By Gregory Daurer | Feb 27, 2020
San Diego, California
When Cramer and his business partner Matt Rattner opened Karl Strauss Brewing Company in 1989, it was the first new brewery in San Diego in more than 50 years. To put it mildly, they had some consumer education to do to, at the time. It was then a Miller Lite kind of town, says Cramer, recalling people's initial reactions to the offerings: "They'd ask questions like, 'Is it safe to drink?' Or: 'Is the dark beer the beer that's at the bottom of the tank and the light beer the beer that's at the top of the tank?'"
Cramer and Rattner (who Cramer calls the "most competent guy I'd ever met") became friends while attending business school at Stanford University. Desiring to start a venture together, they didn't go into computers like a lot of classmates were doing -- they decided to go into beer.
Their inspiration came from a trip Cramer took to Australia, where he first sampled craft beer, made on the premises, at the Sail and Anchor in Fremantle. "It was the best beer I'd ever tried in my life," he recalls. Cramer also noted that the place was doing "gangbuster business" in a setting -- with it's maritime culture of sailing -- that felt as akin to San Diego as any other place the fourth-generation San Diegan had ever visited.
Luckily, Cramer knew an expert he could ask about his then-novel idea: his much older cousin Karl Strauss, who had just retired as the head brewer at the Pabst Brewing Company in Milwaukee. (Cramer's family had sponsored Strauss' entry into America, when Strauss fled Nazi Germany and the Holocaust.) In a 40-year career at the brewery, Strauss had reformulated Pabst Blue Ribbon, nearly doubling its popularity in the process. "Karl was an icon of quality in the American beer industry," says Cramer. He warmly recalls Strauss -- born in the private quarters of his father's small brewery in Germany -- as being "gracious and funny and avuncular."
Cramer asked Strauss about the feasibility of this then-new concept -- starting a microbrewery. Cramer says Strauss ruminated, before responding in his German accent, "'You know, kid, I think it will be the wave of the future!' I was like, 'Wow! I didn't expect that from him.' . . . Here he was, back then, predicting the rise of craft brewing in the United States." The enthused Strauss not only lent his name to the new brewery, he "helped us choose our equipment, design the brewery, set up our system of quality assurance, choose the brewmaster, formulate the beers. The original recipes that we had were all Karl Strauss recipes." (Strauss would help for years to come, living until 2006 and the age of 94.)
One of those early Karl Strauss recipes has become known as Red Trolley Ale, still the brewery's most popular beer. "It is really the quintessential Irish Red Ale," says Cramer, and he likes to quote a former tour guide's tasting notes on it: "Drinking Red Trolley is like drinking the inside of a Fig Newton." Cramer adds, "It has this deep, rich, seductive flavor."
In 2015, the brewery first released its Aurora Hoppyalis IPA, which medaled that year at the Great American Beer Festival, and has twice won the blind taste challenge the "California Craft Beer Throwdown." The following year, the brewery was named "Mid-Sized Brewing Company of the Year" at the GABF; among its four medals that year, the company won a gold for its splendid, barrel-aged, sour ale Queen of Tarts.
Over the years, Karl Strauss Brewing Company has increased its imprint throughout Southern California via its 10 brewpubs (e.g., in downtown San Diego, downtown Los Angeles, La Jolla, and Anaheim). "The most profitable activity a brewer can do, really, is sell their own beer by the glass across the bar in their own establishment," says Cramer. In fact, he sounds almost loathe -- albeit, in a cheerful manner -- to talk about the number of barrels the brewery produces annually. (Online publication Brewbound put it at around 78,600 for 2016). "Nobody ever took a barrel to the bank!" Cramer says with an MBA-informed laugh. "You only take dollars to the bank."
In 2018, Karl Strauss Brewing Company sat at #40 on the Brewers Association's list of the "Top 50 U.S. Craft Brewing Companies." And its distribution arm not only sends beer throughout "Karlifornia" from its main brewery in Pacific Beach, it now carries other San Diego County brands on its trucks, including beers from Bitter Brothers Brewing Co., Black Plague Brewing, Duck Foot Brewing Company.
When the company opens a new location in San Marcos next year, it intends the space to serve as a backyard for the apartment dwellers in the neighborhoods, complete with fire pits, food trucks, and small batch beers. At its brewpub locations, memorials and weddings have taken place. Parents sometimes bring in their kids, who've just reached legal drinking age, for their first legal pint of, say, Boat Shoes Hazy IPA or Follow the Sun Pils.
Cramer, 58, says, "Every kid turning 21 [in San Diego] has grown up in a city that is one of the best beer cities in the world -- and it didn't used to be. And Karl Strauss is at the very core of it. Having helped change the world for the better, in that way, I think, means we've lived a life that's worthwhile."
Surely, Karl Strauss would agree.
Favorite beers: Cramer is a big fan of Russian River Brewing Company: "They are so quality-focused on everything they do . . . making some of the absolute best beers on the planet." Thanks to the open fermenters at Russian River's new Windsor, California facility, Cramer calls the resulting STS Pils "sublime." He adds, "I could not believe one of my favorite beers could get even better."
Challenges: A past chair of the California Restaurant Association, Cramer calls the Golden State "a challenging state to operate in from a business standpoint" and "not particularly friendly to employers." Especially, he says, since the state doesn't recognize tips as wages when calculating minimum wage.
Opportunities: Noting the proliferation of craft beer in America today, Cramer knows that not all brewpubs will survive. As a result of that situation, there might be more acquisitions to come. "We have the skills to redeploy them and turn them into productive, cash flowing assets," says Cramer. In fact, some of the brewing company's locations were once "failed restaurants, picked up for pennies on the dollar."
Needs: "We are always needing the best people," says Cramer. Calling his business "one of the best employers in the region," Cramer encourages people to check out the positive ratings for the company on Glassdoor. "That helps us to attract people who want to come and play for our team," he says of the brewery's reputation.