What does ‘Booming in Bend’ look like? If you are a business owner here in Central Oregon you know the unique challenge to running a business within a limited economy. Let’s face it, Bend is lean and mean these days. One business that has survived and thrived by redefining themselves in these tough times is 10 Barrel. Drive down Galveston and you can’t miss the crowds day and night at the 10 Barrel Pub.
Interviewing the original two 10 Barrel partners, Chris and Jeremy Cox, they share how they went all in to redefine their business and take the risks of expansion even in the harshest of economies. The brewery had 100 percent annual growth for the first three years until reaching maximum capacity with the opening of the 10 Barrel Pub. The pub has shown 30 percent year to date growth in 2011 over 2010.
CBN: How did 10 Barrel begin?
Jeremy: We began in 2006. We started it with the intention of being a small brewery. We brought in a brewer while Chris and I sold it to all of our restaurant buddies downtown.
CBN: How did your business model change when the economy declined?
Chris: We reacted as fast as we could. At that time our brand was defined in Central Oregon and sales were declining. We didn’t have the money for sales guys so we went on the road straight to Portland three days of the week to sell our brand. We took on the right distributor in Portland but we still had to sell ourselves. We did this for a year. We haven’t had a day off in years. People don’t realize that. We struggled as much as everyone else. Over the last couple of years we have had our ups and downs for sure. We’ve made mistakes and still make mistakes daily.
CBN: How did you finance the business in the beginning?
Chris: My brother and I had a little money saved up and then we took seconds on our houses. We didn’t pay ourselves for two years. What differentiates us is we take risks, calculated risks. The brew pub and the brew expansion were both risks. If the pub had not been successful we would have put ourselves in a very difficult situation. Same thing with the brew expansion, it’s a really big risk for our company.
CBN: How did you get the financing for the pub with the banks being so tight on loans?
The banks felt comfortable with our restaurant experience since we owned JC’s Bar and Grill but we didn’t show enough cash flow to support that business model. We got some private financing.
CBN: Is that when you brought in the business partners Garret Wales and Brad Wales?
Chris: Yes. Hopefully that will be the last time we have to do that. We brought in Garrett as a managing partner in 2008, as he was a good friend and someone we always wanted to work with. Brad was originally brought in as a private financer and soon became a partner due to us needing to free up debt.
CBN: What did it cost you? Did it cost you more than 50 percent?
Chris: We valued the business asset and we gave up partnership based upon that evaluation. So we didn’t lose a ton in our partnership. It was well worth it. We created a secondary profit center that allowed us to get traditional financing for future expansion as well as brand our product. We are all 25 percent partners, which works out great for
our team.
CBN: What is driving your success the pub or the brewery?
Chris: It’s been a combination of both. Our brewery has been strong the last four to five years and it’s been very successful in Central Oregon as well as Portland but we never had an identity window or front door to the company. Opening up the pub has given us so much more exposure to the local community. The exposure gives us the ability to do a lot of things and freedom we could not do before. The pub has been a lot more successful than we expected. We are very thankful for that.
CBN: What are the things that define your success?
Chris: It’s about the beer, our dedication to our beer. It’s our willingness to not stay in the box. We take a little different approach then the other breweries in that we push the envelope with a lot of different styles of beer. We are not afraid to take risks.
The drive, we want it. We all have a strong passion and drive. You have to take the risk. There are a lot of smart people out there but it’s tough to take the jump. That jump comes at different points in our business model and we continue to take risks opening up a new pub in Boise and expanding the brewery. Our motto is “cross the river and burn the boats.” It’s from the George Washington story of going to war and after crossing the river ordering the boats to be burned so there would be no option of retreat.
Our team: every position we hire is the best talent in their field and that goes from a line cook to the pub managers to the brewers. We have the most talented managers in town running our pub and they are great leaders. I think we have the most dedicated brewers in the northwest and we are adding a couple of more brewers at the beginning of the year.
Partnership: we took on the right financial partners to enable expansion.
Mentors: we have a team of about four to five people who meet with us on a quarterly basis. They are all entrepreneurs who may not know about beer but have great business experience. They are in a place in their life where they can give back to guys who remind them of themselves 30 years ago.
CBN: Do you pay them?
Chris: We pay them in beer!
CBN: You have a monthly charity called “Locals Supporting Locals.” How has that helped your business?
Chris: The reason we did it is because the success of the pub is due to locals. The first year we generated $28,000 for local charities. That doesn’t include all the free beer we donate to charity events. From a business perspective the benefit has been bringing in people who may have never been to the pub. They may be supporting Mountain Star and in the process realize…”this place has great food!”
CBN: What advice would you give to someone trying to start a brewery?
Chris: Stay small and have a strong work ethic. It’s a business that requires you to spend money to make money. It’s very competitive so refine the craft before you try to blow it up. You have to create a demand and a brand for yourself. You just can’t put your beer out there and think it’s going to create a brand.
CBN: Last year I was at Deschutes brewery when a load of hops came in for both their brewery and yours. Is being collaborative typical of this industry?
Chris: Yes, it’s a little bit different industry than most. We divide our industry into two sides, operations and sales. From an operations side it’s a very collaborative industry. Everyone shares and luckily we have the fifth largest brewery in the country, Deschutes, in our back yard. They are very supportive as well as other breweries. On the sales side there is not collaboration, which is to be expected.
CBN: So what is considered proprietary in this business?
Chris: The yeast strand. The yeast strand is the secret of the breweries. Most often that is what differentiates the brew. All the brewers run in a tight group. They know a lot more than they probably should. That collaboration benefits all of Central Oregon in increasing our quality and bringing in tourism.
CBN: What differentiates you from the other breweries?
Chris: I think the brewery expansion will differentiate us. We are currently in a 3,500 square foot building with a 10 barrel system. We are moving into a 15,000 square foot building that will include a 50 barrel system, packaging line, barrel aging room and sour room. The 10 barrel system will be free with the expansion so our brewers can go to town creating high end revolutionary beers. Currently the pub has ten beer faucets on tap with the expansion we’ll have 20 beer faucets on tap.
CBN: What does the future hold?
Jeremy: We are opening another pub next summer in Boise, Idaho which will have a 10 Barrel system on site and we’ll be expanding distribution in Washington, Oregon and California. Our goal is to be the most revolutionary brewery in the northwest.
It’s nice to see good guys win and these are definitely good guys. If you have never tried out the pub I suggest you drop in the last Tuesday of the month which is the “Locals Supporting Locals” night where all profits are donated to a local charity.
10 Barrel Pub locations: 1135 NW Galveston, Bend, 541-678-5228 Boise location opening summer of 2012; 830 W Bannock Street.
If you would like to share your “Booming in Bend” experience with our community please contact Elizabeth at eueland@hotmail.com Elizabeth Ueland, International Sourcing Agent.
