Craft Brewers Build Entrepreneurial Ecosystem

YOUNGSTOWN, Ohio – Of the niche industries that have sprung up during the Mahoning Valley’s revitalization, few are as closely knit as the breweries. They work together, offer each other advice freely and, sometimes, share a few pints – either for work or relaxation.

These brewers almost universally started by brewing at home as a hobby before eventually converting those small-scale efforts into something much larger that, in some cases, stretches across state lines.

“We took this idea and moved into starting a business with no idea what it would entail,” says Richard Bernacki, who started Penguin City Beer in 2017 with his wife, Aspasia Lyras-Bernacki. “We wanted to go big. We didn’t know how to achieve it or understand all the moving parts. We didn’t know how to brew beer. I’ve been a beer enthusiast for 20-plus years … and we came up with the name and knew it was an idea that’s too good to waste.”

That sort of path isn’t uncommon. What helps these startups thrive is guidance from other businesses, both in the industry and in other fields.

 A couple of years after he started home-brewing, Modern Methods Brewing Co. co-founder Adam Keck began an internship in the IT department of Compco Industries. It was through that job that he learned the basics of running a business. 

While brewing and manufacturing aren’t a one-to-one fit, many of the concepts translate across fields.

“I really latched onto that, learning some ‘Manufacturing 101’ basics like quality control, systems, accounting, labor and 5S organization,” Keck says.

In 2016, Keck wrote the business plan for Modern Methods and opened up a year later in Dave Grohl Alley in downtown Warren. He quickly learned that theory and practice can be two very different things.

Adam Keck says he’s part of a group text among local brewers that discusses common issues and business operations. 

“It’s something that we’re still working on. It’s building the right team for Modern Methods and managing what’s a pretty complex animal,” he says. “When we finished our business plan, it was perfect. But when you’re running a company, nothing’s going to go to plan.”

At Penguin City, the co-founders were able to turn to Lyras-Bernacki’s cousin, Youngstown State University marketing professor Michael Pontikos, for help with establishing their branding. The founders knew they had a great name in “Penguin City Beer” but were unsure of how to market their yet-to-be-made product.

“He helped us understand how important branding is in this industry. It’s as important as brewing beer. It can’t be one or the other; the effort that goes into beer has to be the same put into marketing,” Lyras-Bernacki says. “[Richard] worked on beer and everything in that aspect of the company and I took on the marketing side to build the brand and expand into sales and distribution.”

In turn, the couple is assisting Hannah Ferguson, the founder of Dope Ciderhouse & Winery, as she works to get her business off the ground. The ciderhouse and winery will have a space inside Penguin City’s future home, the former Republic Steel warehouse on the eastern end of downtown Youngstown.

“Penguin City kills it when it comes to distributing. I know nothing about distributing. Being able to shadow them and ask questions has been valuable,” says Ferguson. “I was able to follow [Penguin City distributor Pat Anderson] and see how he handles accounts and interacts with owners and managers, just to get a feel for this. When I’m ready for that part [Aspasia and Richard] want me to be ready to go. When I get out there, I won’t be a fresh, new person. I’ll have those connections already.”

As part of the Women in Entrepreneurship program at the Youngstown Business Incubator, Ferguson was able to get feedback on her ideas and business plan from “real people” to supplement what she learned while getting her MBA.

“Not just entrepreneurs but loan officers and other people who helped us understand what happens when we’re a startup. What I’m thankful for is that so many people aren’t secretive about what they do. They’re willing to help,” she says.

Part of what makes the brewery community unique, the four all agree, is that it’s incredibly open between would-be competitors. The brewers know that they share customers and that if one brewery can turn someone into a fan, that person is likely to try other local beers. The people of the Mahoning Valley, they say, support companies that work together.

“People are supportive of local businesses and are starting to see what happens when you support them. Maybe the breweries helped kickstart that but look at the coffee shops around here, where everyone’s buying from their favorite local spot,” Lyras-Bernacki says. “There are a lot of elements that come together, like how Derrick [McDowell] bought the building across the street for the Youngstown Flea and we started thinking about how we could combine forces to work together and then Hannah came along. It’s all about building and people see that.”

On the craft side of the business, plenty of questions circulate between brewers. Keck is part of a group text that includes Noble Creature Cask House co-owner and brewer Ira Gerhart and his counterpart at Birdfish Brewing Co., Josh Dunn. The group can use the space to ask questions of each other, whether about brewing itself, the business side of operations or anything else they encounter.

As he wrote his business plan, Keck visited with Paladin Brewing owner John Chandler, who let Keck look at his books to see if the business plan’s cash flow projections were accurate. “You don’t get that in every business. If you want to open a used car lot, another one isn’t going to do that for you. It’s a unique ecosystem that’s exciting to be part of,” Keck says. “It’s a hard business to be in, but if you’re surrounded by like-minded, creative and passionate competitors that all see their success tied to each other, that makes it easier.”

For Bernacki, who had no experience in brewing before the creation of Penguin City, being able to talk to colleagues has been an invaluable learning experience.

“We don’t have the resources that the people who brew Budweiser and Coors have. Their equipment is really expensive and achieves great results for what they want to do,” he says. “On the craft beer level, you have to be innovative and, through trial and error, find out what works for you. Being able to tap into someone else’s knowledge to find out how they achieved certain things is a tremendous help.”

What will also help Penguin City is its plans for the old Republic warehouse. Unlike the space the brewery first used inside B&O Station, which had its own brewing system, Bernacki and Lyras-Bernacki will be able to design theirs from the ground up at the 32,704-square-foot building. Of the space, Ferguson will have about 1,400 square feet for Dope Ciderhouse.

When they announced their purchase, Bernacki and Lyras-Bernacki said they planned to invest $3.7 million to renovate the building, putting in offices, a taproom and, potentially, a banquet area. Construction is slated to start this month and be wrapped up by year’s end.

“We can imagine the workflow and make it work,” Bernacki says. “We still have to be mindful of the budget. With this kind of equipment, there’s always more automation you can add. It’s been exciting to figure out what’s within our budget while not going too crazy with it.”

With more space to welcome beer enthusiasts, Penguin City hopes to foster a sense of community, much as other breweries have done.

In its space on Dave Grohl Alley, Modern Methods has a large metal sign behind its bar reading “WARREN” and, on the opposite wall, a sign thanking its founding investors – about 35 people. With some 3,500 craft breweries nationwide and customers looking for craft beer in countless stores, what makes local places stand out, the brewers all say, is building a community.

“What we have is the commitment from the Modern Methods family, the people who are going to support us no matter what,” Keck says. “Part of that is the space; it’s meant to be a local taproom where you can come in and maybe there’s a fundraiser or you’re drinking something that has some local historical meaning to it.”

For Ferguson, part of that effort is bridging the gap between the East Side and the rest of Youngstown. A South Side native herself, she notes that the area east of Penguin City’s new site is often the forgotten side of town for many. By bringing some of downtown’s development eastward, Penguin City and Dope Ciderhouse can be “the beginning or ending point” for a bridge to the East Side.

“It’s one of the most beautiful parts of town and I’m already thinking about how we can do more there,” she says. “I don’t know if it’s because we’re the homegrown kids, but I feel like people see the pride we take in this area. We want to stay here. We want to invest here.”

Pictured at top: Richard Bernacki, Hannah Ferguson and Aspasia Lyras-Bernacki work together.