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10.2004

Massachusetts Beverage Business

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Long Trail's Pherson

Article By: Lew Bryson

Long Trail Brewing recently re-entered the Massachusetts market.



At about that same time, I got a press package from Long Trail. That may not seem significant - my desk is six inches deep in brewery press releases - but I can count on the fingers of one foot how many times Long Trail has contacted me in the past - they just don't do this. Long Trail has a reputation as the Tibet of New England brewing; they keep to themselves. You can go to their brewery taproom and eat and drink and look at the brewery through the big interior windows, but don't look for much more information than is found on their website.

And now a press package comes out, complete with a slickly - produced DVD? Time to press my luck and go for an interview with Long Trail president Andy Pherson. He went for it.



LEW BRYSON You haven't done a lot of interviews - I think I've talked to you once in six years. Your packaging and your names aren't as flashy as some, but you've had strong growth. What works so well?

ANDY PHERSON I guess maybe not saying much. We've referred to ourselves as monks up here. It seems no matter what you pick up, periodicals or anything, certain names pop up all the time. I always chuckle because ours never does. It's not that we don't want it, it's just that we've never sought it out. We've always been very, very busy. We designed and built this brewery ourselves, it's a unique building. Maybe what's different about it from others is that we designed and built the equipment that's in it.



LB Let's go back to the beginning. Tell me about starting out in the old brewery, near Quechee. What was the plan then, what were you aiming for?

AP We don't know what we were aiming for. When I wrote a business plan in 1988 - and I still have a copy of it - it was to make a locally produced alternative to imports. That's our mission statement then and now, that's all we want to do. It's as simple as that. I remember our first bottle, which is on display in our entry foyer. The label very proudly said "Product of the United States." That's what really turned me on.

Finally this year import growth has subsided a little bit, and craft continues to grow. And it should continue to grow! Americans should be awakened to the fact that craft beer is every bit as good as the imports and take a second look at the crafts.

That's what we do. I feel very opinionated and American about it. That's always been our mission statement. It doesn't say "Product of the United States" on our label any more, because it seemed like nobody cared. Very much like in the early 199Os, when we were all beating the drums against Samuel Adams, because the beer wasn't made in Boston. Then we all stopped, because we found that the consumers didn't really care. And when we found that the consumers didn't care whether the beer was imported, we went from "Product of the United States" to "Brewed in Vermont".



LB What was it that made you decide to brew beer? What was your inspiration on that angle?

AP My background is in engineering, and my 198Os were spent in Massachusetts high tech. I used to go all over the world, and the trip I took the most often was about a week per month out to Silicon Valley. I saw my first Mexican food, and I observed the Mexican food mania move from west to east. I had my first Corona beer on the west coast.

Then I had my first Anchor Steam, and I went to the Anchor brewery, and that was it. I called my wife and told her, hey, if you happen to go to the library this week, pick up some books on brewing. "Why?" Well, it's because I want to build a brewery. When I got home, there was a stack of books on the kitchen counter. She didn't want me traveling any more than I wanted me traveling, because our kids were very young. Two or three months after that, I had resigned my job with a wonderful company that I'd been in for years, we'd sold our home in southern New Hampshire and moved to our second home, which is right down the street from the brewery.

That's how it came about. I saw these trends and I jumped on them. I remember my dad yelling at me in the 197Os for spending $18 on a case of Lowenbrau Oktoberfest for Thanksgiving dinner - eighteen bucks! That was 1976, that was the real Lowenbrau, before Miller made it. God, that was good beer. But I've always liked good beer. The old family photos show it, we've always got Heineken, or Lowenbrau, whatever we could get.



LB Going straight from that, how would you describe the beers you brew at Long Trail?

AP We were into German beers. It wasn't economically viable for us to brew lagers, as in any small craft brewer. Fortunately, as I said, I traveled all over the place, so yeah, I traveled to Germany. So I spent some time in Munich, visited Dusseldorf and Cologne, and had my first altbier, which are just "old beers", you know, non-lager beers. They were really clean, crisp ales, and I loved 'em. So that's what we tried to make.



LB You took a huge step with the new brewery. What made you think you could swing the money and the volume you'd have to do?

AP That's a very good question. The truth is, we were almost acquired by Anheuser-Busch back then. I had to hesitate for a second and decide whether I really wanted to admit to that. We signed confidentiality agreements, as did they. We had the exact same rationale for doing it as Redhook Ale Brewery did, the exact same: we wanted access to markets. We were just a little ahead of our time. I wrote a letter to Anheuser-Busch in 1993 proposing it to get us the access to market that we would need going forward. By early 1995 we pretty much had a deal structured.

What happened? This was at the end of the March. We had a laundry list of fairly minor issues to work out. But things were happening so fast, the lease was up on the basement in June, and I was still working on permits for the new building. A-B is so big, nothing happens fast. I knew that, so I just respectfully said, "I gotta walk on this." It's more important to the company to get the building done than to do this deal. So on April 1 we pulled the plug. It was a big day, the biggest day of my life. I can remember it like it was yesterday, a huge decision.

We built the building and moved into the new place on Thanksgiving. It was brutal, we lost five people because of the long hours, but we did it. We did a press release, and sure enough, we got a communication from the Midwest. But this was 1996 by now, and in mid-September, all the microbrewer IPO stocks - Sam Adams, Pyramid, Redhook - crashed. That was the end of the deal. That, arguably, is when our little craft brewing depression started. It stuck in the mind of institutional investors: hey, maybe this isn't so big as we thought. That made it a lot harder to raise money.

Did I make the right decision? Yeah, but we still have access to market problems, and it's getting worse. As the middle tier continues to consolidate, it gets harder for a biz our size to get to consumers. Anyway, that was the motivation to get out of the basement, where the original brewery was. You'd have to have seen the basement .



LB Oh, I did. I did!

AP That was just an absolute miracle that we even lived. Oh, my God. When I left there, the last day I was there was December 8, 1995, and when I walked out the back door, I swore I'd never set foot in that building again, and I haven't. It got us where we are, and you can never take that away from it. And I'm very happy to say that there are still a number of people here that weathered that storm with us.

But what made us build this place? To keep it simple, we had to get out of the old digs - it was as simple as that - our lease was up. I remember I was negotiating to buy the building. We were going to buy the mill, and that wasn't going the way I was hoping it would go. I remember the owner said, "Well, what're you gonna do?" And I said, "I'm going to buy the hayfield down the road, that's what I'm gonna do." And that's what I did. We bought the hayfield in June of 1994.



LB It's a gorgeous spot.

AP Thank you. This spot's heaven. That's what has kept us so occupied. This facility is unique, I think, as a brewing facility, in that it's self-contained. We had to drill our own wells, we have our own water supply. And we have to treat all our effluent on-site. We have no sewer lines. This brewery has no water lines, no sewer lines, no gas lines. We had to put three light poles in just to get power. Can you imagine that?



LB This is starting to sound like an Amish farm.

AP It is! Everything is recycled. It's a zero-emissions facility. The beer is naturally carbonated, we recycle the CO2, and our kettle emissions are scrubbed. We could be at a full boil, like we are as we speak, and be out on the brewhouse floor or out in the parking lot, and not know it. No steam coming out of the building, because the heat's captured, and you won't smell the boil. It's really cool, and it's all home-made. The heat-recovery system and the chemical scrubber are designed and built by me. The whole brewhouse - that's an often-asked question when people come through our visitor center: "What type of system do you have?" Well, we have a 6O-barrel system. "I know, but what kind?" And I say, it's home-made. That's what keeps you busy. But it's a lot of fun!

As President, right now I'm wearing an old Long Trail shirt, a pair of work boots, and a very beat-up pair of green work pants. I've been out to Sierra Nevada a lot of times, and I see us as a miniature Sierra Nevada in that they're the same way, they have an extensive (machine) shop. I do all my own welding, plumbing and electrical, so I just don't get out like a lot of other guys do. My heart is really in twisting wrenches and building the facility. I love what I do. I really do. It's just a great job. I'm a very lucky guy.



LB What kind of numbers did you do last year?

AP 44,OOO barrels, I don't remember what the sales were - $9 million, $8 million. We have the restaurant here, and it all just kind of blends together. We're on track to do over 5O,OOO bbls. this year - up close to 2O%. We have room for more fermentation capacity, so we could make more beer. But we're happy with the schedule that we're on right now. We're making the product that we had programmed to do this summer. We're actually outfitted right now to do about 75,OOO bbls. a year. But we don't want to go there yet. We've been at a programmed growth rate of about 15% a year for 15 years. We don't measure our success by volume growth - it's all about the bottom line. And it's about quality. We're just learning so much. People that grow too fast often die just as fast. We're learning, and we've kept it close to home for a long time.



LB Where is the future? Are you going deeper in New England, or spreading out?

AP We're going to keep growing at the same rate. We just reentered Massachusetts, after being out for years. We re-entered Rhode Island last year. That gives us all of New England, but it gives us a ton of room to grow within New England. We've been in New Hampshire for seven years, and we're up something like 22% year-to-date in New Hampshire. There's so much more room to grow. That's what I mean when I say we're learning. We're learning to make better beer more efficiently. But we're also learning, every day, new things about the market. How to properly bring your product to market for success and for long-term success. It's a huge learning experience, and if we go too fast we're going to hurt ourselves.

We are doing New York right now, it's a big state, and so far the reception has been good. It's a little intimidating. We deal with 24 wholesalers throughout New England, and then to sign up all of New York it's something like 14 more. It's a tough area to cover. From there? I don't know where we go.



LB Back to the monks thing: you did that for so long, and now you've got your new marketing guy, Trevor McCormick, you've got that really slick DVD out, and here we are doing this interview. What changed?

AP The fact that we have more capacity. We've never had anybody in marketing. When I hired Trevor, he had no experience in beer. He's learning as fast as he can. His job is to make people hear about Long Trail, get our story out there. It's a good story, but only we know it! I told him, don't hurry, take your time, we've been at it a long time and we intend to be in it for a long time.

Why now? We feel like the hardware project here is almost complete. We think it's time to take the story to the public.



LB This programmed growth, close to home idea sounds a lot like Deschutes, and that's not a bad model to follow.

AP Gary Fish is a wonderful guy. I know him, I've spent some time with him. I guess there are a lot of similarities. I like to think, without breaking my arm patting myself on the back, that there are similarities to Sierra Nevada as well. Ken Grossman and I have very similar backgrounds. And he still works his butt off, so does Gary, and so do I. That's what you have to do. Years ago, the Craft Brewers Conference was in Boston, and the keynote speaker was Michael Jackson. He stood up there and gave a tremendous and very appropriate talk. He said, "I look around this room and I see too many tans, not enough band-aids, not enough messy hair. To survive in this craft that you're so deeply involved in, I hope that there's a lot of plumbers out there, a lot of welders." And I sat in the back of the room and thought just how appropriate that was that year. There were a lot of bankers in the room, and a lot of people with stars in their eyes. And then there's old Andy-boy sitting in the back, with two hands that are littered with scars. I couldn't have related more to what he was saying! He was so right, and I never forgot that. We're still here, and stronger than ever. That's it.



LB What advice do you have on how to sell more Long Trail?

AP Keep doing what you're doing, because the response to the brand has been very, very good in Massachusetts. What I have to say to retailers is two words: Thank you! They've been great.



LB It's been a good interview. Thanks.

AP No, thank you. Talking to someone who's been on this since way back is good. I've had a smile on my face the whole time.

 

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