POSTED ON DECEMBER 8, 2010:
Will Success Spoil Brewmaster Marshall?
Not as long as he can keep the locals hoppy. That, and with another local brewery on the horizon, business needs to boom
Beer did not play a disproportionately large role in the upbringing of Eric Marshall. The Tulsa native remembers that his father David, like most dads, enjoyed knocking back a cold one every now and then, so the idea of enjoying an occasional brew certainly was not something that was ever looked down on in his family, as long it was done legally and responsibly.
Nothing special, you might think -- until you hear about what David Marshall, a bagpipes player and a nut for Scottish culture, did with his house's suddenly vacant bedroom when his youngest son left home for college at the University of Tulsa a little more than a decade ago.
He converted it into a pub. An authentic Scottish pub, to be exact -- Marshall's Public House, its stained wood surroundings complete with a pair of taps, bar stools, stained glass, beer trays, an impressive collection of single-malt Scotch whiskeys, lots of Scottish memorabilia and, of course, plenty of tartan.
It's important to understand, a grinning Eric Marshall pointed out, that this type of thing was not considered excessive in his father's house.
"It wasn't like an overindulgent thing," he said. "It was like, 'Hey, we've got this extra room, kind of like a library, let's build this pub for entertainment.' It's definitely a Scottish pub. It's basically a room for him to put all his junk he's collected over the years."
Marshall recalled that when the Tulsa World featured the pub in a story in February 2009, it got picked up by a wire service and came to the attention of a reporter for the Glasgow Times. The reporter called David Marshall and interviewed him, and the next day, the story of Marshall's Public House was well known to the residents of that city, as well.
Should any one of those Glasgow Times readers ever find themselves in Tulsa and longing for home, Eric Marshall figures, they know just where to go now to find a touch, and enjoy a taste, of the old country. He's pretty sure they wouldn't be turned away.
Beer, after all, plays an important role in the way the 29-year-old Marshall views the world in general and his community in particular -- certainly not in any three-kegger, chug-'til-you-puke sort of way, but more in the sense of how the beverage has served as a community-building agent throughout human history. It's been that way for Marshall since he studied in Germany during his TU days, when he earned a degree in international business, and wound up delivering a lengthy oral presentation on the history of brewing.
"Obviously, Germany is known for brewing and for beer," he said. "Just the way that beer is part of their culture, locally or regionally or whatever. It was fascinating for me. I've always been fascinated with culture. And so relating something like that to culture stuck out to me."
It's no coincidence, then, that that emphasis on community serves as one of the guiding principles at the Marshall Brewing Company, the Tulsa-based brewery that Marshall started in April 2008. In less than three years, the brewery has become a profound success in a city that had little or no brewing tradition, thanks in no small part to its founder's efforts to make his venture an integral part of Tulsa's social fabric.
One afternoon in August, Marshall had time to sit at a table in the tasting room of his brewery at 618 S. Wheeling and reflect on that progress, most of which has come during the worst economic conditions in decades. In the adjoining warehouse/brewhouse sat four new stainless steel tanks, the last one of which had just arrived that morning. The new tanks will allow Marshall to increase its brewing capacity by a whopping 80 percent -- and even that may not be enough to keep up with demand, according to the owner.
"It wouldn't surprise me if we have to order another tank or two before year's end because we're selling more beer in Oklahoma right now than we can make," he said. "So these tanks will definitely help us."
Booming sales totals are one thing, and Marshall certainly doesn't want to understate their significance. But for him, it's just as important that Tulsans have embraced his product as their hometown brew and, in many ways, become the best salesmen he could hope for.
"Absolutely, and that was one of the goals from the beginning," he said. "We want to make a beer that people are proud of, that people will say, 'Hey, this is my local beer, this is our beer in Tulsa, this is one of our beers in Oklahoma.'
"And that's very important, because the people that are out there advocating for you, you want them to take ownership. You want them to believe in what you're doing."
Getting his feet wet
Authentic Suds. “I think the ultimate goal is to get to a point where we feel like we can sustain and continue to make a good beer, do some fun things, keep everybody around here employed, taken care of, then be able to use the brewery to do some good things, do some charitable stuff,” Marshall said. “That’s the ultimate goal — to make sure my people are paid and to be a good citizen.”
Marshall wasn't the first member of his family to develop an interest in an art that has been a part of human culture for 5,000 years. His older brother Adam became a home brewer during his law school days at the University of Oklahoma, and Eric would visit him on weekends after he started at TU. Together, they'd brew gallons and gallons of beer for Adam to serve to his buddies at tailgate parties before OU football games.
That may have sparked his interest in brewing, but it would still be a few years before the youngest Marshall would even begin to think about carving out a living as a beer maker. His experiences studying in Germany during his junior year opened his eyes to the possibilities, particularly after he toured the facilities at Krombacher, a large regional brewery located only five miles from where Marshall lived with his host family.
"I'd never toured a brewery before," he said, explaining that he simply wandered in the door at Krombacher one day and, in half-English and half-broken German, explained that he'd like to look around. Company officials were accommodating, and Marshall liked what he saw.
"I had a great experience and was fascinated," he said. "Got bit by the bug."
Marshall returned to Tulsa for his senior year. By then, his brother had graduated from law school and had returned to his hometown to practice. The two brothers then set about trying to convince their father to invest in a fairly elaborate home brewing system so that he could serve his own beer in his own pub. Faced with that kind of irrefutable logic, David Marshall could generate no argument against their proposal.
"He said, 'That's a hell of an idea,' " Eric Marshall said, laughing. "And do we started getting a little bit serious with it."
Marshall spent his senior year pondering his career options, realizing more and more that what he really wanted to do was what he was already doing, albeit on a much larger scale. He began to research the business of brewing but still wasn't sure how to break into the field.
Then Marshall ran into some family friends during a charity event one night. When they asked what he planned to do with his degree, Marshall responded he was interested in becoming a brewer.
"And they were like, 'Our son's best friend is a German brewmaster in Munich. We'll have to get you guys hooked up,' " Marshall said.
Even better, that German brewmaster -- Stefan Grauvogel -- had already spent a fair amount of time in Oklahoma, setting up the Royal Bavaria brewpub and restaurant in Moore, an Oklahoma City suburb. At the urging of those family friends, Grauvogel called Marshall the next day, and the two agreed to meet in Germany when Marshall graduated from TU in the spring of 2004.
"We met up and outlined a course of study, and then he got me fixed up with some apprenticeships independent from the course work," he said.
Marshall's studies were delayed so that he could undergo a major knee operation, and it wasn't until early 2005 that he returned to Germany to begin learning his craft. He quickly completed his studies under Grauvogel, then was introduced to another German named Ralf Gerwert, a second-hand brewing equipment dealer and specialist who travels the world setting up breweries, and buying and selling equipment. Gerwert kept an office in a large, regional brewery, and he took the young Marshall on as his student, introducing him to another course of independent study. When that phase of his training was complete, Gerwert sent Marshall to a number of breweries throughout the country -- six in all -- to serve apprenticeships lasting anywhere from a couple of weeks to several months.
In November of 2005, Marshall came back to the United States for good, landing a job at the Victory Brewing Company in Downingtown, Pa., right outside Philadelphia. It was much bigger than any of the breweries he had worked at in Germany and produced a greater variety of beers.
"I had a great experience there because I learned everything," Marshall said. "I started working in the cellar cleaning tanks and kegs and filtering, then worked my way up to the packaging side and the brewing side of things. They were also going through one of their first waves of a big expansion, so I got to experience that and see what planning was involved with it, see how they were able to maintain or balance everything in terms of keeping production going and then working at expansion at the same time, which was very valuable for me. I think it helped in the start-up side of things (for Marshall Brewing). I worked with some great people, learned a lot, had a lot of fun."
Marshall had always intended to return to Tulsa at some point and open his own brewery, though he believed he would need to spend several years working at other breweries before he was ready to take that step. But in early 2007, during a trip home for the holidays, he ran into his friend Elliot Nelson, an entrepreneur who a few years earlier had opened a large pub in downtown Tulsa at a time when the conventional wisdom held that such a move would be a certain failure. Three years later, McNellie's Pub was one of the most successful bar/restaurant operations in the city, and was on the leading edge of the downtown revitalization effort.
So when Nelson -- who was aware of Marshall's goal of returning to his hometown and opening a brewery -- suggested the time to make that dream a reality had come, Marshall listened.
"He was really key in saying, 'Hey, I think the market's here. I think the time is right. You should really consider shortening your experience side of things and getting this going if you feel like you're at a point where you can,' " Marshall recalled about their conversation.
The would-be brewer knew it would be a risky move to speed up his personal time table, but when he considered the success Nelson already was enjoying, he realized it might be time to throw caution to the wind.
"Of course, he's obviously done well for himself," Marshall said of Nelson. "I put a lot of value on what he said on that front. I think I was ready to make a move at that point. I felt like at Victory, I had learned what I was going to learn there. I could have stuck around and probably learned a little more, but I felt like I was at a point where I had enough information in my head and enough knowledge and experience that I could really go ahead and jump into doing this, and learn some of the other stuff as I went along."
Nelson still recalls that fateful conversation clearly more than three years later. He listened as Marshall related his concerns -- his desire not to rush into anything, his worries about being able to raise enough capital to get the project off the ground and his insecurities about whether he would be up to meet the demands of operating his own company -- and did his best to address those without trying to talk his friend into anything he wasn't ready for.
"There's a lot of pressure that goes along with running your own business, and that can be difficult," said Nelson, who in many ways saw Marshall's idea as a venture that would serve to complement what he was trying to accomplish through McNellie's, which offers hundreds of beers from breweries around the world. "But I think I was able to ease his mind about a lot of other things, particularly how good the market was. To a certain extent, I don't think we've gotten close to topping the market here. It's still ripe, and it definitely was before he started his brewery. That beer culture was developing here, and people had started to drink better stuff."
When Marshall's return to Tulsa was still in its theoretical stage, he had wrestled with the idea whether he wanted to open a production brewery or a brewpub. But as he acquired experience and saw more of both sides of the industry, the answer presented itself, he said.
"As time went along, it became more and more clear that, hey, I'm a brewer, I don't run restaurants," he said. "Actually, with the way the (state) laws are, I didn't want to be limited to 3.2 (percent) beer, which brew pubs are limited to here. So it just became more and more clear that that was the model we wanted to go after."
All you need is cash
In 2007, Marshall quit his job at Victory, moved back to Tulsa and committed himself to opening the city's first production brewery. Only one thing stood between him and his dream -- the $600,000 he figured he needed to buy the building and equipment, and provide enough operating funds until a little cash started to roll in.
Marshall had arrived at that figure after putting his education to good use and spending four months compiling a business plan. Setting up shop in a spare office his uncle had provided for him, he approached that task like a regular job, going in each day, researching the industry thoroughly, carefully crafting a plan and compiling a presentation that would be used to attract investors.
No sooner had he finished the first version of the business plan than commodity prices spiked, meaning the cost of the hops, malts and grains Marshall would be using in his beer quadrupled, going from $5 to $10 a pound to $20 to $25 almost overnight. But in a way, the timing of that increase was fortuitous, he said.
"We had to adjust our price at the very beginning to account for that, whereas other people were maybe 10 or 15 years in business and were like, 'Oh, man, now we're going to have to change completely -- we're going to have to account for those prices,' " he said. "We were able to build our model around that instead of having to adjust on the fly. It's helped us out a lot because our pricing at the beginning may have been at the higher end, just to remain competitive, and everybody else has had to adjust their prices. Our profit margin is a little better because of that."
Marshall and his brother began holding meetings for potential investors at their father's personal pub and serving guests test batches of the beer they hoped to produce. There was no hard sell, as he recalled.
"We just put together a little dog-and-pony show, which wasn't much," he said. "It was just, 'This is what we're looking for, this is what we're going to do, this what you've got to worry about, this is what the benefits could be. This is why we think Oklahoma, why we think Tulsa.' "
Marshall was surprised at how well those meetings went.
"That was one of the things I probably sweated the most that was probably the easiest," he said, noting that a number of family members, family friends and friends of family friends quickly came on board. "It was overwhelming the people that were interested."
Not all those individuals were people who were interested in owning a brewery, Marshall said.
"I think a lot of it ended up being people investing in me and not so much the concept, but knowing how much effort I put into it, knowing the kind of person I am, knowing my family," he said. "That really was a good selling point to a lot of them. We've got a great network just within our family."
Marshall was honored to have so many of those people express confidence in him and trust him with their investment. But he also felt more of an obligation to live up to that confidence and trust than he would have if more of those investors had been strangers, he said.
"That is an added pressure, and that plays into things a lot -- especially in the beginning, when it was like, 'How are we going to sell these first kegs?' " he said. "I think the greatest thing has been how understanding people are and how much they believe in it and how supportive they are. So, yeah, that is an added pressure. But at the same time, it's a little more motivation: Hey, this isn't just my dollar. I'm not just screwing myself up here. If things go bad, then how am I every going to be able to talk to him again, you know?"
Fortunately for Marshall, there was no shortage of immediate family members who already had demonstrated considerable business acumen. His father was well regarded in Tulsa's business community for his accounting and financial skills, while brother Adam was named the Tulsa Bar's Association's top young lawyer in 2009 and handles a lot of small business clients. But it was Eric's mother Kathleen who provided perhaps the best example for her son.
"My mom is an entrepreneur herself," he said. "She started a small business out of her house and now has the largest children's clothing store in the Midwest," he said. "I always joke she's the only one who understands me, and a lot of times I think she is the only one. Because unless you've been there, done that, you don't really know what's it's like. She's been in business probably 25 years, and she started making hair bows out of a room at our house, expanded to our garage, expanded into a store front, then went to Utica Square. Now, she's out at 81st and Harvard."
It took awhile to put all the pieces together. The most difficult part of the proposition was locating a facility that could accommodate the massive brewing tanks, as well as provide the floor space necessary for bottling and storage, Marshall said. But he found a building he liked on Wheeling, just a few minutes from downtown Tulsa, and set up shop. In April 2008, the first kegs were filled with Marshall Brewing Company beer and shipped out to a handful of local bars and restaurants. The company's founder could only hope they would be returned quickly in need of a refill.
Keep 'em coming
To Marshall's delight, that's more or less exactly what happened -- and has continued happening for the last two and a half years.
"That was the thing from the beginning," he said, recalling his mindset as he awaited public reaction to his beer. "We can start a brewery, and people are going to try the beer because it's local. But it's up to us to make sure it's good so people keep coming back. I've got four new tanks out there that say we're doing our job all right."
In 2009, the brewery's first full calendar year, Marshall produced approximately 1,200 barrels of its four signature beers -- McNellie's Pub Ale, Atlas India Pale Ale, Sundown Wheat and Old Pavilion Pilsner. This year, Marshall said, he anticipates producing 2,000 barrels.
"Every month this year we have continued to grow and grow," he said. "Our numbers this year have been bigger in comparison to every month over last year. This summer, this (July), was the biggest we've ever had, and it was something like over 160 barrels out of here over the month."
Those numbers likely will increase this fall as Marshall's new bottling line is able to begin packaging the IPA and wheat in six packs, as opposed to the 22-ounce bombers they have been available in up until now. The pub ale and pilsner have been available in six packs since early this year.
"As soon as we get the other six packs out, that number could potentially double just because of a lot of people drink beer at home, and that's really where the biggest growth in the market has been," Marshall said of his 160-barrel-a-month record. "As the economy gets a little rough or has been, people don't stop drinking beer. They just don't go out and drink as much."
Marshall Brewing Company products are now available in 180 to 200 bars and restaurants throughout the state, and that many or more liquor stores, from Weatherford in western Oklahoma to Ardmore in the south and Durant in the southeast, as well as Oklahoma City. By early 2011, Marshall plans to be marketing his beer in surrounding states, concentrating on southwest Missouri, northwestern Arkansas, Kansas and Texas.
But Oklahoma -- and Tulsa, in particular -- will remain his primary market, he said.
"I don't think we'll ever see another Sierra Nevada, anybody that's ever going to become 600,000-plus barrels a year, or Sam Adams at 2 million barrels a year," Marshall said, assessing America's craft brewing industry. "I just don't think that's going to be the case anymore. I think there are enough small, regional breweries (with distribution to just a few states).
"Obviously, your home state will be your key and then little distributions here and there," he said. "I think the ultimate goal is to get to a point where we feel like we can sustain and continue to make a good beer, do some fun things, keep everybody around here employed, taken care of, then be able to use the brewery to do some good things, do some charitable stuff. That's the ultimate goal -- to make sure my people are paid and to be a good citizen."
Since its first anniversary, the Marshall paid staff has gone from one full-time employee (Marshall) and one part-timer to three full-timers and two part-timers.
"I imagine that number will probably have to grow in the next year or so," he said.
Marshall takes a lot of pride in making his brewery a place that attracts people who are just as enthusiastic as he is. Anyone who isn't passionate about beer making need not apply at Marshall Brewing.
"My job is to make sure when I bring people in here, the corporate culture is passed on to them," he said. "We want to keep the energy and the momentum going, make sure we're doing stuff that's fun on top of everything that makes money."
That "fun stuff" includes being able to help out those who have helped him, including Nelson. That's why Marshall approached his friend shortly after his brewery opened with the idea of naming his pale ale in honor of Nelson's flagship property, McNellie's.
The decision to do that has led to its own set of problems -- Marshall said many people labor under the mistaken impression that Nelson owns a stake in his brewery, which he is prohibited from doing by law -- but Marshall doesn't regret it.
"The reason I approached Elliot in doing that was just because he was very helpful," Marshall said. "In terms of timing, he was keeping me in mind to say, 'Hey, it's time to come back.' Getting out and saying, 'Hey what can I do to help you?'
"He wanted to see this happen," Marshall said. "He believed in what we were doing and believed it was a good thing for Tulsa. Obviously, he's a businessman, and he's doing a lot of things downtown, but I think deep down, one of the biggest driving factors for him is he wants to see Tulsa grow and revitalize and be successful, as well."
Nelson certainly appreciated the gesture.
"I always wanted a really good session beer, an English-style beer that was approachable and really drank well," he said. "I think it's his best beer, although I think there are certain people out there who won't carry it because our name is on it."
The two have collaborated to bring cask beer -- unfiltered, unpasteurized ale that undergoes conditioning in the cask, from which it is served without benefit of a pressuring agent such as carbon dioxide -- to McNellie's. Nelson said Draft magazine recently named his downtown pub as one of the top 10 places in the country to drink cask beer.
"You can only do cask beer if you have a really good local brewery willing to do it with you," he said. "It's pretty popular back east, where you have a lot of local breweries. The beer is really fresh, with live yeast, so it's a dynamic product. But the only way to do it is if the brewery is really close because it doesn't ship well. We can't even do it at the McNellie's in Oklahoma City. It's that sensitive."
Nelson and Marshall also share a belief in using their businesses to help promote worthy causes. The brewery has participated in a variety of charitable fundraisers over the past few years, including the weekly Charity Okie karaoke events at Joe Momma's Pizza for the Make a Wish Foundation, the First Draft benefit for the Tulsa Press Club's scholarship fund and Wild Brew, an annual beer tasting and fund raiser for the George Miksch Sutton Avian Research Center in Bartlesville.
"Maybe that gets back to a core business belief for both of us," Nelson said. "There's more to it than my pub or Eric's brewery. He gets that, and, hopefully, it works for us, too, because we're always looking for partners, and it helps to know somebody like that."
Marshall said he receives so many requests to donate beer for those kinds of events that he could literally give away every drop he produces, meaning he finds himself having to turn down requests from worthwhile organizations. He looks forward to a day when that isn't the case.
"We try to do as much as we can now," he said. "Time commitment wise on my part hasn't been what I'd like it to be, but in that sense, we try to do as much charitable stuff as we can in the community. Just because I think it's right. Doing the right thing has always been taught to me. We're not in business to be shady or make shady decisions. We want to be a part of Tulsa, and that's doing good in the community, being involved in charity."
Kari Culp, an account executive at Schnake Turnbo Frank, a Tulsa-based public relations firm, has worked with Marshall on Wild Brew every year since the event's inception. She counts the brewery's participation as invaluable in making it a success.
"Anytime you can have a local brewery involved with and working on a beer-tasting event, it's great," she said. "You get the kind of feedback from them you wouldn't get from anybody else."
Culp sees Marshall's work as a good example of the kind of giving-back-to-the-community spirit that organizations like Tulsa's Young Professionals work hard to promote.
"Eric Marshall and Marshall Brewing Company are great representatives for Tulsa," she said. "It's a great company all Tulsans should be proud of. And when I go to a bar and want to have a beer, I'm going to drink something local."
As bright as the future seems for his once-fledgling venture, Marshall doesn't kid himself when it comes to comparing his company to such industry big boys as Coors, Miller or Budweiser -- which still control more than 90 percent of the American beer market, even with the unprecedented growth of craft breweries in the last 20 years.
"Our goal is not to get people drunk," he said. "Our goal is to get people to enjoy our product. We want to make beer that people will enjoy, that people will savor. People are not just going to guzzle our beer. That's not what we're going for. We're in the business of making beer that tastes good ... that is more of a gourmet approach.
"Will that side of things ever outweigh the other side of things? Probably not, and, if so, it won't be for a long time, because for the longest time, everybody was accustomed to drinking only that one style of beer. They've made a name for themselves, and people have come to believe that is what beer is supposed to taste like. On economies of scale, they can make it a lot cheaper than we can. They use a lot less expensive products, but, of course, that really takes away from the big, bold flavors that they can put in their beers, as well."
In addition to its four signature beers, Marshall also produces a couple of seasonals, Big Jamoke Porter and Oktoberfest Lager. Look for the number of those offerings to increase, as well.
"Our four core beers, the importance there is, we want to make four that are more or less everyday beers," he said. "Do we want to push the envelope and make crazy, over-the-top beers? Hell yeah, we do. That's what brewers want to do. We're all brewers. This is a business, but we're all beer geeks, too."
Marshall said he welcomes the addition of another production brewery, the planned Spring Loaded Brewery in Sand Springs, to the local market.
"I would like to see it happen," he said. "It would be cool."
Marshall Brewing has had the Tulsa market all to itself so far, but its founder believes there's plenty of room for other craft beers.
"I don't necessarily look at it as competition," he said. "In the grand scheme of things, there are about 1,600 craft breweries in America for not even 10 percent of the beer market. I think the more opportunities there are for people to try craft beer, the better.
"The Oklahoma brewing scene is very small but growing at the moment, so I think it's a good thing. I have no negative views about it at all."
Marshall isn't so consumed with the demands of running a brewery that he forgets to appreciate the uniqueness of his personal situation. He considers himself fortunate to have a supportive wife, Mandy, who understands "brewery time" -- that when Marshall says he'll be home in 30 minutes, she shouldn't expect him for two hours -- and a way of making a living that is also a lifestyle.
"I've taken a hobby and made it my career," he said. "That's what a lot of people want to do, and I've done it. I still look forward to coming into work every day. My duties have shifted quite a bit from what they were when I started to do what I'm doing now. But I still enjoy coming in here. I enjoy walking in here and knowing we're going to have a couple of hundred kegs go out the door this week."
Most of all, he looks forward to the challenges of managing a business that has yet to plateau.
"That makes it fun," he said. "That keeps the excitement behind it. Yeah, I'm only a couple of years into the game, but still, it is a lot of physical, manual labor. There's a lot that's repetitive, and it can get very monotonous. But, at the same time, you're making beer. And at the end of the day, that's a lot better than a lot of other things."
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