founder

Founder Profile: Craft Beer, Reimagined

Summary

At Time Of Publication, March 12th, 2019, Seven Stills had raised $830.4K of the $1.07M Round

Recently KingsCrowd CCO Sean O’Reilly sat down with the Co-Founder & CEO of Seven Stills Tim Obert.

Below is a transcript of their conversation.
Sean O'Reilly

So you’ve got an interesting production history, can you tell investors a little bit about your growth story and how you managed to pull off your incredible success so far?

Tim Obert

Absolutely. The most important thing investors should know about me and my cofounder Clint, is that we are creative. This creativity goes a lot further than just the types of products that we put out and the packaging we come up with for them, but it more importantly involves how we find solutions to take our company to the next level that are outside of the norm.

For example, Clint and I founded the company to make whiskey from craft beer. We didn’t have a brewery or a distillery, or any money to open one, especially in San Francisco. So to get the company started we came up with a solution, which was to find a small brewery in Mill Valley that wasn’t at capacity and have them brew a small batch of beer for us.

We then trucked this beer in olive drums that we bought from a guy off of craigslist to a distillery in Petaluma that would distill the beer for us.  We then filled up another drum with the unaged whiskey and trucked it back to a small storage facility in San Francisco where we aged it and waited for it to be ready to bottle and sell to our favorite bars and liquor stores.

Finding small creative solutions like this is definitely how we’ve been able to grow as quickly as we have with as little traditional resources as we have had.

Sean O'Reilly

You mention a demand spike, to what do do you attribute it to?

Tim Obert

Our team is in the best place it’s ever been and things are just starting to fall into gear.  2018 was the first year we really put any focus onto our packaged beer program so all year there was a lot of “figuring out what we were doing”, but now we’re in a position where we have things dialed, are hiring people for the right positions, and are confident in what we’re doing and it’s really coming through in the quality of the products we’re putting out and how the team is presenting them.

Sean O'Reilly

Tell me about your famous IPAs.

Tim Obert

I’m generally a cult brewery “fanboy”, so I’m always seeking out the best breweries that you can’t get anywhere else and have huge lines on release days and sell out in hours and have high trading value.

I have always been into finding new breweries like Sante Adairius, De Garde, Jester King, etc. that make extraordinary sour beers but never paid much attention to the hype IPA breweries, i.e. Monkish, Treehouse, Trillium, etc. because I thought, why would I wait in line for hours to get a $26 four pack of an IPA…that is until I went to Monkish for the first time and my mind was blown.  This wasn’t an IPA, it was something way better and different than I’d ever had before.

After this I was just kind of like, I want to start making these beers.  We spent the first six months or so dia ling our recipes and landed on Eight Pounds that I feel is just as good as anything Monkish or Trillium is putting out, but that our fans/customers didn’t have to wait in line for hours to buy.

This was kind of the start of the whole “Hype Can Series”, i.e. just kind of poking fun at the hype around a beer and how excited people get new beers, but backing it up with actually making hazy IPAs that are just as good as these other cult brewers.

Sean O'Reilly

What’s your current production, how does that compare to where you’ve been in the past few years?

Tim Obert

Since 2018 was the first year we started producing beers, we’ve only needed space for whiskey fermentation for the last four years, which has a lot quicker of a turn time due to the more active yeast strains we’d use.  When beer took off right out of the gate we immediately quadrupled our production from one 30 BBL fermenter and two 15 BBL fermenters, to ten 30 BBL fermenters and the two 15s.

We’re now anticipating maxing that out in the next few months, hence the opening of 100 Hooper, which will have fourteen 60 BBL fermenters when we open in July.

Sean O'Reilly

You’re planning on opening a new production facility -- where will it be located and how did you choose that location?

Tim Obert

We more or less hit the jackpot with our new facility.  We had heard of a project in the works near the soon to be open Warriors stadium that was going to have the Adobe corporate headquarters on the top and production spaces on the bottom.

We started the conversation with the developers of the project in late 2017 and quickly were informed that they were looking for a brewery to move into the complex as their “anchor tenant” and were able to get a large Tenant Improvement Allowance and 18 months in free rent to get us into the building.

Sean O'Reilly

How much production capacity will this new location have?

Tim Obert

During the first phase we’ll be adding 840 BBL of fermentation tanks, which will again about quadruple our beer production.  We also are adding on a 750 gallon stripping still that will sit next to our current 300 gallon still (that’s also being moved to the new facility).

Sean O'Reilly

Taking a step back, why did you get into this business?

Tim Obert

The two things that you should know about me are 1) I was born and entrepreneur and 2) I love craft beer. I always knew I wanted to start my own business and really wanted to enter into the craft brewing space, but was under the mindset that if we didn’t have an idea that was 10 times better than anything else on the market that we shouldn’t start a business.

So when we came up with this idea of making whiskeys from different craft beers and realized that no one else was doing it, it wasn’t really a question of should we do it, it was more of how are we going to do this.

Sean O'Reilly

How do you see your industry taking shape in the near to medium term?

Tim Obert

The industry is very segmented towards regional and hyper local breweries.  Everyone asks me why we’re opening a brewery in San Francisco since there is so much competition in the market.

And I always ask them, who is the competition?  In all honesty the only brewery we feel is competing for the regional spot right now is Fort Point and they are taking a completely different approach to it than we are.

At the same time, yes there are 30 something breweries in San Francisco, but they are all hyper local breweries servicing their communities and the bars near their community and in all honesty they aren’t competing with each other because they are solving the problem that nobody in San Francisco wants to leave their neighborhood.

We are taking both approaches.  We are investing heavily into building a sales, logistics and delivery team to build our beer program into a regional brand, and at the same time we are opening up hyper local taprooms to gain exposure to the people who are drinking in their neighborhoods and will hopefully buy our beer next time they’re shopping for groceries.

Sean O'Reilly

Looking ahead, what can you tell us about the pros and cons of national wholesale expansion versus  opening up an additional brewery closer to your home marker?

Tim Obert

I don’t anticipate us looking to expand outside of the Bay Area let alone outside of California in the next two years.  It’s incredibly important for us to focus on our home turf and to do really well in this single market rather than doing okay in a bunch of markets.

Once we have established ourselves as the number one brewery and distillery that you think of when you think of drinking in San Francisco, then we’ll think about doing the same thing in San Diego, or LA. Until then we need to keep focused on our back yard.

Sean O'Reilly

Longer-term, what sort of exit would you envision?

Tim Obert

The two routes of exit are 1) Growing to the point of being acquired or 2) Growing to the point of acquiring. The latter, is our preference, and is really exciting to me because it would allow us to maintain the integrity and the quality we stand behind but also to continue to grow our company outside of our home market.

Tim is an awesome Founder and we think this is a Deal To Watch!

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