MICHAEL OXTON: First
of all, we just want
to thank everyone for coming.
We're super excited to share
our story with you all.
So thanks for taking the time.
What we want to talk about today
is sort of a history of Night
Shift Brewing through the lens
of what we have just called,
Create Better.
We've sort of refined
what our company
stands for to the
point of calling this--
or calling it,
Create Better, which
has led us to sort
of consistently
improve our business.
It's kind of about
learning from our failures.
And we're just kind
of hoping to walk
through our history
with that lens in mind
and just kind of talk
through our story.
A little bit about who we are--
we are the three founders
of Night Shift Brewing--
I'm Michael, this
is Mike, that's Rob.
We collectively own
about 80% of the company.
So we are the
board of directors.
We make the decisions.
We set the vision for it.
And we started it.
So we're actively
involved day to day
and we're also driving some
of the long-term vision.
I just want to note Rob is
also the president of the Mass
Brewers Guild, which has
been really impactful not
just for our business, but
also for business and breweries
in Massachusetts.
So that's been super exciting.
So first, I want to
talk about failure,
because our past is full of it.
And I think it's
important context to set.
This is me I think just
transferring some beer back
in 2013 and totally
failing at it.
So I think what's
important to note
is our failures are often
some of the reasons we've
been successful, because
we've had to learn from them.
And it's kind of forced us
to make creative mistakes.
So I just wanted to walk through
a few of them and just kind
of recap some of the
things that we've
screwed up over
the years that have
taught us some serious lessons.
First off, we just didn't have
any professional experience.
We made a lot of mistakes
because we weren't
in the industry beforehand.
We're just home brewers.
I do think having that
perspective kind of gave
us this a fresh set of
eyes on the industry--
and sometimes I think we
made more creative decisions
but also a lot of mistakes.
At times, especially
in the early years,
the quality of our beer
was sometimes iffy.
It was good enough, definitely,
to get us where we are.
But we did have corks that
would pop out of bottles,
bottles that would gush.
There's a video on
YouTube of a guy opening
a bottle of our beer and
it explodes everywhere--
which we play at staff parties.
And we've drained a lot of beer.
We won't put out beer that's
no good-- or that's good--
or that's no good.
And it's forced us to develop
a much better lab, better
equipment.
We learned a lot
through initially
having some iffy beer.
Inventory and freshness
issues were definitely
things we struggled with--
or at least struggled
with in the past.
As you grow, you have
more and more beer
you have to figure
out how to store it
and how to keep track of it.
We've had to learn ways
to sort of deal with that
and develop cold storage
and better processes
for managing all of our beer.
Especially early, we
barely made payroll a lot,
and it was really scary.
But that forced us to create
more fiscally responsible
approaches to our
budget and have a better
control of our balance sheet.
When we started, it was
just the three of us.
And we didn't really have
a staff development plan,
because we weren't
worried about developing
anyone other than ourselves.
We're now at 126
people, and that
has forced us to think about
how we're developing people
and their future is
not just our own.
And we most recently
hired an HR director
which was super exciting.
And then just
finally underplanned,
over budget, and
abandoned projects.
We have plenty of
those behind us,
but I think what's
important to note
there is we just learned to ask
better questions to put better
projects in front of us.
All right, so why we hope you're
going to listen to us anyway--
we're a passion-driven business.
We started with a
really strong passion
and I think we still
have that today.
It's what drives us to wake up
every day and do what we do.
We're still very independent.
We own collectively
80% of the company.
The rest is friends and family.
We've been profitable every
year since we started--
150 times volume growth
since the very beginning.
It's been amazing to
see and we don't even
think about it very often.
We just kind of keep going.
But we sort of do
have that behind us,
and it's been awesome.
Like I said, we
employ 126 people.
We try and offer
them great perks.
We started with this approach
of going deep, not wide.
And we still have maintained
that in our market.
We were just in
Massachusetts when
we started and we're mostly
still in Massachusetts today--
just a little bit out of state.
We still have strong
sales and velocity.
And, as we're going
to talk about today,
we're on a mission to shift
our industry and create better.
So a little visual history of
Night Shift through the lens
of Create Better.
Five years of home brewing
behind us-- we started in 2012.
We had $150 capital raised
between friends and family,
three staff, 1,500
square feet in Everett
in this small, dingy
little construction space
that we turned into a brewery--
and lots of passion,
lots more ignorance.
This photo was taken
at 4:36 AM at the end
of a really long brew day.
That was our first
day ever brewing.
So it was just like one of
those moments we've captured.
MIKE O'MARA: First day
brewing commercially.
MICHAEL OXTON: First day
brewing commercially, yes, true.
And here is a day
brewing as home brewers.
So this is our
Somerville kitchen.
The three of us just standing
there looking like Muppets.
And then we turned
pro and that shot
was taken for the "Improper
Bostonian" in 2012.
This is our brewery
back in 2012.
This is like a clean day for us.
So I just want to talk
through a few of the things
that we focused on to
sort of create better
when we were beginning and then
I'll hand it off to these guys
to walk us through
the rest of the years.
We started with all
cork and cage bottles.
We hand labeled them,
we hand-wrote on them.
We were really going
for a very premium look.
We were trying to stand
out in the marketplace--
elevate beer to sort of
like a wine-like status.
It gave us higher margins
and I think it did help
us stand out--
and a personal touch--
writing on every single
label is a huge pain
but people, I think,
appreciated it.
And eventually, we
moved away from that
into cans, which we'll
get to fairly soon.
But it was an
interesting way to start,
because it was this
Create Better mentality.
I also just want to note--
we started with volunteers--
some of those guys
in the picture
there were just
volunteers helping us.
None of them we
employ anymore, but we
did hire a bunch of our
volunteers from the beginning.
And that's just been
super rewarding to be
able to take people that were
volunteering and just lending
their time to us and bringing
them on and sort of help
grow the company
with them together.
So the other I would
say like big thing that
helped us stand out
in the beginning
was 100% shifted beers.
It was like nothing can go in
a bottle unless it shifted.
We even said, we will
never brew an IPA.
That's a thing.
Which is so weird
because now our focus
is really hoppy beers.
But in the beginning,
it was all shifted--
viva habanero was the rayo
with habanero peppers.
That was sort of one of
our trademark flagship
core beers in the beginning.
It got us attention.
It really established us
as an innovation brand.
Ultimately, it was
unsuccessful, just
because we decided to switch
to more drinkable beers--
hoppy beers that encouraged
more repeat purchases.
ROB BURNS: Genius.
MICHAEL OXTON: It's genius.
It's brilliant, but
it was a great way
to get our name out there
and spread the word.
The sour barrel-aging
program that we started with
is still alive to this day.
It was sort of an extension
of our shifted approach.
I mean, we still
produce Ever Weiss.
Shifted is basically
no traditional--
not just traditional
ingredients of water, malts,
hops, and yeast.
So anything else that we could
think of like cinnamon sticks,
fruit, habanero peppers--
we got weirder than
that, but, yeah.
Ever Weiss is a beer that
actually stuck around.
We started with
it and that one's
grown into of a core
offering of ours.
And I think trying to do
barrel-aged sour beer has,
again, forced us to learn about
interesting processes that
are really complex.
And we made a ton of
mistakes along the way.
And now we can put out
this awesome sour program
that's grown with us.
We started with
plastic fermenters.
It was not a good idea looking
back, but it was cheap,
and we didn't have
a lot of money.
So it's so shameful to say,
but we had a normal ale room,
which was just conditioned
with an air conditioner
and then like a sour
Cezanne room which
was just a space heater.
And that's how we
controlled temperature--
which is just not
recommended at all.
But we made it work.
And the beer quality was good
enough to get us out there.
We did ultimately
make the decision
to move to stainless steel
when we could afford it.
And that allowed us to really
expand our style offerings.
It actually allowed us to
really get into hoppy beers,
improve our quality a
lot, and set the direction
for the future of the company.
One of the core decisions I
think we made in the beginning
was to not sign
with a distributor
and just do it ourselves.
We'll get to it a lot more
later, but at the time,
we were just looking at the
distributor partners out there.
We didn't see anyone that
we wanted to work with
and Mass franchise law
basically locks you
in a contract for life.
So we didn't want to do that.
And so we said, we'll just
throw beer in a Subaru,
drop it off, and handle
all the sales ourselves.
It allowed us to keep
30% margin, which
was good for profitability.
But probably more
importantly, it
allowed us to develop really
deep relationships with all
of our accounts and get to
know what our customers'
needs were-- like hear
on a regular basis now
what's happening in the market.
Our tasting room was not part
of the business plan really
and it's become core
to who we are today.
We started with 90 square feet.
We thought some people drop in
here-- probably not very often,
because we're in a
sketchy warehouse.
But if they want
to come in, cool,
and we'll sample
them on some beers.
As our reputation grew, we
just got busier and busier.
We expanded our hours.
I think we were just Thursdays
and Saturdays to start.
And open every day of the
week was soon a thing.
We expanded into our production
space, which was dangerous
and not a good idea.
But when you have people waiting
out the door, what are you
going to do?
And then we ultimately
learned like, OK,
when we move-- which
we know we have
to do-- we have to build a
bigger tap room because this
is more important than
a 90 square foot space.
And then the last thing
I want to talk about
is just the decision to
put the owl everywhere.
I actually drew our
logo back in 2010
when we were just homebrewing
and it was just something
to slap on bottles as
like our homebrew labels
and give it to friends.
And when we made
the business, it
was just like, oh, this
is our logo-- cool.
We decided to be a
logo-oriented company.
Not a lot of breweries
were doing that
and we decided that's going
to be what's everywhere.
It's a hop and an
owl at the same time
and it's kind of a
nocturnal creature,
so it felt like it made sense.
And we've grown with
that and we've just
made that a bigger and
bigger part of our branding.
And I think that's
been a huge part of how
we've grown and
created messaging
around our logo and the owl.
Transitioning from our
early early, early years
in 2012, 2013 to 2014 and '15,
I'll pass it over to Mike.
MIKE O'MARA: So the
next couple of years
was kind of a big
transition for us.
We moved to a new brewery,
as Michael alluded to.
We went from 700 barrels in
2013 to over 4,000 barrels
by the end of 2015.
Kind of had a renewed focus on
quality, evolved our branding,
and went through a few
expansion projects along the way
that themselves had a
couple of rough patches
that we learned from.
And then really
continued to establish
our strong local
presence and following.
In 2014, we expanded
our tap room.
That was a new thing.
It wasn't in our business
plan to begin with.
Kind of threw that
business plan out
and like, OK, we're
focusing on the tap room.
It's going to be an
awesome place for people
to come and hang out
instead of coming
to a dingy, creepy warehouse
that didn't have true working
bathrooms.
So this was a very
nice upgrade--
real bathrooms included.
Just kind of a side by
side-- our original brewery,
which was about 60 gallons per
kettle there to our new brewery
which required
steps to get up to--
about 600 barrels per batch--
so a pretty sizable increase
in production size there.
And then there's a couple
of pictures of our lab.
So we also invested
a lot in quality.
Because if we're dumping
beer that isn't good enough
to go out to the market--
which is good for
our reputation,
but bad for our bottom line--
so we had to do something
about that in order
to continue making
world class beer.
We invested heavily in our
lab and equipment and people
to run it to make sure that
everything from the day we're
brewing it to the time
we're packaging it
is analyzed along the line
and made sure it's quality.
And we're going to be
able to ship what we make
and be really proud of
it at the same time.
So increasing the quality
and consistency there
is pretty key.
In addition to that,
transitioning to cans
is kind of two parts there.
One was cans are better for the
beer-- they don't let light in.
They don't let as
much oxygen in,
so it increases the
shelf stability.
So that increases the quality
of the beer just in the package
format change.
We kind of saw early on
that the craft beer market
was shifting away from
bottles which goes totally
against what we were trying
to do with the cork and cage.
But that's what
people started to buy,
and we latched onto
that very early on.
And as soon as we did,
we noticed velocity
increased tremendously.
And we think a big
part of that was--
it's kind of hard to sit down
for a night and commit to 25
ounces of a 7% beer where it's
much easier to snap a can off
of a four-pack and drink 16
ounces of it and then maybe
drink the rest of the
four-pack if you want--
but you have options.
And then along with the
cans, it was an opportunity
to kind of re-envision
the branding.
And originally with
our logo, we kind of
had the owl and Night
Shift Brewing all kind of
squished together with a box.
And this offered an
opportunity for us
to revisit that and
really focus on the owl.
The owl was going to be
everywhere to begin with,
so why not just make that the
prominent thing on the can?
The owl is pretty
cool and recognizable.
So we did that and we
started with a Whirlpool can,
with just the silver can
which looks pretty cool,
and the morph can.
And then you can see it evolved
into a more playful thing
with the Santilli Whirlpool.
And along with that,
we shifted away
from doing our shifted beers
with weird ingredients only
and our no IPA philosophy
to doing IPAs and pale ales.
And Santilli and Whirlpool
have become our two
best-selling beers.
So we're not afraid
to change our mindset
and get stuck in our
ways so to speak.
And a really awesome example
of our IPA evolution is Morph.
It was kind of born
out of necessity.
We weren't very good at hop
contracting or forecasting
what we were going to
sell in the future,
so we kind of took what we got.
And Morph was a way to do that
and we had a consistent brand,
but each batch was
different from itself.
So we saw an
opportunity in that--
it's like, well, we can kind
of use this as a test market
because we didn't have a
flagship IPA at the time.
And we would analyze
sales data in the tap room
and collect feedback directly
from customers in the tap room.
And we used that to turn Morph
into our flagship IPA, which
is Santilli.
So we kind of secretly
crowdsourced our flagship IPA.
And then in 2016, we entered
that into the World Beer Cup
and it ended up
winning bronze, which
is pretty awesome validation
for that process there.
Continuing the evolution towards
quality and making things
happen to go from
a keg seat-belted
into the back of a Subaru.
ROB BURNS: That's my
Subaru that I still drive.
I drove it here today.
MICHAEL OXTON: It
smells like beer.
MIKE O'MARA: Yeah, it
constantly smells like beer.
It's never going away.
We upgraded to a
sprinter van, which
helped us increase the amount of
beer we could drop per account,
which increased efficiency.
And then finally now
we have a fleet of--
well, we still kind
of have a fleet
of Subarus floating around, but
we don't deliver beer in them
anymore.
Now we have a fleet of
refrigerated box trucks.
So everything is
cold from the time
we package it to the
time we deliver it
and put it on the shelf.
Just kind of focusing on
efficiencies and qualities
and making sure the beer
is the best it can be.
And in 2016-2017,
new equipment--
of course, brewery expansion's
happening, tap room expansions
and continuing to add people.
Here we've got our
tap room expansion.
So this is a new
room and ended up
making this really cool
event space with the tap room
and what we call the annex--
which ended up being like
an event space for us.
Continued to add new
equipment, new canning line--
our own canning line.
We were using a mobile canner.
Again, we could focus and
do our own quality control
on that canning line and not
have to rely on somebody else--
more capacity with bigger
tanks, more efficiencies
with more equipment
outside-- grain
silos we could order
by the truckload
instead of by the pallet.
And it's always awesome
to get validation.
We always thought we had it.
We always thought we
had great culture,
we had quality beer, great
beer, people liked it.
But to enter these
contests and win awards
and look at our Yelp reviews--
it's always good to see that--
and Google reviews.
Yeah.
ROB BURNS: The best ones.
MIKE O'MARA: Of course.
It's always good
to have that kind
of like different perspective
and outside-in validation
of that, OK, yeah, maybe we
are doing something right.
That feels good.
Let's continue to try
to do something cool.
And along the way, we've
had to hire more people.
So we had about 65 employees
at the end of 2017.
I think we mentioned
we have 126 now.
We've had struggles,
but we've gotten smarter
about how we keep the
culture, gotten smarter
about how we hire people.
We invested in a
program that helps
us looking at
people's personalities
to make sure that the right
fit, get the right people
in the right role--
the right people in the right
seat of the bus so to speak.
So we've gotten smarter at
hiring people over the years
and continue to add
great people to the team
and keep them around
with what we provide
and with culture and benefits.
During that time, we also
started a distributorship.
So I'm going to let
Rob take that away.
ROB BURNS: Sure.
so in October 2016, we launched
our own distribution company.
We were running out
of space in Everett
and we needed a new warehouse.
And we'd been doing
it for ourselves
and we thought we were
kind of good at it.
So we were hearing from
a lot of other breweries
that they were frustrated
with the same options
that we were faced at one point.
And a key tenet to our
distribution company
was even though franchise
law exists in the state today
that we wouldn't hold fellow
like-minded brewers to that.
If things weren't working out,
we'll take it professionally
and we can part ways
and it will be better
for both sides of the fence.
NSD has grown significantly
over the last year.
We started the year
with 600 accounts.
We now have 1,600
accounts that we service.
We pretty much go from
Springfield, East Hampton,
Amherst area all the way out
to Martha's Vineyard now.
We've really, really added
a lot of capabilities
to our logistic side
of our operation.
And not only that, when we
started the distribution
company, we were beer guys--
so let's only sell beer,
which we sell 18
different breweries now.
This year we also added
on wine and spirits
as well as non-alcoholic
beverages like cold brew
and teas and things like that.
And we just recently also
got our import license.
So one of the things we're
going to tackle in 2019
is start importing
alcohol from Europe--
starting with some
wines from France.
But all under the same
lens of let's look
for small, like-minded producers
who are doing something
a little bit different, who
have either innovative packaging
or cool products
that are small batch
that we can really take a
hold of and represent well.
We set out to sell
beer for other people,
and we wanted to make
sure we were good at it.
We didn't want to
make a false promise
to these other
breweries, because they
are small people like
us that put their heart
and soul into their businesses.
This is a presentation from
one of our key suppliers
to Steel-- they're a brewery
out in Normal, Illinois.
I visited-- it's very normal.
They make great
sour beers in cans.
And we are actually their number
one distributor along the East
Coast-- from Maine to Florida.
We are their best supplier
that moved the most volume.
This is just a fun little
slide that we put together once
to kind of show that we wanted
to be more than just a beer
company, that we wanted
to be a beverage company.
And that anytime
of the day, we're
selling something
that's awesome.
Most of these are all local--
the first three non-alcs are
all locally owned
Massachusetts businesses, which
is pretty cool.
And then the brewing side,
we continued to innovate.
This beer came to life--
we're pointing today as well--
came to life kind
of back in 2016
when the brewers, after
a hot day of brewing,
wanted something light
and refreshing to drink.
And they were drinking like
Miller High Life and stuff.
And I was like--
eventually we were
like, why the hell are
we drinking other
people's beer when
we have all the equipment
to make that beer
and we can probably
do it better?
So let's do it for ourselves.
And that's what we did.
And we did that
for a couple times
over the year and a half period.
And then we started
testing it in the market
and people were actually
responding to it.
So we decided with that
combined with the feeling
that we were getting tired
of going out into the market
and taking down breweries--
IPA draft lines and
those are breweries
that we like to hang
out with-- that we
share similar challenges
and successes with.
It was like, I love the
guys at Jack's Abby.
Why am I taking down
their draft line?
Let's go after the guys
that we don't like.
And let's go after
the biggest guys.
And we're sort of using the
term macro nuisance now.
And it's also important to say
that the light beer category is
the largest category in beer.
And it's one that,
for whatever reason,
craft brewers decided that
they didn't want to play
in-- that was anti-craft.
And so we sort of fenced off
the biggest part of the pool
and let the biggest
people win in it.
So why not try to be the
smallest guy taking share?
We continued to also change
our packaging options.
These beers used to be in 750
milliliter champagne bottles.
We talked about these earlier.
These are sour beers that
are fermented with bacteria.
We got a separate canning line
so that we could put the beer--
live bacteria into
the finished goods.
That's something
atypical of what
a lot of the sour beers that are
out there in the market-- those
are usually kettle sours,
which they kind of cook it
to kind of almost
pasteurized the product.
These are living beers.
And we also kind of
try to play around
with the innovative labeling and
we use really cool photography
techniques to kind of showcase.
And they look very different
from our core lineup.
This summer, we also
open up two beer gardens
along the Esplanade that were--
that were a pretty fun place.
We have a patio in Everett.
I don't know if
you've ever been,
but it is basically
you're sitting
on crappy asphalt in
an industrial park
and it's not a very scenic spot.
So we set out to find the
best spot in Boston to drink
and we worked really hard
to get this location.
It was a wild success.
One of the cool things
that we did here
too was we could be most
profitable if we only
sold Night Shift Beer here,
but that wasn't who we are.
We called it the
Owl's Nest and it
was a celebration of Night
Shift Brewing and our friends.
And so we poured a lot
of other people's beer
here that we made lower margins
on, but it was important to us.
This is just a fun little
slide of our barrel-age edge
production over the last seven
years and kind of showcases
our rapid growth.
We started with 200
barrels in our first year.
This year, we'll do
a little over 30,000.
Our business plan had that if we
did 10,000 barrels in 10 years,
we'd be wildly successful and
we would probably call it quits.
Now we don't know where the
limit is and how far we'll go.
But I think one
important thing is
we've always set out to brew
to demand not to hit a number.
We're not beholden to
a VC or private equity
where we need to
hit certain targets.
We're brewing really
slightly behind demand
so that we can always have
the best product on the shelf
and we're not chasing
anything that's not real.
I think all this is kind
of inside feedback on how
we thought we were
creating better.
But I think the real
proof is will customers
recognize that and
open up their wallets
and pay for the product.
These numbers are
IRI data, which
is a syndicated data that's
from cash register sales.
These are all from
Mass liquor stores.
One thing that we
did to get smarter
was actually buy data
instead of guess.
So this isn't our
internal sales numbers.
This is actually what people are
ringing up at cash registers.
And it's not every single
transaction that happens,
but it is indicative of what
is happening out in the world.
And we set out to make-- once
we decided to make hoppy beer,
we set out to make
the best hoppy beer.
And this chart shows
that we actually
are the number one
hoppy beer provider
in the state of Massachusetts,
which is pretty crazy.
That middle column is velocity.
That really tells us how often
does a customer pick our beer
over other people's beer?
And you can see we're almost
at 2 to 1 ratio over kind
of our next closest peers, which
is pretty incredible to see.
Our sour can series is
classified as a specialty beer.
It is the number
two specialty beer
in the market just behind
Budweiser Amber Lager--
I don't know who's
drinking that crap,
but clearly a lot of people are.
We like to showcase here that
our velocity is a lot better
than theirs.
We're in just less stores
than Budweiser is in.
If we were in more stores,
we'd probably be beating them.
Nightlight-- we set out to be
that kind of macro nuisance
and we released it
about 26 weeks ago.
So right now, we're
basically in the top six
of light beers, which
we're pretty shocked
to see that we're beating
out big global breweries
with multimillion dollar
advertising campaigns
and that we're actually
playing somewhat
successfully in this
market without, really,
any advertising budget at
all other than Instagram.
So that's been fun to
take away mindshare.
And some of these guys
are down almost as much
as we're up, so we like
to think we're directly
stealing from their pie.
If you look at just craft
beer across all styles
in Massachusetts, we're
number three right
now-- just a few
hundred thousand dollars
behind Harpoon.
But, again, we're beating out
a bunch of national brewers
that have much more resources
that have been around
much longer than us.
This is ranked by
velocity again.
So, in the state, we are
the second-fastest beer.
So this helps us a lot
in our selling story
when we go to market.
If a liquor store is deciding
to carry us versus, let's say,
Dogfish Head, we'll sell
three times more volume
than Dogfish Head will
in that same store.
Then if you bring in
the national brewers--
or the global Brewers
again, we are a top 10 brand
in the state, which
is pretty incredible.
This is, again, a
testament to kind
of our deep, not wide
philosophy of really trying
to get our brand in front
of Massachusetts consumers
and make it just as recognizable
as some of these other big beer
brands.
We really only package our
beer in 16-ounce four-packs.
So another way to
slice the data set
is to look at packaging format.
And if you take all beer across
all global brewers in the state
that play in the liquor stores
and look at only 16-ounce
four-pack sales, we are
by far the dominant--
I like to say the king.
We're toppling Budweiser
pretty heavily here
and we're a far
market leader compared
to our peers in the state.
Just really, again,
kind of humbling
for us to see that this kind
of idea from our Somerville
kitchen has actually
like really taken off.
But, nonetheless,
we're not done yet.
We're setting out in 2019 to
try to create even better.
We're building Boston
Tap Room on Lovejoy Wharf
right next to the garden.
We'll have a brewery in there,
a kitchen, and a coffee bar--
which is something--
kitchen and coffee bar
are all new for us.
It will really be our
innovation factory
and a lot of our new ideas
will be first developed there
before scaling up and going
out to the wholesale world.
We're, again, continuing
an even better workplace
adding more benefits,
adding more resources,
adding more internal training--
that's super important.
We're trying to make ourselves
the best place to work,
although I don't know if
we can compete with all
your amenities, but we'll try.
I think we do have
more free beer.
We're continuing down
that macro nuisance line
and we're going to launch
Limelight this year,
which is definitely a direct
shot at Bud Light Lime.
We think it will be better.
It will use better
lime ingredients.
And if it's at all as
successful as Nightlight,
we think we'll have another
big winner on our hand.
We're continuing to
invest in production.
We'll continue to
add more sour styles.
There'll be a fourth one-- kind
of the mix Ramble Weiss, which
will be a blackberry
sour with lemon.
And then the next
two big questions
for us is what do we sell?
90% of our beer in
Massachusetts and only beer
that we make can we grow
beyond Massachusetts
and replicate what we've done
in this state in other states.
With the regulatory
environment, you kind of
have to reinvent the
wheel in every state.
They all have
different liquor laws,
which makes it really
confusing and challenging.
But can we replicate the brewery
and the tap room experience
somewhere else and
can we also replicate
our wholesale operation
in other states?
And those are kind of
the two big undertakings
as we look future.
And then the third one is,
should we do other beverages
and take the same sort of
lens of creating better
to other beverages?
Could we do it for spirits,
coffee, wine, cider,
kombucha-- whatever we're
excited and passionate about
and kind of take what the
lessons we've learned from beer
and apply it elsewhere.
And I think our
final note is just
every day we try
to create better
and I think you
guys do the same.
And we appreciate your time.
And we can open up to any
questions and answers.
[APPLAUSE]
AUDIENCE: Let me ask
you a timely question.
A certain other brewery
in the Boston area
is having some very widely
publicized labor issues
right now.
Seems like they made some
pretty appalling cuts
to the wages of some
workers and now seem
to be like boomeranging way
back in the other direction.
Maybe this is just two people
who made some bad decisions,
but it seems like the
first time that attention
has been drawn to the labor
practices of craft brewers.
I'm sure you guys are
thinking about this a lot.
I'm wondering what
the implications might
be in terms of wages in the
industry, general employment
practices.
Is this going to have any
kind of widespread impact
or is it just a kind of
one shot thing that's
going to die out in a few days?
ROB BURNS: I mean, I
don't want to speak
to the specific situation of the
brewery you're referencing to.
But, traditionally,
the beer industry
hasn't been one that's
been a good place
to make a living wage.
We've always set out to try
to create a place that people
should earn an income.
If you ever read through
some of my older--
I usually banter on
beer advocate forums.
I've justified our
higher priced beers
around paying our people
more and the higher
cost of doing business
in the Boston metro area.
That's important to us.
As the Mass Brewers
Guild, we are certainly
open to doing some sort
of compensation studies
so that we can all benchmark
how we compare to our peers
and make sure that
everyone understands
kind of where the market is.
We obviously can't get into
the anti-competitive territory
of price-fixing
wages, but I think
there is more that could be
done to make sure that everyone
is compensated correctly.
I think the three of us never
started this to get rich.
That's not our motive,
and we've always
felt that we should share
the success with people
who create it.
AUDIENCE: Talk a
little about packaging.
You talked about going from
corked and caged 750s to cans.
Why did you end up
on the 16-ounce cans?
I know it's what everyone
is doing, but why 16 not 12?
I personally find 16 to be kind
of more than I usually want.
ROB BURNS: It's
definitely something
we went back and forth on.
I mean, we showed a picture
where we first did do 12s.
And the kind of initial feedback
was that it would be cooler
if they were in tall boys.
And I would certainly
credit a lot of that
to the Alchemist
and Heady Topper.
I feel like they kind of
paved the way of like this
is where the cool kids go.
But I do agree-- we
do make Nightlight
in 12 ounces, which is our first
return back to the 12 ounce.
And for the first like
three or four months,
the 16 ounces were king,
but now the 12 ounces
are kind of taking over as far
as the preferred package type.
And we're definitely
now considering
should we move other beers
into either both formats
or back down to 12.
AUDIENCE: How about like
the 9% ones in 12 ounce?
MIKE O'MARA: I agree with you.
That's a little much for me too.
I also just want to add
it seems that the 16 ounce
format is somewhat of a
New England phenomenon.
You venture outside of
New England and it is--
you still see a lot
of 12-ounce bottles,
you see a lot of 12-ounce cans.
And one of the other
aspects was, OK,
we use the same amount of volume
and the same amount of time
to fill the bigger format.
It cost us less in the long run.
It's slightly small, but a
bunch of those things combined
kind of led us to this
to be like, OK, we
need to compete in this market.
16 ounces are a New
England phenomenon.
Let's at least play
around with it.
ROB BURNS: Data-wise too, we
have some of our distro brewery
partners that sent
us 12-ounce cans
and they didn't sell very well.
And we asked them,
can you put them
in 16s and we'll see
if it sells better?
And some of them
did do that for us
and the 16s did sell better,
which is just kind of crazy.
Especially ones from
out of state we're like,
well, everyone wants
12 in our market,
we're not going to make
something special for you guys.
But when the velocity
increased, it was worth it.
AUDIENCE: So with the craft
beer scene growing so much,
has that changed,
I guess, the way
you guys look at
what you're doing?
I'm sure when you started out
it wasn't as big of a fad,
but nowadays you see different
places popping up all
over the place-- which is
great for the consumer,
but I just wonder if
it changes the way you
look at things at all.
And also do you have any other
favorite non-Night Shift beers?
MICHAEL OXTON: Sure,
I'll start this one.
I mean, one of the breweries
we consistently look up to
is Allagash.
Beautiful branding, incredible
beer, great leadership,
really good QA QC program.
They seem to sort of check
all the boxes in terms
of an excellent brewery.
And so they've sort of become a
great model and staple for us.
In terms of how we
look at the industry,
I mean, I think Rob kind
of touched upon it earlier.
But I do think if you look
at overall industry trends,
beer is somewhat flat.
We're not.
And so we definitely
feel like we
can continue competing
and growing and innovating
on the brewery perspective.
And adding a tap room allows us
to connect with consumers sort
of in our space--
so doing that in Boston is
just building on the tap room
success that we've had and sort
of diversifying our portfolio
between wholesale involvement
and sort of on-premise tap room
involvement.
But looking into other
beverages is something
that we consistently--
or have consistently
talked about,
but it's starting to become a
more and more real conversation
as we look at what is the
future for not just Night Shift
Brewing, but Night
Shift the family.
AUDIENCE: So when you guys
do collaborative beers,
how do you decide where
the beer is brewed?
MIKE O'MARA: That's
a good question.
I don't know if I know
the answer to that.
ROB BURNS: I think
it usually depends.
Sometimes we coordinate
around travel--
whether it's somebody going
on vacation or somebody
is coming for like Extreme
Beer Fest by Beer Advocate.
Hey, why don't you come a day
earlier and we'll hang out?
A lot of those collaborations
are really a great opportunity
for breweries to swap inside
techniques and methods
and processes that is kind
of the real secret value
behind those.
They're, of course,
really fun, and it's
fun to kind of mash up either
the styles that breweries
are known for or their label
art and stuff like that.
And we do a fair amount of
them, but they're definitely not
big revenue generators for us.
MIKE O'MARA: I'd also say
a lot of the collaboration
that we've done have kind
of gone back and forth.
It's kind of like a serial
collaboration, if you will.
So one time we'll do a
collaboration at Night Shift
and then we'll sell that
beer through our tap room.
And then the next time
we'll travel to that brewery
and do a collaboration
over there
with them so they
get a chance to sell
that beer through their tap
room and things like that.
So it's a true collaboration.
AUDIENCE: I wanted to ask
about the new flavor process.
So like now that it's not
just three of you working on--
let's throw this in there
and see what happens.
You mentioned you have a new
blackberry sour coming out
I think.
How many people are
involved with that?
Or how do you decide
on the recipe?
How do you kind of
push that to market?
MICHAEL OXTON: We used to be
involved in every single recipe
because it was ours.
I mean, I think
when we launched,
every single one was
in a notebook somewhere
that we had homebrewed a bunch.
And we brought it to market
and watched it evolve.
But as we've hired
a team, we have
people that can make beer
that's way better than any of us
could.
So we entrust our people.
We definitely have input on
where do we want the vision--
or where do we see the
company going from a vision
perspective of like, all right,
we want to get more into sours,
so let's develop those recipes
and sort of set that direction.
But our production team,
which is actually--
what's the size
in terms of staff?
ROB BURNS: I think it's
like a dozen-plus people.
MICHAEL OXTON:
OK, yeah, so I was
going to say like 15 people.
They crush it every single
day and so we trust them
to nail it, execute, innovate.
We sort of have our
wholesale market beers
and then we have
our tap room beers.
And we've actually kind
of blended a little bit
over the last year in putting
more small batch stuff
out into the market.
But we see a lot
of our innovation
happen with those
smaller batch releases.
We have smaller tanks that are
basically exclusively reserved
for that.
And then the brewers are
basically just given free will
to come up with whatever you
think is interesting and cool--
put it out, see how it performs.
And then we scale
up appropriately
based on success,
feedback, all that stuff.
It's a really fun,
creative process.
And, again, our team
is trusted to do it
and we just kind of sit
back and go, awesome.
That's the direction.
Keep going.
AUDIENCE: I'm curious about
your new light beer offering.
I'm curious why no
other craft breweries--
or very few other
craft breweries--
seem to be going down this road.
And I'm also curious what the
different challenges are as far
as both technically brewing
and marketing this kind
of very different offering.
MIKE O'MARA: So I think
there is a couple of reasons.
There are a few craft
breweries doing it.
Some of them are the
bigger craft breweries.
And I think part of
the reason for that
is it's kind of a daunting
task, because the market is
pretty much cornered by
like Bud Light, Miller Lite.
So they've already kind of
got a huge head start on that
and it's hard to kind
of break into that.
We've had success and gotten
lucky with our branding.
And it is something that people
I think we're looking for,
but I think that's one of
the bigger reasons for that--
that coupled with they
demand a lower price point.
People go out and they buy
a light beer that's 4%.
They don't expect to pay
$15, $16 for a four-pack.
They expect to pay a lot
less for a 12-ounce 12-pack.
So that's part of it too because
a lot of other craft breweries,
including us-- and that's one
of the reasons why we held off
on actually going full
force into it for a while
was because it is lower margins.
And it's a tougher
beer to brew--
there's not much other
flavor to hide behind
if you don't brew it right
or don't have great quality
control, things like that.
So kind of all those
things combined--
I mean, I can't speak for
any other brewery really.
But I would assume
that those are
all big reasons for them not
really entering that market.
ROB BURNS: And I'll
just add this data only
shows two pack types.
Bud Light is packaged in so
many different glass bottles,
18-packs, 24-packs, 30-packs--
that if you look at that number
that's almost nine million
here, I think it's
in 26 weeks-- it's
something like
almost 50 million.
So while we're making a dent,
we're nowhere near the Goliath
that is Bud Light.
That beer is going down--
every year they're selling
less and less of it.
But it's a big hurdle to attack.
It's something like, I
think, 40% of the beer
drank in the state is Bud
Light, which is ridiculous.
MICHAEL OXTON: I just
want to add one thing
based in your question.
I think we've almost put
it in our brewery's DNA
to ask questions like
what you just asked,
which is like why
isn't anyone doing--
like why aren't more
people doing that?
And if that question gets
asked around the brewery
and we can't come up
with a good answer,
it's just like, OK, go there.
Go in that direction.
That's really interesting
and at least explore.
And that's kind of
we're trying to do.
ROB BURNS: And it's
a similar thing
to starting our own
distribution company.
Everyone told us
that's way too hard.
You guys can't figure it out.
Brewers can't just run
a distribution company.
There's guys who's
done this for decades--
multi-generation businesses that
are billion dollar revenues.
Just give it to them,
they'll get it there.
And it was like, no, we're
going to try to do it ourselves
and we're going to do
it better than you.
We don't always do it
better, but we try.
AUDIENCE: Thanks for all the
good beer over the years.
Can you talk about your
improvement process
after you release a beer?
I swear that
Whirlpool has gotten
more bitter over the years.
So I'm curious like
once you release a beer,
do you actually go
back and look at it
and try to improve the recipe?
Or do you try and keep it
as consistent as possible?
ROB BURNS: I would
say there's always
a little bit of
evolution in the beers
as time goes by as
the brewers tweak them
and try to get them
better and better.
Obviously taste is
subjective and not
all the times it is better.
The other component
I'll add is that it
is an agricultural product
at the end of the day.
Mosaic hops from year to
year do not always taste
the same, which is a challenge.
And some of the tweaking
is derived from that
around crop variability.
But we do have a
tasting program where
different versions
of Whirlpool are
tasted against benchmark
batches versus how
they're aging on shelves.
And if a product is skewing
out of what everyone deems is
Whirlpool, then we
re-evaluate what went wrong
or what changed and
things like that.
But it's definitely hard
to keep it as consistent.
I mean, for all the shitting
on Bud Light I've done,
they do an amazing job
getting that right,
and that's something that
we can't quite compete with.
But we try our best and we do
have QA QC processes in line
to try to mitigate any drift.
MIKE O'MARA: Thanks, everyone.
ROB BURNS: Thanks, everyone.
[APPLAUSE]
