Business Startup: How a beer turned problems into profits If you've ever been in Texas, you've probably noticed a drink special for the sale of beer called St. Arnold.
It comes in a separate bottle, with a picture of St. Arnold himself (the patron saint of brewing) right on the label, and it happens to be the company's largest brewery micro Houston.
But St. Arnold did not always start a profitable small that it is today. In fact, their 13 year history is full of false starts, missed opportunities, failures and near.
I recently had the opportunity to meet Brock Wagner, founder of Saint Arnold, and his story has had a profound effect on me. It all started in 1994, when Brock was a major achievement: the time was counted.
At the time, Brock has worked in the financial services sector makes a good salary, but when his father died unexpectedly, he gave Brock the opportunity to reflect. He realized that time was limited, and he did not want to spend the rest of his life at a job he disliked.
He sat down one day and made a list of what he loved. Near the top were two factors: the consumption of beer and brewing.
For the average person, it may seem that the possibilities for a poor career move. After all, his career has been entirely in financial services. What would he do, go drive a delivery truck of Budweiser?
But Brock has decided to simply follow his heart and began to get funding to create the first Houston microbrewery.
From the beginning, there were problems with his business idea to start small. The money was rare for such a risky business. Investors are reluctant to put their hard earned money in a company where the founder had no experience in the beverage industry. But after more than a year, Brock was awarded barely enough to start (one of his first investors was Kenneth Lay of Enron, which is a whole other story).
Several years into the project, Brock got a facility, built across the brewing equipment, and was ready to start making beer! But about a week before he was ready to launch, there was another major setback: a city inspector who had been testing the pipeline made a mistake with a pressure valve, and ends up destroying $ 100,000 worth of equipment brewery in just 30 seconds!
What a blow, and just one week before they are set to launch. The next years were spent in various courtrooms before being reimbursed by the city, but Brock was not deterred. He raised more money, rebuilt the plant, six months later, finally delivered his first bottle of beer Saint Arnold.
It should be an occasion to celebrate, but initial sales of the product have been disappointing. In fact, five years after shipping their first bottle of beer from St. Arnold had yet to make profits. How easy would it have been packing things and go home? Even as the contractor would have a hard time admitting defeat after five years right? Maybe Houston was not ready for its own micro-brewery.
At this time a business partner of Brock decided to go back to society. Brock has redeemed its shares (generously ensuring that it would at least recover its initial investment, even if the company was losing money) and they parted on good terms.
This was the lowest point of St. Arnold and Brock. With a company in difficulty, and very few customers, it was difficult to remain optimistic. But over the next five years, Brock has been slowly but surely turn the company around. Today, Saint Arnold is not only profitable, but he is admired and loved as a Houston tradition. People ask for the product if a particular bar or restaurant does not carry it, and holds a brewery every Saturday that is open to the public. Houston.
Posted on June 17, 2010.