San Diego, California
CEO David Favela, along with his nephew and CFO, Martin Favela, and brother and brewmaster, Marcel Favela, had an idea to infuse and sell craft beer mixed with Jamaica and Horchata, two traditional Mexican fruit drinks. "It started with the idea of doing something that brought our family together. We all had our professional careers, but we wanted to make beer to enjoy and share in the company of family and friends," says David.
With a unique menu of craft beers that include Horchata Golden Stout, Gran Jefe wheat beer, and the best-selling Blood Saison, Border X Brewing pulls ingredients from Mexican-inspired flavors that you can find at your local taco shop.
"We were making Scottish ales before we started to pull from our cultural background," says David. Then Martin brought Marcel and David a red beer infused with Jamaica tea that led to a major pivot: "We decided that this would be the direction for us to go in, not to follow the trend, but to stay true to ourselves and our Mexican culture."
The trio did not expect their idea to stand out. "We had no business plan, and no visions of grandeur," he says. "When Border X opened, just over four years ago, there were 50 people waiting outside. We never expected that. We chose the name Border X Brewing because we are close to the border of Mexico."
When the Favelas decided to open Border X, there were 85 breweries in San Diego. Their approach was to serve the Latino market, one Favela believes is largely overlooked by craft breweries.
It follows that Border X staked its claim on one of the largest untapped craft beer markets in the metro area: the South Bay, between downtown and the U.S.-Mexico border. "The South Bay has about 1 million people, mostly Latinos, and there were no other breweries down in the South Bay," says David.
"We wish for Latinos to have their first craft beer experience with us," he continues. "We are creating a market, not chasing and fighting for the market."
The strategy is paying off. "Our market is growing while the craft beer market may be hitting its first shakeout," says David. "Most of the breweries are making delicious beers, but with similar approaches -- IPAs, brown ales, et cetera. They aren't catering to any community other than the craft beer community."
Border X started small but grew quickly. "At first, we were only brewing 15 gallons of beer at a time," says David. "Currently, we have a 10-barrel system that brews 300 gallons at a time. Our brewing abilities have improved tremendously. The right technology and equipment can make a huge difference."
Same goes for ingredients, he adds. "Our Blood Saison uses a tremendous amount of hibiscus flowers to get the right flavor in our beers. Our Horchata is created by using special techniques with cinnamon."
And Border X Brewing tries to source locally as much as possible. "There is a hop farm here in San Diego's Valley Center which we have worked with numerous times," says David. "They harvest the hops fresh, and then we use them in our beer. Unfortunately, they do not harvest enough for local production, so most of the hop production occurs in Washington state. The hibiscus for the Blood Saison is grown and harvested in Mexico."
Challenges: Copycat breweries. "We originated this approach, so we feel that we can outperform our competition," says David. "We need to seize the moment and grow before we are crowded out by others."
Opportunities: Border X Brewing is expanding to Los Angeles County. The doors for a new brewery in the City of Bell could open as soon as August 2018. "There are a lot of underserved communities out there," says David.
"Our brewing is not just about beer," he adds. "We love our product and we are proud of it," says Favela. "We host Latin jazz on Saturday nights. Our jazz master brings in his 14-year-old students to play musical instruments. It is a mix of culture, love, and great beer."
Needs: "We need capital," says David. "We are looking at operating a second brewery, and we need a talented team of collaborators to continue our growth at our new location in Bell."