Flip The Switch Episode 53: David Walker

PAT. Today on Flip the Switch, the guys sit down with David Walker the CEO of Firestone Walker Brewing, home of the 805. From the genesis of microbrewing to the process of scaling the business to the 16th largest craft brewery in the world we cover the trials and tribulations of owning such a successful brewery. If you drink beer you’re going to love this episode.

Let’s get into it.

00:53 AUSTIN. Welcome to Flip the Switch presented by Power Digital Marketing. This is episode number 53.

00:58 PAT. 53

00:59 AUSTIN. Sandy Koufax?

01:00 PAT. It’s not Sandy Koufax. We thought that it was Sandy Koufax.

01:06 AUSTIN. Sports Illustrated is leading us on

01:08 PAT. But any rate there’s somebody…

01:10 AUSTIN. Yeah, anyways… We are very excited about this one. If you tuned in, you are getting ready to listen to Mr. David Walker, the CEO of Firestone Walker Brewery. They have the 805, which is one of the most famous beers in the world.

01:24 PAT. Tremendous beer.

01:25 AUSTIN. All of us in this room really like it.

01:26 PAT. Yeah. Yeah. I’m super-excited to bring everybody this interview honestly, like this was it was really educational. It was about an industry that we don’t really delve into too much… You know, microbrews, microbreweries. A lot of similarities across different industries.

So without further ado we should just get into it.

01:49 AUSTIN. All right with us today a very special guest. Mr. David walker of firestone walker brewing. He’s the CEO of that fantastic company out of Central California. And they’ve got one of the most famous beers out there right now… The 805 brewing. Which a lot of you’ve probably heard of and also tasted. Fantastic brew.

So thank you so much DAVID for coming on.

02:14 DAVID. My pleasure. Total. Very excited.

02:15 AUSTIN. We were very excited too. Just quickly want to say this… Just letting us know he was on Stone Cold Steve Austin’s podcast before ours… Prior which my name is–Austin’s part of the name so I feel really excited and…

02:27 PAT. He’s also a die-hard wrestling fan. He’s not letting that on right now she was seem cool, but yeah. That’s something.

02:33 AUSTIN. I’ve been known to do a couple Stone Cold Stunners.

02:34 DAVID. That’s good. Mr. Austin’s… He respects beer.

02:40 PAT. Yeah good. I love that.

So jumping right into things a little bit, it’d be great for you to give us a little bit of background on, you know, just who you are where you come from and kind of what you’re what you’re all about.

02:48 DAVID. Well I’m an Englishman. I started out in England and wound my way to California. Fell in love with a Californian. And she sort of dragged me back to California.

I am, I was actually in the tech business and computer business…

03:05 PAT. Really?

03:06 DAVID. Yeah, I sort of was lucky enough to get into it at the right time a lifetime ago in the late eighties in the UK. And ended up in the Silicon Valley. And sort of you know that’s essentially what drew me here.

It was actually it was cheaper to buy a rundown vineyard in the center of the state than a three bedroom house in Pleasanton. So we moved there and I sort of got the artisanal bug and that’s really where it all started.

03:41 AUSTIN. And brewing itself is a pretty big undertaking. I can imagine just growing and producing and making a fantastic brew is quite an art. So where did where did that passion come from? Or maybe that idea that “hey, this is something that I’m gonna be about.”

03:55 DAVID. Well, initially it was actually born out of the fact that I was in an area where I was sort of part of a family enterprise. And as much as my wife’s brother was running a third generation family winery, I was growing grapes. There were a lot of people in the area who in sort of an artisanal world.

And him and I thought that you know maybe the family should be making some beer. They had their hands full. So him and I decided to start a brewery called with the firestone walker brewing company. Borrowed the name firestone and off we went.

And then literally it was that simple. I mean, we believed in honest, family enterprise we had an artisanal bias, as I said. We loved beer.

And it just started literally as a hobby. Both of us had a sort of a suburban full of kids each. So we both had our day jobs and then we figured it out. Neither of us were brewers. We figured that out. And slowly but surely built a brewery in a time when there was really, I mean…

You probably can’t visualize this, but when we start a library you know our biggest competition was indifference. People just didn’t care. Beer had been sort of distilled down to two notions–sort of refreshment and good times. I mean that was the only conversation that people were having about beer.

And we started to talk about ingredients. Tradition. Quality. Freshness. Provenance and all that stuff. And us along with you know a handful of other great breweries, you know… Some of some of the greatest down here in San Diego. We started to chip away at people’s perception of what beer is.

05:48 PAT. That’s so interesting. And just like kind of thinking about that… Like you said… We can’t really visualize that. Especially being in San Diego right now it’s like everywhere there’s a microbrewery popping up somewhere. They’re very into just portraying themselves as that… This is almost like a higher-end way to drink beer.

And I find that so interesting, and you kind of touched on it a little bit you know you believed in honest family values and free enterprise–what was the original vision for the company when you guys started it? Like did you ever see yourselves getting to the point that you are now?

06:19 DAVID. No. I mean we wanted to you know we wanted to be proprietal about it. We wanted to make beer. We wanted to put our name on the bottle. We wanted to be proud about it and there was a little bit of an old-fashioned sort of dickens-like sort of pride in what we were doing. You know–Mr. Firestone, Mr. Walker. Brewers. Brewing beer and standing behind what we did.

And whatever we were gonna do we wanted it to be great. It didn’t have to be terribly successful we just had to be proud about it. And a lot of that was born out of the world that we were in. You know, we were surrounded by a hundred small wineries. Most people in the wine business don’t do it to make money. I mean they do it… It’s a way of life.

And it truly started in that frame of mind it’s… “This is a nice little idea and you know maybe some of the folks who come up to the wine region, maybe they’ll get to try a beer.”

07:19 AUSTIN. Yeah.

07:21 DAVID. And I mean it was literally that innocent when we started it. I mean, because the concept of starting what people called microbrewery in those days was

07:31 PAT. (laughing) great radio voice, by the way.

07:33 AUSTIN. Could take our jobs after this. That was fantastic.

07:38 DAVID. (laughing) yeah. It was just silly. It was like, “why would you do that?” and you know like we say we–and I’m talking about the collectively the brewers that started at that point–we changed the world of beer. When we started the concept of just changing the world of our local tavern was daunting enough. But American craft brewers and I’ll go out on a limb here–west coast craft brewers changed the world of beer. They changed the palates of Californians and the Pacific Northwest. And that spread across the nation. And I know there’s breweries all over the nation but I really felt that California did a great job.

And that in turn changed the way the world looked at beer. And you know today brewers look at beer in a very different way.

08:28 AUSTIN. I have a couple of questions. Just curious about maybe the process or influence of making wine and having a vineyard in your life prior to becoming a brewer. Did you adapt or take a lot of the ideas that you’re maybe used to with the firestone vineyard? Or maybe the process is to turn that into beer? Are there any similarities between making wine and making beer?

08:50 DAVID. Yeah it’s great question. You know right out of the gates we started to ferment the beer in 60 gallon American oak barrels. You talk about craft beer–it comes from the term hand crafted–and when we hand filled those barrels we hand empty them we hand clean them. We took lab samples to check the when they’re infected. I mean we really… It was an incredibly–and it still is–time-consuming process. And we integrated wood into our process very early on. Wood has become a big part now of American craft beer. I mean, there’s a lot of barrel aging going on. There’s a lot of secondary wild l fermentation going on in barrels.

And so yeah, from that standpoint… But also from the standpoint of the way that a winery is set up. Sort of you know you have the estate. You sort of have the fruit. You have the seasons. And there was a real sense to try and make a beer that we were proud of. It wasn’t a gimmick. To a certain extent in the early days what was happening when we started there was a lot of weird beers out there. I mean the big brewers… I mean there was a vehicle bulldog or red dog or something and it was and it was sort of pitched as this sort of gimmick beer made by some crazy red dog dudes and you know it wasn’t it was made by one of the big brewers.

10:15 PAT. It was more of a marketing ploy.

10:16 DAVID. Yeah. I mean there was Pete’s Wicked Ale at the time you know that was you know formulated in a bath by Pete’s Slosberg, which I think it was, but ultimately was brewed by miller. It was always brewed by miller. And it really was just sort of a little bit of a trick.

10:37 PAT. Right and even just talking about that process right? Using oak barrels. How did that differ from these big brewers and how they were preparing and fermenting their beers through their process at the time?

10:50 DAVID. It’s so different. I mean the brewing at the levels that they’re brewing at is incredibly different. Very difficult. I mean, whether one likes the beer that the big brewers made–I’m talking about probably Anheuser-Busch is the best example–you can’t you can’t question their attention to detail and quality. I mean it’s extraordinary.

And you know that we were truly at an artisanal level. I mean–like I said we were hand filling kegs. We were hand filling barrels. We were hand filling tanks.

And at every point there’s a potential for infection. So when you get things down to a manual level it’s a little bit more… It is just very difficult.

The big brewers are just operating at a totally different level to us

11:41 PAT. Right. Yeah. Their goal is probably more along lines of efficiency. Reducing overhead. It’s a process at that point, right?

11:47 AUSTIN. And that really does tie in to kind of the follow-up question here and scaling. And I’m very curious about… Coming out of the 80s and 90s you obviously knew you had something here, and you guys were gonna grow. What did it look like in maybe a three to five year plan or something on that kind where you thought “we need to scale this business and this is kind of what it looks like.” how are you going to sustain growth?

12:08 DAVID. Well, you know, it’s extraordinary. We never really thought in terms of scaling the business. It was and I keep going back to this… I mean, we sort of started it with great intention, but not with great ambition. And we never visualized who we became.

So, you know, that the business, the brewery was a little bit of a hockey stick. I mean we spent… Breweries measure their scale in barrels. Barrel’s 31 gallons of beer so for the first five years we got to about 5,000 barrels. The next five years which makes us ten years old we got to about 50,000 barrels. 15 years we got to a hundred thousand barrels and then 20 years we got to four hundred.

So you have this huge hockey stick and scaling that was incredibly difficult because you know it’s not digital media. It’s barrels. It’s barrels of beer. And we had to build a brewery you know… A Willy Wonka factory as I like to call it, to sustain that. And that journey has been amazing. I mean it’s a life’s work and something that I’ll always be proud of and the hundreds of people who were shoulder-to-shoulder with us should be proud of too. I mean, building a brewery is a wonderful thing.

13:35 AUSTIN. And was there any moment in that–because it sounds just incredibly difficult–where you’re like, “there’s no way we can get any bigger. We don’t have enough land. We don’t have enough–I don’t know barrels.” or is there any moment where you’re like “I don’t know if we can get bigger.”

13:48 DAVID. Yeah you know there was… I think like with anything you know, you push, and you push, and you push and it just seems like everything you do is push and then all of a sudden it’s almost like the wind changes. And all of a sudden you’re getting pulled and the dynamic changes. And first of all you don’t believe it and all of a sudden you’re sort of getting pulled.

And then actually what happens is you get used to it. And you’re sort of living in this environment where you never… You’re chasing customers all the time–rather customers are chasing you.

And that’s that switch flipped for us sort of roundabout 2007, 2008

14:27 PAT. Was there like a particular moment that you remember kind of realizing that? Or was it a gradual process where you just learned to adapt?

14:34 DAVID. You know in our case, I mean–I’ve thought about this many times–but in 2006-2007… I think 2006 was when the first tweets sort of started to hit the ways. When Facebook got out of children’s bedrooms and into adult’s hands. And for once we had a platform as small brewers to tell our story. So I think social media was a real force multiplier. I can’t quantify it, but I just know that something happened then.

There was also–and this is really boring–there was some massive strategic shifts going on in the beer business Anheuser-Busch got acquired by a giant banking outfit out of Brazil called 3g. Anheuser-Busch INBEV and Anheuser-Busch up until that point had just maniacal control over the American beer business.

15:23 PAT. Yeah.

15:25 DAVID. And they were very, very strong. They had over 50% of the market. And they controlled their wholesalers, the retailers, I mean not controlled them, but there was just sort of a tension that made it very difficult to break into the market.

15:36 PAT. Yeah, huge amount of influence there I’m sure.

15:39 DAVID. Absolutely and you know any small brush fire they saw out there that looked promising they just put it out immediately. And they were a force.

And so what happened when they were acquired by the Brazilians, the Brazilians–you know I’ve got no intelligence and knowledge on this–but, you know, they backed off on the volume. So they went from 50% market share to mid-40s. They became a hell of a lot more profitable because they weren’t squeezing out that last 2%.

But by doing that they let enough oxygen in I think into the American beer industry to enable brews like us to propagate. And then cultivate our businesses. And I think that happened at the same time.

So those two things I think really made a difference

16:28 PAT. It’s kind of like a perfect storm of things happening in your favor.

16:30 DAVID. It is. You know it’s the weirdest thing. It’s cause and effect. I mean shit happens when shit happens.

16:37 PAT. Right.

16:38 DAVID. And you never plan for it. But my partner Adam Firestone and I used to say as long as we got our sails up, when the wind blows we’re gonna move. And when the wind blew we moved.

16:50 AUSTIN. You guys just stayed on it and here we are. So I’m pretty curious about kind of the takeover of the microbrewing world. I have a little bit of knowledge that a lot of those big companies are buying up the smaller microbrews at this point right to kind of either sustain their market share or potentially hope to not get eaten alive by the microbrewing world.

Well what does that look like as a smaller brewing company? To get acquired or maybe you know deal with these larger companies that are kind of on your back or constantly weighing down on you?

17:20 DAVID. Well I mean I think… Listen its economic physics… It’s going to happen. I mean, building breweries is capital intensive. It’s labor-intensive. Larger brewers have massive economies of scale, and they can write huge checks, and it’s hard work. So if someone invests their life in it they might they might just want to check out at some point.

So, you know, a couple of things. Obviously the large brewers are acquiring what they see are dynamic craft brands. You know, obviously the issue is they’re not sort of fully transparent about who owns those brands. But you know that’s frankly the way of the world.

I mean I think someone told me and I’m pretty sure they’re correct that half of the first growths in Bordeaux are owned by a 38 billion dollar luxury company, LVMH, and you know people still will fawn over first growths out of Bordeaux as long as it tastes beautiful. It doesn’t matter that it’s owned by a giant company. So to a certain extent it was inevitable that that was going to go on.

But I mean if you just look at the field. I mean there’s 9,000–well I think there’s something like 7,500 breweries today, there’s 2,000 in planning there’s, two opening every day. 12,000 wineries in this country, there’s going to be 20,000 breweries, because breweries aren’t constrained by climate. So I mean there’s a sort of sense where you know one of these brewers gets acquired by you know a giant brewery there’s a thousand to step into their shoes. So I don’t think it threatens the fabric of what we’re doing.

But likewise you have to expect investment. I mean a lot of breweries have significant investments. We have we have a significant investment by another brewer. But in a lot of cases it’s necessary to grow.

19:21 AUSTIN. Mm-hmm. And just kind of staying on this economic climate of microbrews–do you think that this is kind of a bubble with the fad of what microbrews have become? Or is this sustainable? Is this kind of just the general direction that beer drinkers are gonna stay? They’re liking the micro brews. Do you think that this is a sustainable business model, I guess?

19:40 DAVID. Well, without question I think people have–you know, the genie’s out of the bottle in terms of flavor. I mean, when we started our brewery 90% of the beer in the world tasted the same. Different brands.

Now people are actually when they drink beer they’re looking for flavor. Some people still I mean–not some people, 70% of the people still want to drink light lagers and not think about flavor. But there’s more and more people who want to see flavor in their life when it comes to beer.20:10

And so that’s happened. It’s out of the bottle. I mean, craft brewers are now 12 to 13 % of volume in the US. Outside of the US it’s much less it’s sort of 3 to 5%, but they’re about 20% of the revenue. And you know from a business standpoint they’re closer to 25% of the profit.

Well, you know, the profit’s driving the retailers. It’s driving the wholesalers. And so it’s part of the chain. It’s part of the discussion. So it’s not going away. Where it settles I don’t know. I mean without question there’s going to be crowding. But that’s just the nature of feast and famine–it’s sort of weird 2-3 years ago I was sort of flipping through the sort of the online content they had available through Netflix and Hulu and so forth. And now this almost too much shit. I’m now like “what the hell am I gonna watch?”

21:11 PAT. Right. I rely on suggestions. I need them to tell me.

21:15 DAVID. And the same thing’s gonna happen… I’m gonna get to a point where it’s just like walking into Barnes & Noble. It’s like “what am I gonna read on holiday?”

And so anything that’s good, tends to just get sort of over-developed and so, yeah, that’s gonna happen.

21:30 AUSTIN. I think to a degree that is happening in San Diego. A microbrew capital where we’ve seen just pop up door to door really. There’s so many breweries and it’s fantastic beer, but it’s extremely competitive. And if you’re not one of those ones that has that great marketing tactic like maybe Ballast Point did with Sculpin, then it’s not going to necessarily pan out. So it’s been really interesting.

But I don’t think it’s necessarily gonna go away. Like you said–the taste side of it is what I think it’s gonna drive the business forward. People do actually care about either experimenting or just enjoying 1 to 2 good–very good tasting beers right? And that’s kind of developed over the years where you don’t necessarily need to drink six Coors Lights that night. One or two Sculpin’s gonna be great. You enjoy the taste. It’s a more wholesome buzz if you will and it’s just a more enjoyable time, I think. For a lot of people.

22:16 DAVID. Totally agree.

22:18 PAT. Yeah, it’s more of a change in consumer behavior pattern than it is… And I think it’s because there weren’t as many options available before. Kind of like you were saying right? A lot of these companies were concentrating on the light lager which is kind of that it was sort of tried-and-true best practice. And that kind of leads into a question I wanted to ask as well from a sales perspective or just from an overall business perspective do you find that–you know, maybe firestone in particular–but other microbrews do better by concentrating on a few varieties of beer that they can scale and make a lot of? That they know people will like?

Or do they do better when they kind of dabble into a lot of different tastes?

22:53 DAVID. Well it’s a lot easier to focus on one beer and scale it. But ultimately sometimes you just don’t have that choice. And so when we started, I thought we’d only ever make one or two beers. I mean we make you know up to a hundred now. I’m embarrassed to say we might make hundreds.

But because we’re you know we’re getting driven to it internally, I mean, because we’re tinkerers. But also by the community that we’ve built around our brewery. And friends and fans and so forth. But yeah I mean in a utopian world? We’d just have one focus? In a utopian world you just wear white t-shirts and jeans and that’s all you’d have in your wardrobe. But somehow it just doesn’t work like that.

So it’s difficult question, but there’s a balance with that question

23:52 PAT. Sure and do you find that you get…? So like you were kind of talking about–there is that feedback loop between the community around firestone let’s say. And you guys internally. Do you find yourself asking for feedback from these customers? And almost dictating new tastes or lagers that you create based off of their feedback?

Or is there a multitude of other things that go into that?

24:12 DAVID. Yeah, I’d like to say there was a structured feedback, but you know we’re not Kraft foods, you know. I mean we have an ongoing… I mean we’re lucky. We’re still in our first generation. We’re still very close to our customers. So we talk to them all the time. We see them. We see them on the street. We see them in the pub. We see them at events. They talk to us of across social media.

So we have an ongoing narrative and we listen. Do we do we have a sort of a conscious sort of R&D program? Not really. But you know, I mean you guys could probably speak to this. It’s your world. I mean, we’re so woven into the fabric of our beer community. We’re all jabbering and watching and listening and sharing ideas, that it’s almost impossible not to… I mean you actually have to consciously not let yourself get off track. Because it’s… You know, you could be so promiscuous in terms of what you’re focusing on.

25:13 PAT. Oh yeah, I’m sure there’s just like an overstimulation. Everybody has the next great idea that they’re coming to you with. And you do need to sift through that to an extent. Definitely makes sense.

25:21 AUSTIN. And I’m curious about kind of the way firestone walker approaches the beer lines. And kind of what you’ve done with maybe the lion and the bear series so that piqued my interest. What does it look like when you’re developing new beer and then kind of deciding it sounds like you’re going two different ways? Is it two different taste palates or maybe two different ideas of kind of the way you want things to turn out?

25:42 DAVID. Well a lot of it was accidental. I mean, we started out with, you know, firestone as a brand the lion and bear represented the principles underlying my partner’s the bear. I’m English he’s Californian. And they’re sort of standing off in sort of conflict because him and I are always aggressive… We’ll argue over the currents in a muffin you know.

But it’s good and we think it’s a positive thing. We encourage it in everybody in the brewery. But you know we’ve sort of distilled that whole story down to that icon. And it works and we’ve been rabbiting on about it 20 years and it works.

You know, the 805, which is this sort of what I call a cuckoo in the nest. I mean this thing showed up and all of a sudden… That was never intentional and we developed it as a sort of a sort of a beer for the brewers. A shift drink. And then it and then it turned into a beer that we made available some of our local tap room’s. We then gave it a brand that represented what we thought was the provenance and the locality that we were from. And then it sort of took off.

And all we did is… It’s very monochromatic, very simple. The beer is very simple. It reflects the sort of graphical imagery. But more importantly the message is very simple. It’s like… This is who we are, this is where we’re from, this is where our brewery is. And we’re proud about it.

And that sort of connected with a lot of people. And so we didn’t touch it. We just sort of let it fly.

27:27 PAT. Absolutely. I mean it’s a very good beer. I wouldn’t touch it either. Yeah I was gonna say it’s probably my favorite but I don’t want a fanboy too hard here. And that’s very interesting. So it does sound like there’s a lot of that storytelling aspect almost that you’re trying to communicate. With the branding that you put behind each lager, each beer. Is that is that true?

27:46 DAVID. Yeah, I mean, the magic–the sex in branding is getting an emotional connection with your consumer. When you have that it just goes to the next level and the level of emotional branding that we have with 805 is phenomenal.

And the other thing about 805 for us is that it’s also talking to people who aren’t engaged in craft beer. So you know there’s a lot of people who’ll drink our IPAs but they’ll also drink several other IPAs from other brewers a lot about our beer, how it’s different from others. And you know they’re engaged in a sort of a journey that sits in that in that world.

People drinking 805 or just drinking beer, and they you know… Like I don’t obsess over the brand of underpants I wear. I mean they just show up and I might buy them somewhere and they sort of work.

Some people are like that with beer. It’s just got to work. And they’re like that with a lot of things. And as long as it you know as long as it’s functional and it works and it ticks a bunch of boxes, they’re into it. And there’s a whole series of people that well I mean there’s a whole community of people who are drinking 805 because it means something to them, but it has nothing to do with the hopping regime. Their palate which is their most sophisticated filter they’ve got has given them a thumbs up. “Hey, this is good. This is not poisonous. It’s phenomenally tasty. Drink this thing.”

29:22 PAT. Stick with it.

29:24 DAVID. Yeah. And then the rest is all sort of emotional.

29:27 PAT. Absolutely.

29:28 AUSTIN. Biggest differences between when you first started and now? Besides, of course, the fact that you’re selling so much more beer. What would you say that is, maybe from a culture perspective, or just how you operate as a business?

29:39 DAVID. Yeah it’s huge. I mean if I actually… If I were smart enough to keep journals I’d probably just freak out at the change. You know, because everything’s incremental. Sort of like anything in life, it’s sort of you add these sedimentary layers each day and you know 20 years down the line, it’s like how did I end up here?

30:04 so there was no real conscious recognition but in order to operate a brewery of this scale you gotta be pretty grown-up. And that piece we’ve sort of learned as we’ve gone along.

And you can’t operate any enterprise in a state like California. Employ 4-500 people without high levels of human resource management and considered rules and regulations on how you operate.

And it’s sort of interesting. Managing that piece and also managing the culture–that’s difficult. Because we’re such a cultural business. Anybody who starts a business, you know everybody. I mean you all sort of… I mean that’s part of the… The journey is that’s it, you know?

I mean that’s what wise people tell you. It’s not the destination it’s the journey. It’s all about the journey. And you know when you’re growing a business, that’s it. It’s the people you work with, the people who leave, the people who arrive. The people who hang in there. The mistakes, the triumphs. And, you know, keeping that culture and growing an enterprise is difficult.

31:18 PAT. Right, yeah. Because there’s always that dichotomization between the administrative side of things that you know needs to be intact to be able to scale and to be able to continue to exist as a company. But you don’t want that to contrapose the culture that got you to where you are. And I imagine that’s a very difficult thing to have to balance.

31:34 DAVID. It is really, because one of the other things that you realize once you get to a scale where your influence has no influence. And what I mean by that is you can only cover so many things. Because the job at hand is too far away from you, because you’ve literally had to delegate so far.

So really the only way that you can influence the final piece of work is through culture. And so all of a sudden culture becomes really important. It’s like I really want the guy who’s pitching the pub in the Gaslamp district in San Diego to sound like me. And I want them to tell my story. I want them to tell our story. I don’t want them to screw it up. And a lot of that… I mean you can’t send someone a manual. It has to be born through culture.

And so you know I think it’s very important.

32:36 PAT. Absolutely kind of on that same vein–you touch a little bit–there’s always mistakes, there’s triumphs, there’s things that you learn along the way. What would you say it’s been like the biggest business lesson that you’ve learned from you know when firestone walker brewing started and now?

32:54 DAVID. You know I think you need to be on the front foot. You need to always wake up every morning not satisfied. But also you need to… As this old saying sort of “hasten slowly.” you’ve got to be aware that you’re mortal. You can’t take risks that are reckless and foolhardy, because the world will bury you. So I think the most important thing is you know never be satisfied, but always be fully aware that you’re vulnerable.

And that I suppose is part of that whole sort of world. I mean, keep it in proportion, because you can turn into this sort of paranoid weirdo by adopting those principles. But I mean, it’s just sort of a healthy humility running a business that you need to balance with a sort of arrogance. They’re really very two different things, but you got to try and let them both sort of live within you in order to be successful I think.

34:11 AUSTIN. I have a couple of questions about just international import/export not anything too deep but I’m just curious I read an interview I think you were at a pub in England and you were talking about how difficult it is to get the beers over there. Because of just shipping it.

Did you ever figure that out or what does it look like for firestone to send you know your best beers over to the other side of the world?

34:31 DAVID. Well personally, we sent beer to Britain because I’m from Britain. I want to show my mates what we’re doing.

34:39 AUSTIN. Of course. That’s the best part…

34:40 DAVID. Export’s not a strategy for us long-term. I mean, short- or medium-term I mean it’s a… We sell 70, 75 percent of our beer in California. California’s fifth largest economy in the world. Giant. It’s a giant place. So I mean, we can propagate our ambitions for the firestone walker brewing company for the next three generations just in California. So the only reason that we ship, we export… There’s a little bit of vanity involved. There is a thing called trademark. If you don’t defend your trademark, actively defend it, people can assume it.

So for instance we got a we got an email from Argentina from a trademark attorney who looks after us who basically said “there’s a guy about to start up a brewery called the “firestone brewery” and they’re going to start making…” and it was clearly confusing and so we immediately shipped beer to Argentina and then we challenged their trademark. And said “listen, we’re actively selling beer here, as you can see,” and so our position was defendable.

So that’s really, truly the only justification for us to be in the export world. Beers fragile it’s heavy. You know, for a lifetime I’ve told my customers in Santa Barbara, you know, drinking my beer is lightening your carbon footprint. I mean to drink a beer that’s made in Amsterdam that’s refrigerated all the way to your fridge in Santa Barbara is ridiculous. When you can drink a beer just as well made a mile up the road. Why wouldn’t you do that? Or within the state… Or within a trucks drive.

So you know you’re really pushing a lot of logic uphill moving beer around the world.

36:33 AUSTIN. That’s a very good marketing tactic, right there. I honestly think put that on a website somewhere and blast that out. Run Facebook ads.

36:40 DAVID. Yeah we tried actually years ago. What’s the carbon footprint of your beer? No one noticed, so…

36:46 AUSTIN. Maybe that doesn’t associate with beer drinkers too much. I’m not sure. 36:48 DAVID. Well listen there’s a movement to drink local. And south San Diego-Portland, I mean, those are places that really have, you know, to find that. But it’s just one of the dynamics that plays into regional brewing.

37:04 PAT. Super interesting to just hearing about from the export side of things. It’s a little bit more of a strategy, to defend your brand. Defend your trademark. Than it is like a distribution point.

37:13 DAVID. Right exactly.

37:14 AUSTIN. Just one quick point. It’s almost the inverse of what you think for a multinational corporation, right?

37:20 PAT. Just gonna say…

37:21 AUSTIN. They get really excited when they’re entering other countries. Because that means they’re growing their distribution. They’re growing their revenue streams. They’re now much larger.

But sounding like for a microbrewery it’s almost inverse. It might actually affect your revenue long-term and hurt the money you’re making. That’s something I don’t think I would have tied back.

37:37 DAVID. Well a lot of it has to do with the fact there is so much opportunity for just domestic brewers right to be effective domestically, that I mean… Maybe this is a problem for someone 50 years from now at our brewery. But it’s really not at the moment.

37:57 PAT. Right and there’s always gonna be those obstacles right? There’s always like the logistics piece of it to figure out. There’s the overhead cost. There’s a lot of different things and it almost doesn’t make sense in terms of time and cost opportunity.

And to just focus here because there’s so many people here and the market is clearly so reachable locally. Especially in state, let alone like in between states within the same country.

38:17 DAVID. Yeah. I mean, when I came to this country 25 years ago, I was drinking English beer that I used to drink in the pubs in England that was just like angels would sing when you drank it. That beer would show up in this country been sitting around in kegs for months and it would sort of wind its way into a pub. Because no one recognized what the hell it was… I mean you were drinking this stuff and it was old. It lost all its life.

38:42 PAT. Sour?

38:43 DAVID. No, it wasn’t sour. I mean it was pasteurized before it was shipped.

But, you know, those beers were just not the same. And it was never designed for that sort of rigor.

By the way beer can be drunk well within a hundred days. And as long as it’s kept cold…it is very hard to tell the difference between you know 3-4 day old beer and that beer. Now maybe if you’ve got an intensely hopped beer, they can change over a very short period. But most beer easily manageable.

But exporting beer… It’s difficult absolutely.

39:24 AUSTIN. It sounds extremely difficult. Of course, you have a product that’s expiring just constantly expiring, and you can’t put preservatives into it because it’s beer…

39:31 PAT. Defeats the purpose…

39:32 AUSTIN. Right, it’s a wonderful thing about beer too. Is that it’s natural.

I think we want to wrap up with just kind of getting where you’re at now. What’s coming in the future? Do you have any big plans for firestone walker?

Of course things are going so well with staying local, as you’re saying. Is there anything you need to change, or anything on your horizon?

39:48 DAVID. Just more the same. I mean, we’re 22 years old and we just, you know, just going to work every day doing what we love. And, no I mean it’s, I mean we now have plans, obviously. Plans for next year and the year after.

But there’s no great gadget that we’re launching. I mean there’s gonna be some new beers that are following some of the trends that people are into. But we’re just sort of continuing to do what we do.

40:19 PAT. Awesome as you should. David, thank you again so much for joining us today. We know you’re very busy, but really appreciate you taking the time.

40:25 DAVID. Likewise. Thank you very much. Cheers.

40:29 PAT. All right everybody. That was our interview with DAVID walker. Again, CEO of Firestone Walker Brewing Company. Super nice guy.

40:37 AUSTIN. Probably one of the best voices we’ve ever had on the show too.

40:40 PAT. Oh yeah.

40:41 AUSTIN. And you guys couldn’t see it–a little bit of bad radio but he had these very smooth leather boots on that were much cooler than anything I own.

40:49 PAT. Super tight. And honestly, I love how like kind of what he talked about. Like the genesis of the idea behind firestone. The similarities that he draws between craft brewing and vineyards and viticulture I thought was super interesting. And wasn’t really a connection that I had ever made before.

41:05 AUSTIN. I mean we were talking to one of the godfathers of microbrewing. And you think about how popular that’s become in our society, not in just California, but in the United States. And being in San Diego, it is one of the most important things that you can do in San Diego is be a microbrewer–they’re the guys that invented it right?

His ideas of just creating a beer that tastes good. What a novel idea.

41:26 PAT. Seriously.

41:27 AUSTIN. Is why we’re all sitting here drinking an IPA much more regularly than we were in the past. Or what was going on in the 80s and 90s. So we really have these guys and their care for taste. And their care to make something really good, for having good tasting beer.

41:41 PAT. Yeah and I think like the biggest differentiating factor and thing that was unexpected to me was just, you know, they never intended for that to be as big as it is. Like you could hear it time and time again, he cared way more about the quality of what he was putting out, than the quantity or the scalability of it.

Which is just super different than most businesses and business ideas that we get to cover on the show.

42:02 AUSTIN. Yeah, you know that their patent. And he talked a lot about his culture–which we all know being at a company that strives to have a great culture–you just can’t force it. It’s not something that can be artificially created. It’s not something that you can constantly force others to be a part of. You have to lead by example.

And Mr. Walker really does that. Just by being himself. You know, he’s a relaxed guy. He’s engaging. But he really cares about that product. And he strives for excellence. And that’s what firestone walker really breeds. And that’s what their beer is. And that’s why it’s become a household name.

42:35 PAT. Absolutely. Couldn’t agree more.

All right you guys, that just about wraps everything up for us here on episode 53 of Flip the Switch podcast presented by Power Digital Marketing. Again, very special thank you to David Walker, CEO of firestone walker brewing company, so much for coming on the show.

Again join our forum everybody. We have a forum on Facebook. It’s flip the switch podcast forum. We will add you to it. Get some more discussions going. Until next time this has been Pat Kreidler, Austin Mahaffy, John Saunders and Joe Hollerup, signing off.