CEO John Giarratano sees a growing market for yeast outside of brewing in a wide range of food and beverage categories.
“Yeast can be a commodity,” says Giarratano. “If you’re buying yeast from White Labs and you’re buying yeast from me, theoretically you should get the exact same product.”
But that’s not the case at Inland Island Yeast Laboratories, he notes. The differences start with constantly improving propagation techniques and continue all the way through to delivery.
“Getting the fresh pitch that is in the best shape it can be viability-wise and cell count-wise will ensure that you’re getting more generations down the road,” Giarratano explains. “Using healthy yeast from the get-go might be the difference between four generations and eight generations, and that is a huge cost savings.”
Since Giarratano and co-founder Matthew Peetz went their separate ways in 2018, Inland Island has upgraded the operation with steam sterilization and automation. “I have completely revamped the entire laboratory,” says Giarratano. “Since 2018, I’ve invested over $300,000 in equipment.”
Giarratano’s background with Good Manufacturing Practice (GMP) in the pharmaceutical industry carries over to Inland Island. “I took a lot of what I learned in pharmaceuticals when I was working there and building pharmaceutical bioreactors and translated that to yeast propagations,” he explains. “We have a fully steam-sterilizable system in place that definitely sets us apart from what brewers are doing and most other yeast labs I’ve seen are doing as well.”
The company’s 7,000-square-foot facility on the north side of Denver features a clean room and lab. A third-party GMP audit “is something I’m pushing towards,” says Giarratano. “We’re operating like a GMP facility in every way possible. I basically tried to model it after what I’d seen in pharma.”
Inland Island sources stainless-steel tanks via Denver-based Evolve Brewery Outfitters. “He’s able to get completely custom tanks made for us in China,” says Giarratano. “It’s really nice. I can work with an engineer, and we can put ports where we need them. At first glance, they look like a typical fermenter, but we’ve actually designed them to do yeast prop rather than making beer.”
While breweries represent most of the business, Giarratano says he’s seeing increasing demand from makers of hard seltzers, kombuchas, and other non-beer beverages.
Colorado-based customers include Upslope Brewing, 4 Noses Brewing, Talnua Distillery, and The Block Distilling Co., but Inland Island’s customer base is increasingly national. “Most of our growth is coming from the rest of the country,” says Giarratano. “We picked up Societe Brewing out in San Diego — they’re a 20,000-barrel brewery and they’re growing like crazy.”
“Big breweries who have switched to us have just raved about the fact that it made all the fermentations more predictable, they’ve been able to get more generations out of their yeast,” he adds. “We work directly with them to improve their practices. That’s important — an extra two days in the tank can screw up your production schedule for the month.”
After a slowdown in 2020, Inland Island’s sales grew by more than 25 percent in 2021, and Giarratano forecasts another bump of 20 percent in 2022. “That snowball is really starting to roll,” he says. “I’m getting calls from breweries all over the country that are, ‘Hey, I talked to my buddy, he’s raving about you!'”
Challenges: “Head count has been difficult,” says Giarratano. “I need to hire a middle-management team. I’m still kind of the guy everybody comes to with every question and every concern.”
Supply chain has also been a thorn in Inland Island’s side. “If I don’t have, for instance, sugar, I can’t do my job,” says Giarratano. “We can’t make yeast if I don’t have liquid malt extract, if I don’t have the nutrients that we’re adding. All three of those things have been very hard to acquire. I’m looking at four- to six-week lead times on almost everything, so we’ve had to get better about reordering as soon as we receive something.”
Opportunities: Colorado-based clients account for about half of sales, but Giarratano sees increasing numbers of orders coming from Texas, Southern California, and the Midwest. He’s targeting the eastern U.S. next. “Me getting out there really makes the difference,” he says. “I think I’m our best sales guy.”
Adds Giarratano: “I’m also looking at potentially finding other industries to apply yeast to, food being a very big one. Some of the new synthetic meat companies, the flavor of those products are coming from yeast-derived flavors.”
Needs: “Good help is probably the biggest one,” says Giarratano. “Finding qualified people who are eager to work has been way harder than it was a year or two ago. Salaries have gone up by at least 25 to 30 percent.”
Inland Island also is on the lookout for more accounts. “We have enough capacity that I could grow twice as much yeast as I’m currently growing, but it’s just going to take people and sales to warrant it. I can’t make a bunch of yeast and sit on it for six months — it’s a perishable product, so we definitely always have to be dynamic and grow as we get more business, rather than grow a bunch of yeast and then go out and sell it.”
