Case Study: Odell Brewing Adds Wine Making Equipment to their Brewery
Odell Brewing is now the 23rd largest independent craft brewery in the country, distributing beer to 19 states. The company is 100% employee-owned. Odell has its roots in innovation and creativity that meets balance, consistency, and quality in each brew. This balance is not just a philosophy for the beers Odell Brewing crafts. It’s a foundation for the company as a whole. Odell Brewing recently announced the introduction of a winery in 2020 to its portfolio. Learn why they decided to diversify the brewery and find out about some of their challenges and opportunities in the process of adding wine making equipment to their beer brewing business.
About Odell Brewing
Matt Bailey is the Maintenance & Engineering Manager and has been at Odell brewery since 2010. He has been a huge wine fan for several years and is leading the production of the wine program.
Odell has also hired a winemaker. They expect to open a tasting room in 2020. Packaging/production will begin in Mid-May. The package format will be 375 ml cans. Unique bottle offerings in the fall and winter months will be offered in the tasting room. Once the tasting room is open, there will be to-go pilot wines, and experimental products will be offered.
As part of their company’s family approach in the brewery, they have a pilot system that all co-workers, regardless of their position, get a chance to brew a batch of beer in their first year. Odell does a lot of R & D on the pilot system. Their MARKS custom built brewhouse at their Denver location is a similar system where they do the main R & D, experimentation, and product development.
Now, they are bringing the same innovation and creative philosophy to the winery by diversifying into wine making equipment. Matt said that small batches that may not make sense for the masses offer something fun and exciting, bringing in new customers into their tasting room. Small batches will also help in training their staff.
Matt said Odell will source their grapes in Oregon and Washington. He related, “we have a really close relationship with our hop suppliers and growers. This is sustainable for our farmers and vital to us. We found that a lot of our hop growers also grow grapes and found that synergy there too.”
A small percentage of red grapes will be coming from California. He hopes to bring grapes from Colorado when it becomes feasible. He further related that “by year 2 and 3, all the wine tanks that MARKS made for us will be used in the wine production when we start shipping the grapes from those regions.”
Q & A With Matt from Odell Brewery About Adding Wine Making Equipment
Q: What led to the discussion about adding/diversifying product in your lineup? What prompted you to add wine making equipment to your brewery? A slow-down in beer sales?
A: Not a slow-down in beer at all, we started researching and investigating this three years ago. We did an investigation group on spirits as well. A lot of our ideas and new opportunities for the brewery have come up through employee suggestions, and wine was one of those, and then we started looking into it. We believe that conservative and slow growth and diversification are good for sustainable business, so we take those suggestions regardless of who they come from seriously.
And as we started looking at wine, we realized a lot of us love and drink wine at home. As we started talking about it more specifically, we found out that we are all just really passionate about fermentation. It was intriguing to us to take this seriously the more we talked about it. The common saying that ‘it takes a lot of good beer to make good wine!’
Q: How will you bring the spirit of Craft Beer’s ingenuity and experimentation into your new product?
A: Most people agree that traditional wine can have a lot of barriers or perceived barriers, and we want to put a new spin on it. By putting it into cans, we want fewer physical barriers: to have to take a foil top off, cork, and have to have special glasses and be able to enjoy quality wine in a new format. Lighten the feel of it out where you don’t have to have someone walking you through every single thing to enjoy good wine. We want them to enjoy that onsite experience the same ways when they come into a craft brewery.
When it comes to fermentation, we are excited to use different yeast, fruit, and mixed fermentation. We have a list of long ideas we are excited to start playing with. Like beer 20- 30 years ago, it wasn’t supposed to be hoppy, wasn’t supposed to have wild yeast, not supposed to have all this funky flavor that you can get anywhere now. That’s what we want to do with wine! Break down some traditional barriers. Having a wine license in Colorado allows us to ferment anything else besides spirits, so different percentages of different fruits, it really opens up a whole new palette of things we get to play with.”
Q: Did your existing customer base take on the new product, or was there an effort to reach a new sector of consumers?
A: Our marketing team is working super hard on it. The name of the business is OBC Project (Odell Brewing Wine Project), name as a nod to the brewery next door. Our tagline is ‘a wine story told by craft beer makers.’ We do want to bring people, our beer fan base over to wine, but we want to reach new customers who don’t normally enjoy beer. In the initial social media blasts, people have been overwhelmingly positive and excited, a lot of people have a significant other that can’t drink beer or may not enjoy it, but they like wine.
Q: What are your medium and long-term goals for this new product as a percentage of your total production (including beer)?
A: We have estimates, but sheer volume will be less than 1% of the total volume we produce compared to beer. We want to keep pushing the boundaries of it, but only the future will really tell how much long-term volume we can get out of this new building next door.
Q: Were you able to combine beer and wine making equipment? Utilize your existing beer making equipment? Did it require any additional equipment to add to for wine making? Did it require a brewery reconfiguration?
A: We weren’t able to because legally, we are not allowed to share any equipment. We have to have our own separate canning line, pumps, etc. Everything physically has to be kept separate and can not be multi-use. But there was a handful of items that the brewery had outgrown and was no longer using that we were able to use next door in the winery.
Q: How does the method of distribution/logistics differ from wine making vs beer brewing?
A: Distribution will be a primary focus, with the tasting room being delayed. In the Colorado area, we are allowed to co-ship, so we won’t change much for how we will ship. The finished product is not allowed to co-mingle, so we will have segregated spaces in our coolers and warehouse floors that will have to be dedicated to wine and not occupied by beer, but shipping itself to distributors can be so we are fortunate there.
Q: Were there additional challenges for the new product that is different from beer? (e.g., a food product requiring different QC procedures, HAACP, FDA, pasteurization, filtration, and so forth)
A: Similar to distribution, there won’t be extra runs there. We self-distribute in our county, so our wholesaler operation will be Odell operated. We will be able to distribute our wine where we are placing our beer, which will be helpful. We don’t typically brew to style, having that experimental offering will have a lot of synergy there. We might have something that doesn’t work well with beer as a fruit, but it might work well in wine. A lot of that cross-business collaboration is going to be really fun and we are looking forward to that.
There are a few places in Colorado canning wines, but it’s still a small segment of the wine business. People are not always aware that it’s available in the liquor store, and a lot of liquor stores don’t know where to put it. It is often kind of just put in the back corner, and people are just going through the bottle sections.
The bigger hurdle working with individual stores is working on placement. Getting it right in front of customers, so they know canned wine is an option. There is also a lot to be learned in the whole winemaking area, so we hired an experienced winemaker who will be educating us. Breweries are more hyper aware of sanitation, and we are looking to bring that level of cleanliness to wine. Wine is higher alcohol and lower pH, so it isn’t as susceptible to spoilage. But gleaning insight from someone in the wine industry and merging the strengths that already exist in the brewery is key.
Q: What steps have you taken to mitigate the risk of this new venture?
A: We are starting small and went through a tremendous amount of market research. Our internal working group essentially built the business plan. The model is super diverse, people from production, engineering and data analysts, marketing, financial folks, virtually every corner of the building were all involved to try and analyze and do the best forecast of what we think we could do. We were not naive, knowing we’re not experienced, winemakers. We didn’t want to make a whole lot of irresponsible decisions starting out. So we are starting small, and doing as much research with a lot of different perspectives is how we hope to mitigate risk.
Q: Are you able to utilize and cross-train your existing labor of brewers, or do you have to recruit new employees with a wine background?
A: We hired a tasting room manager in addition to an experienced winemaker. The tasting room manager will help out and wear a couple of different hats, including cross-train/walk across the parking lot for our brewers. People are super excited internally, so they want to learn, and they want to help and have a hand in it. We are definitely going to involve current labor as much as we can.
Q: How would you approach this project again, knowing what you know now?
A: I’ll definitely be able to tell you more in a year or two. But right off the bat, I think from a business plan and model perspective, we needed to allow a little bit more time between a decision time point and working through the construction side of things. There is a lot of municipality delays. Processes are inherently slow between permitting, design of tasting room, and construction build-out. More time would be both beneficial for marketing teams and architectural design team.
Q: Any advice you would give to another brewery thinking of combining adding wine making equipment to diversify into a new market segment?
A: Making sure that it’s a good cultural fit. I can’t imagine trying to do this if it wasn’t for the full support from our leadership and all co-workers involved and their excitement. If people didn’t understand or have that genuine passion, it would be really, really difficult. That’s been huge, and getting that insight from everybody’s skill sets from all the different departments has been extremely helpful. You can lean on someone else and use their experience where it’s needed for a new business like this.