They Talk Beer Here

Steve Melito: Hey, welcome to New York State Manufacturing Now, the podcast that’s powered by FuzeHub. I’m your host, Steve Melito. Today, we’re talking to Paul Leone and Meghan Connolly out of the New York State Brewers Association. FuzeHub is exhibiting at the New York State Brewers Conference from March 22nd to 24th at the Albany Capital Center. So today we’re here to talk about beer. Paul and Megan, welcome to the podcast.

Paul Leone: Hey, thanks for having us.

Meghan Connolly: Thank you so much.

Steve Melito: It’s a great honor to have you here. And Paul, let’s start with you. Since you’re the executive director, tell us a little about yourself, if you would. For example, how did you get involved with the New York State Brewers Association and what did you do beforehand?

Paul Leone: Wow, that’s a long answer, but I’m going to shorten it up real quick for you. I really began my career in baseball, worked for the National Baseball Hall of Fame for a number of years, and then got into cable television and traveled around the country doing TV shows for a variety of networks. But while doing that, fell in love with craft beer because you travel a lot. And so I had the bright idea of to try to write several beer TV shows, pitched a few, I mean, really fell in love with the community. And so I got to a point where television was just not as fun as it used to be, and really looking for a career change. And I just happened to be at the right place at the right time and know the right people. So here I am talking to you, which makes me the luckiest guy in the world. I got to tell you.

Steve Melito: TV, baseball and beer. That’s pretty amazing right there. So Meghan, you’re the director of partnerships, which is the key role, especially with the New York State Brewers Conference coming up. What is your background like and how did you get involved with the organization?

Meghan Connolly: I’ll start with the second question, how I got involved. Nine years ago, I wanted to work in craft beer. My background was in sustainability communications and marketing. And I wanted to work in craft beer but didn’t want to work for a brewery. I didn’t see an obvious connection of how my skillset could benefit a brewery, so I was looking at a higher level from an industry perspective. I was given Paul’s cellphone number by a friend of mine who owns a brewery in upstate New York, which sat on my desk for six months. And one day I looked at the number and I said, “I’m ready to call him.” I cold called him and Paul said to me, “Well, I’m driving. I have 45 minutes to my destination, so who are you and what have you got to say?” And I pitched my services being partnerships and sponsorships and tried to inspire Paul with the idea that partners could help fund the organization so that the organization could then in turn better support the brewery members. And Paul fell for it. So that was almost nine years ago that Paul and I have been working together ever since. And we both have a traditional backgrounds in the craft beer industry, so does everybody else really. And that is part of the beauty of why both of us wanted to work in this industry. It’s an incredible myriad of backgrounds and cultures and colors that come together.

Steve Melito: Oh, that’s excellent. And nothing like being in the right place at the right time. You had a captive audience with Paul, it’s great. So Paul, craft beer is fun to talk about and even more fun to drink, but it’s also a business. What is the importance of that business to New York state in terms of jobs, revenues, and other key metrics?

Paul Leone: A few years ago pre COVID, we actually did a rather large economic impact study, and we made sure in that study that we only counted for the small craft breweries. We’ve got an Anheuser-Bush facility here, we’ve got the Genesee factory, so we have some sizable breweries in New York state, and we wanted just the small craft breweries. And so that came back as a $5. 4 billion economic impact, just the small breweries in New York state, 20,000 jobs and a lot of revenue coming in for tourism and of all angles. And so we really were shocked and happy by those numbers. I know those numbers probably have changed a little bit since that time because of COVID. Maybe some of the job numbers have gone down. But interestingly enough, there were about 420 breweries when that study was done, and there are 528 now. So we continue to grow.

Steve Melito: That’s excellent. And Meghan, let’s talk about the companies that are members of the association. How many are there? Where are they located? And is there such a thing as a typical member? And I got the sense from you that there’s not, so this is fun.

Meghan Connolly: Correct. There’s not. So as Paul said, we have 528 breweries, but when we think about the New York craft beer community, we include the consumers and we include what we consider what we call allied members. Allied members are a critical pillar of that community. And the allieds are really any business that wants to do business with breweries. So you look at ingredient suppliers, equipment manufacturers, law firms, accounting firms, anyone that will serve a brewery through a product or service basically qualifies as an allied member.

Here in New York, we have about 150 allied members throughout 26 different industries. And the way that I look at my role is really twofold. One is that I work to gather resources and share those with the breweries so that they’re not spending hours googling a new accountant or the latest hops. We kind of feed those resources directly to our brewery members. And then secondarily, my role is revenue generating, where we help to kind of redistribute in the industry and we give these allied members access to these brewery prospects in exchange for revenue that again, in turn helps us better meet the needs of our breweries through advocacy, legislative initiatives, marketing promotion, so on.

Steve Melito: That makes sense. I went to the conference last year and I remember walking around and talking to an insurance agency that offered insurance and cybersecurity and then talking to a chemical company. And it’s a big ecosystem right?

Meghan Connolly: It is. Breweries have so many diverse needs, like I said, from services to products and products from massive million dollar spend equipment all the way down to glassware for the tap room and t-shirts for promotions. There’s a huge variety of businesses that work with breweries.

Steve Melito: Excellent. So Paul, let’s talk about the term craft beer. So when a lot of people hear the word craft, they think about small scale production and even things that are made by hand. How hard is it to go from a home- based operation to low volume manufacturing?

Paul Leone: That’s a great question, Steve. And there are a lot of home brewers right now all around and a lot of really good home brewers. And so to go from generally a one barrel system, and for those that don’t know, a one barrel is two half kegs, everything’s measured by barrels. Most are either five gallon or one barrel systems at home. It’s completely different to not only go professional and upscale depending on the size of the system that they want to open and operate. So let’s say they want to go from a one barrel to a five barrel because they’ve got business plans to sell kegged beer or distribute beer, but recipe formulation from a small system to a big system to an automated system is really hard to do. And the biggest challenge in all of it is the fact that it’s a business. So a lot of folks really just want to make beer, and then they said, “I’m going to open a brewery because I make this really great beer.” And Megan sort of touched on it too, and the reason why she’s so important to work with all of businesses is because there’s so many components that go into owning a brewery. It’s a business. So there are taxes, there are legal issues, there are counting issues, there are regulatory issues, all of those things. And we find it interesting. Somebody opens a brewery for the first time and they just are sort of scratching their heads because really they’re spending more time on the business side of things than they are on the brewing side of things. So it’s not really as easy as you would think, but brewers are such passionate people and brewery owners are, and that’s why you see 528 of them in New York.

Steve Melito: That’s an awesome answer.

Meghan Connolly: And that number is we gained 28 breweries during COVID. The growth rate of the industry in New York actually has outpaced the national growth rate for the last several years. And I didn’t mention this in your previous question, but it’s worth saying that when I did cold call Paul nine years ago, there were fewer than 150 breweries in the entire state, and now there’s 528.

Paul Leone: And a staff of five of us managing it.

Steve Melito: So why is that? What happened? How do we go from 100 to 500? It’s an amazing thing. Did people’s taste just change? I mean, what are your ideas on that?

Meghan Connolly: Well, Paul and I probably have different perspectives on it, so I’ll go first. For me, it is the legislative climate has been pretty supportive and pretty positive here in New York. We haven’t had to fight many battles that other states face. And that’s an area where Paul could get into more detail. And also I think that the businesses have really helped support the industry because we do have a deep network of allied members and sponsors and partners, we’ve been able to funnel resources to New York that maybe other states don’t get. And it’s cyclical. If an allied member is getting a lot of business from New York breweries, they’re going to increase their level of support to the guild. The guild provides more resources to breweries. More people want open breweries, more breweries open. There’s more business for allies. And it’s this beautiful cycle where everyone is winning. And yes, that is kind of an idealistic viewpoint, but I have seen firsthand that it works that way.

Steve Melito: Sure, it’s a overall ecosystem, right?

Meghan Connolly: Mm-hmm.

Paul Leone: Yeah. Legislatively, we are probably one of the most liberal states in the entire country. You can do an awful lot here. And I always say, regardless of your politics, beer is bipartisan. And we’ve really held to that. And legislatively, on a state level, on a federal level, we’ve had a lot of support. And prohibition ended 90 years ago. And there are a lot of folks that understand that there are some rules and regulations that need to go away just for the sake of growing business. And you’ve seen that a lot here in New York state. Is it perfect? No. But believe it or not, in 2014, you couldn’t even buy a pint of beer in a brewery. And obviously it’s something we just do naturally. We helped get the Craft Act passed, which allows breweries to sell by the pint. So it really wasn’t that long ago, and we’ve come a long way, and that’s why you see the growth that you do.

Steve Melito: That’s good. Paul, I really like that phrase, “Beer is bipartisan.” Can we get that on a t-shirt or something?

Paul Leone: I know we’re almost at that point where we need to remind everybody that in such a hypersensitive political climate, everybody can agree on beer for sure.

Meghan Connolly: Well, and that really is actually why I got into the industry. I have no background in politics, nor do I want one. But for me, craft beer is really a conduit to a conversation and conversations are what build community. So coming home from college, walking in the front door, my dad would be standing there saying to me, “What are you having to drink,” not, “Will you have a beer with me,” because then the answer could have been no. But just this invitation to sit down and have a conversation kind of using a craft beer as the excuse to do so, those are the memories that drew me to this industry in the first place. Nothing else in history, nothing else in our culture kind of brings people together the way that craft beer can.

Steve Melito: And bringing people together is a big part of your big event that’s coming up, the New York State Brewers Conference. And Meghan, all companies need to overcome barriers to growth. But what are some of the obstacles that brewers face and how can the conference help them get the information they need?

Meghan Connolly: So Paul touched upon that a little bit. There are really great home brewers out there, but transitioning from a hobby to a business is a big deal. And a lot of people have the passion. They’re very smart people. I will say in all the industries I’ve worked in my 30-year marketing career, I’ve never been part of an industry with so many smart, motivated people before. It’s a matter of all the business pieces, the accounting, the regulation, the legal, all those pieces is what makes it difficult. And so the conference kind of pulls these resources together in one place so that if a brewer walks in with 20 questions, there’s going to be somebody at that conference who can answer every single one of their questions. It is the premier event for our industry. It is the single biggest opportunity for allied members to do business with breweries and it’s the single biggest opportunity for breweries to kind of get everything they need in one place. And every year we survey conference attendees, we ask, “Did you meet someone with whom you are planning on doing business?” And I’m really proud to say that every year, 100% of survey respondents answer yes. So that makes the conference worthwhile to us. And another interesting statistic is when we survey our brewery members and ask them about the allied side of things, 80% consistently say that they look to whether or not a company is an allied member when deciding whether or not to do business with them. So in New York, what we see is that the breweries want to and understand the value of supporting those companies that are giving back. And so the conference pulls it all together. Again, I talk about here in New York, it’s not three distinct divisions. It is a single community of businesses which include the breweries.

Steve Melito: Excellent. That’s why I hope that we get to listen to this podcast, not just the brewers, but companies who could potentially serve the industry as allies and get them keyed into the fact that you’ve got something great to offer. Paul, what are some other highlights of the New York State Brewers Conference? I want to ask you about the length because it’s a multi-day event and at FuzeHub, and we have a half day event, and sometimes we’ll hear from people, “I can’t be away from the office that long,” or, “I can’t get out of the factory floor.” Do you need to be there all three days? What do you get out of it?

Paul Leone: The brewing industry is really unique and the conference is, and believe it or not, just very specifically designed to meet a lot of things. And Meghan sort of just touched on a lot of it, but really the brewing industry is unique because there’s a lot of camaraderie and collaboration, and there’s a lot of thirst for knowledge. And so the way we’ve designed this conference is you’re going to get… education’s a huge part of it, and you’re going to want two days of that. Brewers are really want to learn more. Believe it or not, if we have a session on anything technical, especially like about yeast, it’s going to be the most crowded seminar. They’re just the thirst for knowledge.

But what’s unique about the brewing industry also is we want to bring everybody together for a few days and it gets them out of their little breweries or wherever they’re living, and they get to see what everybody else is doing. They get to have broader conversations. And you can’t do that in a half a day. You really need to do it through a couple of days. And we do it during the week, so it really doesn’t interfere on their weekends too much. We try to get them home by Saturday morning. But it’s the networking, it’s the education, it’s the connections to businesses and industries they might not know about and might not realize that they need from a business side of it. So really the two full days, which then we cap off with our competition award ceremony, which again goes back to the camaraderie networking piece of it. It’s all carefully designed and you really couldn’t do it less than two days.

Meghan Connolly: I think the year that everybody was snowed in, when the conference was at the Desmond Hotel, we all got snowed in for three days. I think there was more business done in those three days than the entire rest of the year.

Steve Melito: What a captive audience. So Meghan, is it too late to sign up for the conference? Say for example, you make steel tanks and you’re out in the Mohawk Valley of the Southern Tier, is it too late to sign up?

Meghan Connolly: Absolutely not too late to sign up. And we really do encourage as many allied members and breweries as possible to attend. Here in New York, we’re really, really conscious of that, split that ratio of breweries to non breweries, because we want it to be as rich of an experience for everyone in attendance as possible. So we monitor that number closely and we make sure that a minimum of 50% of conference attendees are brewery representatives. And right now we are at exactly 50%. Last year, we were able to get to 58%. So breweries are always the last to register for the conference. So we do expect to go up from the 50%. But any company at all that is interested or does currently do business with breweries here in New York state should really, really consider attending.

The fees are very low, both for allied and for the breweries. Because of the generous support that we received from the conference sponsors, we were able to keep the fee the same for brewers. And actually last year, we dropped the fee, so it’s only 199 for the first brewery representative and 179 for every other. That includes most of the meals. That includes the trade show floor of which we have 105 exhibitors. That includes the two keynotes, the 40 breakout sessions, the cocktail parties and happy hours, live music, and pretty much everything. And then for the allied members, the exhibit hall is closed. It sells out every year pretty much by December. We do the call for abstracts in August. We open the exhibit hall in September. It sells out very quickly. But whether or not a company is able to get in the exhibit hall, they should plan on being there and will have undoubtedly a fantastic experience.

Steve Melito: And it is a good time for sure. I will be there on the last day. The FuzeHub team will be there sort of in rotations throughout the week, and we look forward to it.

Paul Leone: How many trades those of you been to where you have beer from all day long? Just grab a beer. Come on. How fun can that be?

Steve Melito: It is the best. I was on a panel last year and I was drinking a beer. Oh, I just said that out loud. Now it’s part of posterity, but I think that you’re supposed to do that when you go to this event.

Paul Leone: You’re walking the walk. That’s right, Steve.

Meghan Connolly: Well, a lot of these allied members go to several state conferences. There’s a couple others in the country that are also fantastic. And the feedback that we’ve received is, “New York is the best in the country. There’s some others that are really good, but I will say about New York, it’s the only one that serves beer at breakfast.”

Steve Melito: And why not?

Meghan Connolly: So we have that distinction. And I will say we do a toast every year. And to be in a room with 700 people cracking a beer all at the same time and hearing nothing, but that…

Paul Leone: 700 of them.

Meghan Connolly: Is actually a really powerful moment and kind of reminds us that we are all in this together.

Steve Melito: Love it. Good stuff. Paul, I’m going to give you the last word on this one. Maybe opportunity for a little elevator pitch on the organization in general, why should brewers join your organization? Is it expensive? I think Meghan talked about that a little bit. It’s not. What is the value for them?

Paul Leone: Well, I mean, the value is really legislatively, we’ve handled a lot. We do a lot. We protect the industry for a long time. We need membership just to… We’re a 501(c)(6) first off, we’re a nonprofit and we need to fund the association in order to not only pass good legislation, but to prevent the bad legislation. And good Lord, there is bad legislation that is introduced every year that could really hurt the industry. But on top of that, marketing is another big side of what we do. Think New York, Drink New York is our slogan. And we really try to get New Yorkers and outside of New York, anyone else to drink New York State craft beer. And it really is affordable to be a member. And then you also have a staff of five people that are working all the time on behalf of every brewery in the state. So we really try to push that message along. We spend a lot of time at the end of every year visiting every region of the state because as you know, it’s a big state. And there are a lot of personalities in the state. Brewers in Long Island are way different than brewers in western New York, Buffalo region. And they all have their own issues. And so we really do a good job at trying to get out and visit with people. And the conference is a big piece of that, obviously, because they can all be at one place together at one time. So it’s hard for me. I know I’m on the inside, but there are a lot of reasons to be members of the New York State Brewers Association.

Steve Melito: Sold. I wish I made beer. I’d join up. Well, maybe I will someday.

Paul Leone: We’d love to have you.

Steve Melito: Hey, thank you. So we’ve been talking to Paul and Meghan from the New York State Brewers Association. Thank you so much for being on the podcast.

Meghan Connolly: Thanks for having us.

Paul Leone: Yeah, thanks for asking. We appreciate it.

Steve Melito: Our pleasure. So before we wrap up here, just a reminder that the New York State Brewers Conference is from March 22nd to 24th at the Albany Capital Center. That’s coming up, but there’s still time for you to register. FuzeHub will be there as an exhibitor, and we would love to see you there. If for some reason you can’t make it and you still need to talk manufacturing, you need to get over some obstacles to growth, reach out to FuzeHub. The way to do that is to go online to www.fuzehub.com , look for the button. It’s in the middle of the screen on the homepage, request an expert consultation and a member of our Manufacturing Solutions program will reach out to you and find out what’s going on. So on behalf of FuzeHub and New York State Manufacturing Now, this is Steve Melito signing off.