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Ashland's Caldera Brewing Co. is building a reputation for microbrew mastery
Jim Mills, founder of Caldera Brewing Co., moves equipment in the brewhouse near large fermenters in the background. Mills, who started in the business by washing kegs free, later became a brewer's assistant for Rogue Ale of Newport. By GREG STILES ASHLAND - Jim Mills missed the great microbrewery gusher of the late 1980s and early 1990s. That might have been for the best. Although microbrews have created small fortunes, the industry's failure rate over the past 24 years has been one-in-three. But the 32-year-old Mills watched as he waited before opening Caldera Brewing Co. nearly five years ago. "I started working on a business plan and it took me a good six months," Mills says. "I came into the micro industry late. But we've learned from the mistakes of the regional breweries that have gone through too rapid expansion. Ultimately, the quality of their product has suffered." When the product suffers, it doesn't take long for customers to find a more palatable beer in a crowded market. Mills' interest in brewing was stimulated when a cousin made a home brew. During his college days at Southern Oregon University, Mills tended bar at Rogue Brewery. "I was trying to get into the brewhouse at the same time and was washing kegs for free just to be learning," says Mills, who eventually became a brewer's assistant at Rogue Ale in Newport. Mills secured roughly $225,000 in financing and plunged into the beer-making business, brewing the first batches of Caldera ales and lagers in January of 1997. "It's a scary proposition when you've taken something you've produced and put it in front of other people to judge," says Jim Parker, a former brewer and beer-industry writer and now see MICROBREW, Page 2E executive director of the Oregon Brewers' Guild. "The craft beer populace isn't shy about saying what they think. It's like taking your newborn kid, sticking it out there and having them call it ugly if they don't live up to expectations." Caldera reached a milestone in June when its brews earned four medals at the North American Beer Awards at Idaho Falls, Idaho, including a gold for its Pilsener Bier in the German-style Pilsener category. Caldera's Oatmeal Stout and Imperial Stout claimed silver medals, and its Hemp Brown Ale received a bronze in a field featuring 400 entries nationwide. "I thought it would be nice if we got one medal in anything," Mills says. "It was especially surprising to win the gold medal for the Pilsener. The brewery (Uinta of Salt Lake City) that won silver specializes in lagers." Precious tap space makes it difficult to break into a pub's lineup. Thus the best brewer in the world would fold without a bit of marketing prowess. Caldera saturates the Ashland market, selling in all but two of the town's watering holes. Ashland customers, including sales from the warehouse dock, account for two thirds of Caldera's business. Jackson County accounts for more than 90 percent. Significantly, Crater Lake Lodge's two taps belong to Caldera. "Geologically, Caldera is a perfect fit with Crater Lake," Mill says. "It was a natural." Equally important is cracking the Eugene and Portland markets - where he has a half-dozen accounts. But rather than trying to pour through every open door, he concentrates on two or three places until he lands a customer. "When you only sell beer in kegs - draft beer - your business survives solely on the number of tap handles you can get," Parker says. It's a constant battle to gain and keep handles. If you're not on tap, then you have to knock someone else off. A craft beer's acceptance doesn't depend on slick marketing, but word of mouth. "People aren't going to hear commercials for Caldera during the Super Bowl," Parker says. "The only thing that sells his beer is what's in the glass. Caldera's success is not driven by babes in bikinis, barking dogs and talking lizards. That isn't what sells his beer. What sells is good taste, consistently good taste." In 1998, Caldera produced 590 barrels (two kegs to the barrel), jumping to 797 in 1999 and 1,045 in 2000. The projection for this year is 1,300 barrels. At $100 a keg, the company's revenue should top $300,000 this year In December, Mills will have repaid a $75,000 start-up loan from Southern Oregon Regional Economic Development Inc. (SOREDI) and begun a re-investment program. He's one of four shareholders and is backed by investors in Ashland, Bend, Arizona and Washington. "The bottom line is that stainless steel is expensive," Mills says." A lot of people spend $1 million right off the bat. The last six to nine months we've had a positive cash flow, paid the bills on time and had a little extra to buy equipment." Mills also has a knack for turning landlords into employees. Chris Fowler, the owner of the cabin that Mills rents, helps brew Caldera, is in charge of maintenance and fashions the company's distinct tap handles. Andy Svaren, whose family owns the Clover Lane warehouse where Caldera is brewed and aged, helps with sales and delivery. Scott Saulsbury, one of Mills' original brewing hires, is now back with the company after stints with Wild River Brewing in Grants Pass and Deschutes Brewery in Bend. Mills has modeled his enterprise after a couple of California breweries. He followed the wholesale footsteps of Mad River Brewery, a 12-year-old company in Blue Lake, outside of Arcata. Sierra Nevada Brewing Company of Chico has attained nationwide distribution "without loss of quality." His first decision was not to open a brewpub, where the failure rate is even greater than breweries. "That way I didn't have to go through the twin nightmare of operating a brewery and a pub and deal with the problems of pub expansion," Mill says. "If there is growing demand at a pub, you have to buy property next door to keep up. Ashland is a small town and I sell beer to a lot of restaurants. It's highly competitive here and I didn't want to have to compete with the rest of the bars and restaurants." Mills' entry point into the brewing profession - cleaning - remains paramount to his future. Anything less than perfect sanitation in the kegs and brewing equipment tends to alter flavor. "It's very difficult to get consistency with small batches unless you take extreme care, which Jim does," Parker says. "Brewing is 90 percent cleaning. When I brewed commercially I spent 90 percent of my time cleaning and the rest of the time worrying whether I cleaned right." Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com |
