The F Word with Eric Marshall, Marshall Brewing Company

[TRANSCRIPTION]

Eric:    We had a little small issue there for a little while where we actually had some bottles blowing up on shelves.

Lauren:    This week on The F Word ...

Eric:    There's a contingent of people that really don't get what we do and think that we're just out trying to get people drunk and put them on the streets.

Lauren:    Eric Marshall, founder of Marshall Brewing.

Eric:    We knew full well in Oklahoma that if you make beer, you're kind of a bad guy, right?

Lauren:    Microbreweries are popping up around the US like crazy. In Tulsa, it seems like there's a new one opening almost every month and it's fantastic. But there was a time when the concept of a microbrewery was so foreign. And today's guest really blazed the trail for the industry. Eric Marshall is the founder of Marshall Brewing; Tulsa's first, full strength craft microbrewery. Of course, his beer is now found in tons of restaurants and liquor stores, but that required a lot of social and legislative work. After all, we're talking about alcohol in Oklahoma. Eric, thanks for coming in to share your story.

Eric:    Yeah, thanks for having me. I'm excited to be here.

Lauren:    So, this whole thing started with a trip to Germany. Tell us how that experience sparked the beginning of Marshall Brewing.

Eric:    Yeah. I think you can kind of look at it in several different ways, but I started ... I've got an older brother who's about six or seven years older than me and he was kind of starting to introduce me to some more of the craft beers and stuff like that. At the same time, my first job in college, or my job all through college, was working at a local liquor store. So, I was kind of exposed to some of the better beers, I guess, if you would say. And then my junior year of college, I went and studied over in Germany and really had the opportunity, obviously, to drink good, fresh, local beer. But it was really the first time I ever got to tour a brewery and really just experience how a brewery can be a huge part of the culture, a huge part of the community. And that was just really fascinating to me. So, I went into TU as an electrical engineering major and found out real quick that I wasn't an electrical engineer. But I loved the German language and one of the ... The actual head of the international business in German program was in one of my German classes, so he was in a continuing ed, wanting to learn a little German, because he had been over there to teach a few classes at the university that TU had a sister city with. Or a sister exchange with. And he really kind of persuaded me to look at international business and German, and that was what gave me the opportunity to then go study over there. I didn't start college by thinking, "Oh, man, I'm going to start a brewery." But having the opportunity to go to Germany and really experience that cultural perspective, I really just fell in love with it. So, when I came back for my senior year, my brother was finishing up law school at OU and we had done a little bit of home brewing prior to ... He did a little more than I did, but I helped him here and there. At the same time, my dad converted my old bedroom at our house into a home pub.

Lauren:    That's awesome.

Eric:    Yeah. So, we convinced him if he invested some money in a nice home brew system, that he could serve his own beer at his pub, which he thought was cool.

Lauren:    Dad of the year.

Eric:    Right? So, that kind of got my interest really peaked and I got really into brewing and then just kind of saw a need and an opportunity here in Tulsa. Really the only other production brewery at that point was our friends, Choc in Krebs. So, we saw an opportunity and it was also an excuse for me to get to go back to Germany, which I was certainly looking for that, 'cause I had a great time. So, I did that. After I graduated, went back to Germany and studied and apprenticed over there, and then came back and worked for a brewery in Pennsylvania for a little over a year. Kind of getting experience in the American craft industry. At that point, just decided it was time to come home. Kind of some different pushing from certain areas in terms of, "Hey, the timing's right to do this" and moved back and started to get things going here.

Lauren:    So that was in 2007, 2008, right?

Eric:    Yep. So, beginning of 2007 and yeah, so it took about a year and a half, roughly, to get things going and tons of challenges and obstacles and hopes as you can imagine. Like you kind of said in the intro there, making beer in Oklahoma was a little difficult at the time. So, yeah. It took a little longer, I think, than we had anticipated, but at the same time, it's probably par for the course.

Lauren:    And it was a complete culture change at the time. People weren't crazy about craft beer, especially in Oklahoma, like they are today. Can you talk about some of the challenges getting started, not only with the logistics, but also creating this culture change of convincing people, no, this is better than your PBR.

Eric:    Sure. Yeah, no. I think a lot of it started ... You had some places that were kind of early pioneers, I guess, in focusing on craft beer. Jeff Castleberry, who opened Caz's. Caz's has been going for a long time. I think it's the classic, sort of, Brady District dive bar, been around a long time. But he was one of the first to really have several taps and other than just your domestic stuff.  Then when Elliot Nelson opened McNellie's, I think that's when people kind of changed their minds or got their eyes opened to where they walked into a bar and there's 60 taps on the wall and there's a couple hundred bottles in the cooler. Things that kind of ... I always like to joke and say that things start on the coast and work their way to Oklahoma. Which, I can say that, because I was born and raised here. But it's very true in a lot of senses and so the craft industry was really mature in a lot of those markets and kind of working their way to Oklahoma. So, we embrace the opportunity to really have the ability or to be on the forefront of education in the craft beer and what a local brewery can do, and so on. But we also had to pay attention, too, to what the market would bear. We're coming into a state, again, where the majority of the people are drinking your macro lagers and stuff like that. So, in terms of flavor intensity and things like that, we really kind of had to be a little bit mindful. And a lot of that was sort of helped in the selection of our beers that we started off making. But, you know, there was also the challenge of the three-two versus six point beer, which I ... Six point is the common term, obviously, for strong beer; so in excess of three-two. So, we had to fight that misconception that we were only making three-two beer for the longest time and ...

Lauren:    How did you fight that?

Eric:    Again, it's just sort of the education piece. Getting out into as many accounts as possible and try to talk to people, doing as many festivals, charity events, things of that nature. Really being out in the community, out in the market, telling people that, "Hey, this is traditional craft beer. It's not ..." Everybody liked to use the term "watered down," which I hate. I hate that term because as we've grown in the company and started to look at new opportunities over the last several years, you can really make some great three-two beer. But I think at that time, there was just that, "I don't want that three-two beer. I don't want that swill." So, it was kind of fighting that misconception. I think there was also people ... Home brewing culture has gotten more and more significant over the years and I think a lot of people had the misconception that it was like, "Hey, these are a bunch of guys with a bunch of five gallon buckets, fermenting in a big warehouse" or something. So, I think a big piece for us was to bring that sort of point of sale or point of purchase person, being the bartenders, the wait staff, the people who are pushing the product, the folks from the liquor stores; bring them into the brewery and give them the experience of what we had. Another challenge that rose there was technically, we couldn't offer samples or anything like that, so that kind of started a whole legislative initiative, that I'm sure we'll touch on a little bit later. So those were kind of some of the early challenges from the standpoint of getting people to understand what we do. And it wasn't just that level, it was also the wholesale tier. There were certainly some challenges there, but over that process, we've really developed some very significant relationships, which is going to be helpful as we move forward into the new system, as the laws change, because the distribution system is going down to more of a three tiered system. So we've got great relationships that we've developed over time that's really going to be beneficial moving forward.

Lauren:    Speaking of relationships, you mentioned Elliot Nelson earlier; the owner of McNellie's Group. And he's really served as a big mentor to you. He helped you get your product in front of a lot of people. Tell us more about that mentorship relationship. How'd it'd start? What'd it looked like? How has it shaped you, having that really experienced mentor in your life?

Eric:    Yeah. Elliot is a great friend and you'll never hear my say anything bad about that guy because he's just been awesome. I think the greatest thing about Elliot is he really, truly, deeply cares about Tulsa and wants positive things for Tulsa. He's obviously had a lot of success starting with McNellie's and then developing other concepts. And then we've had the good fortune to kind of work together on the Elgin Park project downtown.

Lauren:    Which we love.

Eric:    Well, thank you, thank you. I actually met Elliot ... I think it was ... I think he opened McNellie's right around the time ... I think it might have be the day I took my last final of college and we were in the ... My parents and I went to McNellie's for dinner for the first time and he was kind of making the rounds, talking to folks and we just struck up a conversation and my dad always liked to kind of brag and be like, "Hey, this is what my son's getting ready to go do." Which, like any good day should, right? But it annoys you as a kid. It's like, "Dad, stop."

Lauren:    Yeah. There's that embarrassment.

Eric:    Starting to learn some of that with my own kids. But that's just how it works, right?

Lauren:    It's a cycle. A vicious cycle.

Eric:    But anyway, I kind of struck with Elliot, and he was real excited about the possibility of somebody wanting to start a brewery, but also going and taking the time to learn and do things properly. So, we had a great conversation at that point and then I went back to the fraternity house, grabbed a couple of my buddies who were all finished and said, "All right. Let's go grab some beers. Let's go down to this place; it's awesome." And we went back and Elliot came over and we really, again, struck up a conversation and talked a considerable amount more and we just really developed a solid friendship. So, that was very helpful, just having that initial point of contact. Who do I go to if I'm having some issues, from somebody that had done it before. Also, once it came time to, all right, now we're distributing product or we're getting to the point where we're ready to start selling beer, how do we get it from point A to point B? I knew some folks through my time spent working in a liquor store and was able to kind of develop a few relationships there, but he was really key in saying, "Hey this is who you need to talk to here, this is who you need to talk to there" and so on. But then also, from the level of the retail, he was like, "Yeah, I've got several places that will put your product on, but volume's the name of the game and you're going to have to get your product out there and get people interested in it." So, here's the 20 or 30 different bars in the state that are really focusing on variety and craft beer and so on and these are the people you need to talk to.

Lauren:    That's amazing support.

Eric:    Absolutely.

Lauren:    What would you tell someone who's like, "I want a mentor like that. I want someone to walk through my experience with me like that?" Is it just a matter of just initiating and ...

Eric:    Yeah, I think there's a lot of that. I think that you'll find, especially in Tulsa, it's very small business friendly; there's a lot of entrepreneurs. A lot people that want to see good things for Tulsa similar to Elliot that ... Yeah, there's that initiation, there's asking questions. I think when you get into some of this, I think a lot of people sort of have maybe just a fear that somebody is going to laugh at you or say, "Ha ha, yeah, I'm not going to tell you my secrets or anything like that." But I think you'll find a lot of people very willing to share with you what they've done, issues they've had, things that they've done right and so on. I think there's two sides of it. You don't want to just go to somebody and say, "Hey, I really love what you're doing and I want to do it, too. Tell me how to do it." You really have to have your plan, you have to have an idea of what you want to do, but be open to what other people have to say and be open to criticism or thinking about things a little differently. Because I think when you start ... I think I was, what, 25, 26 when I was getting this going, so I was young and dumb and there's a lot of things that it was like ... Not to say that 25, 26 year olds are young and dumb, but I was.

Lauren:    No, we get it. We get it.

Eric:    There's just this level of things maybe that weren't completely real in my head, that looking back now, is like, "Wow. That's a little crazy. I just signed my life away," type of thing. But I think that it kind of goes back to the old saying of ... One of my friends used this a lot, or a teacher or something that was, "Proper prior planning prevents pathetic performances." Kind of a tongue twister. It's just the idea of going out and gathering as much knowledge as possible because you're never going to do everything right. That's why I think it's important to gather as much information, kind of have some sort of plan as to what you want to do, do some of the basic research in terms of what kind of licensing I need and so on. Then go seek some of those people out to pick their brain, to ask them question to say, "Hey, this is what I figured out. This is what licensing I think that we need. Is there any other thing I'm not thinking of?" And then also just in terms of, "Hey, what are some challenges you've had that you'd be willing to share?" And so on. And I think you find that there's a lot of people very receptive to that. Too, I'm involved with a round table group; a CEO round table group through the chamber, which has been super valuable. Just kind of the idea that, hey, non-competing business, but we all have the same problems. We have similar issues and helping each other kind of navigate that stuff and it's been a huge thing for me, too, just to be able to go in and say, "Ugh. Man, I feel like such an idiot, I'm having this problem." To hear other people say, "Oh, yeah. That's very common. We've had that issue." Or, "Man, I'm going through the same thing right now. How can we figure some of this stuff out?" Is huge.

Lauren:    Entrepreneurship can be so isolating, so that is huge ...

Eric:    Yeah, absolutely.

Lauren:    ... to have people who can just empathize at the most simple level.

Eric:    Yeah, and I'm very fortunate, too, that I've got a family member that has ... My mom started her own business and so when I was in kindergarten or first grade, she started making hair bows and headbands out of a room in our house, expanded to the garage, then to a store, and now she's one of the largest children's clothing stores in the Midwest. So, I have someone in my own family that understood me and understood the challenges. So, I was able to kind of grow up around it and see some of these things. There was definitely a benefit there.

Lauren:    You were talking a little bit earlier about making mistakes and our show is called The F Word; we love talking about overcoming failure. Can you tell us about a moment when you messed up; made a really poor business decision and how you came back from that?

Eric:    I guess one of the biggest failures I guess would be sort of underestimating some of that stuff. Underestimating some of the challenges that were there.

Lauren:    Like what?

Eric:    I think in knowing ... We knew full well in Oklahoma that if you make beer, you're kind of a bad guy, right? I think that stigma is changing a little bit. But just in terms of how long things would take, some of the challenges you have dealing with certain agencies with navigating the city, state and federal stuff. We started at a time where there were about 1,500 craft brewers in the US and now there's about 6,500. So, we've had an immense growth in this industry since we started. So, from top to bottom, just navigating some of those issues. And fortunately I've got a brother who's a great lawyer and has been very key in all of that stuff and in fact, some of the initial licensing obstacles we had with the federal government ... Once we kind of got through some of that stuff, the federal government was actually calling him for advice ...

Lauren:    No way.

Eric:    ... on how to handle stuff, which is kind of crazy. You know, navigating some of the things with the Health Department that were underestimated. And the health department's really been great to deal with, but early on they didn't really know how to treat breweries; they didn't understand kind of what we do in the grand scheme of things and we were being treated the same as any other food manufacturer, which from the consumer protection side of things, that's great. But there are some things; the acidity level of beer, there's things that can't live in beer that will harm people and so some of the things that were kind of regs were a little bit ... we felt were a little bit excessive and so we kind of had to do ... Kind of back to the education standpoint, we had to do a lot of educating. Part of that was I continued to fight for about six or seven years to loosen up one of the regulations in terms of washable ceilings above the production area. That's been able to help other breweries. So, obviously, with us sort of blazing the trail on that front ... I wanted to make sure it was easier for people to start and didn't have to start through some of those hoops that we had to jump through. I guess that's another failure, is underestimating how much political involvement I would have to have from the get go, or from starting up.

Lauren:    Should have got your poli sci degree.

Eric:    Yeah, right? Yeah, you wouldn't have met anybody that hated politics and all of that stuff, more so disinterested in all that stuff more than me at the time. So now, going into that realm and trying to understand how sausage really is made in terms of all of that stuff. So, one of the big challenges that we had early on was thinking that, "Hey, yeah, we're set up. We can offer people samples" and so on. Well, that wasn't the case. So, our ABLE agent, who ... ABLE's the legislative entity, and so he was very helpful in terms of ... Or encouraging, I guess, in terms of "This is kind of how we see things. This is how you need to move forward on stuff." So, I think there was a little bit of naivete in thinking that, "Oh, this is going to be really easy. We should be able to offer somebody samples." And "Yeah, I know we can't sell beer out of our place, but we should be able to educate people and give somebody a sample." Well, that started basically a three year process of trying to get the laws changed to where, again, I thought it was "Oh yeah, we'll just put something in, have our local rep run it. We'll be able to sample here in a couple months." Well, that didn't happen.

Lauren:    Not so much.

Eric:    Three years later and a lot of kissing up and all that stuff. You can kind of learn that process and see that, oh man, there's a contingent of people that really don't get what we do and think that we're out just trying to get people drunk and put them on the streets, which is absolutely not the intent of, I would argue to say, any brewery, but any craft brewer out there. We're very much a quality or quantity type of industry. This is an art, a craft. And kind of the failure to realize that we need to focus on some of this stuff was pretty big on that front. So then kind of learning that process and moving forward was pretty key. Some of the other sort of failures and poor decisions ... As a small growing company, you're going to make mistakes, you're going to have hiccups, you're going to trip and we had a pretty significant one in terms of quality control, I guess. And that was quality control from top to bottom. We had one particular beer that the yeast drain always has a little bit of any issue and may do a little bit of secondary fermentation in the bottles, causing some foaminess. But we also had a problem with our glass supplier, and sort of having bottles that were out of spec and weak glass to where we had a little small issue there for a little while where we actually had some bottles blowing up on shelves.

Lauren:    Oh my gosh.

Eric:    Which you want to talk about scary. People getting injured and so on. Fortunately, we didn't have anything like that. There was a lot of nervous, sleepless nights in terms of trying to deal with some of that stuff and figure out how to move forward. Fortunately, it was a pretty isolated incident and we were able to kind of educate some of our customers, meaning the retail, the points of sale, sort of as to what we do. But then early on, having to buy back product to get it out of the market hurts. That hurts the cash flow, hurts everything as you're trying to get going.

Lauren:    You're making upwards of 20, 25 different beers a year now. How do you stay fresh? How do you keep yourself from getting in a rut?

Eric:    There was a statistic that said that we were at the rate of 1.8 breweries per day, opening in the United States. And so, there's been several that have opened here recently in Tulsa; several very close to us, which a lot of people are usually like, "Oh, well what do you think about all that competition?" Which, yeah, people are right next door, people are right in our area. But we definitely see it as an opportunity. As long as people are making good beer and bringing people to the area and gives us the opportunity to really work together in terms of continuing to build and create the culture, kind of like we talked about earlier, which was very difficult early on.  So, kind of taking that mentality and translating that to what you're saying in terms of staying fresh and staying ... And now we're at a different point, where we call it the shiny new object syndrome, where somebody comes and there's 10 new brands. "Oh, we've got to have what's new. We've got to have what's there. We've got to have what's exciting." So, there's definitely a level of not having to reinvent the wheel, but have some new, exciting stuff here and there. I think also, the ability to operate a taproom. People want to come to us and have that experience and maybe see what some of the other stuff that we get to make, some different things that we play with. It also gives us a positive testing ground to play with some new stuff and see what people have to say. But we also have to remember that our brand was built on certain products that have carried the torch. Yes, you have to evolve over time, but there's also products that keep the lights on that you've got to produce and do right. On the other front, it's ... There's so much stuff. It's a great time to be a beer drinker because again, being an art, there's so many people out there doing so much different, unique things, that sometimes you find yourself trying to keep up with everybody, which is I think not the way to do it. To an extent, you have to continue to do some of that stuff, but at the same time, we always like to say, we do kind of tend to focus on a lot more of traditional styles instead of some of the styles that are very up and coming; some of the sours and stuff. Which I love those beers; I'm not saying anything negative on that. And we may make some at some point, I don't know.

Lauren:    You're just keeping your focus.

Eric:    We keep our focus. The tradition ... I've always been in the mindset of those traditional styles have been around so long and there's a reason for that. They're good, people like to drink them, they're standards. But people do like to venture out and experience some different stuff. Now, also, on the other side ... Sorry, I get a little talky.

Lauren:    No, you're good.

Eric:    On the other side, too, we're starting to find ourselves nine, 10 years in the game having to look over everything, too, and refresh. We've had the same packaging for nine years. We've got to do a little refresh there, so we've been working on some of that. Things, as the business goes along and sort of the life cycle of products and packaging and so on, to kind of refresh, reinvigorate, sort of refocus on some things. We're kind of finding ourself in that position right now as well.

Lauren:    Let's talk about the future. There are big liquor law changes coming soon to Oklahoma. Will we start seeing Marshall beers in Reasor's and Walmart and all that?

Eric:    We certainly hope so. That's kind of scary for us. We're going from potential of about 400 outlets, right now with liquor stores across the state, to upwards of 4 thousand, with convenience grocery, liquor and all that.

Lauren:    Yeah. How are you going to meet that demand?

Eric:    Yeah. See, that's scary. We're built to where we've got capacity; we've got overhead now. And expansion in terms of capacity is relatively ... We're set up to where we can expand pretty easily. But it's just kind of looking into a crystal ball. How well is our product going to sell in the grocery and convenience channel, is kind of what we're like, "Okay. What's this going to mean?" But again, it's a leap of faith. The whole system is changing. When it goes into effect next October, we'll be 10 years in the game and ... 10 and a half years in the game and learning a whole new system. I am honest in saying, when we started this business, I never had ambitions of being a massive national brand. We've always wanted to be a small regional brewery, really focusing on our home market. Kind of the idea of we want to see enough beer that it is a business, so you have to sell beer to make money. But keep it to the level to where it's manageable from making a quality product and keeping your shelf life sort of as ... Not having to worry about as much because your product is moving as quick as possible. So, getting fresh beer out there, making sure we're taking care of the people that make the product because those guys love and care about what they do and you don't make a lot of money being a brewer, but you love what you do and you're working with beer and that's a lot cooler than a lot of other things, right?

Lauren:    Our last question that we always end with; how would you encourage entrepreneurs who are busting butt to make these dreams and goals a reality right now?

Eric:    I think a huge key is your passion. This consumes a lot of your life and you don't have to love it all the time because there's times you definitely get frustrated and don't. But you really need to be passionate about the product, especially if you're getting into a craft industry or something like that, because it's really going to show in the final product. One thing I think that's very important and it's very simple, is just do the right thing. That's very important. I'm going to use a little bit of a rough language, but don't be an asshole. That, I think is very key. You're the face of what you're doing. People are receptive to people that love and care and are happy that you're doing business with them and so on. So, I think that kind of gets back to the do the right thing. I know that's very simple and that may not be the most groundbreaking piece of advice, but that goes a long way.

Lauren:    Absolutely. Well, thank you for your insight, thanks for sharing your story with us. We appreciate you.

Eric:    My pleasure. Thanks for the opportunity.

Lauren:    Next week on The F Word ...

Robin:    Many times we would tell a customer, "Yes, we can do that," and I had no idea what I was doing.

Lauren:    Robin Siegfried explains how he and his brother built NORDAM, one of Tulsa's most notable companies, from the ground up. Before the time of strict airport regulations or the internet.

Dustin:    The F Word is brought to you by 36 Degrees North, Tulsa's base camp for entrepreneurs. To learn more about our work space, community and resources, visit 36n.co. The F Word season one is recorded at KOSU Studio, hosted by Lauren King and produced by Julie Combs.

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