Director of Brewing Mike Schnebeck has succeeded by going big — and contrarian.
Who doesn’t like a rich, ultra-hoppy India Pale Ale? Schnebeck certainly does, but with one caveat. IPAs typically have a high alcohol content — too high for Schnebeck’s taste. Moreover, he has plenty of company. “Lots of people like the rich flavors and variety associated with craft beers,” he says, “but they don’t necessarily want to drink a lot of alcohol. I certainly feel that way.”
So do Justin and Tyler Catalana, two brothers who realized their beverage predilections pointed toward a market opportunity. In 2010 the Catalanas hired Schnebeck and opened a small brewpub — Beerworks — in Mill Valley, a Marin County town located just north of the Golden Gate Bridge.
“From the start, we concentrated on making a variety of dry, balanced, approachable beers with alcohol contents of around 4.5 percent,” says Schnebeck, “and the response was really enthusiastic.”
So enthusiastic that the trio felt compelled to go big. Really big. They shopped around, found industrial space in San Francisco’s iconic Presidio, and launched Fort Point Brewery in 2014. Fort Point is now the largest independently-owned brewery in San Francisco, and only a few beer-producing enterprises — such as the iconic Anchor Brewing — are larger.
The shift from neighborhood brewpub to large brewery required Schnebeck to recalibrate his approach to beer-making. “At Beerworks, we made around 400 barrels of beer a year,” he says. “At Fort Point, we’re brewing 40,000 barrels annually. Making that jump was a challenge. I essentially did everything myself at Beerworks, and that’s not an option at Fort Point. I have to build strong teams, draft training protocols, imbue everyone with the company culture, oversee every aspect of production — it’s a lot to figure out.”
Supply-chain issues are especially daunting. “It’s just so much more in the way of materials,” Schnebeck says. “Many of the ingredients are seasonal, and I have to be strategic on sourcing, timing, pricing and storage. Then I have to ensure I have the space to store them under the proper conditions.”
While beer is a product, it is also a cultural touchstone and an expression of personal style and values. Sales and marketing are thus intertwined with production to a degree unknown in many industrial sectors. Fort Point has a lot of beer to move, so its approach to sales is particularly innovative. Case in point: All of its beer is sold in cans.
“There are a few reasons for that,” says Schnebeck. “First, cans really are a superior container. They exclude oxygen as well as glass. And unlike glass, they don’t allow the ingress of light, which can spoil beer. They’re lightweight, safe, and easy to transport, making them an ideal choice for camping, tailgate parties — all the places people typically bring beer.”
Cans also have a lot more “real estate” than bottles, says Schnebeck: There’s simply more room on them for messaging. That allows for the creation of a high-aesthetic package, one that catches the eye with attractive art and detailed information.
Finally, going cans-only sets Fort Point apart from the general glass bottle herd. That’s critical in the beer biz, where the surfeit of available brands can be overwhelming for the consumer — and a death knell for the producer trying to make a mark.
Fort Point also purveys its beer in proprietary retail taprooms. “We kind of went at it backward,” Schnebeck observes. “Most craft breweries do retail first, then move to wholesale. We started wholesale, and then went retail. We remodeled our old Beerworks brewpub in Mill Valley, then opened taprooms in San Francisco’s Ferry Building and Mission District, and in the Rockridge district of Oakland. COVID has forced us to go on retail hiatus for the most part, but we still feel there’s a lot of opportunity there. For one thing, it’s an extremely effective way to build our brand.”
Fort Point also marched to a different drummer when it came to distribution. Unlike virtually all other mid- to large-size breweries, it decided to self-distribute. That helped forge close relationships with both retailers and consumers, says Schnebeck, but eventually the brewery grew too large for such a DIY approach.
“We’ve been moving into Southern California, and we’ve really gotten too big to do it all ourselves,” he explains. “We needed a partner who could handle that expansion. But we still see ourselves as a regional brewery. We don’t plan to expand nationally.”
In the end, of course, it’s all about the beer, and maintaining quality is Schnebeck’s foremost priority. Fort Point maintains about 10 varieties in rotation, including the brew that built its reputation: KSA “cold-style” ale, a libation celebrated across the Bay Area for its lightness, crispness, and pleasing balance between hops and malt.
“It put us on the map, and it’s keeping us there,” says Schnebeck. “There weren’t many cold-style beers on the market, and it really set the standard. It was recently inducted into the San Francisco Chronicle‘s Northern California Beer Hall of Fame — a legacy it shares with beers like Anchor Steam, Sierra Nevada Pale Ale, and Russian River’s Pliny the Elder. For us, that’s a big honor.”
Schnebeck also is optimistic about a new limited release program that features small batches of specialty beers packaged in 16-ounce cans. “In a way these are R&D beers that engage the consumer in the process,” he says. “They present a lot of different flavor and aroma profiles, and we solicit feedback on them. Depending on response, some of the beers could make it into our regular rotation.”
Challenges: “The farther from your home base, the greater the challenge,” Schnebeck observes. “We started distribution in Southern California about two-and-a-half years ago. There’s some friendly competition down there — they love their LA and San Diego beers. Our growth has been slow but steady. The fact that we’ve signed with a distributor instead of self-distributing will make a difference, I think. That gives us both predictability and real growth potential. As far as production goes, we’d like to cement our presence in the Presidio, and at a certain point we’ll probably need to look for a larger facility. Also, there are challenges implicit in just working to keep the brand strong and developing new products. That never eases up.”
Opportunities: “We anticipate really growing our footprint,” says Schnebeck. “From the beginning we wanted to be a beloved San Francisco brand, and that has happened. Now we’re seeing that love extend past the Bay Area to Southern California. We’d like to become a go-to brand for all of California, and ultimately, the West Coast. But probably not beyond that. People really appreciate a regional connection. Also, we think our brand could extend to beverages other than beer. We’re looking into that.”
Needs: “Supply chain issues have given us some real headaches, especially for cans,” says Schnebeck. “The price has just skyrocketed since COVID, and we’re sourcing from all over the world. We’re really working to stay on top of it and cultivate good, reliable suppliers. We also commit a lot of energy to our labor force. We’re in San Francisco, and the tech sector is really powerful competition for skilled, competent workers. But luckily a lot of people around here have a strong passion for beer, want to work in the industry, and understand we can’t really match the pay scales of Silicon Valley. Also, we want to ensure diversity in our workforce. The beer business has been pretty exclusionary, and we’re determined to do our part to remedy its racial, gender and social inequities.”