New program on the business of making and marketing craft beer
and distilled spirits
FROM THE OUTSIDE looking in, craft brewing looks pretty simple. Just take grain, hops or fruit, add a little time and maybe some flavorings, and through the alchemy of fermentation you have beer, whiskey, or hard cider. It's a trade that can easily be done out of a basement or garage, and many enthusiastic home brewers start there. But wait until the time comes to sell your product—that's when things begin to get tricky.
This fall, Portland State's Center for Executive and Professional Education is offering a new online certificate program called the Business of Craft Brewing. While a few other colleges have programs in beer or wine production, this is the first course of study to focus specifically on business operations.
Classes will cover regulations, operations, accounting, and brand development among other subjects as they relate to craft beer, distilled spirits, and ciders. The certificate program culminates in an optional immersion weekend: three days of touring breweries, hops and malt producers, and other craft beverage businesses. At the end of the program, students will have worked out their own business plans.
"Most of the people who are going to be taking this are people that have been making beer at home and now they want to make it on more of a commercial basis," says Mellie Pullman, director of the program. "So we've kind of merged the basic business skills with everything they need to know about the industry."
A PROFESSOR in the School of Business Administration, Pullman specializes in supply chain and operations management. But she first worked as a brewer, having trained with Pyramid Brewing in the mid-1980s before moving to Utah where she was brewmaster and co-owner of Wasatch Brewery, the first brewery in the state. Realizing that she needed to have a broader business background to meet the needs of a growing company, she decided to earn an MBA.
"We faced a lot of challenges, so I have a lot of great insights to pass onto the people that will be taking our program," she says. "I once blew up a tank of stout. And I had to duct tape the brewery together to keep it functioning back in the day when there were no people to call and ask, 'how do you fix this?'"
Pullman plans to call on local brewers and distillers like Lee Medoff to share their hands-on expertise with students in the program. Medoff is a longtime Oregon brewer, winemaker and now distiller.
"My best advice is to start at the back end," says Medoff, owner of Portland-based Bull Run Distilling Company. "I caution people that being enthused about what you do and being passionate is important, but you really have to know where your first bottle is going to be sold. And it can't be just to your friends."
Medoff is a founding member of the Oregon Distillers Guild. In 2003, he and a partner started House Spirits Distillery, specializing in gin and vodka. Their Aviation Gin became a quick hit, but Medoff was more interested in distilling dark spirits. He left House Spirits to found Bull Run in 2010.
CRAFT BREWING has exploded since its early days, especially in Portland. Out of 137 breweries operating in Oregon, a full 51 are located in Portland, and dozens more are in planning stages. Of 46 distilleries, 14 operate in Portland. The total industry, including related businesses like hops and malt producers, adds about $3 billion each year to the state's economy and employs around 30,000 people.
Initially, Pullman and her colleagues intended to offer just one section of business courses, but demand for the program has far exceeded expectations. With available seats filling up for fall, a spring section was added, and there are plans to offer a third section in June 2014. Students are enrolling from as far away as Germany and Spain. However, it is the program's answer to a local—and national—industry need that has Pullman most proud.
A recent $8 million private gift to the School of Business Administration—home to the new program—reflects the community's interest in this kind of innovative education, says Pullman. The gift and a $40 million bond approved in June by the Oregon Legislature will help the business school create more space for its collaborative, industry-responsive programs.
"At Portland State, we're definitely in a highly innovative phase. We have to be. We have to figure out what topics are going to meet the needs of our region," says Pullman. "Obviously, the craft brewing business is one of these."
Top left: Professor Mellie Pullman, director of the new Business of Craft Brewing program, brings her former brewmaster experience to students. Top right: The successful, but relatively new Migration Brewing Company in southeast Portland, will share its story with students in the new Business of Craft Brewing program. Bottom right: Sara Lynn pours from the seven Migration Brewing craft beers on tap at its Laurelhurst neighborhood pub.
Students will learn what it takes to run a profitable distillery from program partner Lee Medoff, owner of Bull Run Distilling Company.