By David Mielach, BusinessNewsDaily
Before Brooklyn, N.Y., was a hotbed of indie music, hipsters and locavore restaurants, it was the borough of the Dodgers, a blue-collar work ethic and beer. In fact, a century ago, Brooklyn had 48 breweries within its borders. At the time, that was more breweries than in brewing hubs like St. Louis and Milwaukee. But just as many other businesses and residents had done, they slowly moved out of the borough, with the last two breweries closing their doors in 1976.
That was until the late 1980s, when Steve Hindy and Tom Potter took a chance and started Brooklyn Brewery. Their story, however, begins a few years earlier and several thousand miles away from King's County.
"I was a reporter for 15 years, six of those years were in the Middle East as a correspondent for the Associated Press," said Hindy, co-founder and owner of Brookyln Brewery. "I covered a lot of big stories like the Iranian Revolution, the hostage situation in Iran. I was with the Iraqi army when they invaded Iran in 1980 and I was in Lebanon during the civil war where I was actually abducted at one point in 1980. I moved to Cairo and I was sitting behind President Anwar Sadat when he was assassinated in 1981."
Although covering those stories was good for his journalism career, the danger and a job opportunity at New York newspaper Newsday brought Hindy and his family to Brooklyn. The move to Brooklyn gave Hindy the chance to perfect a passion that he had picked up while overseas.
Hindy said there is a long tradition of home-brewing beer in Egypt, where he was based. "I got interested in brewing my own beer," he said. "When I got to Brooklyn, I started making beer at home and serving it to all my friends and neighbors."
One of those neighbors, Tom Potter, turned out to be more than just a fan of Steve's home-brewed beers. Potter, a banker with a master's in business administration and a desire to start his own business, teamed with Hindy to start the brewery that brought beer-making back to Brooklyn.
"We decided to quit our jobs, raise some money and start the Brooklyn Brewery," Hindy said.
All of them failed
With a commitment to start the business, the partners began brewing, but they ran into a problem.
"Instead of building a brewery in Brooklyn, which would have been very costly, we decided to contract brew our first beers," Hindy said. "We made a deal with a brewery in Utica, N.Y., to brew Brooklyn Lager, our first beer. That beer is based on the beers that were brewed in Brooklyn back in the heyday of brewing in New York. Part of our mission was to bring brewing back to Brooklyn, but we decided to start brewing upstate, truck the beer to Brooklyn, then sell it ourselves out of the back of our van."
The partners also set up a distribution business that helped them get the products into the hands of consumers. Although setting up the distribution company proved difficult, Hindy credits it with being a major impetus behind the future success of the business.
"I think there were about 20 other small breweries that started up in the first 15 years of our existence," Hindy said. "All of them failed, and most of them failed because they had trouble … getting their beer distributed. A lot of them made really good beer, but they were unable to get it into the hands of the customers. I think that the distribution company was a key for us, both in educating us and in enabling us to build a market for craft beer."
Do you know who Milton is?
Early on the partners also realized the importance of branding their product.
Hindy said he knew having a great brand was just important as having a great beer.
Despite knowing several graphic designers and artists, Hindy had a problem finding the right designer.
"I really wanted someone to educate me about what I should be doing," he said. "Eventually, with some urging from my wife, I went to the best designers in New York and Milton Glaser was one of them." [5 Entrepreneurial Cinderella Stories That Inspire]
Getting a meeting with the famed designer who came up with the "I Love New York" logo proved to be more difficult than Hindy expected.
"When I called Milton's office the first time the woman who answered the phone shooed me away," Hindy said.
Hindy continued to call the office every day until he was finally able to meet Glaser, who loved the idea of Brooklyn Brewery. Glaser agreed to design the logo in exchange for an equity stake in the company.
Together, they came up with the "B" logo now used on the company's products.
"When he unveiled it, I was kind of underwhelmed because I was looking for the Brooklyn Bridge and the Brooklyn Dodgers," Hindy said. "I wanted something every Brooklyn guy would want to have tattooed on his arm. The more I looked at it, the more I grew confident in the brilliance of that logo and the way it expresses the history of Brooklyn. It was a fresh, but timeless image of Brooklyn."
Breaking ground in Brooklyn
With a strong brand in place and a booming distribution company and brewery, the partners began to expand their offerings. They hired a brewmaster named Garrett Oliver in 1994 and began offering new beers such as Brooklyn Brown Ale and Black Chocolate Stout.
Oliver also played a role in designing the Brooklyn-based brewery Hindy and Potter opened in May 1996. Mayor Rudy Giuliani celebrated the opening of the brewery in Brooklyn by cutting the ribbon.
Eventually, owning both a brewery and a distribution company became too much to handle.
"At a certain point it was very difficult to fund the expansion of the brewery and the growth of the brewery and to fund the distribution company at the same time," Hindy said. "We ended up selling the distribution company to the big distributors in New York, the people who wouldn’t have given us the time of day five years before."
The sale of the distribution company gave the company $12 million, which they invested in expanding the brewery in Brooklyn and paying back initial investors.
Today two-thirds of Brooklyn Brewery beers are brewed in Utica, while the rest of beer production takes place in Brooklyn. There are plans to move 50 percent of production to Brooklyn within the next two years. The company had sales of $35 million last year and projects sales to increase to between $40 million and $45 million in 2012. The company employs 120 workers upstate and 57 in Brooklyn.
You never know what you are going to run into
"I think our story is a lot about adaptability and persistence," Hindy said. "It took us six years to make a profit and even then it wasn’t a very big profit and it wasn't very consistent. But we were always growing our sales and reaching new markets. It really took a lot of persistence and endurance to get to where we are today. I think that is true of a lot of businesses."
With that persistence Hindy believes anything is possible.
"You really have to commit yourself to success and never look back," Hindy said. "I kind of compare it to going off to cover a war, because when you go off to cover a war, you never know what you are going to run into. It's going to take everything you have got to do the job. That is sort of the way it is with a company. You never know what you are going to run into when you start a company and it takes every bit of gumption and courage that you have."
Reach BusinessNewsDaily staff writer David Mielach at Dmielach@techmedianetwork.com. Follow him on Twitter @D_M89.
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