Four years ago, three buddies in Nebraska did what many people only dream about: they turned their pastime into a business.
Around a kitchen table, the trio – two lawyers, Tom Wilmoth and Marcus Powers, and an orthopedic surgeon, James Gallentine, – discussed banding together to launch an artisanal brewery. All home brewers, they sealed the deal after Wilmoth and Gallentine spent three days at the Chicago-based Siebel Institute of Technology, which offers classes on brewery-related topics, including manufacturing.
“I expected to take the course and that we would not go into business,” said Wilmoth. “But after the coursework, we were perfectly capable of handling it. ”
A local brewers association provided the partners with access to a list of vendors for equipment, materials and ingredients, and they funded their venture – housed in a 6,000-square-foot warehouse in Lincoln — with a mix of debt borrowing and equity.
The co-founders christened their new venture Zipline Brewing Company, a name designed to connect with craft beer enthusiasts and their spirit of adventure.
Today, Zipline is in the process of expanding its production facility to 18,000 square feet, and the 26-employee firm produces 32 different kinds of beers annually, including dark and light varieties, as well as suds aged in barrels that previously held tequila, gin, bourbon and red wine. Except for the tequila- redolent beer, which is only available in 750 ml wine bottles, its offerings come in 12-oz. bottles, with a six-pack retailing for about $8.99. They are also available in kegs.
The brand, which is sold in liquor stores, supermarkets, restaurants and bars, is distributed in Nebraska, South Dakota, Iowa, Missouri and, most recently, Kansas.
“We really think this is a relationship business and I like to get into a car and be at an account within five or six hours at the most,” said Wilmoth. “We have no intention of going further.”
That local mindset is paying off. Although Wilmot declined to reveal the firm’s sales volume, annual revenues are slated to grow 35% this year – the same growth rate Zipline achieved in 2015. The co-founders will continue to reinvest all proceeds back into the business until the firm produces 11,500 barrels, a target that they expect to reach in 2018.
Zipline is part of a growing sector in the beer industry.
According to the Brewers Association, which represents small and independent beer producers, craft brewers’ retail sales jumped to $22.3 billion in 2015, a 16% increase over year earlier results, snagging a 21% share of the beer market, up from 19.3% in 2014.
Still, the heady craft market has its dark side.
It has taken Zipline more than year to score shelf space at some retail giants, including Target, with its efforts encompassing lots of emails, phone calls and conversations. And in the years ahead, penetrating retail chains could get even tougher with Anheuser-Busch InBev’s $107 billion acquisition of its largest competitor SABMiller this year. Wilmoth believes the mega-giant could potentially command more shelf space and squeeze out smaller producers.
To maximize its fortunes, Zipline only serves its brand in its two company-owned taprooms in Lincoln; a third beer hall is slated to open in Omaha this spring.
“Retail margins are more friendly than wholesale, and any time we can increase our retail sales, that’s good for us,” said Wilmoth.
And rather than run pricey ad campaigns to drive sales, Zipline promotes its products via social media, including Facebook, Twitter, Instagram and Snapshot. Plus, it embraces event marketing, supporting about 60 local charity activities a year, including for breast cancer awareness, the National Guard and Adopt-A-Dog. Its running club, with 250 local runners, raises funds for a different cause every month.
“We don’t write checks but provide beer and/or space,” said Wilmoth. “Local is king in this business, and people are very receptive to products by people they know and like.”
For Wilmoth, Zipline, like home brewing, is about producing a product that connects people to each other.
“I wanted to bring that device to the community more than sell beer – and to use that product to get people to a common table and to start a conversation, which is more important these days.”