#90: Pat Conway & Mark King (Great Lakes Brewing Company)

Pat Conway [00:00:00]:

It's a huge part of our existence. And we think that we deserve to say to the rest of the population of Cleveland, if not the country, this is how you can run a business, sustainably, where you take care of your property, you take care of your profits and your people, land your planet. And you can do that and you can do it successfully. And here's an example. Here's our brewery. We've been doing that and we're going to continue to do that and then be a beacon of hope for other companies that are having some decisions about whether they should do that or not.

Jeffrey Stern [00:00:34]:

Let's discover the Cleveland entrepreneurial ecosystem. We are telling the stories of its entrepreneurs and those supporting them.

Jeffrey Stern [00:00:43]:

Welcome to the Lay of the Land podcast, where we are exploring what people are building in Cleveland. I am your host, Jeffrey Stern, and today, on their 34th anniversary of the company, I had the real pleasure of speaking with Pat Conway and Mark King of Great Lakes Brewing Company. Pat and his brother Daniel founded the company back in 1988 in Cleveland's, Ohio City neighborhood, where it has been independent for over 30 years and employee owned since 2018, serving 14 different states across the country and Washington DC. With an award winning and beloved selection of fresh, flavorful and innovative craft beers that Clevelanders and others alike have come to love, like their Dortmunder and their Christmas Ale. In 2019, Mark King joined the company as the CEO after an extensive career in the industry as a Vice President at Anheuser Bush, and most recently having founded his own cidery back in 2013 down in Austin, Texas called Austin East Ciders. We cover a lot in this conversation. From the history of breweries and beer production in Cleveland to Great Lakes Brewing commitment to a triple bottom line of brewing good. From beer to community to environmental stewardship, to their role as a staple in Cleveland, through events like the Burning River Festival to how they handle the ever changing beer industry. From the proliferation of craft breweries to be on beer beverages like Seltzers, great Lakes Brewing really has blazed the trail for so many other Cleveland companies and entrepreneurs and it is a privilege to capture a piece of their story here and how they are thinking about what comes next. So please enjoy my conversation with Pat Conway and Mark King.

Jeffrey Stern [00:02:28]:

To kick us off. Congratulations on 34 years of Great Lakes Brewing. That's an incredible commitment to the craft.

Pat Conway [00:02:38]:

Yeah, it feels like it's only been 34 days. Just kidding.

Jeffrey Stern [00:02:44]:

Well, a lot of the exploration that I've done land the Cleveland stories of entrepreneurship told through this podcast are about what it is and what it means to start something. But with a celebration of 34 years, really as a pillar in Cleveland, I'd love to start maybe just what it is to sustain, to survive, to continue to innovate. What have been the keys to longevity and persistence over this journey so far?

Pat Conway [00:03:14]:

Well, I think it wasn't any accident that we chose to locate in the city. We thought back when we were in our infancy, we wanted to be part of Cleveland's renaissance because Cleveland was changing its image as a tired, rust Belt city. And so when we decided to choose this address in this part of town, it was a commitment to the city, really, and to, of course, our own selves. Land we thought that, and it turned out to be true, that we would be a catalyst for great renovation of more of a more abundant part of the city land that's exactly what happened. So we were committed to making this dream come true. And we knew it was going to take a lot of time and effort. But I think the fact that we had committed to the city land, to the neighborhood, and to the craft industry kind of put a lot of pressure on us to do it right, because we were told by many people when we were designing it just put something out. And really, people don't care about the quality of the beer. It's just going to be different from Bud Light, and that's enough. And in terms of the service land the food, don't worry. It could be a banal tasting menu because people really aren't you're not going to be like a gourmet operation, so don't put a lot of time and effort into that either, which we did the exact opposite. We put a lot of time land effort into making an upscale menu. We brought in trainers to talk about quality service. We had a brewmaster and brewing engineer that brought 75 years of experience. So when we first opened our doors and hit the ground running, we had so many positives going on in the project that we are convinced that we'll probably succeed.

Jeffrey Stern [00:05:09]:

Did you have kind of a vision of what it would become, though? I live just a few blocks over in Ohio City, and I feel reflecting on the history of the neighborhood, there's a tremendous amount owed to the vision that you had an investment that you made, taking a shot on Market Ave. At least that's my perception of it within the lore of Ohio City. But can you take us through what was the vision that you had at the time?

Pat Conway [00:05:35]:

Well, we said when we hired our brewmaster, who has ran the last brewery in Cleveland, he was retired. I looked under B for brewers in the phone book because when I lived in Cleveland years ago, I lived in Chicago land europe. I was gone for 15 years. When I was younger, Cleveland had three or four breweries around, but when I looked for a brewer, I looked under B in the phone book. Back when they had a thing called phone books and there were no breweries, but they had a line called The Brewers and Soft drink union. So I called them and I said, Where are the breweries? He said, well, the last one closed a couple of years ago. It was called Schmidt, and the brewmaster is sitting in his retirement and his antique store, but you could look him up if you want. So I looked up thane Johnson. I ran the idea behind it, which was start within our four walls, make a high quality beer in a variety of beer. Land seasonal specialties. But with the success, then we could move outside the four walls and then start packaging and then adding a bigger brewer at a later date. But we thought the first phase would be pretty much within the four walls. No sales force, no distributors, no sophisticated marketing and sales plans. It was all pretty much in the house and word of mouth. Land sure enough, after three or four years of doing that, we ended up having to land bottle. And then we added a second brewery behind us, and then, of course, the third brewery across the street. So the whole concept was start small, refine your process. And that's how that more cautious plan, I think, turned out to be the better plan. I had a cousin who was a homicide cop. The said, You've been gone Chicago for all these years, but I'm telling you, do not go in that neighborhood. He said, I know where all the drug lords are, where the prostitution is, where the homicides are, and said, don't go in that neighborhood. But the building had a successful country French restaurant in the. We wanted to know, well, why did you go out of business? And was it because people wouldn't come down to the neighborhood? Or was it because you mismanaged the business? And the answer was the latter. People did come. Land it was a very popular restaurant, but they were horribly mismanaged and they went out of business. Land that was an important bit of information to know, because if we found that they went out of business because no one came in the neighborhood, then we probably never would have chosen to be here.

Jeffrey Stern [00:08:03]:

So I want to take a step back and just hear about both your respective interests and paths to beer and to brewing and to entrepreneurship.

Mark King [00:08:14]:

I had a more conventional path into the industry versus Pat and Dan and their entrepreneurial roots. But I was in school at Marquette University, which is right downtown Milwaukee, back when there were still four very big breweries still operating there in the city. And one of my rugby teammates came to me one night and said, we need a need a forklift driver at the Budweiser Distributorship. He said, do you know how to drive one? And I said, sure. I had no idea. That's how I got into the beer business. I was not a very good forklift driver, but I fell in love with the business back when I was in school. Land so when I graduated school, I packed up my car Land. I drove out to California for no other reason than to have fun and play some more rugby. And one of the sponsors on the team was the Budweiser distributorship there? So I got a job loading beer trucks in San Diego. And from there, I had an interview with anheuser bush company. So I spent a good amount of years traveling the country on the corporate hamster wheel. And I say that in a loving way. It was a lot of fun for me. But I worked for big brewers like anheuser Bush for a number of years. Ended up leaving to work for Labat breweries in Canada, managing a big chunk of the country for them. The all the acquisitions and mergers and acquisitions started happening in the industry. And so fast forward, it gets a little complicated. But Interbrew, which at the time is a little brewer in Belgium, bought Labat breweries in Canada and they had plans to become the biggest beer company in the world. Land. They did. They ended up buying anheuser Bush. So if I Look Back At it, I spent 17 Years In The Beer business prior To Joining Great Lakes, and Most Of Them Were With One company or Ended Up Becoming One company through Mergers And Acquisitions, interbrew, InBev, Ambev, so on And So forth. But I had a more conventional path. But in 2013, I did start an entrepreneurial venture down in Texas. Very successful, hard cider business called Austin East Ciders. It's the fourth largest cider company in the country right now. And the reason I did that was just I saw an opportunity. Much like Patton Dan saw an opportunity back in 88. I saw an opportunity because the cider market was growing, but it was dominated by a guy in the east coast woodshock and a guy in the west coast called Ace Cider. And then there were some imports, and there was nobody in the middle or the south of the country that was doing it. And so I put together a business plan. I got funded and kicked off a business which now has over 150 employees and is a pretty successful business. Brought in some investment at the time, and I opted to leave the business, exit the business, when I found out that the Conways were looking for a CEO up at Great Lakes. And since I grew up in Michigan, I had great respect for what Pat and Dan had done over the years and especially for Great Lakes. My brother lives in Detroit, but he always had Great Lakes in his fridge.

Mark King [00:11:36]:

So that's what I came home. So when I heard they were looking for somebody, I put my hand up and was able to get an audience with these guys. So I've been here two and a half years now.

Jeffrey Stern [00:11:47]:

And Pat, from your perspective, what drew you to the world?

Pat Conway [00:11:52]:

When I went to Loyola University in Chicago. They had a school in Rome, and I went a school abroad for a year. And not that Italy or Greece are beer drinking cultures. They're not. They're still wine based. But taking the train north over the Alps and visiting Austria, Germany, Czechoslovakia, Belgium, England, Ireland, I fell in love with these full bodied, flavorful Land fresh beers. And I was like, Why do we have these aggressively carbonated, banal tasting American lagers? It's like, what's up with that? And I came back, and I was in graduate school at University of Chicago, and I was bartending at night, and I was selling a lot of Becks and Heineken and Carlsburg Land, Guinness and Bass. And I went, there's a change in the American palate, but the bigs aren't responding to it. And as flavorful of those beers that I was selling as a bartender were in comparison to American beers, they still weren't those kind of beers that I had in Europe. And the reason why is they weren't as fresh. I was drinking beers from these ubiquitous neighborhood breweries. And to this day, unless, mark you disagree, everyone still thinks to this day that the best Guinness is actually in Ireland, right? I'm not sure if it's psychological, but when I drink Guinness in Ireland, it's like a religious experience. So anyway, I came back to Cleveland with this idea of building this brick, and my wife said, either do it or don't do it, but quit talking about it. So thane said. I think we should. Thane I went up and down the coast of California, Colorado, Iowa, Canada looking at small breweries. And he said as we were flying back east over the Rockies, he said, Why don't we build our own brewery? Well, I said, if you're a brewmaster, that's great, but you're not a brewing engineer. And he said, no, but the guy that ran our million barrel a year plant at Charlie Price could come out of retirement, and then let's design our own. So those two gentlemen sat there in 75 years of experience, and we designed our own brewery. And it all started with me going to Europe, land, falling in love with those beautifully well rounded flavorful products, and then coming back to Cleveland to do it and running into Thane and Charlie Price. But then my brother Dan, who went to the same school I did in Rome ten years later, he understood the concept because he, too, had traveled around Europe and fell in love with those flavorful beers. So Dan was a banker, and he helped him with the business plan. And to this day, he's more of the financial arm of the company. And we're still partners after all these years. And we don't agree on everything, but at least we agree on the core principles of honesty, integrity, and what we call our triple. Bottom line means take care of your finances, but also take care of your people. And the planet, and that's been the guiding principles for the company for over three decades.

Jeffrey Stern [00:14:55]:

I definitely want to ask more about the triple bottom line concept, but just before we get there, before we press record here, you were mentioning that today they're close. Not quite yet 10,000, but perhaps by the end of this conversation, there might be other brewers in the country, but at the time when you started it, there are very few. Land you mentioned this observation that the American palate perhaps changed, but I know Cleveland itself also has quite an elaborate history as it relates to brewing, as historically, at one point in time, one of the hubs of beer production in the country. And at the time you started it, you mentioned there were none left. Did the kind of historical context and history kind of play into your calculus at all when you were starting out?

Pat Conway [00:15:44]:

Oh, absolutely. And I used to teach history in inner city school in Chicago, and my master's was in social studies, but I knew a lot about Cleveland brewing history, and they had 30 breweries in the 1870s. But the original beers of Cleveland were more Anglican based, like Ales Porter Stouts, because our founding fathers were from Connecticut, which in turn had come from England. But when the German population, of which were in the hundreds of thousands came in the 1860s, everything turned to lagers. By 1890 to 1900, there were no Ales Porters or lagers left or Ales Porters or Stouts left. It was all lagers. It's because of the German lager. Beer was a huge part of their cultural identity. And so they had these enormous beer gardens, and every Sunday, which was the only day off, they would gravitate to these open fields. And they'd have poetry readings and billiards and archery and music and great food. And that was something that we knew about. And we knew that our neighborhood that we chose was actually in the middle of a hotbed of brewing in the 1870s, all the way up to the 19 hundreds, because this is where all the German immigrants landed.

Mark King [00:17:04]:

Land.

Pat Conway [00:17:05]:

All the names of the breweries became Lizzie, Garen, Goodman, Schmidt's Every brewery in the city of Cleveland had a German ownership, except for one standard brewing company, which was owned by a couple of Irishmen, and their flagship beer was Aaron Brew. And Aaron is another name for Ireland, but because of the huge German population, they came out with the same beer with a different label, and they called it Ehan Brow.

Mark King [00:17:33]:

Wow.

Jeffrey Stern [00:17:34]:

That's awesome. So maybe fast forwarding a little bit. Right. In this 34 year anniversary, what does the company look like today? Land mark, I'd love to get your perspective as well on how are you thinking about kind of that you mentioned your own background in insiders like the Beyond Beer Opportunity, which seems to have really kind of captured society by Stern in the last few years with seltzers, land ciders, and that whole kind of breadth of offerings.

Mark King [00:18:07]:

Yeah, I got here just before the pandemic hit. So the company, certainly like every company did in the beer industry, got hit pretty hard as the consumption patterns changed and the bars and restaurant businesses went away for a good period of time. So it's been a really unconventional couple of years here. But I would say that if we take a look at where we're at today, we took a look at some of the initiatives we've been working on the last couple of years. We couldn't do a darn thing about the pandemic right at the time. So we did know that we needed to focus more on the off premise side of the business because that is where consumers were buying their beer. They couldn't go out to bars and restaurants. We were fortunate because we made plans to get into the canning business for the first time at the end of 2019. So we had gone ahead and cut a check for a canning line at the end of 2019. We got a warehouse and a facility to make our own cans because that's where the industry was kind of going within the beer business, was cans were becoming the dominant package. And so you look back in hindsight and say, well, that's something. That timing worked out well for us so that we were able to get more presence in the off premise. Cans are more convenient, they're better for the environment, they're better for freight, and they're better for more drinking occasions. Land so that was just, I say, one stroke of luck in the middle of the pandemic was at least we're in those right packages. But if you look at the business today versus where it was, we also knew that we have a lot of legacy brands at this company that are still powerful brands, especially in our home market. And so our number one, we set a number of different goals or big rocks, so to speak. Number one was stabilize our legacy brand business. We had brands like Fitz and Dort and Ness. Land commodore Perry, which had taken it on the chin over about the past five, six years in the industry. And we knew that there was too much at stake there. There was still a lot of people making a lot of cash on a lot of our bottle businesses. And so we focused on making sure those brands didn't fade away. But we also knew that we had to modernize the portfolio. And it's cliche, but the fish where the fish are, our clientele base was probably aging out a little bit. Every brand has a life cycle, so to speak, but we still felt as though we could walk at you. Gum at the same time, we still had those consumers who are loyal great Lakes consumers that recognize quality, recognize branding and legacy brands. But we also knew that where we were losing share was among a lot of the emerging consumers, right, and who were drinking lighter styles or heavier alcohol styles or IPAs. I mean, there was a number of different segments than the business we weren't participating in. So the big one, for instance, is IPAs. And it might seem obvious now, but we did have an IPA, but it was an English IPA, Commodore Perry, and a successful one. But the IPA category itself, if you talk to the head economist of the NBWA, the National Beer Wholesalers Association, or the Brewers Association, which is an organization representing craft brewers, over 50% of consumption is happening in the IPA realm, and there's so many different variations of flavors and techniques you can do to make varied flavors. So we stepped up innovation there. So it was really walking a tightrope. Keep those legacy consumers, don't let them stray away. But when we're creating new brands, be able to reach a new voice. And so another thing that we did was we engaged a new ad agency here in town who's very young thinking and very progressive, very social media driven to get into those conversations. So thankfully, we were successful on both fronts with all the goals that we made. But one thing you can't ignore when you go to a store, that 80 foot or 100 foot cooler at Giant Eagle isn't going to be any bigger or smaller next week or next year. It's going to be the same size. What makes up those brands on that shelf is going to change land. So you better be progressive and you better be skating to where the puck's going, or you will continue to lose brands, land packages on that shelf. These buyers are smart and these wholesalers are smart, and they want to sell things that are growing or have growth potential. So a lot of that space in that cold box was getting allocated to not only hard seltzers, but there's hard teas. There's spirits based products in cans that were nowhere. Jim Beam has been selling Beam and Cola in cans for 30 years. They only started selling a lot of it in the last couple. So you have to be cognizant of the fact that if your brands are not turning over in a retail environment, they're not going to have a long life. So you have to keep up with the times and you have to continue. Continual improvement of your liquids is something a new COO brought to the table. Pat asked Steven, are you always kind of continuing to work on your existing brands? When you were at Boulevard Brewing, he said, Every day you got to continue to keep your ear to the pavement, know where the consumer is going. The data doesn't lie. I remember Jim Cook at Boston Beer saying he had never put beer in cans. And you look now in Craft, and craft beer is 60% in aluminum and less than 40% in bottles. So if we could all sell one beer brand in a six pack, we'd all be pretty happy. But that's not well, it's really interesting.

Jeffrey Stern [00:24:02]:

Because there is a real, and I don't know if it's necessarily unique to Great Lakes Brewing, but I feel like it's quite more potent with Great Lakes Brewing than with other companies, but their tradition around it. Right. When I first pat in the background there, people won't be able to see, but you have the Christmas Ale poster, but there's a whole cultural component to the history of what you've done with Great Lakes. And so how do you try Land honor that tradition while skating to where the puck is going as you're talking.

Pat Conway [00:24:37]:

About, Mark, when we first were dreaming of this project, actually in the early eighty s, it was like a terminal case of the land. It was like coffee out of cans, wonder Bread, banal tasting chocolates. It was horrible. Wine out of a basket with the jug in it. And it was like from one end of the consumer experience to the other, it was like, you got to be kidding me. Isn't there going to be ever some upscale, flavorful, cool, unique products? And it started, I think, Mark, unless you disagree, I think it started with the vineyards where somebody won an award in France with their cabernet or something, but then all of a sudden the breweries jumped on board, then chocolates, then coffee, and it hasn't stopped yet. And you have to be very honest to say that I think the culture has been greatly improved because of that. I think that Europe doesn't hold a lot more on the sophistication front, on the beer or wine front than they did for hundreds of years. And I think it hasn't stopped. I think you're going to see even more gourmet cotton candy, for Christ sake. I mean, it just seems that even with inflation, people are looking for these unique flavorful, fresh gourmet experiences. Unless, Mark, you think with the inflation that things have now moved at the dial in the opposite direction or you think it's still viable, I think it's.

Mark King [00:26:13]:

Going to impact the business somewhat, but still. Pat, to your point, you look at like when I was a kid, which was five plus decades ago, land, there was limited choices to Pat's observation. The bread aisle was like two different styles of bread, white bread or wheat bread. Coffee was three different brands and cans. And kids today are growing up with flavors, gourmet flavors of everything. I mean, the coffee section is an entire aisle now, the bread section is an entire aisle now. And that's just a couple of simple staples, right? So kids are used to having a lot of choices. The other thing to mention is though, that when I say we can walk, it should go at the same time. It's like Great Lakes, these other breweries that have popped up and there's some really good ones. Now, craft doesn't always mean quality. It means small and sometimes just quirky. But now there's a lot of small breweries that are making pretty good product. You take a look at most of the brewmasters that are around Great Lakes. They're all like Great Lakes guys, right? So that's a testament to Great Lakes. But what you can't do as a small brewer is create history and heritage. And that's something that Great Lakes has. But we can't rest on our laurels. We got it. We have to embrace it. But we also have to be a company that young core consumer thinks about. Land we got to be in the conversation land. So we've got to make those products that keep us in that conversation.

Pat Conway [00:27:46]:

When we first started, like I mentioned earlier, that we started within our four walls in a restaurant environment, but then we started to hand bottle and we did all day. Land bottling. We would counter pressure the bottle. Then we'd open another valve, we'd fill it with beer, then hands the next guy, he put a crown on. It took us all day to do 16 cases, but the first count that we chose was a store called West Point Market. And everything in the store was gourmet. But the thing that was real interesting is but none of the beer was cold and our beer was a non pasteurized product. So we gave them this little cooler that used to hold ice cream and it looked like an enormous six pack. So we actually emblazoned all four sides with imagery to make it look like a big six pack. And that's where we started selling our beer. And there was not endless linear space of beer. In fact, when we first started, there was no Christmas ales except for ours. And then I guess Sierra Nevada had a real strong IPA celebration Ale, I think it was called. Real strong, real happy. The anchor had a real interesting spruce, but it was all spruce. It was too dominant of one thing. So when we made our own exploratory missions around the country, we came back and said, let's do ginger, honey and cinnamon because as long as one doesn't dominate the other, it wouldn't be nice to have all three flavors there present and festive land, convivial land. Here we are now, decades later, land. Now, there's hundreds of Christmas ales out there, but the preeminent one is Great Lake. And this guy out in California, I think Mark told me this, somebody said, well, he came out with a Christmas ale in Oakland or somewhere and he called it a Cleveland style.

Jeffrey Stern [00:29:36]:

Oh, that's amazing.

Mark King [00:29:38]:

And Jeffrey, you had mentioned some beyond beer too. It's nothing that you can ignore. I still think there's a romance about craft beer that won't go away. You've seen the slowdown in seltzers, you've seen other products come and go, but you have to probably continually look for opportunities. But the. Other thing you can't be dumb about is it's really expensive to create new brands. The marketing aspect, the recipe aspect, it's very expensive and time consuming to create brands. So you have to be really careful about which lanes you want to run in. We did a lot of really successful things in the last couple of years. We've done a couple that I would have done differently in hindsight. But they say in the beer business, if you bat 300, you do pretty good on innovation. I think we're doing better than that. But you have to be careful. Hey, we are one of the few top 20 crap breweries still owned by the original founders.

Jeffrey Stern [00:30:41]:

Right?

Mark King [00:30:42]:

So when we pick and pick and.

Pat Conway [00:30:44]:

One of the few the as a Nissan.

Mark King [00:30:46]:

Absolutely right. So we have to be very careful about where we go. We don't want to take too many gambles, so we have to be smart about it. But I feel really confident in the team that we have here now, that if we choose a lane, there's going to be a reason we're going there. We'll be able to attack it aggressively. We can't be all things to all people, but I think we can make a little something for everybody. That's the way I think we can stay in that conversation.

Jeffrey Stern [00:31:15]:

Yeah.

Jeffrey Stern [00:31:16]:

To pull on that thread a little bit about well, I guess just in the context right, there's this old Jim's Barksdale quote that the only way to make money is bundling and unbundling. I probably butchered it, but something along the lines of that. And I feel like with the real proliferation of these craft brewers, there's a big consolidation movement across the country where just my observation as someone who drinks beer sometimes from craft brewers is that they're getting acquired in some capacity or another. So I'd love to get your perspective as an organization still owned with an employee ownership component of it. Why did you introduce that? Why is that important? Is that a lever to maintain independence going forward? How have you thought about that component of it?

Pat Conway [00:32:05]:

Well, we've been approached by breweries in Asia, Europe and United States, mega breweries that would want us to be part of their portfolio. But we thought, why not keep it independent and let's have our employees participate in the success of the company Land. I'm glad we did that because some mega brewery may have said, well, your triple bottom line is frivolous Land not worthy of any attention. Or they may have introduced possibly some scheduled marketing initiatives that were just outrageously expensive. Whatever. All those other things that could have changed the dynamics of the company didn't happen because we said, let's stay independent. And I'm glad we did, because we can wake up tomorrow and do a different beer in conversation with Mark or with operations and do it. And if you are with a mega giant brewery concern, whether it's Asia, Europe, united States, I think you'd lose that flexibility and you'd probably start to lose a lot of your cultural identity in a cultural aspect of our business, an enormously, huge importance to us.

Jeffrey Stern [00:33:18]:

Well, maybe it's a good segue then, to address the third of the triple bottom line and just understand what the ecological component of it means to you. At Great Lakes Brewing. How is it that you're thinking about sustainability and how does that play into the work that you do?

Pat Conway [00:33:39]:

Well, it's interesting since we've been talking about this for decades, from the very first year, we used to take our grain from our seven barrel system and give it to a farmer who gave it to his dairy cows out in Middlefield on the Amish sections of the east. So this whole concept of take make remake instead of take make waste, we thought was ridiculous. And when I finished graduate school, I went around the world for a year with two buddies. We drove the Jeep to Alaska and spent a lot of time in China and Japan and India. Land to see how meager the resources the Third World has and how creative they are with trying to etch out an existence was really impressive. And I kept thinking, even though I was impressed by their creativity on that front, how wasteful a culture we have. We have so many resources, and we waste it in a sinful way. So we thought from the very beginning, let's take a very different approach to our business and let's try to take make remake as much as we can and let's bring in alternative energy sources and let's do a lot of things that unfortunately, we couldn't do all the things we wanted because we occupied 150 year old stables building across the street. That was landlocked. So we couldn't do a lot of things we want to do. But now, with a new property that we're thinking about, we might be able to do a lot better on the zero waste, environmentally friendly front. But it's a huge part of our existence. Land we think that we deserve to say to the rest of the population of Cleveland, if not the country, this is how you can run a business, sustainably, where you take care of your property, you take care of your profits and your people on your planet. And you can do that, and you can do it successfully. And here's an example. Here's our brewery. We've been doing that, and we're going to continue to do that and then be a beacon of hope for other companies that are having some decisions about whether they should do that or not. And I think our customer base celebrates that attitude. Mark, you have to agree. Right?

Mark King [00:35:54]:

Absolutely right. Our business depends on a lot of things, mainly of which is water. So we have to be very good stewards of what we do and how we do it. To Pat's last comment, even more so with every up and coming generation or new set of consumers. That's becoming even more important. So look, selfishly from a pure selection standpoint. Younger consumers tend to get behind environmentally, socially conscious companies more so than the previous generation does. So it's good for business, but it's also the right thing to do.

Pat Conway [00:36:34]:

When you think of what's going on out west with a dearth of fresh water, with the Colorado River drying up, vegas at 100 land, 15 degree temperatures, hydroelectric disappearing because they don't have the water, huge fields of vegetables in California suffering because they don't have enough water. Here we have one fifth of the world's fresh water sitting right in our backyard. The lake is our yosemite. It's our Grand Canyon Land. That's why every year we've had this Burning River Fest, the money of which we give to groups that work in the area of water quality. We've raised with our sponsors a million dollars over the years. And I think that we need to be in that space of telling our customers, please support water quality, please support our company, of course, but also recognize that these assets are hugely important to our culture, in our livelihoods in Cleveland.

Jeffrey Stern [00:37:29]:

Yeah, I'm glad you brought that up. I would have been remiss to not ask you about Great Lake Brewing Company's relationship to the Great Lakes themselves and water stewardship and all that. So I appreciate that.

Pat Conway [00:37:43]:

In terms of the burning rear fest. It's been dark for three or four years now because of COVID and we're having this conversation about when to reactivate it because it's an expensive undertaking. But the brewery is still clawing its way out of post COVID and these are tough times, even though things are starting to look bright because of Mark and the sales and the brewery's production efforts. But we got a long way to go yet, right, Mark?

Mark King [00:38:12]:

Absolutely.

Pat Conway [00:38:13]:

That took the wind of our sales. Yeah.

Mark King [00:38:18]:

The last couple of years, we've been able to turn around the business into growth in a tough environment. Right. But we're not out of the woods. It would be a lot easier if the market in general was growing, but it's not. And bars and restaurants are still struggling to be open every day of the week and to be staffed enough to happen all day. A lot of the have smaller windows of time that they're open during the day, they're open less days. You have inflation running rampant and guys paying $120 to fill up their car aren't able to go in and purchase some beer on the way home. And it's still going to be, I think, a difficult path for the next year at least. There was 650,000 independent off premise retailers before the Pandemic. Now there's less than 600,000. So there's 50,000 less places that you can purchase beer at. And let's face it, also there was a lot of government support for businesses financially the last couple of years that's gone away now. So I don't think we've seen the end of the rough stuff, but we can only take care of what we have control over. And that's what we're aiming to do, is continue to make good beer, continue to make brands and styles that appeal to our core consumer in hopes that we can get this business back up and running in a very profitable nature. So we can go back and do a lot of the things that those budgets will allow us to do. But there's supply chain issues which have become monstrously difficult to manage. It takes you almost ten months to get cans for a new product now, for instance, it used to be about eight weeks, now it's ten months.

Pat Conway [00:40:21]:

And Mark bring in CO2.

Mark King [00:40:22]:

Yeah, there's CO2 shortages that we're juggling with. We can't make beer without CO2 packaging, land timing and lead times. It's all become an incredibly difficult couple of years, but we managed through it pretty darn well. And right now we're putting together our plans for 2023 and we're genuinely excited about next year. But you don't know what nature is going to throw at us next year.

Jeffrey Stern [00:40:53]:

Yeah. Wow. CO2 shortage. You just pull it from the atmosphere. Don't we have an excess of it there?

Pat Conway [00:41:01]:

If we build a new plant at a different location, it's been proposed and it makes common sense in terms of return on investment to create our own CO2.

Mark King [00:41:11]:

You can reclaim your CO2 and it.

Pat Conway [00:41:14]:

Seems like that reclaiming to have a three or four year payback. That sounds like a no brainer, right?

Jeffrey Stern [00:41:22]:

It does sound like that.

Pat Conway [00:41:23]:

But we can't do it. We can't do it in our existing plant. There's so many limitations to our existing plant that we get handcuffed on some of these more commonsensical ways to approach better margins. And so that's a vote for let's find a different location that could celebrate these new ways of making more beer and more quality beer in a less costly manner.

Jeffrey Stern [00:41:50]:

Well, selfishly, the Burning River Festival, it's a special event, so I'm rooting for it. I'm looking forward to the day it returns.

Mark King [00:41:59]:

Fingers crossed. 2023.

Jeffrey Stern [00:42:01]:

Yeah. Well, Mark, you mentioned a few of the things that you're excited about looking forward. Pat, Mark, I'd love to get both your perspectives on the future and looking forward. What are some of those things that are exciting to you?

Mark King [00:42:14]:

I'll start off we've done some pretty darn good work the last couple of years, innovating? But we still think there are opportunities.

Pat Conway [00:42:23]:

Out there for us.

Mark King [00:42:25]:

So we're in development now with some of the beyond beer products that our new COO, Stern Powells brings to the table. He's got a great track record of making products at Boulevard Brewing Company over the years. The seltzer the developed is wildly successful locally. We're taking a look at that part of the business. We're taking a look at the ability to create things like hard teas. But we also know that there's other segments within craft beer that are still pretty appealing where we don't have a lot of penetration. So we'll continue to develop those brands where it makes sense. Like I said, at the end of the day, craft beer. There's a sexiness to craft beer and a real craft, so to speak, of making that beer that the consumers really do understand and embrace. And so we don't want to walk away from our roots. It's also tough, too. You don't want to look like you're making a money grab. So unless we can make a product that stands up to our expectations, we're not going to go there. We want to make sure that we are making good bets for the right reasons and that we have the capability to make an exceptional product. Land that's what we're excited about our new COO coming on board for.

Pat Conway [00:43:43]:

I think the other thing that Stern, the new CEO, is going to bring to the table is not only innovation, but actually making better products than we already have. Always improving on products, even if they're legacy beers, always coming up ways to make a higher quality product. And the big rock that we're hoping for through his efforts and everybody else in the brewery is extending shelf life on our beer right now. We are really hampered. Land with probably, unless Mark disagrees, one of the shortest shelf life beers in the market. And beers are perishable. So the fresher you drink it, the better is. And so what you don't want is beer that's languishing out there for month after month after month. Because as the Germans say, beer is like liquid bread. And so the fresher you eat bread, the better it is. Well, the fresher you drink beer, the better is. And so to extend a shelf life with high quality, innovative techniques and machines is remarkable. And we're going to benefit greatly from.

Mark King [00:44:48]:

That, absolutely right now for the right reasons. The team has really been policing our shelf lives, but we've got to find ways to make better and better quality beer at every turn. And it can be done, even for legacy breweries. You talk to folks at other big beer companies around here, they'll all say that you can never stop continuous improvement. And that's something that having Steven in here with eyes coming from outside the company, different techniques, we're pretty excited about what he brings to the table.

Pat Conway [00:45:24]:

And one thing that's interesting about our culture is our obsession with quality. We've always had dates on our labels, please drink by this date. And there it is. It says August 15 or September 12. It says it right there. It's not a mystery. And so now that turns the screw up, make things more intense, because now you have to deliver. Are you going to have beer pulled through the market? Or if it's not, are you going to be able to invest in taking that beer out of the market and destroying it. A lot of breweries don't want to mess with that and so they don't have any dates. So you as the consumer, you don't know if you're buying a product that was packaged yesterday or two years ago.

Jeffrey Stern [00:46:06]:

Well, I think we've covered quite a lot of ground here. There are a lot more questions I could ask you, but I'll kind of leave it to you. Are there particular components of the business, of the story of the future that we haven't really touched on yet that you would like to well, I would.

Pat Conway [00:46:23]:

Just say getting back to your question about history, breweries used to be like an enormously important aspect of the city's culture. It was as important as the newspapers, as the baseball teams, as the politics. And so we want to bring that back, and I think it's coming back. I mean, my God, how many breweries in Cleveland right now? Maybe, I don't know, 30 or something. But I think the fact that they were so philanthropic back then, especially these German owners of these German breweries, really bent over backwards to support the city and all the various philanthropic efforts. We had a strong philanthropic arm of the company as well, but during COVID we were in total survival mode. The person that we had hired who was in charge of that was Furloughed. Those dollars dried up because we were trying to make payroll. So as we get more healthy, we'd like to get back to that giving because I think that's part of the company's culture. You take care of your people, you take your profits, you take care of your planet, but take care of the city that supports your product. And I'm hopeful we're heading the right direction.

Mark King [00:47:32]:

For me, Jeffrey, I just say, totally echo Pat's thoughts there, and just to say this business is a lot different than it was in 1982 when I started this business, lord Beer Trucks. It was 40 years ago. And it's more fun, it's more competitive, it's more complicated, it's more everything. But Pat talks about culture. I think that the competition, hey, we can handle the competition, let's bring it on. Because I think what craft breweries do is bring sense of community locally and sense of civic pride that Pat talked about and that'll never go away. But my existence here has been all overcast by COVID. And so the thing I'm laser focused on now is making sure we get through this next, at least the next year, I think, will still be very unpredictable. But we have to think about our future at Great Lakes and what that's going to look like. Land making sure that we've got the right place to do business, the right brands in the portfolio. And one thing in beverage alcohol, right, is if you're not consistently recruiting younger consumers, core consumers, you'll be out of business pretty soon. And so that's something you have to be cognizant of that you got to land young consumers to fall in love with your brands, because that's where most of your consumption takes place before you get older, you get married, you have kids. You have to continually think about what these consumers are going to be wanting further down the road. That's anybody's crystal ball. But I was laughing about your last question that you sent to Michael Williams. What's your favorite hidden gem in Cleveland? I have no idea, because I've been here for two years of COVID land, so I haven't been able to go out and explore. My friends say, how do you like Cleveland? I'm like, I don't know yet, because I haven't had an opportunity to really get out and enjoy everything the city has to offer, which is super unfortunate, but it's a reflection on what's happened in the beer business in general. But I will say that I've been able to find a couple of really good dive bars. I won't mention them because they'll be upset if you call them dive. That's been a good thing.

Pat Conway [00:50:03]:

Well, you know, Mark mentioned recruiting consumers in the future, but also recruiting staff. One thing that we are trying to get better at every year is who are we recruiting, what kind of skill set do they have? Of course, but what about the cultural piece? Do they fit? Phil south some of the things that we're trying to discuss in terms of triple bottom line, take make remake, be sympathetic, compassionate, work well with other customers, but also staff over the years. If we part a company with some staff, which is rare, but it does happen. It's always on the cultural piece, not on the skill set of the job. So it's up to HR to really look in a more enlightened way. And they've done a great job so far, especially during COVID It was crazy what they were able to accomplish. But that whole thing of building your company based on who is that you're trying to attract as part of your family is a big deal.

Mark King [00:51:07]:

Yeah, Jeff, we went from 250 employees down to about 115, and now we're back up to about 200, land 30. So, yeah, it was pretty darn tough couple of years and a lot of people that have been here for a long time. Like Pat said, we went into ultimate survival mode, and I think we're coming out of it pretty good, but we're not there yet.

Jeffrey Stern [00:51:27]:

Well, 35 years of practice there. Well, Mark, I'll spare you the closing question because I think we already know where it might go. But, Pat, I will ask you then for your favorite hidden gem in Cleveland.

Pat Conway [00:51:46]:

The venue for our Burning River fest is the Coast Guard station down by Whiskey Island is still underappreciated. It's such a beautiful structure. We've raised a lot of money over the Burning River Fest to help support the structure to keep it in existence. But it's got those beautiful Art Deco modern lines that are supposed to replicate the images of a boat. The views of downtown are stunning. That's something that I think more Clevelanders need to explore. Also, if you get outside the city and you go to the national park and get off and go through some of the trails down there and get as far south as our Hindsize Farm, it's in Hale Village. Hale Village is replete with structures from the 19th century. Well, that's where we have an acre of ground that we grow vegetables to come back to the brewery, that is a magical area of the city. You feel like you're way far outside of one of the top metropolitan cities in the country. I think that's something that needs to be explored as well. And then in terms of things that are not unnoticed. But I just adore the Cleveland Orchestra and the Cleveland Museum of Art. They're just world class facilities. We are so fortunate to have those in our backyard, both of which supports Great Lakes Brewing. If you go to the Intermission at Severance Hall, they have the Dortmunder, and at the Cleveland Museum of Art, you can also have a glass of beer from Great Lakes Brewing in their little shop there while you're touring. Both world class facilities with a world class beer. What's not to like?

Jeffrey Stern [00:53:31]:

What is not to like? Yeah, those are great hidden gems. Thank you, Pat. Well, Pat Mark, really incredibly appreciative of your time and for coming on today to share the story and what you're working on. So thank you.

Pat Conway [00:53:46]:

Absolutely.

Mark King [00:53:47]:

Jeff, come by for beer sometime.

Pat Conway [00:53:49]:

And speaking of working on, I just had my second pint, so I'm down to 32 more.

Jeffrey Stern [00:53:54]:

32 more?

Mark King [00:53:56]:

Well, yes.

Jeffrey Stern [00:53:56]:

Land, congratulations again on 34.

Pat Conway [00:53:59]:

Land hopefully there's 34 more and nothing but growth and profitability in front of us. Land a beacon for folks that are trying to figure out on the sustainable front, how do we become as a business, not necessarily brewery business, but any business, how do we become more sensitive to our planet's needs? And I'll drink to that too.

Jeffrey Stern [00:54:24]:

Cheers. That's all for this week. Thank you for listening. We'd love to hear your thoughts on today's show. So if you have any feedback, please send over an email to Jeffrey at layoftheland.fm or find us on Twitter at podlayoftheland or at sternjefe. J-E-F-E. If you or someone you know would Make a good guest for our show.