Art and the Craft

Entering the Gateway to the South, Louisville, Kentucky, a few things may come to mind. For many, those are horses and bourbon, but for a few, it’s high quality craft beer.

When Sam Cruz, the co-founder of Against the Grain (ATG) Brewery in Louisville, Kentucky, thinks of the city, he’s one of those that envisions rivers of well crafted beer. Although Cruz is actually from the Hoosier state of Indiana, the dream of owning his own brewery had to come by way of the River City.

Cruz, 35, first discovered brewing as a 17-year-old living with his parents in Mitchell, Indiana. “It was all pretty much garbage up until I was 22,” he said. “I just made alcohol until then. I got into all grain pretty soon into my 20s and that really kind of propelled it to a point where I felt I was learning a lot more. That’s where I really started to enjoy the art and the craft of brewing.”

It was during this stage that Cruz learned a multitude of lessons about brewing. “Over the course of the time … I learned you can’t run off and hold your ward over night at room temperature, and then boil,” he said. “I also learned that more hops isn’t always better. I learned a number of things. Sugar, more sugar, even though it means more alcohol doesn’t mean it tastes good. All of those things … I learned a lot.”

As many know, home brewing is enjoyable, but not sustainable as a business. Cruz didn’t want to just create for his friends in family, but instead wanted the opportunity to be a successful professional brewer.

“I walked in [to Bluegrass Brewing Company (BBC)] as a home brewer and asked, do you need any help?” he said. “Fortunately for me he said, ‘yeah, I need someone to clean kegs.’ I had done that in college and kind of knew what came with it — it’s dirty, it’s hard and it sucks, but there’s free beer. So, it’s kind of worth it if there’s free beer.”

The hard work didn’t bother Cruz. He kept his head down and showed promise as a hard worker under the brewmaster Jerry Gnagy. “That’s tough to find in this industry,” he said. “We hear people all the time say they want to be a brewer, ‘I wanted to be a brewmaster, I want to make recipes,’ but really that’s such a little part of it. Really it’s the hard work, you have to dig out and have a commitment to process. So I showed that commitment.”

Over the course of four years Cruz worked his way up to be a primary assistant where he was managing the brew house in St. Matthews, an area on the east side of Louisville. BBC built a third location that Cruz eventually took over for about a year. “The opportunity arose to start Against the Grain, so [Jerry] and I collectively left to start Against the Grain.”

The two had spent days upon days working in BBC discussing what it would be like to own their own brewery. The two enjoyed working on specialty beers at BBC and wondered what it would be like to have control over their own product. “The idea was really just an idea and didn’t materialize until we met our partners, Adam Watson and Andrew Ott,” explained Cruz. “Adam Watson, at the time was in law school, … as I was taking a lead brewer job at Third and Main [BBC], he came in to be our assistant for both of the brewpubs, and kind of just showed the aptitude to do the things we do and also the work ethic. Andrew, at the time, we thought he was just a guy that worked [at BBC], but later found out he had pretty in-depth experience opening other restaurants. Just out of the blue he kind of approached us like, ‘you guys ever considered opening your own brewery?’ Of course we were like, yeah sure, here’s our business plan we’ve talked about. He looked at it and kind of was like, ‘you guy’s don’t know anything.”

Ott was comfortable telling Cruz and Gnagy what they didn’t really understand about opening their own business. “It kind of made sense, the kind of contributions he was bringing to the table, that an equity partnership of all of us being equal was important in that we could each take our area of expertise and make it a cornerstone of the foundation in Against the Grain,” explained Cruz. “All of that kind of culminated in the success we have now.”

From the beginning the team set out to create unique beers that had full flavor and could provide some diversity from the typical domestic beers. However, in addition to the rotating beer selection, ATG’s location helped set it apart from the rest.

Situated in Downtown Louisville, ATG found its home inside Louisville Slugger Stadium, sharing the home of the Triple A Baseball team the Louisville Bats. “This was a restaurant brewery prior to us,” said Cruz. “Prior to having this space, we were looking for spaces to lease — our business was looking for a home. Right and left we were being turned down by potential landlords. They don’t believe the concepts possible, they don’t want to take the risk financially because there are going to be some improvements or changes to the space. We looked at a number of spaces in some really prime spots in town and were told no.”

On chance, the team entered the previous restaurant/brewery downtrodden about the lack of success in locking down a location. “We looked at the equipment that wasn’t being used and said, ‘let’s at least buy this equipment,’” said Cruz. “We called the owner of the previous business and made an offer on his equipment. He said it’s not for sale, but of course everything’s for sale, [he’s] not using it. In a very brazen manner we said, ‘hey we’ll take your stuff.’”

An offer was put together and sent to the owner, but it wasn’t what the owner was expecting. “Our response is, ‘you don’t know what you have, this is what it’s worth,” explained Cruz. “If you don’t know what it’s worth, why don’t you contact someone and ask what it’s worth.”

The previous owner did so and realized that the ATG partners’ offer was quite generous. “Instead he countered with, why don’t you buy it all, the kitchen, dining room, brewery,” explained Cruz. “Us being brewers are like, yeah let’s do it. We buy it all, fix all the broken things, renovate, rebrand, trained a kitchen, came up with a concept for the kitchen and go at it.”

The cost of the location was more than originally planned by ATG, but it was a prime location in downtown with a highly active dual tenant in the Bats. “In this particular space it was either you come out hitting hard or you lose,” said Cruz. “We realized that very quickly that you have to be willing to go big and go big fast. Because honestly, it costs a lot to be here.

“As a marketer in this particular space we are selling to two different crowds. One crowd is facing the stadium, the other crowd is facing the city. For the customers in the stadium all we do is open the doors and that is essentially casting our net. By opening the doors they fill up, they want to buy things, they want to get out and enjoy the game. It’s getting them to come back is the challenge, and that’s where quality comes in.”

That crowd was easy for ATG. They were going to be at the location regardless simply for the baseball season. This gave them a regular customer for which to practice their business concepts, and refine as needed.

“On the opposite end of things, baseball season isn’t all year long,” continued Cruz. “Although it’s good, there are still a whole year worth of bills that don’t change here. We had to learn how to market to the city side, how to sell to them and how to appeal to our people within the city. It took a lot of learning, but fortunately we had that other half of the year as a cushion to make some mistakes. But, half assing it, it never works.”

In semi-coordination with the opening of ATG in 2011, four months later distribution began, but not in a way you’d think. “This is what’s unique about us,” said Cruz. “Obviously if you own a brewery or any sort of business, you know the best place to sell your product is in house because you set the market price and you can control your margin. So, you know we are producing, and it is finite here and we want to sell everything here, because that’s where people get to experience the brand and hopefully get acclimated to us.”

The problem for ATG was that Louisville was new to beer, so to speak. Even though there were some established breweries already in existence, the culture was in a primitive state. “We decided we would contact some friends in Chicago and say, ‘hey we’d like to sell some beer,’” explained Cruz. “By chance a distributor happened to be in our area from Chicago, they stopped by, tried our beers, liked them and we started distributing our leftover stuff to Chicago.”

From Cruz’s perspective you’d think the ATG brands in Chicago were burning down the city. “It caught on like wildfire,” he said. “It just blew up. We became one of the hottest brands in that boutique portfolio, challenging anyone in Chicago, which is a big market.

“We realized very quickly, to get traction and move product like that says a lot about your brand and the quality of the product. As we were kind of getting a handle on things in terms of production here and sales, pushing things as far as they can go, we increase distribution in Chicago and then start in Louisville.”

Now ATG sells a lot of beer throughout the entire state of Kentucky, but its also expanded into 38 states in the U.S. and Western Europe. Up through the third quarter of 2014 production for ATG beers was relatively small and limited in some regard. However, that all took a massive shift with the development of a production brewery during the final quarter of 2014.

Cruz has been all over the world in the past two years giving out tastes of ATG beers to anyone willing to try. He’s developed a passion for his beers all over the world and set ATG up for extreme distribution.

“In the Portland neighborhood, on the opposite side of [Interstate] 64, so 15 blocks from here, a 25,000-square-foot warehouse, 30 barrel brew house with a variety of tanks and packaging set up, allowing for an additional push of 6,500 barrels right off the bat,” said Cruz. “Planned upgrades in the first year to take us over 10,000 [barrels] and then over the course of five to seven years, 25,000. Maybe we’ll cap that out at 70,000 in that spot without any alterations to the neighborhood.”

Production will increase for ATG by 400 percent by 2016. With the growth it’s ATG’s goal to become a worldwide producer of high quality, unique beers. Cruz said first will be immense local growth, and then a strive to push towards Japan and Brazil.

ATG has come a long way in just a short amount of time. It’s development from water cooler conversation, to a full fledge brewery, has been a rapid movement. “First, my four partners and I are committed to a goal,” said Cruz. “The goal is to make the very best beer no matter what, no matter the cost, no matter the energy, no matter what agonizing pain we have to go through. To make that, and put it in front of people and say, ‘that came from your home, you don’t have to go across the world to get it, you don’t have to go back a hundred years, you don’t have to find any other brewery, just some dudes that happen to know how to do this in your hometown make that beer.’ That’s it, to make the very best beer.

“The next is our commitment to the work, the four of us are very much staying-until-the-job-is-done guys, I think that culture has been bred among our people and our employees, and they also exude that. Then, our ability to say, ‘hey, we don’t know what we’re doing, let’s go find people that do.’ And trusting the people around us to perform.’”

It’s just recently that Cruz has found a normal work-life balance again. He’s lost that need to be at the brewery by 6 a.m. and stay until 12 p.m. That doesn’t mean he’s lost his passion or he’s become hands off. But, what it means is he’s learned how to truly be an entrepreneur, balance his business and work as one of the most highly efficient brewers in the world.

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