#17: The Explosive Growth Journey of Karbach Brewing That Started With A Few Good Men
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Learn More Earn More Business Growth Podcast

Host: Brian Webb

Guest: David Graham

Episode 17: The Explosive Growth Journey of Karbach Brewing That Started With A Few Good Men

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Crawford Bock

Karbach Brewing  - Facebook | Instagram | Twitter

William VanderBloemen - Culture Wins

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TRANSCRIPT: 

Brian Webb:

Hey there everyone, welcome to the Learn More Earn More Business Growth Podcast. I'm your host, Brian Webb. This podcast is your premier place to learn the frameworks, secrets, and growth hacks to grow and scale your business and revenue faster. Whether you're an aspiring entrepreneur or a thriving business owner, this podcast is designed and produced just for you so you can learn from the best industry experts in the world. I'll bring you exclusive interviews with authors, thought leaders, and successful business titans who share their stories and business journeys so we can draw insights and learn from their successes and struggles together. As you're working on growing your business and pursuing your dreams, I'll be here to help you make better decisions and avoid costly pitfalls and expensive mistakes along the way, and we'll have some fun in the process. So let's go ahead and jump into today's episode.

I'm really excited to have my guest today, David Graham, who has been with a company called Karbach Brewing since they began, 2011. Karbach was actually a client of mine for many, many years. They've had explosive growth, to put it mildly. Literally, when I started working with them, it was a few good men. That's actually what we put that in the title today because it's relevant. I remember when I first met with them, it was literally a few guys around a cardboard table. And wow, has that changed. Talk about an American entrepreneurial success story. Wow.

When David began with Karbach, he started as a Marketing and Promotions Coordinator, he ultimately transitioned to the Director of Marketing. And David's role is he basically focuses on managing all the overall implementation of all marketing efforts for Karbach company-wide. So from monthly beer events at the brewery to beer collaborations, such as Crawford Bock with the Houston Astros Foundation, David has been really instrumental and overseeing the growth of Karbach's consumer base, both locally and nationally. And remember founded in 2011, 10 years later, over 150 employees, multiple markets around the nation, and acquired by Anheuser-Busch, Karbach has truly become an iconic brand, and I'm proud to share some of their story with you today. What an amazing, amazing story.

So let's jump into my interview today with David Graham. David, it's awesome to have you here on the podcast today. You know, I've known you for, I guess, 10 years when I went back and do the math, easy math. It's good to have you here today.

David Graham:

Hey Brian, thank you so much for having me. I'm looking forward to talking all things beer and Karbach.

Brian Webb:

Yeah. You know, I've already told the audience of what it was like. I still remember meeting you, I'm guessing one or two, two or three other people, your brewer was there, but I introduced you as the company that started with a card table and a few good men. But tell us how Karbach got started. Let's start by sharing that with the audience today.

David Graham:

Yeah, absolutely. Yes, you're indeed right. When you met with us, we were all sitting around a cardboard table in our office building, just me and our brewmaster, Eric, and then David Greenwood, one of our founders. But yeah, so we started selling beer September 1st, 2011.

Brian Webb:

It's crazy.

David Graham:

So coming up on 10 years right now. But the interesting thing about Karbach is as our history is really unlike most craft breweries out there. And what I mean by that is breweries that were getting started around that time generally were homebrewers, kind of taking it to the pro level and our history actually started way, way further back than 2011 with our founders, Chuck Robertson and Ken Goodman. Chuck and Ken started their beer journey and [crosstalk 00:03:37].

Brian Webb:

Wow, I didn't know that.

David Graham:

Yeah, they started in 1982 in College Station, Texas, when they opened up a beer distribution company out there. When they originally opened their doors, they had three brands, Mickey's, Old English, and Pearl. So not always the most robust craft beer portfolio, but again, 1982, College Station, very different time [inaudible 00:04:00] beer. However, kind of what brought them to the path of opening Karbach was as they expanded, they got really into bringing import beers and craft beers in the state of Texas when no one else was. And they fell in love with these full-flavored beers, unlike the kind of standard American light beer that had predominantly been available at the time.

And so through their journey, they started traveling to all these breweries who they were interested in bringing into Texas, and that's where they fell in love with the idea of starting a brewery of their own. They would travel to these breweries, they'd see the employees there and the passion that they had, and really the sense of comradery that was fostered is what attracted them the most. When the five o'clock whistle blew, people didn't just make a beeline for the [inaudible 00:04:45] They would hang out with one another, they would have beers and really form that kind of family dynamic.

So what's interesting about Chuck and Ken though, is even though they wanted to start this brewery, the Texas laws did not allow it, because they already had a distribution company. So they actually had to sell their distribution company in 2008 to be able to start this brewery today. And then at the same time, they sold that company and they invested that in Karbach. So Chuck and Ken knew a lot about the business side of the brewing but didn't really know much about the brewing itself. So they found [inaudible 00:05:21] by the name of Eric Warner, who joined us as our founding brewmaster, who had studied at the Technical University of Munich at Weihenstephan. Weihenstephan being the oldest, continuously operated brewery in the world.

And it's there that he learned how to brew beer. He got his diploma as a brewmeister. If I had known that degree path was a possibility, perhaps my life would have turned out different too.

Brian Webb:

No doubt.

David Graham:

But yeah, he learned all the training, hundreds of years of German brewing techniques, moved back to his hometown of Denver, Colorado in the nineties, started a brewery called Tabernash, and then later was brewmaster and CEO of Flying Dog. So Ken and Chuck, again, put together what I like to call a dream team when most people were going from garage brewing to trying to take it to the next level, they were already pretty seasoned industry vets at that point, coming together to start this brewery in Houston.

Brian Webb:

One of the things, just by knowing you and having the privilege of, one, working with you guys for several years, but two, just watching you from the outside as someone who has consumed your products, but I know that culture is really, really important. I know that you've really been instrumental in helping to shape that, but share with our audience about the culture, the ethos, that is Karbach.

David Graham:

Yeah, so it's been very important for us as a company that grew very quickly, you know, that can be a hard thing to hang on to. We went from, our original three-year plan was to do 3,000 barrels, 6,000 barrels, 9,000 barrels production year one, two, and three. Year one, we did 8,100, year two 19,000, then up to 33,000 year three. So, a steep climb, heavy growth, and bringing on a lot of employees. Back in the day when we started, it was seven of us, and then up to today, we're right about 200 employees.

Brian Webb:

Wow.

David Graham:

So hanging onto that culture is something that takes a lot of effort and hard work to make sure that you're keeping that. But again, Chuck and Ken really wanted to get into the brewing side because of the passion that they saw and the comradery and teamwork and family dynamic that they saw when they would travel to these breweries.

So for us, it's about working together. It's about working really, really hard, but it is about also having that relationship with each other, that's probably a little deeper than most jobs you might have. We want to hang out with each other after we get off work, we want to have lunch with each other, even on the weekends. So that's something that we're continuously trying to foster within our doors, but also kind of a message that we want to send outward too. You know, we think great craft beer should be for everyone, and we mean everyone.

When craft beer started to really take off, it got this sort of snobbery and this sort of clique-ish mentality where it's like you had to know the right buzzwords to be part of the cool club and be involved. I'll give you an example of what I'm talking about. It was right around the time that we were opening the doors at Karbach, I was sitting at a bar, a craft beer bar, and a guy walks in and he orders, he says, "I'll take six Bud Lights." And the bartender says, "We don't carry Bud Light here." He goes, "Okay, I'll take six Doseki's.". "Sorry, we don't carry that here." "Okay, I'll take six Guinness." "We don't have Guinness here, but we do have Avery Uncle Jacob Stout."

So let me recap this story. Bud Light and Doseki, both lighter lagers, about 4.2% alcohol, and then Guinness, even though it's dark in color, only 4% alcohol and actually really smooth, easy to drink. And he actually sells this guy six of these Uncle Jacob Stouts, which are 14.5% ABV, so about three to four times the strength of a Bud Light and barrel-aged in bourbon barrels, so super intense flavors. So this guy walks this tray out to his table who's outside, and the bartender starts laughing his ass off because that guy wanted something easy to drink and he just sold him something super, super complicated. And do you think that guy came back in for another round for him and his friends? No.

And, so instead of taking an opportunity to teach the guy about craft beer and how wonderful it can be, he kind of took that opportunity to embarrass that guy. Meanwhile, right behind him on the tap wall was a beer called Fireman's #4, still in production today, out of [inaudible 00:09:40] He could have said, "Hey, we don't have Bud Light, we don't have Doseki's, but if you're looking for that flavor profile, we've got this great local beer here, let me tell you about it.

And so instead of sharing his passion for craft beer with this guy, he turned him off, and that is everything we want to be the opposite of at Karbach. If you come into our facility or we meet you out at a bar, we definitely want to educate you about our products. But if you're looking for a light beer, we're going to recommend a light beer for you. If you want to advance on to Imperial IPA's, great, we're going to join you for that journey. But we think everyone should be welcomed into the club of craft beer.

Brian Webb:

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You know, a colleague, I wouldn't say a close friend, but a colleague of mine, William Vanderbloemen, actually wrote a book called Culture Wins, read it many years ago. Really good book, and another good friend of mine, Dr. Ike Reighard, was over the culture for a really large mortgage company up in Atlanta. And he oversaw literally their culture, and that brand won like, that mortgage company, won like top best place to work, three or four years in a row. So I know how important culture is and how difficult, especially as fast as you've grown, so tremendously quickly, to maintain. So it sounds like community and meeting people where they are, are two of your kind of like pillars of your culture.

What would be one more pillar of the value that's really important, that you really try to install to everyone that's on the team there at Karbach?

David Graham:

Well, I would say, you know, achievement. I mean, we are proud to be great craft brewers, and we want to excel and we want to be a big player in the market. So we want a community atmosphere, we want to be inviting for everyone, we want the sense of family, but we also really value hard work. And we want to applaud those people on our team who are busting their ass and getting things done and making sure to do so on a really high level of quality. I think one of the biggest detriments to the craft beer industry is potential quality issues. The entries to barrier this industry have lessened over the years, and I think that's a great thing. But the training and the lab processes and the brilliant processes, that education, I don't think has grown as quickly as some of the amount of breweries opening.

So I think achievement and recognition of strict quality standards is something that we really want to instill in our family. And of course, you know, with growing culture, with growing people, there's always going to be missteps, and there's times you stub your toe, but for us, just making sure that that commitment to culture is at the forefront of our brains every day when we wake up, that's how we drive it forward.

Brian Webb:

So, 10 years, you've been there since the very, very beginning. That's a lot of growth. You talked about even some missteps along the way, which of course, every company, every human being on the planet has, but what's something that you would say is something that you're the most proud of in terms of achievements or accomplishments since you've been there to launch Karbach brewing?

David Graham:

Absolutely. So, there's so many different things throughout the years that I'm very proud of. For me personally, one of my biggest proud moments is the development of our collaboration with the Houston Astros.

Brian Webb:

Yes, yes.

David Graham:

Yeah, so we've been partners with the Astros since 2015, back in the days when they were losing more games than they were winning, 2013, I think actually. And then in 2018, we started to talk to them about, "Hey, let's do something together that's really cool, that's not really being done out there." It was after their world series championship, so Fandom was at an all-time high and, you know, Astros fans wanted more ways to enjoy the Astros. And so we pitched them this idea of doing this collaboration beer, and for me, a lifelong Astros fan and Houston native, I mean the amount of geeking out that I did of being able to work with the organization to develop this beer was off the charts.

But the really cool thing, and you mentioned community, and it's a big pillar of ours is, you know, we didn't just want to make this beer for the Astros', which we knew would sell really well, but we wanted to give back too. So a really big feather in our cap is that at beer, to date, we've raised nearly $300,000 for the Astros Foundation.

Brian Webb:

Wow.

David Graham:

Their charitable arm that does everything from building youth baseball fields to now even vaccine distribution. So, it's been awesome to be able to create this beer, but also give back at the same time.

Brian Webb:

That's amazing, that's amazing. I love to hear that about your story and I appreciate you sharing that with me today and the audience of course.

Everyone has an answer to this next question, but I bet you might have a unique perspective being that this is the center of your wheelhouse. What is it about beer that brings people together?

David Graham:

Yeah, the thing that brings people together through beer that is unlike anything else, it's just that beer is for everyone, it is approachable. Even craft beer, which, you know, I mentioned, I think we sometimes tow the line or did for a while on getting too clique-ish, it's something that everybody can kind of understand. And unlike wine, which is intentionally kind of marketed more as high brow, and spirits can be sometimes a little bit intimidating, beer is something that's historically always been for everyone and bring people together. The pub is short for public house, and what that really was, was a place not just for people to go drink, but for families to come together, for everybody to have a meeting place, to make connections.

And so that's what I think is so cool about the history of beer and the opportunity that we have as a business to fuel that in people.

Brian Webb:

Wow, I did not know that. I did not know that pub was an abbreviation for public house. That's interesting.

David Graham:

Yeah, and if go through the history books, I mean, there's just so many instances where beer was just such a major factor in bringing people together. I mean, even the revolution in the United States was fueled through, that's how they got people to meetings to talk about it, was to offer free beer, for folks to come listen to what the plan was. So, it's a great beverage. It was the beverage of temperance at the time. So instead of spirits where people were drinking too much of, beer is relatively low alcohol comparatively. So it was something where people could kind of calm the nerves, but also keep their wits about them. And that brought them together.

Brian Webb:

So, probably the number one challenge, you know, obviously I'm a marketer and so the people that I work with, the businesses that I engage with, or that engage with me, growing is probably their biggest challenge. And yet for you, that has not been your biggest challenge as far as like, in other words, knowing how to do it. What would you say are some of the biggest challenges that Karbach has faced over the past 10 years?

David Graham:

Yeah, our challenge has been actually keeping up with capacity, especially in those first five years, coming on 10 years now. About a year ago is the first time that I can remember that we weren't actively doing a construction project here at the brewery to add capacity. So that was tough and making sure that we didn't over-commit ourselves. The last thing that we wanted to do was spread our distribution further than we could handle. And so we always wanted to grow in a methodical way to make sure that we were always taking care of those who have been with us since the beginning.

So that's been a major pinch point over the years. It is getting better, but it still continues to be something that, how do you grow effectively and how do you maintain that supply and demand factor. And then for us now, it's increasing our brand awareness. You know, we're in the fourth largest city or-

Brian Webb:

Yeah, Houston.

David Graham:

Third, or maybe we're third already in the United States, in Houston. And so even though Karbach is really well-established in Houston, there's still a ton of Houstonians that have never heard of Karbach before. So it's always - 

Brian Webb:

I can't even imagine that. Everywhere I go, you guys are there. As much as I see the Astros, the Texans, Karbach seems to be everywhere. That's amazing that you share that with me.

David Graham:

It is, I know, I kind of take that for granted sometimes too, but that's also how much run room and opportunity there is too. So we look at it as actually, not a negative, it's just a positive. If we can increase this brand awareness of Karbach, continue to tell our story, God, there's ample opportunity just in the city of Houston alone to keep growing our business.

Brian Webb:

Wow, wow. Let me ask you this. So again, you've been there since the beginning, let's rewind tape. Let's just say, what would you go back and do differently? Looking back, what would you go back and do differently, knowing what you know today, in the beginning?

David Graham:

That's a great question, and I don't know that I would necessarily change anything or pinpoint a certain thing that would definitely change. I think for me, I wish I had just taken in every moment a little bit more, captured every moment a little bit more because it was such a rush in the early days that you were just flying by the seat of your pants, and didn't really take a chance to stop and look around about what you were creating.

So we're doing a lot of reflecting right now, looking back at old photos and stuff, since we are coming up on 10 years. And yeah, I guess I just wished that I would've stopped to smell the roses a little bit more.

Brian Webb:

Well said, well said. That's a lesson for all of us. So, one, thanks for being here. Thanks for sharing the Karbach story. I'm proud to know you and to have been a little piece of that story in the early days. For our audience who wants to learn more about your products and the brand, where's the best place for us to send them?

David Graham:

Yeah, so if you ever want to learn anything about Karbach, Karbachbrewing.com is the place to find that information. But if you really want to take the journey with us and be a part of Karbach, I definitely recommend following us on social channels, which is at Karbach Brewing. That's where we really connect to consumers and really share that experience.

Brian Webb:

And that's Instagram, Facebook, and LinkedIn, I think you said?

David Graham:

And Twitter as well, yep.

Brian Webb:

And Twitter. And by the way, for our listening audience, that's K-A-R-B-A-C-H Brewing. So, well, thanks for being here, David, thanks for sharing your story. I mean, it shocks me that someone hasn't heard of you, because everyone that I know, I would label you guys, I already have as a kind of a really iconic brand and how you guys have exploded. So, I have no doubt that your story can help to inspire others. And thanks for being here today.

David Graham:

Thanks so much for having me, Brian, it's always fun to reflect on that history and to talk about the brand. And next time you're in the area, let's raise a pint.

Brian Webb:

You know, this episode is airing today, July 5th, 2021, the day after we Americans celebrated the anniversary of our nation's independence. We, the people of the United States in order to form a more perfect union, establish justice, ensure domestic tranquility, provide for the common defense, promote the general welfare, and secure the Blessings of Liberty to ourselves and our posterity, do ordain and establish this constitution for the United States of America. We all know this is the preamble to the constitution of the United States, but wow, what an idea. The blessings of Liberty, how easy it is for us as Americans to take these blessings, these blessings of Liberty for granted.

Millions of people around the world live under the tyranny of dictators and governments and countless people every single year risk their lives and the lives of their families to come to this place we call America. How blessed and fortunate we are to live in such an amazing country. And, you know, I'm truly, truly, truly proud to be an American, but not in the elitist we're better than anyone else around the world kind of way. Ernest Hemingway once said, "There is nothing noble in being superior to your fellow man, true nobility is being superior to your former self."

In my view, I'm better than nobody. I've met some of the most iconic, brilliant, talented, generous, and kindhearted people from so many places around the globe, France, Africa, China, Israel, Australia, India, countless people that I am proud to call my friends and that have made an indelible and positive impact on my life. So to me, this July 4th holiday is not about who we're better than, but we're arguably perhaps amongst the most fortunate to live in this country where we experience the blessings of Liberty of which, by the way, has cost countless men and women, their lives to protect these blessings of Liberty that you and I get to live with and experience every single day.

So I hope you had an amazing July 4th holiday and celebration with your family and friends. I just thought it was a timely opportunity to share some personal thoughts. To all you veterans who have served, and all those who are still serving this amazing country, and certainly to those who paid the ultimate sacrifice with your lives to protect these blessings of Liberty, I think I can speak for every American when I say that we salute you, honor you from the bottom of our hearts. We thank you. Happy Independence Day, everyone.

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