would rather build that volume up so when the time comes that we want to bring it in house and build a larger facility, it’s not a matter of basing our investments or our loan off the future growth. It’s, “Hey, this is what we’re doing right now and we’re still profitable, even more profitable than we are now. We don’t even need to grow.” So for me, it was saying, “okay, where can we do this? Where can we find a place to grow the brand?” And I’ll make the decision then to sacrifice profits for growth. And so if and when it does ever come time to bring production of all of our brands in house, we don’t have to do it based off of future growth. We can do it based off of what we’re currently producing and just become more profitable.

“If and when it does ever come time to bring production of all of our brands in house, we don’t have to do it based off of future growth. We can do it based off of what we’re currently producing and just become more profitable.”

Got It. That makes sense. You’re really setting yourself up to make a wiser financial decision in the future when you’re ready to brew everything in house.

But again, we do sacrifice immediate profitability for that. So we sacrifice short term profitability for growth. We’ll put ourselves down the road in a better position to eventually do a build out or get bigger some way.

JDub’s 5000 sq ft onsite brewery taken from JDub’s Website

So what quantity was the contract brewer producing when you started with them?

For us, we were doing 100 barrel batches at a time. That was the smallest production size we could do with our contract brewer at the time. It depends on what your contract partner can do. I mean, some can do 50 barrels, some need to do 100, and some need to be producing 200 barrels plus per run.

Did you need to hire on more sales staff once you started working with this contract brewer?

We grew our sales force based off of what needed to be in the market at any given time. And so right now we have two distributors in the state of Florida. We’re just Florida right now, but we have one rep for each one of those distributors. We’re also looking to hire a sales director.

As the founder, when did you know it was the right time to bring on a sales team and hand over the reins to somebody else?

Well, first of all, it’s a time issue. When you start getting to a level of sales that I was getting to, I thought, “Okay, I need someone to manage this.” And for me, it’s about finding somebody to manage sales who has done it before, who knows my distributors, and who has worked with distributors in the past. I want someone with a lot of industry experience who knows the guys that I currently work with, so, when they show up, the distributors are dealing with somebody who’s been in the game for a long time. To me, there’s a lot of credibility that comes along with that.

“When they show up, the distributors are dealing with somebody who’s been in the game for a long time. To me, there’s a lot of credibility that comes along with that.”

You brought on some new team members and obviously, it can be tricky starting to manage these new players. How has technology and different tools that you’ve used help you handle this?

At first, it was emails and phone calls when it was just one rep and it evolved from there. I’m not sure how I heard about Lilypad, but I knew it was starting up and was close to us so we investigated it and we found that Lilypad seemed to be a good solution for our sales team.

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Do you currently incentivize your sales team, have spiffs, or competition going on between the reps?

Our reps have their monthly objectives, they also have trimester objectives, and those are based on each rep’s market and what we think is attainable at the time. So we’ve done some competing with our reps but not a lot.

Do you have any recommendations for somebody who is getting ready to hire their first couple of reps? What kind of people did you look for when making those hires and what did you do to get them to buy in?

I think the biggest thing for us was passion. You have to have someone who has an extreme amount of passion and also someone who you think is a big culture fit. That’s the one thing I’ve learned, is that when hiring somebody, one of the most important things, if not the most important thing, is a cultural fit for the company. Our first rep for example, who was with us for a few years, she just wanted to check out craft beer and see what the culture was all about and see if she might like it. She became a fan of JDub’s, reached out to me and said, “Hey, I’d like a job in sales.” I think she sent it out through Facebook. I said, “Well, we’re not really looking right now, but we’ve got an event coming up by where you live in Tampa and if you want to go check it out and meet some of us, come out.”

“One of the most important things, if not the most important thing, is a cultural fit for the company.”

So she went and then she said, “I’d love to do whatever I can for the brewery even if you’re not hiring, I’ll just come volunteer.” So for me, what I got out of that was, I’ve got someone here who is so passionate about getting in the industry and wanting to be a part of JDubs that they’re willing to work for no compensation. I said, “Well shit, I got to hire this person.” I had to find the money to hire somebody. Of course, I wouldn’t want someone to work for free. So we hired her and she stayed with us for a few years until ultimately her family situation brought her back home to Denver. But I still maintain a great relationship with her and I think whenever you find someone who’s – not that you should take them up on it necessarily – but if you’ve got someone who’s willing to work for free, that’s someone you need to really think about hiring.

JDub’s team taken from Your Observer

I’d say that’s great advice. So you all grew to 10,000 barrels pretty quick. Were there particular kinds of initiatives or particular kinds of accounts that you targeted that helped you get there?

Well, you can target certain accounts but it’s whether or not they’ll take you on. That’s a whole other issue. Of course you’re always looking for the whales, right? You’re always looking for who’s going to bring in the most volume. You want to make sure they do enough volume to make it worth your while because you have limited resources. So, the accounts that are doing good volume and you think are a good fit for your beer. You know, there are some accounts that aren’t a good fit for our brand. Nothing bad about the account, but if it’s a bar that I feel is more driven to do the domestic lites or the domestic premiums, your Budweiser and Bud Lites, and that’s all they’re selling and that’s what their clientele seems to want, then you’re probably not going to pursue that as heavily. Not all the time, but a lot of the time. Versus a bar that’s selling crafts already and if they bring you on they’re gonna sell a lot of your craft.

Is there one story or one thing that you could look back on and say, “Yeah, that really moved the needle for JDub’s to get to 10,000”?

Oh, for us it was packaging. For us it was putting beer in cans. That’s the lion’s share of our business now. And luckily we got in the market at the right time. For us it was getting on shelves and proving our worth on shelves. Now we’re statewide in Publix. We had to have a story to tell them. We had to have the sales to do it. Now, luckily, we’re in just about every Publix and fortunately the beer, knock on wood, is doing very well. I think every packaging brewery, meaning putting beer in cans, is trying to get into Publix in Florida.

We hear about Publix in Florida a lot actually. Everybody’s thinking about chains. You talked about quality and you talked about proving that you could actually sell this beer. Are there any pro-tips or trade secrets that JDub’s used to make that relationship happen? Do you have any secret sauce for the readers?

I would just say that you need to always be ready and persistently showing these retailers the data that will convince them that they can go ahead and take a risk to put you on their shelves. You just have to be constantly knocking on the door, showing data, and saying this is why we think we could do it.

“You need to always be ready and persistently showing these retailers the data that will convince them that they can go ahead and take a risk to put you on their shelves.”

If you could go back and tell yourself something when you were at 3000 barrels that you know now, what would you say?

Well, there’s a large part of that answer that I’ll keep to myself, hah. I would just say, taprooms. Focus on the taprooms, man. That’s where your greatest margins are.

Okay, I think that’s great advice. Well, I really appreciate your time, Jeremy.

No problem, thanks for thinking of us.

This article is part of the Lilypad Sales Leaders Interview Series.

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