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Modern Times Beer

by Eric Peterson on November 7, 2018, 04:01 pm MST

www.moderntimesbeer.com

San Diego

Founded: 2013

Privately owned

Employees: 241

Employees: Brewing & Distilling

Products: Beer

COO Chris Sarette is helping to guide the craft brewery to dynamic growth with a focus on multiple taprooms and regional wholesale.

Modern Times founder and CEO Jacob McKean was an avid homebrewer and beer writer before he launched a brewery himself.

After a stint with Stone Brewing as a social media guru, he turned his attention towards starting Modern Times, named for an 1800s utopian community on Long Island. With $1.25 million in venture funding, McKean built a 30-barrel production brewery in the Point Loma neighborhood in San Diego in 2013.

"He now wishes he raised three to four times that," says Sarette. "Since then, we've been financed by our profitability and traditional bank lending."

McKean instituted an employee-ownership model in 2017, making Modern Times the first California craft brewery to do so.

In 2014, Modern Times began canning its beers on a line from CFT Group. "It was pretty early adoption of cans and the 16-ounce format," says Sarette. "That really propelled huge growth in 2014."

Part of the idea was guerrilla product testing. "We would go to the local Whole Foods with a can to get a better sense of its identity on that shelf space," says Sarette. That's how the "simple and timeless" branding came to be, as well as the taller 16-ounce format.

When it comes to the beer inside, Modern Times has a core lineup of six beers with no singular tentpole. "We love the fact that we don't have a traditional flagship beer," says Sarette. "Everything is pretty diversified."

Orderville, a year-round, hazy IPA, has been a top seller since its 2017 debut in cans. "It was one of the first wholesale-available hazy IPAs," notes Sarette.

Fruitlands, a gose, and Blazing World, an amber, are also popular year-round labels. Of Fruitlands, Sarette says, "It's just a go-to beer in a pool setting or the golf course. It is your quintessential easy-to-drink beer."

Modern Times also cans four seasonal beers and releases a "monthly special" in cans or bottles. "Moving forward, that'll go to all cans," says Sarette. At all locations, he adds, "We released over 200 beers this year."

After brewing 2,300 barrels in 2013, production more than quadrupled to 9,600 barrels in 2014. The brewery has remained on a similar trajectory in the years since: Sarette forecasts 68,000 barrels for 2018.

The production growth is paralleled by growth in locations. Modern Times has five tasting rooms, with more on the way. "The first was our headquarters in the Point Loma neighborhood," says Sarette.

After nine months of operation, McKean got an offer he couldn't refuse: an opportunity for a 1,600-square-foot taproom in a development in North Park, San Diego, dubbed the Flavordome. That was May 2014, right around the time Sarette joined the company.

The company has since opened two more locations. In January 2018, taprooms opened in Los Angeles and Portland, Oregon. "It made sense to go into a market where we had a strong following," says Sarette of the former. "Portland opened six days later." Both operations have limited production; The Dankness Dojo in downtown L.A. also features a restaurant.

Another location, a restaurant and taproom dubbed The Far West Lounge opened in Encinitas, California, in October 2018. "It's great to plant our flag in North County," says Sarette.

The five taprooms will soon be seven. "Santa Barbara is under construction," says Sarette. So is Anaheim. Both are slated to open in the first half of 2019.

Anaheim, which has emerged as the brewing capital of Orange County, is a particularly ambitious project: Leisuretown. Built in partnership with LAB Holding, it will feature a swimming pool, vegan Mexican restaurant, and coffee roaster in a 32,000-square-foot complex that includes a Craftsman-style residence, commercial building, and outdoor gardens.

"Anaheim is certainly the most audacious of all of them," says Sarette. "For simplicity's sake, it's adult Disneyland. . . . It's going to be pretty special."

Anaheim has reformed its regulations for breweries, often reducing upfront "soft" costs (such as permitting) from $100,000 in nearby municipalities to closer to $10,000.

Wholesale and direct-to-consumer sales "are very complementary," says Sarette, citing a Brewers Association-commissioned study on synergy between the two channels.

It's more about marketing than sales, as "less than 10 percent" of total sales are direct. "They're more likely to buy a brewery's beer after visiting a physical tasting room," explains Sarette. "Being able to go to a flagship where you can taste 30 or 40 beers and find out which one you gravitate to, that's going to drive decision-making."

Other markets are "largely wait-and-see," he adds. "We've bit off quite a bit here. Just making sure we can supply both sides of the business is top of mind."

Beyond the development spree, the production boom, and the constant experimentation, Modern Times is also one of a few breweries that also roasts coffee in-house.

It can be a little overwhelming to keep track of the company's numerous initiatives. "Never a boring day," says Sarette.

Favorite beers: Sarette highlights Modern Times' Space Ways, a seasonal hazy IPA. "It's just phenomenal," he touts, and points to another San Diego favorite. "I enjoy the beers coming out of Societe right now."

Challenges: "Just making sure we make the right decisions," says Sarette. "It's a dynamic time for craft brewing right now," he adds. "It's no longer an industry where a rising tide lifts all boats -- there are winners and losers right now."

Opportunities: Modern Times currently distributes cans in five states: California, Arizona, Nevada, Oregon, and Washington. Sarette says there are no immediate plans to increase that number, but the strategy is to grow in the brewery's existing footprint. "We're growing so much in those markets, it would be irresponsible to go into another right now," he explains. One caveat: "Obviously, we have a soft spot for Colorado, but that's a few years down the road."

Needs: "We are at a point where we need additional real estate," says Sarette. The solution: Modern Times is planning to build an adjacent expansion on a leased lot next to the existing facility. "That project will start early next year," he says. "That will double our square footage here in Point Loma" -- from 12,000 to 24,000 square feet. The two facilities will be connected by a corridor and outdoor tasting room, and annual capacity will also double to about 120,000 barrels.

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