Nashville, Tennessee-based Bearded Iris Brewing Co. has joined the Independent Brewers Union (IndieBrew), the craft tie-up pioneered by Atlanta-headquartered Scofflaw Brewing.
“Everybody in the craft beer industry is looking at the Brewers Association numbers and seeing that the last couple years haven’t been amazing for craft,” Bearded Iris founder Kavon Togrye told Brewbound. “We want to create sustainability. We’re going to set our businesses up for long-term success.”
IndieBrew, which Scofflaw debuted in October, operates with a shared ownership structure according to brewery size that’s governed by a board of directors made up of representatives from each brewery and, eventually, independent directors without ties to the member breweries.
“It’s very tough to share resources – especially some of the most important ones like accounting, HR support, and a sales team – without having there be skin in the game from both sides and there being a sense of accountability from both sides,” Togrye said. “We went back and forth on that, and the ownership structure is such that each brewery that joins will share ownership.
“We think long term that that actually offers a benefit to craft breweries,” he continued. “It helps them diversify their ownership and have a piece of a lot of other brands and hold all the brands in the group accountable.”
In addition to joint purchasing, the IndieBrew platform allows member breweries to share investment to expand teams in a way they can’t independently.
“Instead of having breweries invest in these things in a piecemeal way and get what they can afford, what we want to do is build a truly best-in-class system backbone that has a lot of these enterprise-level functions – HR and accounting and a multistate sales team and centralized buying – to really help breweries give their teams the support that they need, and give them the best version of those functions that they can, that are versions that they probably couldn’t afford on their own,” Togrye said.
As part of IndieBrew, Bearded Iris will have a sales force for the first time in its five-year history, which Togrye expects to continue the brewery’s growth. In 2021, Bearded Iris’ sales increased 40% over 2020, to about 17,000 barrels. The company distributes to 10 states: Tennessee, Kentucky, Georgia, Alabama, North Carolina, South Carolina, Virginia, Ohio, Wisconsin and Minnesota, according to its website.
“What we plan to do is, in our strongest markets, to deploy team members for the first time,” Togrye said. “In some markets that we’ve been in for a while in a much smaller way – like Georgia, for instance – we’re going to have people out there representing the brand for the very first time, and that’s super exciting.”
IndieBrew’s sales team will operate as a joint function of all member breweries, headed by Matt Moore, Scofflaw’s VP of sales. With the move, Bearded Iris will go from having no sales reps to having a team representing it at the national account level.
“It’s really tough, especially when it comes to chain placements and things like that,” Togrye said. “Not every brand that’s making 15,000 barrels has a chain manager, for instance, and we will. Those are the sort of benefits that we can offer by pooling resources to invest in the best teams and not just what each individual brewery can afford.”
2021 was a particularly tumultuous year for the craft beer industry. Aside from a stressed supply chain and restricted on-premise channel, a tidal wave of allegations of sexual harassment and hostile work environments slashed craft beer’s collegial-seeming surface. Many experiences shared by unnamed industry employees on social media included situations in which there was no avenue to report abuse and often no HR department to consult.
Scofflaw was mentioned several times on Instagram by EmboldenActAdvance – a coalition of anonymous industry volunteers – as having an environment that made workers fearful of speaking up. Other incidents in the brewery’s past have caused on-premise accounts to stop serving its products, as reported by Good Beer Hunting in 2018.
At IndieBrew, Bearded Iris will take the lead on HR and culture, Togrye said.
“Bearded Iris is not Scofflaw. We understand and acknowledge those concerns. We had the exact same concerns, and that’s a lot of the reason we’re talking today,” he said. “Bearded Iris is at the table to head up the vision and values for this platform. Our goal at our organization has always been to create a workplace that’s centered in mutual respect, education and a constant desire to improve, and we’re going to be leading the charge at IndieBrew to install those values.
“We’ll be creating systems of transparency and accountability to elevate and hold our current and future IndieBrew brands to those standards, including Scofflaw,” Togrye continued. “We want to be industry leading. When we look at what’s been happening in the industry and a lot of stories we’ve been hearing over the last year especially, we believe that this is a product of people not having healthy ways to report misconduct within their organization and to have a voice within their organization. A lot of that is because breweries have under-invested in many of the systems that are baseline integral to running a healthy business. Unfortunately, HR is one of the last things that a lot of breweries think about integrating.”
In statement emailed to Brewbound, Scofflaw reiterated Togrye’s goals for IndieBrew to become an industry-leading presence, and said that it “is committed to providing a safe, diverse and inclusive environment for our employees and our customers.”
“Over the last three years, we’ve implemented multiple changes that demonstrate an ongoing commitment to building a healthy, safe and productive workplace culture,” the brewery wrote. “Our partnership with IndieBrew and Bearded Iris Brewery represents our efforts to be best in class and set an unwavering example for the industry.”
The breweries’ vision for IndieBrew involves adding three more breweries in the next year. Ideal partners would have annual production of about 15,000 barrels or more.
“The challenges that face breweries as you get larger, as you start to hit this size, are just so different from the challenges you face when you’re at 800, or even 3,000-4,000 barrels,” Togrye said. “I think that size is going to be a component of who we’re evaluating.”
Last year, Scofflaw produced 37,367 barrels of beer, according to Brewers Association (BA’s) data. Combined with Bearded Iris’ 17,000 barrels in 2021, IndieBrew will likely land among the BA’s list of the country’s top 50 craft breweries by volume in the future. (In 2020, the 50th largest craft brewery, New Holland, produced 47,350 barrels.) Member breweries will oversee production of their brands at their own breweries.
Another important component for prospective IndieBrew members: founders must be along for the ride. In some private equity-backed craft rollups, founders often exit after a set period, which can turn contentious, such as in the case of CANarchy and Deep Ellum founder John Reardon.
“One of the very first things that we agreed on was we don’t want to bring people on if founders aren’t going to come on as well,” Togrye said. “Because we don’t have interest in going and running someone else’s brewery. And I think it’s important that they are there, that they’re there to tell the story, and that they’re there to continue executing on the things that have been successful for them. That’s an important piece to it.”
In addition to keeping founders within the fold, IndieBrew aims to retain employees by offering growth opportunities across brands and eventually creating a system for employee equity ownership. Those opportunities wouldn’t exist if each member brewery hadn’t joined forces.
“We’ll have teams that are spanning multiple states, that are 200-300 [people], and I think that the opportunities will really grow at that point. There will be options for mobility,” Togrye said. “With more breweries involved down the road, you can imagine that we could create really strong systems of internal job posting and hiring that could really be put out to a large pool of people.”