Anybody who thinks Atlanta’s Sweetwater Brewing Co. is still a quaint little beer-making operation hasn’t seen the “automated palletizer” in action.
The robot-like device at the end of the bottling line automatically stacks cases of the chilled (36 degrees Fahrenheit) brew on pallets and swaths them in clear shrink-wrap for shipment. Not much heavy lifting involved. This is what success looks like in the so-called “craft brewing” business.
And few specialty brewers in the Southeast have tasted its rewards like Sweetwater’s co-founder and chief operating dude, 38-year-old Freddy Bensch, who goes by the title “Big Kahuna” on his business card.
“We used to do all of this by hand,” Bensch, dressed in shorts, T-shirt and a baseball cap, said recently as a forklift zipped in to pick up a freshly wrapped pallet of beer. “But we’ve outgrown those days.”
Now in its 13th year of operation, Sweetwater has hit the big-time in the world of small-time breweries. Bensch estimates his company will brew 65,000 barrels (more than 2 million gallons) of beer this year, putting it just behind the South’s biggest craft brewery, Abita Brewing Company in Louisiana, which will brew about 75,000 barrels.
That puts Sweetwater at 29th nationally for sales volume among craft brewers; Abita ranks 19th.
‘A craft power’
Located in shadow of Interstate 85 in the Armor-Ottley Drive warehouse district of Midtown, Sweetwater has not only survived but thrived. It has done so as a litany of other Atlanta-area breweries have vanished over the past decade. Gone is Dogwood. Gone is Marthasville. Gone is Blind Man of Athens.
Sweetwater, meanwhile, has continued to grow. It produced just 1,700 barrels of beer in 1997, its first year. Ten years later that number had grown to 45,000 barrels.
“They’ve been posting double-digit growth year after year,” said Paul Gatza, director of the Colorado-based Brewers Association, which focuses on craft and home-brewers. “They’re definitely a craft power in the South.”
Within five years, Bensch estimates, Sweetwater’s production could nearly double from to about 110,000 barrels annually, the maximum capacity of the current brewing facility. The company recently purchased a vacant 40,000-square-foot shipping warehouse next door, a move that could eventually double capacity again.
But Bensch stressed that “how” his company grows is just as important as how much. Currently, 90 percent of Sweetwater’s product is distributed within a three-hour radius of Atlanta, although Sweetwater is in parts of six states. The beer is not pasteurized, which means it must be shipped and stored cold, giving it a shelf life of about 90 days.
“When we were really small, we grew too fast a couple of times and we were completely scatterbrained,” Bensch said. “We want controlled expansion.”
Rewards of success
Kevin McNerney, Sweetwater’s co-founder and former brewmaster, said the company grew by 30 percent annually for 11 of the 12 years he was there. He left Sweetwater last year to spend more time with his two young children and now brews beer for the Five Seasons Brewing Co. in Sandy Springs.
“Our focus was on the quality of the product and not growing too big too quickly,” McNerney said. “We nourished our growth and made sure we were in the good graces of our community.”
Sweetwater’s success has afforded Bensch some of the trappings of a guy who has worked hard and made it. He has a home in the upscale Morningside community he shares with his 6-year-old son. He’s getting married next year in Telluride, Colo. He occasionally takes time off to surf in Costa Rica or fly fish in Montana. He recently fished in the Patagonia region of South America.
Most of his spare time, he said, is spent with his son and fiancée. He occasionally watches a little TV and gravitates to the Discovery Channel, National Geographic or History Channel.
“I can’t find anything else I like,” he said. “TV has gotten so bad.”
He doesn’t discuss specifics about the finances of Sweetwater, a private company, but insists most of the profits are pumped back into the company.
“I’m paid a salary,” he said. “Everything we’ve made is pumped back into the business. We’ve always been about growing the business and focusing on next week, next year and five years from now.”
A mythical number
A physician’s son, Bensch grew up in Stockton, Calif., the second of three boys. His older brother became a doctor; his younger one went into the construction business. Bensch, who got a degree in environmental science at the University of Colorado in Boulder, decided early on he wanted to move in a more entrepreneurial direction.
Sweetwater’s branding is wrapped in a patina of tie-dyed, counter-culture hipness — many of its most popular beers have suggestive names. The number in the company’s core product, Sweetwater 420 ale, has several marijuana connotations. In pot parlance, “420” is used to refer (incorrectly) to police code for a pot bust and the date of National Pot Smokers Day — April 20.
Pure coincidence, Bensch said.
“It was the first day we brewed, April 20,” Bensch said, dismissing the drug allusions with the wave of a hand and a wide grin. “We keep hearing that. But hey, Mercedes has a 420 SL too.”
The company’s mantra, “Don’t float the mainstream,” reflects Sweetwater’s core culture, Bensch said. Some of its 57 employees, Bensch included, bring their dogs to work. Rock music blares from speakers in the bottling area.
Sweetwater also has linked up with local environmental causes like the Chattahoochee Riverkeepers, donating about a quarter-million dollars to the cause in four years.
“We’ve never had a focus group,” Bensch said. “We’ve never had a consultant. It all comes from who we are. It’s refreshing that in today’s world we can function like this and function well.”
Surviving early errors
That said, Sweetwater owes much of its success to some good old-fashioned mainstream business practices. The company began life well capitalized and after a few misfires, hooked up with a wholesale distributor that aggressively pushed its product.
Atlanta urban myth holds that Bensch and McNerney — they were college roommates — stumbled into Atlanta just before the 1996 Olympics, discovered a growing thirst for craft beers and quickly stumbled into success. And some of it is even true.
They did show up here before the Olympics, but the two 20-somethings already had their sights set on becoming a success in the world of specialty beers. They worked at a brewery in college and were later schooled at the American Brewers Guild in California. They were just looking for a place to succeed. Atlanta, with its huge population of young adults with lots of disposable income, seemed like a good fit.
“They were at the right place at the right time with a very good product,” said Bob Townsend, an Atlanta Journal-Constitution columnist and beer expert.
They first set up shop on Fulton Industrial Boulevard because of the cheap rent. It was near Sweetwater Creek, giving them a name for their brew. They came up with a business plan impressive enough to land a $400,000 Small Business Association loan and were able to cobble together another $800,000 from family, friends and a handful of investors.
Still in their 20s, they made plenty of early mistakes. Their brewery was in a rotten location to attract patrons to tastings and tours — a mainstay of craft beer marketing. And their first deal with a distributor went south. They eventually got a new wholesaler and moved to the current location.
Just saying ‘no’
Bensch said success has brought its share of new challenges. There’s the constant fight for shelf space and the unpredictable price of raw ingredients — the price of hops tripled last year due to bad weather. There are always new upstarts to contend with. And your phone tends to ring a lot.
“The phone rings three times a week with someone who wants to buy us or create a beer or wants to do a contract brew,” Bensch said. “It sounds good from the outside and sounds like a lot of opportunity. But all of a sudden it can pull you in other directions and you lose focus on what you’re doing well.
“So we’ve just said: ‘No, no, we’re not interested,’ ” Bensch said. “I still love coming to work. I still have a lot more to do.”
Craft beer by the numbers
Between 15,000 and 2 million
Number of barrels a brewery must produce annually to be a “regional craft brewery”
65,000
Barrels Sweetwater will produce this year
110,000
Barrels it is projected to brew within 5 years
6
States where Sweetwater is sold
2
Sweetwater’s rank among craft brewers in the South
29
Sweetwater’s rank nationally
8.6 million
Barrels of beer the craft industry produced nationwide last year
$6.3 billion
Annual dollar volume produced by the craft beer industry
5 percent
Growth by volume of craft beer business during the first half of 2009
9 percent
Growth by dollar value for the same period
Sources: Sweetwater Brewing Co; Brewers Association
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