By Eric Peterson | May 01, 2015
Chapman and Heaton met in Fort Collins at a meetup for Liquid Poets, a local homebrewing club, and the respective engineer and payroll accountant took three years to develop a business plan for Loveland's first craft brewery. (Now the city's seventh is on the way.)
"It took us a long time to get the capital and equipment," says Heaton. "We got it used. Now it's really tough to get used equipment."
The purchase involved driving all night to look before they bought their initial tanks. "We jumped in my Civic and drove to Washington that night," recalls Chapman.
They saw plenty of English and Belgian styles on the market, but the pair "noticed that there wasn't really any German-style beer," Chapman says.
Chapman and Heaton have done their homework and cite the 1516 German Purity Law as the end of the road for many styles. "All of the aristocrats were taking foodstuffs and making it beer," Heaton says of the law's intention.
Styles like honey wheat ale -- Köttbusser -- were outlawed. Half a millennia later, Grimm Brothers Brewhouse is bringing it back in the form of Snow Drop Honey Wheat Ale.
"We like resurrecting dead German styles," explains Chapman.
Heaton, a self-described "beer geek," says he likes to out-geek his peers with some of these lost styles. "I've met other beer geeks who didn't know what a Köttbusser is."
Grimm Brothers also has a notable barrel-aging program, currently consisting of about 45 former tequila and bourbon vessels, and plenty of sour varieties in wine barrels.
They also like bringing old Grimm Brothers fairy tales back to life. Each beer is named for a character in one of the legendary sibling's tales.
Some are well-known, like Little Red Cap Alt Style Ale. Others, like Master Thief German Porter, have been "lost to history," Chapman says. Considering there were 252 published Grimm Brothers stories and more than 500 unpublished ones, Chapman and Heaton have plenty more characters to choose from.
"It was actually my wife's idea," he adds. "Aaron and I dismissed it right away."
But they came around when they learned about the brothers' process. "They went from place to place saying, 'I'll buy you a beer if you tell me a story," says Heaton. "Eventually, they knew so many stories, people would say, 'I'll buy you a beer if you tell me a story.'"
Production has risen from 580 barrels in 2010 to 2,000 barrels in 2014, and Heaton and Chapman expect to hit 2,500 in 2015. "It's been an aggressive increase," says Chapman.
As production expanded, Grimm Brothers opened a taproom location in the same industrial park in 2012. "Our taproom just got overwhelmed," says Heaton. "We'd put kegs upside-down for tables and use bags of grain for seats."
With the move came canning and bottling lines along with a 30-barrel fermenter, and Grimm Brothers upgraded to a Wild Goose canning line in 2013. The facility's capacity is north of 6,000 barrels, but before pursuing more growth, Chapman has a goal. "I want to make sure our production system is fine-tuned," he says.
Distribution is limited to Colorado, spanning the Front Range to the Western Slope, as well as a few accounts in Nebraska. "We wanted a small market to go into," says Chapman. "It's been good."
It's also a lesson for growth strategies in other states that Grimm Brothers could expand to as soon as late 2015. "How can we do marketing from here without going there?" says Chapman. "We in no way have figured that out."
Favorite beers: Of the Grimm Brothers lineup, Chapman's pick is 3 Golden Hairs Pilsner and Heaton likes Maiden's Kiss Helles Bock. Beyond their own catalog, Chapman keeps a stash of Oskar Blues Pinner and Gordon on hand Heaton singles out Odell Tree Shaker Imperial Peach IPA. "I really like Odell and I really like Avery," he adds. "They do the best IPAs in Colorado."
Challenges: "Cooperage costs," says Chapman. "We own all of our own kegs, and getting them out there is difficult." He says he's looking at leasing kegs to own in the future.
Heaton highlights another challenge: can storage. Aluminum cans from Ball come in lots of 100,000, he says. "Where do you store 100,000 cans?"
Finally, as more and more breweries saturate Northern Colorado, standing out gets harder, adds Heaton. They've developed marketing programs such as Brewery Bingo, where players can X a square off their bingo cards when they drink a given beer in Loveland, Fort Collins, or Greeley.
"The other opportunity is we want to be the leader of community events in Loveland," adds Chapman, citing a recent collaborative effort that raised $3,000 for a local nonprofit.
Opportunities: More packaged products. Grimm Brothers currently bottles numerous seasonals and one-offs and cans two labels -- Little Red Cap, which won a gold medal at the Great American Beer Festival in 2011 and Fearless Youth Dunkel Lager, which nabbed a bronze in 2013. A third can, likely 3 Golden Hairs or Snow Drop, is in the works for release in 2015.
Chapman has developed a fully featured ERP system for craft breweries called OpenBrew with point-of-sale and iOS integration. He's marketing to other companies as a software as a service (SaaS) for $150 to $200 a month; two other breweries are currently using OpenBrew. "We can keep track of where kegs are," says Heaton. "That makes us very unique."
Needs: Tanks are a constant need, but the current plan involves a major investment in 2018, give or take. Chapman says that means Grimm Brothers will "pay down debt but not stifle expansion."
Adds Heaton: "We need more space as we continue to grow. Staffing is a big thing as well."