Episode 90
How Do Tariffs Affect Craft Beer?
How does international trade impact your favorite local brew? Hear Bobby and Allison's personal experience with tariffs buying a new brewing tank. Gary and Joel help delve into the complexities of brewing logistics, economic challenges, and the science behind crafting premium beers.
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TIMELINE
00:00 Welcome!
02:14 Tariff Talks
03:17 Challenges in Brewing
04:16 Tank Installation and Expansion
08:38 Distribution and Market Dynamics
11:48 Impact of Tariffs and Inflation
17:08 The Love of Beer and Brewing
17:46 Marketing Challenges and Insights
18:37 Craftsmanship and Storytelling
21:32 Economic Challenges and Adaptability
23:48 The Academic Perspective
27:24 Community and Collaboration
29:37 The Realities of Running a Brewery
33:37 Support us on Patreon!
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CREDITS
Hosts:
Bobby Fleshman - https://www.mcfleshmans.com/
Allison Fleshman -https://www.instagram.com/mcfleshmans/
Joel Hermansen
Gary Ardnt - https://everything-everywhere.com/everything-everywhere-daily-podcast/
Music by Sarah Lynn Huss - https://www.facebook.com/kevin.huss.52/
Recorded & Produced by David Kalsow - https://davidkalsow.com/
Brought to you by McFleshman's Brewing Co
Transcript
Hello everyone, and welcome to another episode of Respecting the Beer.
Gary Arndt:My name is Gary Arndt.
Gary Arndt:With me again are the usual suspects.
Gary Arndt:We got the historian of hops.
Gary Arndt:And a very simple man, Mr. Joel Hermanson.
Gary Arndt:Thank you, Gary.
Gary Arndt:I'm straight down the middle.
Gary Arndt:Glad to be here.
Gary Arndt:I'm glad to
Joel Hermansen:be
Gary Arndt:here.
Gary Arndt:Appreciate that.
Gary Arndt:You are the Earl Campbell of life.
Gary Arndt:For those of you who don't understand the reference, Earl Campbell was a fullback and he just, he just ran over people.
Gary Arndt:He went in a straight line, didn't you know, in veer you can drive around.
Gary Arndt:He just did it.
Gary Arndt:There's no
Joel Hermansen:meandering, no cutting.
Joel Hermansen:5 47, no jump
Gary Arndt:desk.
Gary Arndt:Big Loki.
Gary Arndt:Thank you very
Joel Hermansen:much.
Bobby Fleshman:The Randy Johnson of.
Bobby Fleshman:Baseball fastball every pitch.
Bobby Fleshman:Yeah.
Joel Hermansen:Yeah.
Joel Hermansen:Okay.
Joel Hermansen:I said this is actually a compliment.
Joel Hermansen:Thank you, Gary.
Joel Hermansen:Appreciate that.
Joel Hermansen:Well, it was never intended to be an insult.
Joel Hermansen:It could have gone that way though.
Joel Hermansen:It could have
Gary Arndt:chuckling in the background are the good doctors.
Gary Arndt:We have a man who's becoming intimately familiar with kegs and tanks, Mr. Bobby Fleshman.
Bobby Fleshman:Yeah.
Bobby Fleshman:The term kegs are, we're allocating to a new employee soon.
Bobby Fleshman:Very soon.
Bobby Fleshman:But yeah.
Gary Arndt:And also with us, sorry to say, been downgraded from professor to student.
Gary Arndt:Um, don't know if that affects your salary or anything, but, uh, I
Allison Fleshman:know, I know
Gary Arndt:A good doctor, Alison McCoy, how are you doing?
Allison Fleshman:Doing well, doing well.
Allison Fleshman:Having just taken a class on general relativity over at Lawrence.
Allison Fleshman:It's very fun.
Allison Fleshman:I recommend it to all.
Bobby Fleshman:Just drop that.
Bobby Fleshman:Just drop that right here?
Bobby Fleshman:Yeah.
Allison Fleshman:I was telling Gary earlier, 'cause I'm sure he's, you know, studied and or done some sort of general relativity, something in his days.
Gary Arndt:Not explicitly.
Allison Fleshman:What about implicitly?
Gary Arndt:Yeah, but every, uh, outside of a lot of like the first three semester physics stuff that I took, everything was orientated towards earth science.
Allison Fleshman:Mm.
Gary Arndt:So
Allison Fleshman:That's fair.
Allison Fleshman:Cool.
Allison Fleshman:I know something Gary doesn't.
Allison Fleshman:No, it's a rare thing.
Allison Fleshman:You know, a lot of things, I don't know, I,
Gary Arndt:that, that ain't, I have a very broad amount of knowledge.
Gary Arndt:The depth on many particular topics, however, is lacking.
Gary Arndt:Good point.
Gary Arndt:But anyways, one topic that I do know a little something about, 'cause I got my degree in it, is economics.
Gary Arndt:And a lot of people may not realize it, but even for a small brewery like this one, you deal with a lot of foreign trade.
Gary Arndt:Uh, the brewing system that you guys have in place was, if I recall correctly, a Czech system that was imported from South Korea.
Gary Arndt:You are installing new tanks right now.
Gary Arndt:Those come from overseas.
Gary Arndt:A lot of the individual barrels and kegs you get.
Gary Arndt:You said were coming in from Canada, plus ingredients from overseas.
Gary Arndt:So what we wanna talk about in this episode is how foreign trade affects brewing.
Gary Arndt:Because a lot of people probably think, oh, well you're small brewery, you probably get all your ingredients from, uh, within the country.
Gary Arndt:All the, the stuff comes in here.
Gary Arndt:But that's really not the case, is it?
Allison Fleshman:Nope.
Allison Fleshman:Not at all.
Allison Fleshman:We like to purchase as much as we can locally.
Allison Fleshman:But in a competitive market, sometimes you want to go to the people who have the expertise or the skills, or in some cases the latitude.
Allison Fleshman:So there's certain grains that'll only grow in certain regions.
Allison Fleshman:And we just purchased a brand new bouncing baby tank and it finally arrived.
Allison Fleshman:We started the purchase in February, and then some federal.
Allison Fleshman:Action started to happen and it kind of got stuck in transit.
Allison Fleshman:And it's been one of the biggest headaches I think Bobby and I have been handling behind the scenes of the brewery.
Allison Fleshman:But Bobby, tell us what, tell us about this tank.
Bobby Fleshman:Well, I actually am still on an adrenaline high.
Allison Fleshman:That's true.
Allison Fleshman:'cause you literally, yeah.
Allison Fleshman:You, you just pushed it up today.
Allison Fleshman:Like it, we, we put it into the building just today.
Bobby Fleshman:Yeah.
Bobby Fleshman:And not like opening a present adrenaline, like opening a present that if you don't do it correctly, it might fall on you and kill you sort of way.
Bobby Fleshman:Or it might stand up and everyone rejoices and so.
Bobby Fleshman:It was the latter today, fortunately.
Bobby Fleshman:That's a, I'm here, so a, what's this?
Bobby Fleshman:A
Gary Arndt:pony.
Bobby Fleshman:It was a pony.
Bobby Fleshman:Yeah.
Bobby Fleshman:So, no, that, yeah.
Bobby Fleshman:It's equivalent to that.
Bobby Fleshman:Uh, so we, standing a tank is always exciting.
Bobby Fleshman:It's always touch and go.
Bobby Fleshman:And we just stood it up and it's the first tank we've stood up since, uh, a couple years ago, we stood a really big tank up at, at the, uh, beer factory next door.
Allison Fleshman:I guess we never stood the lagger tanks up because they're supposed to stay their side.
Allison Fleshman:Lay those down.
Bobby Fleshman:Yeah.
Bobby Fleshman:Yeah.
Bobby Fleshman:Another story there, but,
Joel Hermansen:and this is part just so people are clear, you're expanding.
Joel Hermansen:The, the, the production, the fermentation area to the upstairs of the brewery.
Joel Hermansen:Mm-hmm.
Bobby Fleshman:So we're doubling the, our total volume and we are increasing a number of flavors by a hundred capacity for by 125%.
Bobby Fleshman:So,
Gary Arndt:so have you've done the math on this?
Bobby Fleshman:It slightly.
Bobby Fleshman:Yeah.
Bobby Fleshman:Yeah.
Bobby Fleshman:We've, I've been staring at these books for a while.
Bobby Fleshman:We've needed to, we've run outta so many of our flagships, so this is an effort to protect that, uh, running out of those and allowing us to continue, continue on with r and d.
Allison Fleshman:And we, we've made this plan.
Allison Fleshman:Um, so, uh, because of the hard work of our team, um, Milo Music, there's a large injection of, of Earth.
Allison Fleshman:Large sale of beer.
Allison Fleshman:Um, we take a lot of that money and we revest it into the company.
Allison Fleshman:And so last year we knew, okay, we wanna invest it into this tank and this expansion.
Allison Fleshman:And so we started the process to do that was the best tanks in the world are manufactured in China.
Allison Fleshman:And they know what they're doing.
Allison Fleshman:They can build to spec.
Bobby Fleshman:That's the key with, with Chinese manufacturing, what I'm finding is that, once they understand an industry and they understand the specs, they nail it every time, and they, they're just so efficient and they're so process driven.
Bobby Fleshman:And in the beginning it wasn't true with the brewing industry.
Bobby Fleshman:They didn't know what these tanks were meant for.
Bobby Fleshman:They, someone handed them on paper with some, some specs, and over time they were able to improve on that.
Allison Fleshman:And there are good manufacturing tank manufacturers here in the States.
Allison Fleshman:Oh heck yeah.
Allison Fleshman:But most of them get the base stuff from China.
Bobby Fleshman:Well, this is very true.
Bobby Fleshman:A lot of.
Bobby Fleshman:A lot of manufacturers will import.
Bobby Fleshman:And so the, they're really outsourcing that to China.
Bobby Fleshman:And that's sort of a bigger theme I think in the world right now is, is who's doing the most manufacturing and why and how.
Allison Fleshman:But anyway, so these tanks are built so to spec because, uh, our brewery and our building is very small.
Allison Fleshman:So we want the tank to have very specific ports and, um, hookups and hoses and that sort of thing.
Allison Fleshman:It has to be oriented just in the right way.
Allison Fleshman:And so it's not just you go to the store and like, or go to Amazon and click a button.
Allison Fleshman:So it takes a lot of process and, um, discussion with the company to build this tank.
Allison Fleshman:So we started that, what, back in February?
Allison Fleshman:October.
Bobby Fleshman:I mean, honestly, I started Yeah, longer.
Bobby Fleshman:Yeah.
Bobby Fleshman:Years ago.
Allison Fleshman:Yeah.
Allison Fleshman:And so finally we pushed the button and we sent the first down payment in February.
Allison Fleshman:And then the uncertainty of the tariffs hit.
Bobby Fleshman:Right.
Bobby Fleshman:But back backing up a bit to make a, to have a tank that you can make, uh, Pirates Cove, which is our, our German lager, Public House, which is our Nitro Irish Stout.
Bobby Fleshman:5 47, which we've mentioned once on this show.
Bobby Fleshman:I think,
Allison Fleshman:just wait, remind me what 5, 4, 7 is again,
Bobby Fleshman:which takes, it's our double West Coast IPA with lots and lots and lots and lots and lots of hops.
Bobby Fleshman:So just taking those three extremes
Joel Hermansen:and lots and lots and lots of sales.
Bobby Fleshman:And that's true.
Bobby Fleshman:Good
Joel Hermansen:point.
Bobby Fleshman:Which is a motivating factor for this expansion, but building a tank.
Bobby Fleshman:They can do all three of those very, very, very different things.
Bobby Fleshman:Was, was tricky.
Bobby Fleshman:So we had to design, these are custom, these are not off the shelf.
Bobby Fleshman:We didn't just go online and click go.
Bobby Fleshman:This was a, this was a back and forth between us and their engineers and I've been very pleased, uh, both the process of designing and then building and then to see the end product.
Bobby Fleshman:I'm really happy and this is one of eight that we're going to put into action hopefully in the next 18 months.
Allison Fleshman:Mm-hmm.
Joel Hermansen:And Bobby, I don't know if I can quick interject here.
Joel Hermansen:We just had a texted in question.
Joel Hermansen:Tom Bates just texted me and said, how does 5 47 always get brewed?
Joel Hermansen:But sometimes other beers like Public House don't
Bobby Fleshman:love it.
Bobby Fleshman:Well, you've, I've already mentioned the analogy on here, right?
Bobby Fleshman:How I, I don't know that you have, it's a, oh, it's a, think of a nightclub.
Bobby Fleshman:And there's a line and everyone in that line is a beer and there's someone at the door, the gatekeeper, I guess I'm that in this analogy.
Bobby Fleshman:Mm-hmm.
Gary Arndt:And, uh, you let the hot girls in?
Bobby Fleshman:I guess I'm letting the hot girls in.
Bobby Fleshman:Oh my goodness.
Bobby Fleshman:Or the one with all the money, which in this case, well now
Allison Fleshman:Hold up in effect is, hold up.
Allison Fleshman:I'm just gonna stop you now.
Allison Fleshman:No.
Allison Fleshman:So we, there are certain beers that we distribute that we have, that have higher priority than the tap room.
Allison Fleshman:Because the tap room is a, is a glorified account, really.
Allison Fleshman:So we're, if you think of us as three,
Joel Hermansen:so am I an account?
Allison Fleshman:Maybe?
Allison Fleshman:Hmm.
Allison Fleshman:But I think that it's, it's that we have like contracts that we, you know, have to give out certain amounts of 5, 4, 7.
Allison Fleshman:Well,
Bobby Fleshman:I'm having to think both ways all the time.
Bobby Fleshman:How do I supply the market?
Bobby Fleshman:'cause you don't wanna see empty shelves at the grocery store, but I'm might.
Bobby Fleshman:The other part is you don't want to not have 5 47 on tap in our tap room.
Bobby Fleshman:True.
Bobby Fleshman:That is the component that people here I think, don't
Gary Arndt:see.
David:Mm-hmm.
Gary Arndt:Like we talked previously about October Fest.
Gary Arndt:I didn't realize how much of that you made that was not sold here.
Gary Arndt:Mm-hmm.
Gary Arndt:Oh, 95% is of not sold here.
Gary Arndt:I think most of it, and I think a lot of people don't see that half of the business.
Gary Arndt:Yeah.
Gary Arndt:Mm-hmm.
Gary Arndt:There's, I don't know if it's even more than half of the business.
Gary Arndt:Yeah.
Gary Arndt:We, it's 60.
Allison Fleshman:We could do whole show on just distribution.
Gary Arndt:And so I think that's why.
Gary Arndt:It, they, they just see what's on the menu.
Gary Arndt:Is it there, is it not?
Gary Arndt:And they have no conception of what's happening behind the scenes.
Allison Fleshman:There will be times when Bobby will, I'll ask, Hey, what, you know, what'd you brew today?
Allison Fleshman:And he is like, oh, we brewed this and this is in the tank.
Allison Fleshman:'Cause it's a stair step.
Allison Fleshman:Of, you know, whatever's brewed.
Allison Fleshman:And then as soon as it's, it's gonna occupy whatever's about to be taken out of the tank.
Allison Fleshman:And that's actually one of the things that this new tank is gonna do.
Allison Fleshman:It's a release tank that we can put more.
Bobby Fleshman:No, no, this is, this is a, uh, this is a conical fermenter, it's a unit tank.
Bobby Fleshman:So we do fermentation and, and release and, and so on.
Bobby Fleshman:Yeah.
Bobby Fleshman:This, it all,
Allison Fleshman:But anyway, so I'll ask him and he's like, yeah, so we had say, um, what was the last one?
Allison Fleshman:Uh, well, public house.
Allison Fleshman:And you're like, yeah, and I've already sold it all.
Bobby Fleshman:Oh yeah.
Bobby Fleshman:This is a, this is a really amazing and.
Bobby Fleshman:Rewarding time for us.
Bobby Fleshman:But it's really stressful too, because now we know the market is pulling, but if we're not providing, providing ever, they move on to someone who can.
Bobby Fleshman:So it's, it's a delicate balance.
Bobby Fleshman:So we know it's time to expand.
Bobby Fleshman:No, it's,
Gary Arndt:it's a good problem to have.
Gary Arndt:Mm-hmm.
Gary Arndt:True.
Gary Arndt:But it's a problem.
Gary Arndt:It is a problem.
Gary Arndt:Mm-hmm.
Bobby Fleshman:Yeah.
Bobby Fleshman:'cause you can only say it's coming soon, so many times before they move on.
Bobby Fleshman:Mm-hmm.
Bobby Fleshman:So we have to, we have to, we knew we had to address it, so it's exciting.
Allison Fleshman:So we knew we needed to address this.
Allison Fleshman:We needed to expand, increase tank capacity.
Allison Fleshman:So we.
Allison Fleshman:Buy this tank.
Allison Fleshman:Well, in buying, you know, we, we, we contract this tank.
Allison Fleshman:It's being built.
Allison Fleshman:The idea is half money goes down, they build it to spec, and then the other half comes when they put it on the boat to.
Allison Fleshman:Just send, send it here.
Allison Fleshman:Yeah.
Bobby Fleshman:So we became, I got fortunately Christophe what's Christophe's last name?
Joel Hermansen:Kark.
Joel Hermansen:Yeah.
Joel Hermansen:Christophe Kark.
Joel Hermansen:A good friend of the brewery.
Bobby Fleshman:Yeah.
Bobby Fleshman:He's a, another fan of 5 47 and, and some of our other hoppy beers and a lot of our beers.
Bobby Fleshman:But I, he has connections in logistics distribution and he connected me with people who could get a tank from China to Appleton, Wisconsin.
Bobby Fleshman:It's not trivial.
Bobby Fleshman:It's something I recommend ne never to do on the side.
Bobby Fleshman:It's something you need to do it as a career.
Allison Fleshman:It's took you probably about 20 hours to figure out maybe 40 hours of work I've done just to figure out all the logistics done.
Bobby Fleshman:But that, but that's even with and paperwork with the aid of the people I was connected with, with Christoph.
Bobby Fleshman:So it's a very complicated world.
Bobby Fleshman:This doesn't seem to be much out there that you can learn from.
Bobby Fleshman:Uh.
Allison Fleshman:And then except by experience sprinkle in the headache that is the constantly changing federal actions of the tariffs that
Bobby Fleshman:in those landed, yeah.
Bobby Fleshman:Yep.
Bobby Fleshman:Right.
Bobby Fleshman:In this process.
Bobby Fleshman:And it, and I'll just say it out loud, it's a fentanyl tariff that, that's the most expensive piece of what we pay.
Bobby Fleshman:Uh, this has been imposed on many, many countries, and if not all.
Bobby Fleshman:And, and so, so that shows up as,
Gary Arndt:I didn't know you guys were making fentanyl and distributing beer.
Bobby Fleshman:Yeah.
Bobby Fleshman:Right.
Bobby Fleshman:So good margins in that.
Bobby Fleshman:It was interesting for me to go line by line to see what we're paying tariffs on and for, and to see that one pop up as mm-hmm.
Bobby Fleshman:One of the biggest line items.
Allison Fleshman:But then when you've built your whole yearly budget around any excess is going into this tank, and then it doubles in price practically overnight.
Allison Fleshman:Oh my God.
Allison Fleshman:The, the loss of sleep, the tears, the screaming, the hatred, the anger.
Allison Fleshman:I'll stop there.
Allison Fleshman:It's been an absolute nightmare.
Allison Fleshman:And that's just with the tank that doesn't actually hit the, the grain or the aluminum prices.
Bobby Fleshman:And making, and the beers we make are internationally inspired.
Bobby Fleshman:Yeah.
Bobby Fleshman:And, and so a lot of the, the terroir you can't replicate here.
Bobby Fleshman:So we have to buy our grain if we want to continue to make
Gary Arndt:what, for example, what grains do you have to import?
Bobby Fleshman:Well, the biggest one would be our German Pilsner.
Bobby Fleshman:And, and,
Allison Fleshman:and that's the base malt.
Allison Fleshman:That's, so that's the primary, that's 80 to
Bobby Fleshman:90% of all of our laggers and our laggers are our biggest by volume, uh, beer that we do.
Bobby Fleshman:So.
Bobby Fleshman:Yeah, we're, we're definitely at the mercy of, we're at the whims of whatever the market.
Bobby Fleshman:Becomes there.
Bobby Fleshman:Uh, as far as cans, you know, that's aluminum.
Bobby Fleshman:That's another one that's affected by the ripples of the market globally.
Bobby Fleshman:And then kegs, we, like Gary mentioned at the beginning, we buy from, often we were buying from Canada, may do so again, but at this point there's a sort of a contentious relationship that's making that a challenging exchange of money.
Bobby Fleshman:But yeah, it, there's a lot of factors.
Bobby Fleshman:I I, there may be more that I'm not thinking of.
Bobby Fleshman:And at the end of the day.
Bobby Fleshman:It.
Bobby Fleshman:It's hard to reverse this.
Bobby Fleshman:What economists I hear talk about this seem to suggest that it's not just write it out.
Bobby Fleshman:It seems like we're stuck with some, some long-term price changes and so it gets, eventually it's absorbed, but then it's eventually passed on.
Bobby Fleshman:I should, its not even
Gary Arndt:what you are directly ordering overseas.
Gary Arndt:Uh, let's say you get malt from breeze.
Gary Arndt:Mm-hmm.
David:Mm-hmm.
Gary Arndt:They're getting stuff Yeah.
Gary Arndt:From other places, right?
Gary Arndt:So
Bobby Fleshman:equipment's one thing, another thing, yeah.
Bobby Fleshman:A lot of the equipment people use is not manufactured here, so you have to buy it from Europe or China or wherever.
Allison Fleshman:And so everyone's experiencing like, and, and so the, there's the tariffs, there's, there's inflation, there's the, the unrest of the economy.
Allison Fleshman:And so all of that comes to, we do wanna do everything we can to not increase the price of beer.
Allison Fleshman:It's already maxed out, I think, as much as we can, but it's also, we're in competition with so many other corporations who can subsidize.
Allison Fleshman:I mean, bud Light costs what it does because they make so damn much of it, and we just can't compete with that volume.
Allison Fleshman:And so it's really, it's been one of the most challenging features.
Allison Fleshman:Of the last 12 months, I would say.
Allison Fleshman:Um, and this is coming from someone who works in higher education as well.
Gary Arndt:Yeah.
Gary Arndt:You see that, well, higher education's become so affordable over the years.
Gary Arndt:So affordable.
Gary Arndt:Yeah.
Allison Fleshman:Yeah.
Allison Fleshman:So, so affordable.
Allison Fleshman:So, you know, good return on investment.
Joel Hermansen:They always say that prices go up like a rocket and down like a feather.
Joel Hermansen:Isn't that the Yeah, that's a good, that's a really good metaphor that that's used to describe inflation.
Gary Arndt:Well, inflation never comes down, right?
Gary Arndt:But in certain industries like oil where you're dealing with individual commodities that are subject to shocks, that can happen because oil is kind of a fungible asset.
Gary Arndt:And so if something happens on the world stage where people are concerned about the oil supply, they'll bid up the price quickly.
Gary Arndt:Mm-hmm.
Gary Arndt:And then it may take time to go down pathetic.
Gary Arndt:So yeah.
Gary Arndt:So overall, everything is more expensive than what it was.
Gary Arndt:Five years ago.
Allison Fleshman:Right.
Gary Arndt:COVID has some major thing.
Gary Arndt:Certainly.
Gary Arndt:And what was a candy bar when you were growing up?
Gary Arndt:Yeah.
Gary Arndt:Everything's just more expensive.
Gary Arndt:There will come a time, you'll charge $20 for a beer.
David:Yeah.
Gary Arndt:Nothing to do with you.
Gary Arndt:And it's not just everyone's gonna be charging that much.
Gary Arndt:Mm-hmm.
Bobby Fleshman:Well, I'm imagining, and that's in the span of 20 years, we've gone as an industry from five to basically $10.
Bobby Fleshman:Yeah.
Bobby Fleshman:That's in 20 years.
Allison Fleshman:I'm reminded though.
Allison Fleshman:So, was it Michael Lewis who told you?
Allison Fleshman:At, uh, so Michael Lewis was Bobby's beer professor at uc, Davis.
Allison Fleshman:And he said, I'm teaching you how to brew beer
Bobby Fleshman:day one.
Bobby Fleshman:First, I'm not teaching you
Allison Fleshman:you how to run a brewery and.
Allison Fleshman:I to those out there that are like, oh, I've got a great recipe.
Allison Fleshman:Yay.
Allison Fleshman:I'm sure you do.
Allison Fleshman:However this is the school of hard knocks of realizing like, yeah, Bobby makes some of the best beer.
Allison Fleshman:His recipes, he's like this beer recipe whisperer.
Gary Arndt:Can I confess something?
Gary Arndt:Uhoh?
Gary Arndt:Oh boy.
Gary Arndt:I have taken a little bit of a perverse joy in watching you two as academics learn this stuff.
Allison Fleshman:Oh my God, that it's fair.
Gary Arndt:It, it.
Gary Arndt:You came into this, the smile on Gary's face.
Gary Arndt:Terrible.
Gary Arndt:You came into this very clearly with a love of beer and brew brewing.
Gary Arndt:It is ridiculous brew.
Gary Arndt:It's like we're gonna start a brewery.
Gary Arndt:Oh my God.
Gary Arndt:And it's like Matt Damon.
Gary Arndt:We're gonna start a zoo and not realizing that all the animals poop.
Gary Arndt:Well that's a great metaphor.
Gary Arndt:And they gotta be fed and all this stuff and
Allison Fleshman:that's totally true.
Gary Arndt:But, and but to be fair, you've also used the skills that you have.
Gary Arndt:You have analyzed the shit out of this.
Gary Arndt:Yeah.
Gary Arndt:You've, uh, taken a highly analytical approach.
Bobby Fleshman:You have, you have to be, have thick skin and be humble.
Bobby Fleshman:True.
Bobby Fleshman:And, and listen to people along the way.
Gary Arndt:No, you can't, you can't fudge reality.
Gary Arndt:Mm-hmm.
Gary Arndt:Yeah.
Gary Arndt:And it is what it is.
Gary Arndt:Mm-hmm.
Gary Arndt:Uh, but as we, uh, the last time I was here is as.
Gary Arndt:I told you, Bobby, you, you've marketing, you suck.
Gary Arndt:Oh, and you, that is something, it's so true.
Bobby Fleshman:Not an insult.
Bobby Fleshman:It's a, it's a true statement.
Gary Arndt:And, and what, what I mean by that is, yeah, your product is so good and the story behind it is so good that it doesn't match people's 'cause.
Gary Arndt:We're one of the things of doing this podcast, and I'm, I'm sure, Joel, you will agree.
Gary Arndt:There's been many times where we're just looking at each other like, we didn't know that.
Gary Arndt:Oh, Wednesday night, this past you were saying something about how you brew.
Gary Arndt:It's like we didn't know that.
Gary Arndt:Like we didn't know everything that goes into it.
Gary Arndt:Like when you're, the first time we talked about water.
Allison Fleshman:Oh yeah.
Gary Arndt:And you were like, oh yeah, I try to re, you know, recreate the conditions in Prague or whatever.
Gary Arndt:For what it's like you do.
Joel Hermansen:Like that should be a banner outside.
Joel Hermansen:Like there should be a flame circling.
Joel Hermansen:I think that's with any
Allison Fleshman:discipline.
Allison Fleshman:I mean, go to any, you know, small business where there's actually a crafts person behind, behind it, you know, I think that's the, the point about becoming a crafts person on that, you know, one particular venture
Bobby Fleshman:There, there's a, there's a fulcrum here, right?
Bobby Fleshman:You can either.
Bobby Fleshman:Talked so much about what you do until you talk about talk all day about nothing or the opposite.
Bobby Fleshman:You invest in your story, in your, in the bedrock and everything.
Bobby Fleshman:You never mention.
Allison Fleshman:It's, we have had people's eyes glaze over so much and that's, we're aware that when we start talking about the chemistry of the water and salts, for example, salts are so fascinating.
Gary Arndt:Not, and, and you know what?
Gary Arndt:It almost doesn't matter.
Gary Arndt:It's like when you go to a fancy restaurant.
Gary Arndt:The, the host will come out and they'll say, well, what's, what's your special tonight?
Gary Arndt:They don't say We got beef.
Gary Arndt:No.
Gary Arndt:They say like, we have a fresh cut Angus steak that comes from this ranch in Montana, and we also have oysters that were freshly caught off the coast of Prince Edward, Rhode Island.
Gary Arndt:They just describe,
Joel Hermansen:and you don't mind paying 45, 95 for eight oysters.
Gary Arndt:They just, they of that, they explain what it is and the story behind it.
Gary Arndt:And that is what gives it the value.
Gary Arndt:Mm. You could buy that same steak at a butcher shop and make it yourself, but what you're getting is the presentation and the story and everything else that's behind it.
Gary Arndt:And that's why they charge a premium.
Gary Arndt:And that is why I think that you guys can create something that is a premium product by telling the story and whether or not they even.
Gary Arndt:Care about the chemistry and everything.
Gary Arndt:It could be wahwahwahwah chemistry.
Gary Arndt:The fact is it's like they know, oh, there's a lot that goes into
Allison Fleshman:this.
Allison Fleshman:That's true.
Allison Fleshman:We have science, the shit out of it.
Allison Fleshman:So,
Bobby Fleshman:so we've taken the, the conversation of how the global
Allison Fleshman:tariffs are
Bobby Fleshman:tariffs killing us, have done this and that on as far as impacting price.
Bobby Fleshman:Then Gary arguing, we suck at
Allison Fleshman:marketing
Bobby Fleshman:about how we can do better at, uh, validating that price to telling a story.
Bobby Fleshman:Well, yeah,
Allison Fleshman:and, and I think that's true.
Allison Fleshman:And, and the, um, one of the things that, um.
Allison Fleshman:I probably have mentioned on this podcast a gazillion times.
Allison Fleshman:Bobby and I go out to a diner every Sunday morning.
Allison Fleshman:We take our kid, we go out and we pretty much with graphs, we talk about the graphs, we talk about the graphs.
Allison Fleshman:We talk about just this.
Allison Fleshman:I mean, every corner of this place has a thought behind it, and that thought space takes time.
Bobby Fleshman:The tank had one inch to spare, standing up, I'm not kidding, one inch.
Bobby Fleshman:And I said, Aaron, I hope I. Did my math,
Allison Fleshman:he did check with me his math the other day on it.
Allison Fleshman:I mean, it measured
Gary Arndt:twice.
Gary Arndt:Cut once.
Bobby Fleshman:I
Gary Arndt:mean, when it was fully standing, it was one inch when you were tipping at the diagonal over, it's
Bobby Fleshman:called the breakover height.
Bobby Fleshman:So that's basically, think of it as a hypo noose, right?
Bobby Fleshman:Yeah, yeah.
Bobby Fleshman:It, it, it seems like it's not a square though.
Bobby Fleshman:These tanks are not square, so you have to like really know your s schematics to get that number.
Bobby Fleshman:So we were within one inch.
Bobby Fleshman:So yeah, she's right the way that's where we are.
Bobby Fleshman:Everything's within one inch, metaphorically here.
Joel Hermansen:Yeah.
Joel Hermansen:But bringing this back to economics, not necessarily tariffs, um, but when you, when you think about your journey, you, you've, you've been dealt several significant obstacles that you've had to kind of cope with, whether it's COVID, whether it's recent tariff activity, economic turbulence, et cetera,
Allison Fleshman:The craft beer bubble bursting.
Bobby Fleshman:Eh.
Bobby Fleshman:Evolving, evolving,
Joel Hermansen:evolving.
Joel Hermansen:Easier.
Joel Hermansen:So better.
Joel Hermansen:I think.
Joel Hermansen:I think some of that has been a correction.
Joel Hermansen:That's true.
Joel Hermansen:To be honest.
Joel Hermansen:Again, because it comes back to your notion of, Hey, I brewed a really good, IPA from, from a, from a kit.
Joel Hermansen:I'm a brewer now.
Joel Hermansen:This is cool.
Bobby Fleshman:Yeah.
Joel Hermansen:Like I've brewed a lot of beer, but to even talk with you about brewing is like, I, it's no, well, I mean, yeah.
Bobby Fleshman:It's, it's a business like Allison said, and, and that's kind of the point of this episode is Yeah, and
Allison Fleshman:Business is hard and.
Allison Fleshman:Uh, it's it's also about assembling the right team and going and finding the people who really know the, the particular question that you're trying to answer.
Allison Fleshman:You know, have, have that depth to understand.
Allison Fleshman:And we've had some really good advisors along the way that have really helped kind of steer the boat in a much better direction.
Bobby Fleshman:And to go back to Gary's, what was it?
Bobby Fleshman:Perverse amusement Joy.
Bobby Fleshman:Joy, yeah.
Bobby Fleshman:Uh, about us struggling as academics running a business.
Bobby Fleshman:I, I think the thing that I always told Allison about, uh.
Bobby Fleshman:What I took away from graduate school and, and being a researcher for NASA was perseverance.
Bobby Fleshman:And I knew that
Allison Fleshman:you didn't work on Mars.
Bobby Fleshman:Did I?
Bobby Fleshman:I say more.
Bobby Fleshman:Sorry.
Allison Fleshman:That was a really bad, yeah, that was
Bobby Fleshman:a nerdy Perseverance
Allison Fleshman:is the name of the Mars Rover.
Allison Fleshman:He did Jupiter work.
Allison Fleshman:Okay.
Allison Fleshman:So anyway, and Saturn.
Bobby Fleshman:And, and so we're the only two that are laughing.
Bobby Fleshman:Everyone else is just looking at us, including the audience.
Gary Arndt:So you're always looking for opportunities, crickets, and the spirit.
Gary Arndt:There it is.
Gary Arndt:I can play this game.
Allison Fleshman:Thank you.
Bobby Fleshman:So, but I knew that I needed to prove it to myself, but I also, I knew that I needed to prove it to future investors because of my plan was to open this brewery at some point.
Bobby Fleshman:Well, Christian Hogan once said,
Allison Fleshman:Ride the wave man.
Allison Fleshman:Ride the wave.
Allison Fleshman:Dropping all of the references.
Bobby Fleshman:Anyway.
Bobby Fleshman:So this is there more people, no matter what we don't know.
Bobby Fleshman:We know how to know.
Bobby Fleshman:We know how to learn.
Gary Arndt:Let me ask you this question coming from an academic background, and let me stereotype for a moment, especially as a tenured professor.
Gary Arndt:Yep.
Gary Arndt:There's a reason why academics want tenure.
Gary Arndt:It's safety right?
Gary Arndt:Job.
Gary Arndt:You kind of job security.
Gary Arndt:Yeah.
Gary Arndt:What, what is, what is the phrase?
Allison Fleshman:Oh, you're either hired for life or you're fired.
Gary Arndt:Yeah.
Gary Arndt:Uh, that there's lots in that.
Gary Arndt:That's the, it's a fork in the row.
Gary Arndt:Um, has this changed you
Allison Fleshman:ha tenure or the brewery?
Gary Arndt:The brewery
Allison Fleshman:brewery's made me, yes.
Allison Fleshman:So much so.
Allison Fleshman:I would consider myself not as academic as some of my colleagues because I think there's a reality of when you study something.
Allison Fleshman:Uh, so I study physical chemistry.
Allison Fleshman:Uh, the physics of chemistry, it hadn't changed.
Allison Fleshman:It's not gonna change much, um, over the next century.
Allison Fleshman:And so I get really good at diving really, really deep and becoming one of a few people in the whole world that knows about this one little thing.
Allison Fleshman:Um, so there's not really much room for adaptation and change, and you get set in your ways, whereas the brewery has made me, as Joel pointed out, COVID hit right when we started to open.
Allison Fleshman:We were naive as all hell that had to change.
Allison Fleshman:And then again, the economic landscape is shifting so rapidly in the span of us buying a tank to receiving the tank.
Allison Fleshman:Everything's changed and we have no idea what's gonna happen tomorrow.
Allison Fleshman:And so I think my adaptability is unique in, or I, I'm a small group of faculty who have this experience who, you know, um, because it's not, we're not, we don't have a textbook, whereas most faculty do, and textbooks are, you know, it takes a long time to change those.
Gary Arndt:No, that's a great answer.
Gary Arndt:I was kind of fascinated because all the academic, and I know a lot of academics.
Gary Arndt:Mm-hmm.
Gary Arndt:Because I'm the, when I was on the debate team at Callister, I'm the only person who never got a JD or a PhD. The only one.
Gary Arndt:And I've made more money than everyone else.
Gary Arndt:But
Allison Fleshman:yeah, that's apart for the course.
Allison Fleshman:Yeah.
Allison Fleshman:Yeah.
Allison Fleshman:That's how that works.
Gary Arndt:But I think it does change your.
Gary Arndt:Your outlook.
Gary Arndt:Mm-hmm.
Gary Arndt:Because in it, it's, it's like you said, you either are hired or you're fired in this, it, you either, you know, if you're not surviving, you're gonna die.
David:Yeah.
Gary Arndt:You constant it, it's like a shark.
Gary Arndt:You have to be moving constantly.
David:Right.
Gary Arndt:And you, you also have to be growing.
Gary Arndt:You were talking about you have obligations to meet people that are ordering beer and you have to meet those.
Gary Arndt:And if they don't, they're gonna go somewhere else.
Gary Arndt:Mm-hmm.
Gary Arndt:And there's just the, the harsh reality of this that you have to kind of deal with that.
Gary Arndt:Not everybody gets it.
Allison Fleshman:Yeah.
Gary Arndt:Even, not even academia, just people who, you know, the pressures of being an entrepreneur.
Gary Arndt:Right.
Gary Arndt:I don't think a lot of people get.
Allison Fleshman:Right.
Allison Fleshman:Well, and I think this is one of the things that COVID actually helped shed a lot of light on about people's, uh, capability and adaptability.
Allison Fleshman:Like how much we actually can change when forced to, we two year, actually it was a year and a half COVID hit, and we were like, okay, I guess we're doing distribution overnight.
Allison Fleshman:And so I remember Bobby took a picture of the top of a blank notebook paper and it said Business plan 2.0.
Allison Fleshman:And so he rewrote the business plan and we re strategized.
Allison Fleshman:And in higher education right now we're having to, you know, people are finding they're going more into the trades.
Allison Fleshman:They were finding lower number of students.
Allison Fleshman:And so we have to adapt and the breweries actually.
Allison Fleshman:It's cyclic, it's, it's informed me on things we're capable of doing.
Allison Fleshman:When looking at the numbers, looking at the data, talking to people, talking to people is very helpful.
Allison Fleshman:And just kind of giving it your best shot and then adapting.
Allison Fleshman:Did it work?
Allison Fleshman:Did it not?
Allison Fleshman:Okay, cool.
Allison Fleshman:Pivot.
Allison Fleshman:And I think that that's one of the things that, you know, it's been, become a skill that I have.
Allison Fleshman:And being able to pivot in the face of Lord only knows what fire we're gonna have to put out tomorrow.
Joel Hermansen:Well... and I think this is the benefit of the strong community that you've built.
Allison Fleshman:Oh, absolutely.
Joel Hermansen:You can rely on so many different people to do everything from, help you with the artwork on a can.
Joel Hermansen:Mm-hmm.
Joel Hermansen:Yep.
Joel Hermansen:The logistics of overseas shipping to developing a business plan.
Joel Hermansen:I know there's, there's business owners in the area.
Joel Hermansen:That, that have been a source of strength for you?
Joel Hermansen:Absolutely.
Joel Hermansen:Yeah.
Joel Hermansen:I mean even, you know, um,
Allison Fleshman:Well just community, like just, just patrons who have, right, who have volunteered information or they just give us a perspective and they're like, Hey, you know, you really should think about this.
Allison Fleshman:Like there's this one guy randomly about two years ago who was standing at the front bar and said, you know, you should put a staircase right there and it would really open up your prohibition room.
Allison Fleshman:And then we were like, Gary, fine.
Gary Arndt:Pure genius.
Allison Fleshman:I know.
Allison Fleshman:But good ideas are where you find them.
Allison Fleshman:And the stronger that community is, the more the good ideas come out.
Joel Hermansen:I mean, where would you be without your tanks?
Joel Hermansen:Without, uh, Glenn and Greg from FedEx.
Joel Hermansen:Oh yeah.
Joel Hermansen:Who were here.
Joel Hermansen:Who were here.
Joel Hermansen:Well, and they fell in head over heels in love with your beer.
Bobby Fleshman:Well, that, I mean, it's, it's remarkable.
Bobby Fleshman:It's, that's always humbling.
Bobby Fleshman:And, but yeah, the help that we get, it's, it's so much bigger than one person.
Bobby Fleshman:It's 10 people at this point.
Bobby Fleshman:All these skills that are required.
Allison Fleshman:And I think that's the other thing about this place is that every corner, like I said before, there's thought behind it, but there's also a story and there's a most likely a person or people like I'm looking, we're in the prohibition room now.
Allison Fleshman:We have two or three, uh, kind of old school looking wing back chairs that you can come and perch on.
Allison Fleshman:And I remember Layla and I went and got that one, and then that one I found at a thrift shop and I was trying to figure out how to get it and we put it in someone's car.
Allison Fleshman:Like, so, I mean, there's just, there's, there's people behind these stories as well.
Bobby Fleshman:And back.
Bobby Fleshman:One more thing about Gary's amusement.
Bobby Fleshman:With us being in this field when we came from another, I, I also started in farming and building homes before I got into academia.
Allison Fleshman:Thank goodness you know how to weld.
Allison Fleshman:Oh my God.
Bobby Fleshman:And, and I think my, my walk people wonder, how do I, how did I get here?
Bobby Fleshman:Uh, I think I'm always trying to learn how the world works and I think that it, it makes me better at everything I do.
Bobby Fleshman:That, that's sort of me.
Bobby Fleshman:In summary,
Gary Arndt:I am so glad that you guys do what you do.
Gary Arndt:Because I would never want to do what you do.
Gary Arndt:I remember, I think it was, I was here a week or so ago and someone was getting a, um, a crowler, one of the big cans, right?
Joel Hermansen:Oh, that I went, yeah, yeah.
Joel Hermansen:I made a bunch for, for him.
Joel Hermansen:Yeah.
Gary Arndt:And you had this big roll of tape with the labels you put on.
Allison Fleshman:Yeah.
Gary Arndt:And all I thought of was like, you had to order that.
Allison Fleshman:Yeah.
Gary Arndt:And there's just a ton of these little things.
Allison Fleshman:Design it, make sure it's right to I'm coffees right.
Gary Arndt:Oh, I haven't even gotten t-shirts made for my podcast yet.
Allison Fleshman:More than that, you have to the TTB, the govern, the governess, I guess, of all the things that we put on labels, you have to get the, well, we don't go outta state, so you don't have to get the labels approved, but you have all these things and remember when we made the Toronado uh, cans?
Allison Fleshman:Oh, yeah, yeah.
Allison Fleshman:We use the label from 5 4 7, and we forgot to change the A BV.
Bobby Fleshman:Yep.
Allison Fleshman:Uh, number, so the tor Little Toronado was la mislabeled as having a much higher,
Bobby Fleshman:so $300 worth of to labels almost
Allison Fleshman:so that we can't actually sell in distribution.
Allison Fleshman:Yeah.
Allison Fleshman:But we could sell 'em as long as we had this really big ass sticker that says 6.7%.
Bobby Fleshman:It's death by a million cuts.
Bobby Fleshman:There was always something was because that percent cost 300 bucks.
Bobby Fleshman:Right.
Allison Fleshman:Except we forgot that someone somewhere didn't proof the copy.
Allison Fleshman:Yep.
Allison Fleshman:Ah.
Allison Fleshman:And so now we have to figure out how do we solve that problem?
Allison Fleshman:And we're like, all right, well that's the fire we put out today.
Bobby Fleshman:And that's what makes the small brewers more nimble than the big ones because they would just burn it and eat it as a a loss.
Bobby Fleshman:But yeah,
Allison Fleshman:which is when you discover, but we know
Bobby Fleshman:how to roll change.
Allison Fleshman:It was a game changer when he figured out there's a company that you can just buy stickers and then go their website and the stickers are already pre just like put into the template.
Allison Fleshman:You just type it in and then it just prints it out automatically.
Allison Fleshman:This was a game changer.
Allison Fleshman:Sticker game changer for a company.
Allison Fleshman:That's ridiculous.
Allison Fleshman:We should be brewing beer and recipes and stuff.
Allison Fleshman:Yeah, but stickers are what really like make this easy.
Bobby Fleshman:But we live in a Sam Adams commercial.
Bobby Fleshman:All this is not true.
Bobby Fleshman:We're always staying on the brew deck.
Bobby Fleshman:Throwing hops in and there's polka music.
Allison Fleshman:Yeah,
Bobby Fleshman:that's what it is to a brewery.
Joel Hermansen:It's always Reinheitsgebot brought,
Bobby Fleshman:yeah.
Bobby Fleshman:Ryan Heke brought seven days a week.
Allison Fleshman:Think of Reinheitsgebot brought, you can get brats at our lager fest coming up October 4th.
Allison Fleshman:Hey.
Bobby Fleshman:That may come a different date.
Bobby Fleshman:Okay.
Bobby Fleshman:Who?
Bobby Fleshman:Who's cooking the brats?
Allison Fleshman:Oh, go.
Allison Fleshman:Oh crap, I forgot.
Allison Fleshman:Oh yes.
Allison Fleshman:This is a fundraiser for the Boy Scouts of America.
Bobby Fleshman:Will this air, will this gonna air before?
Allison Fleshman:I don't know.
Allison Fleshman:It can if not next year.
Allison Fleshman:I know the
Joel Hermansen:producer first
Allison Fleshman:Saturday in October.
Gary Arndt:Well, it's always the first day of October you get whatever whenever Bears hot wart that you can put them in.
Gary Arndt:Oh, so everybody can see it?
Gary Arndt:Oh, yeah.
Allison Fleshman:Oh, that's a good idea.
Allison Fleshman:Oh, marketing.
Allison Fleshman:Gary, can we hire you as our marketing director?
Gary Arndt:How about a ticket to Lager Fest?
Allison Fleshman:There you
Gary Arndt:go.
Gary Arndt:Oh yeah, done sale.
Allison Fleshman:Oh my god.
Allison Fleshman:Boom.
Gary Arndt:Easy.
Gary Arndt:No, but that would be just a great, it would add to the ambiance.
Gary Arndt:Yeah.
Gary Arndt:And it would be a great sales scene.
Allison Fleshman:If you dunno what Reinheitsgebot brought is go back and listen to whatever episode that was,
Joel Hermansen:episode two of the Rhine Heitz Gabo series.
Joel Hermansen:Uh, which was.
Joel Hermansen:Is it on the Mount Rushmore of this podcast?
Joel Hermansen:Is that the one with the cat?
Joel Hermansen:The cat was in that episode as well.
Joel Hermansen:Yeah.
Joel Hermansen:That was,
Bobby Fleshman:that was an episode that was scripted and we didn't follow it.
Bobby Fleshman:And what came out was even better.
Joel Hermansen:Yeah.
Joel Hermansen:That one was so much fun to make.
Joel Hermansen:We had Christophe on mm-hmm.
Joel Hermansen:In that, and he read from the Rhine Heinz Kubota in German, which was a treat, and then it just.
Joel Hermansen:It's better went off the rails.
Joel Hermansen:Yeah.
Joel Hermansen:And for those of you who are wondering, does Gary always have this many ideas?
Joel Hermansen:The answer is yes, he does.
Joel Hermansen:Um, I, Wednesday night, he stands next to me from six to 10 and he has four hours of ideas.
Bobby Fleshman:And I, I get, and I
Joel Hermansen:mean that as a compliment.
Joel Hermansen:I really do.
Joel Hermansen:I've never met anyone who has as many ideas as you do.
Joel Hermansen:And I think I have a few ideas, but it's not even close.
Joel Hermansen:So way to go.
Gary Arndt:My
Gary Arndt:idea for the shower umbrella.
Gary Arndt:It's an umbrella that rains underneath it, and you can take a shower at the same time.
Gary Arndt:It'll be a huge seller There you go.
Gary Arndt:Ta.
Gary Arndt:Here's one.
Gary Arndt:Well, for those of you still listening,
Gary Arndt:if you've made it this far, I am guessing that our producer David, has probably cut out a lot of very interesting stuff that is gonna be on the Patreon page.
Gary Arndt:So this is gonna be one you're definitely gonna wanna check out.
Gary Arndt:And with that, that is going to conclude this episode of Respecting the Beer.
Gary Arndt:The producer of Respecting the Beer is the aforementioned David Kalsow without David.
Gary Arndt:There would be no show.
Gary Arndt:Please join the Facebook group to get updates and to support the show over on Patreon where you can get all the juicy tidbits that were cut out.
Gary Arndt:And you can even get SP access to specially brewed beers that are available only to Patreon members.
Gary Arndt:Links to both of these are in the show notes, and until next time, please remember to respect the beer.
