Archive for February 2013

Day 539

February 28, 2013

Halfway through Reading Week, and the siren song of homework has still not seduced me into opening a book yet. I guess I am just strong-willed that way.

Alas, today more important matters called (again). It was time to transfer my brown ale, “50 Shades of Grain”, from fermenter to cask.

As I did so, I also added five more components to the cask, bringing the total to 50 ingredients. What were the final five? Let’s just say that I used my “mad scientist” laugh more than once during the process.

So, good night, sweet cask: And flights of hop angels sing thee to thy rest!

Tomorrow: homework. Absolutely. No excuses. Oh wait, I’ve got to check on the black IPA at the college brewery…

Day 534

February 23, 2013

In lieu of a mid-term, we handed in two major assignments in Creative Writing, and then I made a presentation to the class about “voice” and “language”. (It was too much fun reading passages from The Long Goodbye by Raymond Chandler as the hard-boiled detective and from Huckleberry Finn by Mark Twain. I should have been a voice actor.)

In between classes, I checked on my black IPA. (Yes, I need a name for it. Suggestions welcome.) It was bubbling vigourously–a sign of happy yeast.

Then a mid-term exam in Evaluation and Judging.

The final exam completed, the sun came out, the birds sang, the bunnies frolicked (well, the foregoing happened perhaps in a symbolic sense–it was actually snowing), and the students left town for Reading Week.

Yep, an entire week off. Walk around in my pyjamas. Play XBox. Watch TV. Whoo-hoo!

Oh wait, four major assignments to work on. Black IPA at the college to check on from time to time. “50 Shades of Grain” waiting at my summer brewery to be transferred to a cask.

Would anyone notice if I showed up at either brewery in my pyjamas? Carrying an XBox controller?

Day 533

February 22, 2013

With all the exams, presentations and assignments this week, it would have been nice to have had a quiet day in the Teaching Brewery bottling  or cleaning kegs. Instead, today was my special assignment day where I got marked as I brewed up my very own beer.

Yes, today was the culmination of all the theory and practice. I arrived this morning clutching my own recipe (complete with hand-crafted calculations), then put together the ingredients and brewed a double batch on the 60-litre pilot systems while Brewmaster Jon Downing watched. Over the next two weeks, I will monitor my infant wort as it grows up and becomes an adult beer. Two weeks from now, after packaging, I will perform a sensory analysis on it, then submit a complete report on the brew day and the resultant beer. All of the above will then be the basis of most of my mark in Specialty Brewing. (A small portion of my final mark will be based on a safety test and my work in the Teaching Brewery on days when I wasn’t brewing.)

And how did I luck into having my special brew day right smack in the middle of mid-term week?

I picked the date.

Yep. Volunteered for it. Didn’t think, “Hey, the week before Reading Week is usually full of exams and assignments.” I simply put my name on the available date, and there it was.

Black IPA

Black IPA on the boil. Mmmmm…

For you brewers out there, my recipe was for 60 litres of a black IPA (or as the chattering classes say, a “Cascadian dark ale”): 17.5 kilo grain bill, mainly pale ale malt, with 1.6 kg of Crystal 20, 800 g of Midnight Wheat and 400 g of Chocolate Malt. Hopping was 75 IBU worth of Amarillo. That much grain in a relatively small system resulted in a ridiculously long sparge–almost two hours. But the result was as black as the devil’s heart, and as bitter as a jilted girlfriend.

Twenty litres of the 110-litre batch will be cask conditioned and served at the college Open House on March 23. (Free samples, come on down!) I haven’t decided how to package the other 90 litres yet. Keg them off and sell them to a local bar? Bottle them under the college’s “Brewmaster” label and sell them in the college beer store? Hmmm…

But plans for world dominance must perforce await–more mid-term exams and presentations tomorrow.

Day 532

February 21, 2013

…and the storm hit.

In Sales & Promotions, a mid-term exam. (Hmmm, what ARE three ways to find out what your customers want?)

Then the biggie: A full 20-minute presentation to a panel of experts (Mike Arnold, Trafalgar Brewing; James McConnell, TD Bank; Ron Keefe, Granite Brewpub; Jason Ellesmere, Beau’s Brewing) presenting a business plan for an imaginary brewery, with full details of size, location, production, packaging, distribution, target demographic, marketing plans, competition, SWOT (Strengths, Weaknesses, Opportunities, Threats), start-up costs, how much equity investment we would need, and income statements for the first two years of operations.

We had been arbitrarily split up into teams of seven for this project, but only two from each groups were allowed to enter the sanctum and make the presentation. And so it was, friends, that this poor scribe was chosen by his group to be thrown to the wolves… err… to be one of the lucky presenters.

In reality, it was dead simple: just make your presentation for 20 minutes, then for another 10 minutes,  get grilled on everything you had forgotten, glossed over or hoped the experts wouldn’t notice. No PowerPoint, no flipcharts, not even a smartphone app allowed. Aha, but handouts were admissible, so although we had already handed in a 6-page summary last week, my partner and I arrived armed with multiple copies of a 35-page business plan in full colour  (with “twenty-seven eight-by-ten colour glossy pictures with circles and arrows and a paragraph on the back of each one”, as Arlo Guthrie used to sing in Alice’s Restaurant.) Even if we didn’t know what we were talking about, at least it looked like we knew what we were talking about.

We survived with only a few scrapes and bruises. No time to rest though–the mid-term week storm continues to rage tomorrow in the Teaching Brewery, where I will be brewing for marks.

Day 531

February 20, 2013

Mid-term week is like a thunderstorm. You know it’s coming. In the distance you see a massive stratocumulous anvil head, blindingly white at the top, dark black at the bottom. There’s nothing you can do except tie down the patio furniture, close the windows, and hunker down.  Then just before the storm breaks, the restless winds fade away. There is a moment of exquisite hushed calm.

That was today.

In Human Resources, how to handle job interviews (as the interviewer, not the interviewee). You can do interviews one-on-one, of course. The panel interview is popular with some companies, with as many as five people ganging up on the poor job prospect. Then for long distance, there is the telephone interview, or for the more plugged-in among us, the Skype interview.

The most effective is probably two interviewers–that way, one can be keeping comprehensive notes, which often isn’t possible during one-on-one interviews.

In order to make valid comparisons between candidates, you’re going to want to ask the same questions. So that requires some pre-planning. Do the interview in a quiet room, free from distractions and people passing by. Needless to say, turn off your cellphone. Once you start the interview, take some time to establish rapport–perhaps ask some questions about hobbies or secondary interests indicated on the person’s resume. Then get started with your list of prepared questions. There are two basic types of questions:

  • Situational: What would you do if _______? (This can often result in textbook answers, but does give you a sense of what the person knows, at least in theory.)
  • Behavioural description: “Describe a time when you _____________.” (This can be a good indicator of actual experience, and a valid indicator of future behaviour in similar situations.)

A mixture of both types of questions probably works best. Be an active listener, and be aware of non-verbal clues as well (i.e. body language.)

Once you finish your questions, you  can validate your interview with a test. This can be an ordinary pencil and paper test, or an actual physical skills test (“Show me how to ______”). Remember to check references too.

On to Beer Industry. A special guest had to back out at the last minute so Plan B: Jason Fisher simply presented a class he had planned for a later date, a summary of the craft beer industry featuring three speeches by well-known members of the industry.

First up was Scott Metzger of Freetail Brewing in San Antonio, Texas. Scott’s thesis was that for craft brewers, economies of autheticity trump economies of scale. (Jason’s interpretation: “Your business has to have a core value of authenticity or you will eventually end up making [insert name of well-known generic lager here].”) Another interesting take-away from the same video was, “If you want better business [in your city], then be a better business.” In other words, are you running your business in such as way that it helps your city be a better place for everyone?

Next up was a video  of Sam Calagione of Dogfish Head Brewery. Sam told the story about how he was inspired to leave the path of “traditional” styles of beer in order to research and make beers from prehistoric times. (One could argue that these beers were even more traditional than “traditional” beers. But I digress…)

Jason’s wonderfully condensed take on Sam’s talk: “Find your own path.”

Finally, a video of Greg Koch of Stone Brewing. Greg is a fairly good speaker, if somewhat off-the-wall from time to time, and his advice to craft brewers was fulsome:

  • “Be remarkable. It’s a good business model, but it requires ethics, camaraderie, passion and collaboration.”
  • “Be mad passionate”
  • “Your brand is you–don’t let others lead you astray.”
  • “Craft brewing is a place for artisans.”
  • “Authenticity is required.”
  • “Don’t serve the mozzarella stix of beer–make passionate customers.”

A good video, and well worth watching again.

And with that, the storm is upon us.



Day 527

February 15, 2013

It was  a dark and stormy night in Creative Writing as we talked about plot.

Then it really was a dark and stormy night in Human Resources as we wrote our first test.

And then it was an extremely dark and stormy night in Beer Evaluation as we tasted another round of tainted beers (gnrk!) and then discussed my Favorite.Topic.Of.All.Time — statistics.

But lo! The ultimate dark and stormy night looms on the horizon next week: 2 mid-term exams, 2 presentations, 3 assignments, and one specialty beer to plan, calculate and brew up in the Teaching Brewery.

There’s a storm comin’!


Day 525

February 13, 2013

For the prospective brewer, two very interesting classes today. In Promotion & Sales: setting up a retail store.

First of all, what type of person should open a store? Well, you probably need a creative type who can envision what the store should look like–but you should also have a number cruncher who will delve into daily and monthly sales figures to see what is selling and what is not.

There are a number of factors that will govern the success of any retail store:

  1. The Right Product. (Hint: beer!)
  2. The Right Location
  3. The Right Timing
  4. Correct Quantities of Stock (not so little that your shelves are half empty, not so much that you have months of oversupply)
  5. The Right Price
  6. Customer Service

In addition, you have to consider the three factors that make a customer come into your store: Assortment, Price and Best Experience. It’s impossible to excel at all three (at least for a mere mortal), so choose one, be excellent at it, and be very competitive at the other two. So if you offer the Best.Ever.Customer.Experience, complete with a free car wash and a mani-pedi just for coming into the store, you can probably afford to be merely competitive with price and assortment. On the other hand, having two dozen of everything in the universe in your store probably cuts you some slack with price and customer experience. Et cetera.

In addition to these three areas, you also need a “secret weapon”–something your business can boast of that none of your other competitors have. (This sounds suspiciously similar to the “competitive advantage” that Jason Fisher talked about in Beer Industry yesterday.)

Know the types of shoppers, and know which one you want to attract:

  • Quality shoppers, usually older and fairly well-off, will pay more for quality products. They make up about 10% of the shopping population.
  • Social shoppers look for the wonderful experience. They too will pay more if they find a store they enjoy. That’s another 10%.
  • Specialty shoppers are intensely brand loyal, and don’t really like shopping. Quality and a good, efficient in-store experience are what they are after–they know what they want, so don’t get in their way while they get in and out quickly. 15% of shoppers are like this.
  • Price-sensitive NON-shoppers are after moderate prices, hopefully in one place, since they don’t like to shop around. This is how Winners and Marshall’s stay in business, because a full 35% of shoppers fall in this category.
  • Price sensitive shoppers are also price-driven but they like to shop. Malls are full of them, since they make up 30% of the shopping public.

But wait, there’s more to consider. Who are your direct competitors, and what niche are they not already filling? Don’t know? Visit three competitors–you know, the places you will be stealing customers from. What are their strengths? (Avoid these.) What don’t they do well? (Do these things.)

Next up: location. Downtown? Warehouse district? Tourist area? Suburban street? All have their advantages and disadvantages, but which work best for your business?

Then you need to think about your in-store design, flow and displays, signage (be consistent and try to avoid hand-made signs drawn with Sharpies), lighting (fluourescent is cheaper but track incandescent is the most flexible and focusses on displays), use of wall space (it’s your most productive space in terms of sales per square foot).

Hint: Hire a professional designer to help. Look for one that talks in terms of better sales and productivity relevant to your target market, not just store design.

Once you have your store in place, better have some sophisticated Point of Sale (POS) software that can track your daily and monthly sales, right down to item size. First, its easier to know when to restock when inventory gets low. Second, good POS software will allow you to figure out what parts of your store are working, in terms of sales, and which parts aren’t. This will allow you to adjust displays, put lesser-selling merchandise on sale, and generally let you know if your store design is working.

Finally, are you providing an excellent overall store experience? A recent Harvard Business School study found that a customer with a low to moderate shopping experience only had a 20% chance of returning to the store. A customer with a moderately good experience would return 50% of the time. And a customer with a very good to excellent experience would return 90% of the time. Okay, I wasn’t shocked to hear that a better experience equates to a better return rate. What was surprising was that even a moderately good experience only resulted in a 50% return rate. You need to provide an excellent experience just to have a better than even chance of seeing the customer again. Huh.

In Brewery Management, Mike Arnold warmed us up by discussing how the industry defines a craft brewer. This is a a constantly changing target, and the various definitions that have been used (amount of beer, use of corn adjuncts, controlling interest by larger corporation, styles brewed, etc.) always leaves somebody’s nose out of joint.

On to the main topic of the day, starting up a brewery.

First, set up a company structure, set up a bank account, order equipment, get your permits, get quotes on insurance and start planning production.

Whoa, let’s back up a bit. Each of these is going to take some time over the next few weeks.

Okay, Step 1: Company structure.

Sole proprietership is the easiest: you own the whole company, you get all the profits. Yay!

Problem is, you are also liable if the company goes bust. The bank will come looking for your house, your car, your clothes and your little dog too. Same thing if you get sued. You are personally liable.

A simple partnership works much the same way, except now there are two of you to share the liability. The bank gets two homes. And two little dogs.

The only way to avoid financial liability is to incorporate. That simply means formally registering your company with the Ministry of Government Services. Of course, you have to structure your company a certain way to meet the legal requirements for company governance: shareholders, Board of Directors, and company officers (the Head Brewer, CEO, CFO, etc.) The shareholders provide the equity, and they elect a board of directors to oversee the strategic vision of the company. The board of directors in turn hires (and fires) the company officers, decides what firm or person will audit the company books and approves the salaries and expense accounts of the company officers. The company officers make the day-to-day decisions about running the company. At least once a year, the shareholders have a meeting where they can retain or replace the board of directors.

There are some added extras of course. Shareholder voting. Minority shareholder rights. What happens to a person’s shares if he or she dies? Selling your shares. Shotgun clauses if there is a falling out between shareholders.

(A shotgun clause is kind of a neat “prenuptial agreement” between shareholders. In the case of a falling out between partners, the clause forces a partner to make a fair offer for the other partner’s shares or risk losing money. Suppose Cain and Abel buy a sheep worth 50 shekels by each putting up half the cost, 25 shekels. After a few months, the two partners are not getting along. Cain  decides to buy Abel’s share so he can own the entire sheep. Knowing that Abel needs the cash and will probably accept a lowball offer, he craftily offers Abel only 20 shekels for Abel’s share of the sheep.

“Aha!” Abel thunders, as he hauls out the roll of papyrus holding their partnership contract. “We have a shotgun clause.” It turns out that if Abel turns down the offer to buy, he himself must then buy Cain’s share of the sheep at the offered price. Cain mutters darkly as he thinks murderous thoughts about his brother as Abel buys Cain’s share of the sheep for only 20 shekels, 5 shekels below market value.

“If only I had remembered about the shotgun clause,” mutters Cain, “I would have offered you 35 shekels for your share. Then I would have profited!”

Abel shakes his head. “Brother, a shotgun clause is meant to force partners to make a fair offer. You only offered 20 shekels, which I refused, allowing me to buy your share for only 20 shekels. If you had offered 35 shekels, I would have agreed to sell my share to you and made a profit of 10 shekels, while you would have spent 60 shekels on a sheep only worth 50. In the end, by not making a fair offer, you either lose your share and lose money, or end up with my share and also lose money. The only way to break even with a shotgun clause is to offer me a fair price for my share, which I will then either accept, making you sole owner of the sheep, or decline, making me sole owner of the sheep.”

But I digress…)

The way to incorporate is actually pretty simple. First do a name search (or have someone do a name search) on your proposed corporation name. It has to be unique. If you don’t want to think up a unique name, get a number for your corporation. (You can always call the operating company whatever you want, it’s just the corporation name that has to be unique.) Generally a name search will cost around $60.

Then there’s an incorporation form to fill in. You can get a lawyer to fill it out for around $1000, or you can fill it out for free. The government wants  details like the number of directors who will sit on the board (Fixed number of directors? Or a variable number between 2-6?), who the founding directors will be (at least until the first shareholders’ meeting), any restrictions on who can be a shareholder (for instance, perhaps you have to be an employee to be a shareholder), the number and type of shares (common, preferred, non-voting, etc.), conditions for transfer of shares, who are the incorporators, etc. Take the form and $400 and skip down to a Ministry of Government Services office, take a number, stand in line, have a government drone look over your paperwork. Done. Two weeks later, an form called an Initial Notice arrives. Who sits on your board of directors? And other exciting details. Fill it out, send it in. (Send in a new one everytime there is a change to the board of directors.) You’ll also get a box of incorporation papers and an embossing stamp so you can sign and seal legal dcouments with your corporation stamp. Cool, if that’s the way you roll.

Next week, we’ll take a break from planning our brewery in order to make a presentation of a business plan for a proposed brewery before a panel of real experts–a real banker and three real brewery owners.

Day 524

February 13, 2013

It’s still all about hiring people in Human Resources. First the application, then the first interviews to weed out the people who didn’t read the ad, possibly some sort of test to ensure the remaining applicants actually know what they are talking about–apparently a test increases the chances of picking a qualified candidate by 50% to 60%–then final interviews by the supervisor to actually pick one of the final candidates, reference checks and finally a decision. Pretty straightforward.

In Brewing Industry, Jason Fisher wanted to talk to us about competitive advantage. What is the thing that will give us an edge in a crowded marketplace? Price? Location? Energy? Authenticity? Brand? Style of beer? Partnerships?

How can you tell if one of these should be the important factor in your business? Well, for one thing, someone has probably already tried it. Look around, see who was successful  (and who wasn’t.) Don’t try to re-invent the wheel–emulate the success story. Jason quoted Steve Jobs quoting Pablo Picasso: “Good artists copy, great artists steal.”

But before you decide what you are going to make your competitive edge, find out if anyone cares. Suppose you’re going to be the first brewery in Ableville. You market yourself as “the first brewery in Ableville!” (Ta-dahh!) Do people in Ableville really care? What happens if a second brewery moves in? Get out into Ableville and poll some potential customers: Do they care whether you’re the first brewery there? Is that why they would buy your beer? If they say yes, then being first will give you a competitive edge over the second brewery. If they say no, you’d better start looking for a different competitive edge.

Price is often the first competitive edge companies think of, but it can also be the most vulnerable–all it takes is for one other brewery to underprice you, and there goes your edge.

Brand is another tricky one because it requires total commitment. If you’ve decided you are going to be the weirdest brewery with the weirdest beers, you will have to fulfill that branding each and every day. If you ever do anything ordinary–or brew anything ordinary–you’ve just destroyed your brand.

Jason also gave us another useful tip: when you are testing your business model–running some assumptions on potential production, sales, cost of goods sold and fixed costs through a spreadsheet to see if your business will soar or plummet–many entrepreneurs believe their own hype. They start with the assumption that, for instance, they can sell to 10% of the bars in the area. They run those numbers through the spreadsheet, make a few adjustments, and voila! They have a viable business model. That’s the top-down approach. Don’t do that.

The bottom-up approach simply addresses reality: the day you open your doors for business, you are going to have no sales accounts. So between making some beer, fixing the boiler that wasn’t installed right, painting the office and phoning to find out where your yeast shipment is, maybe you’ll also convince two bar owners to buy a keg each by the end of the first week (and then maybe one of them phones back and changes his mind). Maybe you’ll add two more accounts the second week. And maybe another two the third week. Okay, plug THOSE figures into your spreadsheet and see what bank balance rattles out the far end. It’s guaranteed that the number you produced using bottom-up assumptions will bear little relationship to the figure you produced from your top-down assumptions.

So okay, you may not want to present that exact bottom-up figure to potential investors–perhaps you can be a bit more optimistic during your pitch. But keep it in mind. You, the owner, should have a realistic idea of where you’re headed, and what it will take to soar rather than plummet.



Day 523

February 12, 2013

No classes today, but no time to snooze! My somnolent black IPA needed to be awakened! The Valentines Day party at the brewery where I worked last summer is this Saturday, and the beer will need a few days in a sealed cask for the yeast to gorge on priming sugar and produce enough CO2 to naturally carbonate the beer. (Of course, if there’s too much priming sugar, the extra pressure will blow the bung out of the cask and send beer far and wide. It’s worrying about these things that keeps brewers awake at night.)

It’s always neat being in the brewery–there’s beer being brewed, and beer being packaged, and people dropping in to say hello, and generally a lot of opportunity for chatting. Although I was there to transfer my beer, at one point I somehow found myself pouring 20-kilo bags of barley into the grain mill.

However, eventually I did do the transfer, and needless to say, I couldn’t just do that without examining it more closely, right?

The colour, I would say, was dark brown rather than black, with a decidedly fruity nose. Although it had received a healthy dose of black pepper, it seems most of the black pepper flavour had perhaps been blown off during fermentation–it had a good mouthfeel, some assertive bitterness, but the pepperiness was around the edges rather than in your face.

Next step: serve it to real customers this Saturday.

Day 520

February 10, 2013

Due to the mildest winter on record last year, I didn’t miss any classes due to weather, despite my daily commute along the south shore of Lake Ontario, well known for whiteouts and winter storms. But alas, my luck couldn’t hold forever.

Today I woke up to a full-scale winter storm–high winds, whiteouts, 30 cm (1 foot) of snow.

I believe it’s the first snow day I’ve had since I was in high school.

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