By Angela Rose | Sep 06, 2016
O'Leary and Rizza's journey began when they discovered homebrewing while living in Boulder, Colorado, in the early 1990s. But rather than setting up shop below the Flatirons, they longed to return to their native Montana. The best way to do that, O'Leary explains, was to create their own jobs by opening a brew-on-premise operation in Missoula where they could walk customers through the brewing process as well as sell growlers of their own product under a brewer license.
"My mom raised me to be a recycling fanatic," O'Leary chuckles. "I liked that the brew-on-premise business model would allow us to reuse glass bottles. That made sense to me. Unfortunately, we quickly found out it wasn't as profitable as we thought it would be. It took a high upfront cost and a lot of time to make a batch of beer and people just didn't want to invest it. But we discovered they loved the social aspect and were able to establish ourselves as a neighborhood brewery in the process."
A 1999 change in Montana's liquor laws allowed the couple to transition from KettleHouse You Brew to KettleHouse Brewing Company, a microbrewery with a taproom. "The legislation seemed like a great deal at the time," O'Leary recalls. "We could serve up to three pints per customer until 8 p.m. and were limited to 10,000 barrels of production. We never thought we'd get that big, but we found ourselves coming close to it as early as 2006."
Some creative business restructuring has been necessary as the demand for KettleHouse's beers has continued to grow. "We actually have three LLCs that are operational and a couple just to hold the equipment," O'Leary explains. Their two brewhouses -- the original Southside location and a Northside production facility, taproom, and canning operation opened in 2009 -- produced 15,300 barrels in 2016.
They still can't meet the demand for their award-winning product and are currently working on opening a third facility which should be operational in October. The 28,000-square foot building, situated five miles west of Missoula on an 18-acre site in Bonner, Montana, will house a four-vessel 60-barrel JV Northwest brewing system as well as a state-of-the-art Krones line for canning fan favorites including Cold Smoke Scotch Ale (a multi-medal winner at the Great American Beer Festival and World Beer Cup), Double Haul IPA, Eddy Out Pale Ale, and Fresh Bongwater Hemp Pale Ale. O'Leary estimates KettleHouse will produce close to 17,000 barrels this year, with plenty of capacity for future growth remaining at the new facility.
Favorite beers: "I've never met a free, cold beer that I didn't love," says O'Leary with a laugh. "But my personal favorite has to be our Fresh Bongwater Hemp Pale Ale, which I have a keg of at home. I also love our Cold Smoke Scotch Ale because it has created this life for us that we never dreamed we'd have and the opportunity to grow a business in Montana and provide jobs for some really cool people. I owe everything right now to Cold Smoke."
Challenges: Getting their new facility up and running is O'Leary's biggest current challenge. "The entire process has taken a couple of years," he says. "We're trying to match world class beers with the world class Montana outdoors and we're soon going to be able to craft those brews on the bank of the Big Blackfoot river, an amazing blue ribbon trout stream. It's definitely a dream come true."
Opportunities: "Our new facility's initial mission is to fix our production problem," O'Leary says. "We've always had to cut our local distributors short and tell other distributors from around the country that they cannot have our beer. We even had to withdraw from a few markets in the past because we were nearing that 10,000-barrel limit. We've never been able to give our distribution partners free rein to sell as much as they can or as much as people want, but with the new facility, that will no longer be a problem."
O'Leary envisions distributing KettleHouse's beers throughout Montana before branching out into eastern Washington and the Idaho panhandle. "Our beers are perfect for this great outside recreational nirvana," he adds.
Needs: Staff -- including a head brewer-- is a big need for KettleHouse. "I think for the whole industry right now, training, developing, and keeping good people is going to become more and more difficult," O'Leary concludes. "At least until there is some sort of bursting of the opening bubble."