Lets Get Outa Here

 

Freetail Brewing exec ready to get out of 2020 like a 'Bat Outta Helles'

 

Bill Sisoian knows the beer business.

From driving beer trucks in college to selling barrels — many, many barrels — the president of San Antonio’s Freetail Brewing has seen the industry gyrate over the years.

Born in Worcester, Massachusetts, and raised in South Florida, Sisoian was the first in his family to attend college. After earning a bachelor’s degree at Spring Hill College in Alabama, he came to San Antonio to study law at St. Mary’s University.

About halfway through, he decided law wasn’t for him and walked to the local Miller distributor and landed a job that paid $4.60 an hour. That was in 1983, and he’s been in the beer industry ever since, minus an 11-year stint running sales at the Scooter Store.

He met Scott Metzger, Freetail’s founder, while working as the brewery’s distributor.

Metzger and Jason Davis launched their brewery—named after Mexican free-tailed bats, Texas’ official flying mammal—in 2008 at North Loop 1604 and Northwest Military Highway. Despite the Great Recession, the brand took off, and in 2014 they opened their tap room and brew house in a converted industrial building near the railroad tracks on the corner of South Presa and West Boyer.

 The duo infused San Antonio and South Texas culture into their ales and lagers. With brews like Bat Outta Helles, San Antonio Pale Ale, Puro Pils, Conserveza, Oktoberfiesta, Texicali and La Muerta, they’ve sought to embody their home city. Along the way they’ve garnered much recognition, including medals from the Great American Beer Festival.

In 2016, TETCO Inc. acquired a majority stake in Freetail. San Antonio’s Turner family owns TETCO, a holding company with a wide variety of interests in food service and restaurant franchises, gas stations, truck and trailer repair shops, oil and gas exploration and real estate development.

Sisoian came on board in 2017 to run sales and marketing. Metzger left the company on amicable terms in 2018, according to Sisoian. Metzger remains a part owner and is working at another brewery in Massachusetts. Davis endures as Freetail’s lead brewer.

The Turner family named Sisoian president in January, just before the pandemic struck.

On Oct. 16, the South Presa taproom was closed to the public, its proportions cavernous without customers. Behind the glass doors, brewers weaved between stainless steel tanks hosing the floor and cleaning up from the week of beer making.

In the taproom, at a high-top table under colorful murals of tattoo-style roses and bats, Bill talked about the company and the San Antonio beer scene. The following transcript has been edited for brevity and clarity.

How’s the craft beer industry changed over the years?

Before 2018, it was 15 or 16 percent up every year. Distributors were clamoring to get more craft under their umbrella because craft sales were taking away from the domestics. Everyone was fighting over craft suppliers. Probably in 2018 things started to level off with the ascension of spiked seltzers. Seltzers are hurting everyone. They’re taking up a bigger slice of the pie than before. So now when you go to a distributor, they’re not begging you to come. They’re starting to ask you questions like, “There’s a million craft brands out there — what’s going to make yours different?” They want to carry your brand if you’re going to support it.

How much beer do you produce?

We were tracking toward 6,000 barrels for 2020, but then, of course, everything got knocked back. Now we’ll be lucky if we brew three or 4,000 barrels this year. So it’s taken a pretty major hit on us.

How much of that goes to distribution?

About 60 to 70 percent.

How do your off-premises (product from stores) versus on-premises (bars and restaurants) sales compare?

So, we’re not typical in the craft world because we have better distribution in the “off.” About 55 percent of our business is in the “off” and 45 percent in the “on.” So, it’s close, but a lot of other small breweries of our size, they rely much more heavily on on-premises and tap room sales to survive. We have the benefit of having two brick-and-mortar locations and good distribution.

What happened at the beginning of the pandemic?

Obviously, the pandemic catches everyone flat-footed. You’re just kind of in shock when all of a sudden half your customer base is gone. We’re fortunate because we have good can distribution, but as a craft brewer and supplier we really rely on our keg sales to make money. The first thing we did is react very strongly at our pub and here because we had a ton of kegs in our cold box. We had kegs out in the trade. We had kegs at our distributor. So we had huge exposure. Beer is perishable so if we don’t sell this, we’ve got to toss it. So we got very aggressive at the pub and here for our to-go sales. We had growler pricing out there at $8 a growler when we’re normally $15 or $16 a growler, so we went through a ton of product.

What did the company have to do to survive?

We immediately had a sit-down, and I went to the Turner family with a three-pronged plan. I said we’re going to right-size the organization. It was hard. We had to say goodbye to some really nice people, but we had too many folks. At one point, we were at 55 with all the servers and everything. Now, I think we’re probably at 28 or 29. The second thing was to reduce and control costs because we had a lot of expenditures. We made some strategic moves to reduce about a half-million dollars in costs and then another half-million in salaries. The third leg of the plan was to maximize sales at the pub, the tap room and through distribution.

What was the biggest challenge of the pandemic?

I guess the initial shock of what are we going to do with all these kegs? Where do we go with this beer? The loss of the business was hard enough, but then on top of it having to destroy perfectly good beer was just a crushing blow to us. We were able to avoid having to dump any beer that we had at both of our locations. Since the restaurants have started to reopen, we have had to pick up some out of date kegs that were sitting in accounts. We will probably have to destroy or dump about 40 kegs when it is all over, which is a good number, all things considered. And then we had all these plans. Everything was plowing straight ahead, and then to have to put the brakes on everything and have to bring everyone in and furlough everyone. That was painful. That wasn’t fun.

What did you learn?

I think the growler business was there all the time, and we weren’t aggressive enough going after it. Even at 50 percent occupancy, we were already back to 80 or 90 percent of our former revenue, which is just incredible. Everyone was really making an effort to support local businesses.

How’s 2021 looking?

We are forecasting a record revenue and profit year in 2021. We’re increasing distribution in new and existing markets along the I-35 corridor — like Temple, Killeen and Waco. Also, the Bryan-College Station, Galveston, Victoria and Beaumont markets.

How’d the pandemic impact revenue?

Curbside sales were maybe 10 percent, so 80 to 90 percent of our pub revenue was gone. For distribution, we lost a little more than half of our business. We’re fortunate because we have good off-premises distribution. We’ll be down 30 percent compared to last year.

What is the pandemic doing to small breweries?

I know there are some that are very small and struggling, but I’m hoping they all make it. We’re a tight-knit group, and I want to see us all prosper and do well. There’s enough business for all of us. We’re very competitive here. I haven’t heard of any closures in San Antonio yet. I know there are brokers now that do nothing but sell used brewery equipment, so that tells me there’s a lot of it out there.

What’s your growth philosophy?

The equity we have in our company is the distribution we have, so we continue to try to build our distribution and do it the right way — market by market and not try to bite off more than we can chew. We have a measured approach to growth. We have great relationships with our key retailers, but I think it’s even more important to have great relationships with your distributors.

When will the tap room reopen?

On Nov. 11. We’ll have food trucks here. We’ll have our deck done. It’s pet friendly. We’ll be selling appetizers, and by the first of the year, we’re going to have a full-blown pizza kitchen down here just like we have on the North Side. This is a 30,000 square-foot building, and the tap room is very cool. We’re going to beautify the outside of the building as well to make it a little more inviting. There’s huge potential here. This will be a great revenue source for us, and I think we’ll do comparable numbers to what we do with the pub on the North Side.

What’s next for the company?

We’re making investments. We’ve got lots of additions to the brew house. We’ve got a new grain handling system. We bought two big 60-barrel horizontal fermenters, which for brewers, that’s like the dream come true. We’re brewing a brand specifically for the Austin market. We’re going to do a cents-per-case program with the Austin Bat Refuge. We’ve got a couple other new brands we’re working on that I’m not going to talk about right now. I think one of them is going to be really big for us, and we’ve got some great programming with H-E-B, so we’re in a good spot.

Best thing about working here?

In the craft world especially — you know I’m dressed up today, I wore a nice shirt — usually I got a T-shirt on, and I come to work in shorts every day. It’s just a very laid-back, funky place. It’s fun to work here. To build brands with a team right from the beginning — it’s the A to Z part that makes me so excited every day.

By Brandon Lingle

Original Article