From Field To Foam

This entry is part 21 of 22 in the series May - 2015

From Field To Foam

By Ed Sealover

EACH FALL, Professor Kraig Peel hauls his Integrated Resource Management class to Oskar Blues’ Hops and Heifers Farm, wanting to show students exactly what they can do with their master’s degrees in agricultural sciences.

It’s not that the program is turning out brewery workers by the bushel – farm manager Geoff Hess, in fact, is the only graduate in the 13-year-old program known to go to work for a beer maker. But in Hess, Peel, the director of the IRM program, can point to how those who come to Colorado State University wanting to manage agricultural operations more sustainably can discover new ways
to bring together farm production with industries that may have seemed a distant world from it.

“He took all the concepts of the program and put them to work
in a real-world solution,” Peel said of his former student. “From the time he began interning at Oskar Blues, Hess started bringing up ideas – some of which had materialized as class projects.”

Oskar Blues Brewery has become almost synonymous with Colorado’s fast-growing and trend-setting craft beer sector. Since it put its beer in cans in 2002 – becoming the first craft brewer nationally to employ a package traditionally associated with less flavorful, mass-market products – it has grown to become the second-biggest brewery headquartered in Colorado and the 33rd-largest in the nation.

But while people were gobbling up its Dale’s Pale Ale and Old Chub Scottish Ale in the late 2000s, owner Dale Katechis had
ideas about how to expand the business beyond just beer production. He owned a 54-acre farm in Boulder county about five miles north of the Longmont brewery, and he started toying around with the idea of growing hops there for more experimental or smaller-batch beers.

At the same time, Hess was searching for an internship as part of the IRM program, and he wanted to find an opportunity to grow hops regionally. After reaching out to Katechis and receiving back one of his trademark straightforward replies – “Interested. Call me. Dale.” – Hess met with him and they hit it off.

The first project was establishing a two-acre, high-trellis hop field planted with eight different varieties. Katechis recalls that he was sold on hiring Hess after driving out to the farm one night and finding Hess putting up about 200 trellis poles by the light of his mini van – while Hess’ wife sat inside it nursing their days-old child.

But once established at the brewery, Hess wanted to go way beyond just planting hops on less than 4 percent of the acreage of the farm.

So, he surveyed the soils, grass, and infrastructure of the farm, examining how to bring the land up to the point where livestock could be raised there. Then he looked at how much livestock it could sustain. He put together an enterprise budget. And finally he studied the return on investment of the total budget, determined what was needed, and predicted the outcome of such an expansion of efforts.

“It was basically wrapped up in a three-ring binder for him,” Hess said of the offering to Katechis.

The two men also realized how they could vertically integrate the farm with Oskar Blues’ existing businesses. Spent grain used in the brewing process could be fed to cows and pigs at the farm. And those animals then could be used to supply food to the company’s growing restaurant business.

Hess and Katechis bought 10 purebred Angus cows to launch the beef-production aspect to the farm. Later they purchased eight Berkshire pigs, a 300-year-old heritage breed whose meat is consistently ranked as the best for both flavor and marbling.

The growth of the farm fed the growth of the restaurant sector.
In addition to the original Grill & Brew brewpub that launched the business in the late 1990s in Lyons, Oskar Blues operates the Home Made Liquids & Solids restaurant in Longmont, CHUburger burger joints in Longmont and at Coors Field, and the Cyclhops Bike Cantina in Longmont. The success of the farm has fueled growth of that sector of the business, Katechis explained.

The restaurant business is growing so much, in fact, that Hops and Heifers can’t produce all the food that is needed to supply it. The company has contracted with four other Northern Colorado farms to supply restaurant ingredients, Hess said.

But the farm has been such a success that it has spawned a 120-acre farm in North Carolina near the second brewery in the mountain-biking town of Brevard that Oskar Blues opened in late 2012. That farm includes a BMX bike park that takes up a significant amount of space but also includes beef operations that will supply the company’s local restaurant.

“The farm’s evolved from this little idea,” Hess said. “This opportunity, once I understood what Dale wanted, was such a seamless transition.”

And much of that transition began at the IRM program, which Peel compares to an MBA program for agriculture. Students typically come to it during their professional careers, with about 20 attending a one-year on-campus program and another 85 going through an online program that concentrates on both the economic and environmental needs of the changing agricultural industry.

Hess grew up on a 200-acre farm in Amherst, Massachusetts, where his father worked as a large-animal veterinarian. He studied plant science at Cornell University, worked for almost 20 years for Monrovia Growers and then spent four years working in Oregon, where he caught the bug of wanting to become a part of the craft- brewing industry. A friend referred him to the IRM program.

At CSU, he became interested particularly in the idea of vertical integration – owning the majority of aspects along the agricultural business chain in order to control and increase profit. When presented with the opportunity to vertically integrate Oskar Blues’ breweries, restaurants and farm, he said he “plugged in” what he learned at CSU and went to work.

“The IRM program opens up a huge portfolio of opportunities,” Hess said. “I think this is an example of how much is possible … This program really rounds you out as an agricultural businessman.”

As a result of the work Hess has done, Oskar Blues has been able to market itself not just as a beer maker but also as a company that sustainably uses all parts of the land to serve the local community. Katechis said that when he takes people on tours of the breweries, restaurants and the farm, they are blown away at how much is happening beyond just the company’s well-known brewing system.

But while Hess is quick to give credit to the IRM program, others who know him say that is deflecting too much praise from himself. Peel said he picked up the self-motivation in the 2009 graduate right away. “From the time he walked in on the first day, he had just a little extra spark than most every student has,” Peel said.

And Katechis – who grew up oscillating between wanting to be a farmer, a racecar driver, or the third baseman for the St. Louis Cardinals – said one of the reasons he hit it off with Hess even before he laid out his full grand plan for the farm was because he too saw that he could entrust the project with his newest employee and know that it would succeed.

“My fundamental belief is that people just don’t want a boss. So, you try to attract people who have an entrepreneurial spirit and have the shoulders and the guts to dig into a project and make it their own,” he said. “He’s a super-dynamic. He took the project under his hands and did it almost by himself.”

And even as the farm has expanded to include egg-producing chickens, a vegetable garden and a two-acre fishing pond, Hess’ duties have expanded beyond that property itself. He also is a member of the national-accounts sales team, calling on clients like Kroger and Buffalo Wild Wings, and helps to train new
sales representatives.

Hess is still scheming up new ideas. He wants to develop the Berkshire hog program more fully. And he wants to attract more events to the farm. But for a guy who wanted to get involved with hop growing, he’s found that a little integration can go a whole lot further than a standard, old-fashioned business plan.

“I always thought if I could make a living with craft beer and agriculture, I’d be set,” he mused. “It was a clean-slate property that really hadn’t had a lot done to it, so I was able to develop it.”

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