Newsmaker Q&A: Funkwerks: It’s not just the beer

What does it take to start a brewery during the heart of a recession, and in less than three years become a nationally recognized, state-wide distributor that can hardly keep up with demand? We didn’t know either. Which is why the Business Report caught up Brad Lincoln of Fort Collins-based Funkwerks, the winner of the Best Small Brewer Award at this year’s Great American Beer Festival in October. Lincoln shared a few of the ways that he and co-founder Gordon Schuck have found success in the Northern Colorado market, and why it takes more than great beer to start a brewery.

Question: Rather than offering multiple kinds of beers for different palates, you decided to offer only Saisons (a Belgium-style beer). Was this a business decision or simply a taste preference? How has having a limited selection benefited your business?

Answer: It was a business decision. We met in brewing school, and Gordon had won gold for his Saison in 2007, so we knew we wanted to focus on Sasion. We don’t actually use that same recipe; it’s a different recipe we use, but we knew we were going to focus on Saison and we thought this was a great town to do it in. Neither one of us were from here. Gordon was living up in Steamboat and I came up from Florida.

I think we stand for something, which has been positive. When we’re in a town like this, which has so many great breweries that are covering all the other things, we can focus. The other thing is this was a niche no one was doing, especially at the point when we started.

A lot of our revenue doesn’t come from this town, but comes from all over the Front Range and Colorado. As we expand out to other states, it really will stand out, too. And for that matter, limiting ourselves to Saison, we’ve really made a name for ourselves for that. Winning the gold this year and the silver last year also has been helpful.

Q: How has your location, in one of the city’s industrial areas, affected your taproom? How have you managed to get people off the beaten beer path?

A: This was a brewery for 18 years before us. It was the Fort Collins Brewery and before them it was HC Berger. So people have been coming out here for a long time. Ideally, would there be a better bike lane out here? The answer is yes. It’s kind of sketchy getting out here, but being out here isn’t bad. It has its advantages. I don’t feel bad when trucks pull in and block traffic to the same degree (as downtown).

From a local standpoint, we get less people that bike out here but from tourism coming in through the town, a lot of people start with us. And a lot of people start here, too, if they are from coming in town. But again, I think people just know about us and will come out. They want to try something different. But I’m sure, in fact I know for a fact, that we’re not pulling in as much money with our taproom as someone like Odell’s or New Belgium or somebody like that, either. There is a price that we pay for being out here. But it’s also cheaper entry. There’s more space out here in the industrial area. We would have probably had to build something from scratch otherwise. We looked at many buildings around Fort Collins and we were lucky to find this one.

Q: Are you businessmen who decided to open a brewery, or brewers who decided to open a business? What are the skills needed to turn a great brewer into a great brewery owner?

A: Gordon is certainly a brewer. He started back home brewing in 2002. I had been in business before, and he had worked in a manufacturing environment. He’s far more of a brewer than I am. I’ve brewed, like, two batches this year and he brews fairly regularly. And we have assistant brewers as well.

I got into the beer business not to make money, even though I’d come from a business background – but I could probably make more money outside the beer business to be honest with you. But I did it because I loved the business itself.

I don’t consider myself a brewer at this point for sure, but Gordon very much is. I do much more of the sales, the contracts, that kind of stuff. They come down to me. Originally I am a CPA, and I worked as an accountant in public accounting as well as a comptroller, and I actually worked in commercial real estate, too.

Q: In the last several years, sales of domestic beer have stayed flat while craft beer sales have gone up – even during the recession. Is this a trend that is here to stay?

A: I honestly don’t know, but I will still guess, and my guess would be that there are probably changes going on. And you can see that in other industries, too. Food has become more important, and in my opinion restaurants have gotten better in the last 10 years. They kind of are just a little bit more focused on general quality and that’s true for beer, too. I had a lot of friends in college who didn’t drink anything but Miller Lite. Actually specifically Miller Lite. And now they all drink craft beer. There was a change in them, and it wasn’t just purely economical, that they had more money than they did in college. Their tastes changed radically in the past five years. So my guess is yes, it will continue to grow.

Q: What aspects of the Northern Colorado community make it brewery-friendly?

A: I think it’s easier to start up a brewery when there are other breweries around. From a knowledge-based standpoint, all of these other breweries have helped us start up. I don’t think that we would really exist in nearly the same form without them. But from a drinking population, everyone drinks good beer up here, for the most part. And they like experimenting and looking for new things, fun things, and are willing to support things that are a bit different. The other thing is that there is a focus here on local and quality things.

Q: Any plans to expand to other regions?

A: We’re in the process of picking up distributors. We just signed a deal with American Eagle for Northern Colorado, excluding Fort Collins. We’ll keep distributing here in Fort Collins. But we’re looking for a distributor for the Boulder-Denver area and the rest of the state, and we’re also going to talk with a distributor out in Nebraska. So we’ll start distributing outside the state in the next year or so. As we grow, Gordon and I will focus on bottles more than draft. I don’t know that draft will leave the Front Range, because it’s kind of a pain to deal with, even for us now. And we feel that the bottle is a full product so that’s where we’ll go for the long term and we’ll still focus on Saison and experiment with other beers. We started with five and now we’re up to 11 employees, and I don’t know that we’ll grow that number of employees that much, but probably a few over the next few years.

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