San Francisco / San Leandro, California
Industry: Brewing & Distilling
In an increasingly crowded market, co-founders Nico Freccia and Shaun O'Sullivan's brewery continues to enjoy healthy growth.
When Freccia and O'Sullivan met in a brewing science class at University of California, Davis, in the summer of 1995, they were already a perfect match. O'Sullivan had been brewing professionally and Freccia had been honing his restaurant skills with stints doing everything from bartending and waiting tables to management.
"It was a natural fit," Freccia recalls, "and we were ready to go off and do it on our own. But because we didn't have the kind of access to the Internet and funding that you have today, it was more of a process for us to put together a business plan, raise money, and find a location. It took us about five years to get our doors opened."
The pair launched 21st Amendment Brewery at the turn of the millennium as a brewpub in San Francisco's historic South Park neighborhood. With eight rotating taps, the full-service restaurant regularly receives "Best Brewpub," "Best Burger," and "Best Happy Hour" accolades from the local press.
Since the opening of a production facility at a shuttered Kellogg's cereal factory in San Leandro in 2015, the original location has evolved into a proving ground for new recipes. The 12-barrel system serves as an experimental test brewery producing about 900 barrels of experimental batches each year.
"I'll brainstorm with our head brewer over there and we'll look at what we're enjoying out in the market," O'Sullivan explains. "Then we'll start playing around with different styles and recipes. We have this sort of captive audience to give us feedback on the beers at the brewpub. We're always having fun putting a twist on any type of style."
Some of the more successful recipes make their way to the production facility and its 100-barrel, four-vessel GEA/Huppmann brewhouse. "We'll hone them, brew them, create packaging, and put them in kegs to send out to the rest of the country," O'Sullivan adds.
Freccia says the 21st Amendment Brewery team shipped about 113,000 barrels in 2018. "We had good growth last year," he continues. "It was a challenging year for a lot of the regional and larger craft breweries, but we grew about 17 percent. We're looking at about 10 percent growth this year with some of our current beers and new releases."
Freccia notes that 21st Amendment Brewery's packaged product lineup has been "focused down and honed a bit more over the last couple of years as competition out there has increased." It consists of a "core four" made up of three year-round beers and one rotating seasonal as well as small-batch, one-and-done specialty brews that are generally presold.
"Our best seller overall is our seasonal," Freccia says. "It's led by Hell or High Watermelon, an American wheat beer that comes out in March and goes through September. This is a beer that I brewed as a homebrewer back in 1998 in my basement in San Francisco. It's super refreshing, thirst quenching, and we've always used 100 percent fresh watermelon."
The brewery's six-month winter seasonal, Tasty IPA, is another frontrunner. "I call it a new style of West Coast IPA," Freccia says. "It has a lot of late hop additions and cryo hop powder in the dry hopping to give it a really smooth, aromatic hop character."
This year, Freccia and O'Sullivan are adding a new year-round beer to their core lineup. Coming to coolers in March, Sparkale is the team's "brand-new bet for 2019." A sparkling rosé ale, "it drinks like a cider but is brewed like a beer," Freccia explains. "It has apple juice sweetened with cranberry, peach and cherries to give it a nice rosy color and a sweet but tart finish. It's also a lower calorie beer and much lower in gluten, so it's really different from the hop-heavy types of beers we've done in the past. We're super excited about it."
Consumers will be able to enjoy Sparkale on tap at 21st Amendment Brewery's two locations (the production facility also features a 12-tap tasting room and food wagon) as well as in cans across the brewery's distribution footprint.
"We're now in 28 states plus the District of Columbia," Freccia says. "Until recently, we only sold our beer in East and West Coast states that touched water from Maine down to Florida and from Washington down to Southern California. Now, we're filling in the middle and have Ohio, Minnesota, Colorado, Arizona, and Nevada."
Favorite beers: O'Sullivan says he's really looking forward to enjoying Sparkale because "it's refreshing, easy drinking, and not like anything I've ever had before." When it comes to other breweries' products though, he adds that he's "a huge Sierra Nevada Pale Ale fan. In the rotating nation of craft beer right now, I always just look for Sierra Nevada Pale Ale because I know I can count on it as a beer that I'll enjoy."
Freccia is eager to knock back some of this year's first batch of Hell or High Watermelon. "It's kind of my baby and will always have a special place in my heart," he laughs. "I'm also really a saison guy right now in terms of style. With all these crazy new flavors, juicy IPAs, and pastry stouts coming out, sometimes you have to go back to simplicity with something like Saison Dupont. There's something very pure about it."
Challenges: Competition is a big one, even for an established brewery like 21st Amendment. "As you know, it has become very competitive with all the new breweries opening in this country," Freccia says. "At the same time, there has been even more consolidation in the distribution tier so it's harder to get your beer to the distributors. It's harder to get warehouse space in the distributors' warehouses. And it's harder to get space at retail because there are so many local beers all fighting for shelf space."
Opportunities: Freccia and O'Sullivan say there's opportunity for 21st Amendment Brewery to draw upon the expertise they've amassed over the years -- particularly when working with real fruit. "We've been doing our watermelon beer for almost 20 years now and we've really gotten the process down," Freccia explains. "We know how to use real fruit and make it really shine through the beer. We've taken that knowledge and used it in Sparkale and also our Blood Orange Brew Free or Die IPA. We feel like we can do those styles of beer better than anybody else, and they're all growing really well."
Another opportunity is 21st Amendment Brewery's joint sales and distribution partnership with Brooklyn Brewery and Funkwerks, which was announced in 2017. "We went from 20 salespeople to 80 salespeople overnight across the country," Freccia says. "That has opened up a lot of doors for new chain placements for us and all kinds of other new retail opportunities."
Needs: The brewery's San Leandro production facility has the potential for 250,000- to 300,000-barrel capacity when fully built out, but it's not there yet. "Our current needs are expanding our cellar space, our fermentation capacity, in order to get our finances to a place where they're more efficient," O'Sullivan says.
Staffing is another concern. "Doing business in the Bay Area can be challenging because there are a number of other industries here that draw on the employee types that we need," he continues. "You want to be competitive and to retain people. We do that by offering great wages and benefits as well as some flexibility. And we make beer, so that's fun, too."