The Benefits of Brewing Your Own Beer

By Danny Klein

Before Jed Sanford painted the walls black and handed out spray cans to designers, the space that is now Abigaile was a steakhouse named Union Cattle Co. Locals knew the restaurant for its mechanical bull, proximity to the ocean, and impressive wine list. The fact the concept brewed its own beer, although sporadically, was more of an afterthought than a true selling point. The copper-clad setup, inherited from the previous establishment, Ein Stein’s Brewery, never really fit into the fabric of Sanford’s restaurant, or the demographics of the region for that matter. The beachfront city of Hermosa Beach, California, isn’t going to be confused with San Diego or Portland, Oregon, by West Coast craft beer aficionados anytime soon. Patrons are far more likely to pick up a macro selection and go sit in the sand than order an imperial stout better suited for a cold night by the fire.

But as Sanford graduated into his 30s and began to alter his priorities, he searched for a way to let the restaurant mature as well. Abigaile was born out of that refinement—a culinary-focused restaurant with a fresh, inventive menu that lured in a different kind of crowd. Right away, he knew it was imperative to revive the relic brewery. Abigaile is the only restaurant in Hermosa Beach with an on-site brewery and Sanford planned to embrace the distinction.

“We got the brewery running and brought in some really good food and just started doing it,” he recalls. “That was one of the big decisions when I changed concepts. If we’re going to keep this, I want to make it first class.”

Sanford hired former Stone brewer Brian Brewer, who spent months gutting and revamping the system. There are four 15 BBL brite beer tanks, one 30 BBL tank, a 30 BBL fermenter, and a 15 BBL direct-fire system with two 15 BBL fermenters—all located behind the bar in the heart of the restaurant, which is now led by renowned executive chef Tin Vuong.

Last September, 30-year-old Paul Papantonio stepped into the role after Brewer headed a few miles down the road to open Hopsaint Brewing. Papantonio brought along an impressive résumé, with stops at craft beer havens Oskar Blues, Shipyard, Fort Collins Brewery, and Saint Archer.

Papantonio read the job description (beachfront setting included) and made the leap. He had a lone, brief stint in a brewpub and wasn’t sure what to expect. Truthfully, the boom of the craft sector, which grew 13 percent in 2015, according to the Brewers Association, has completely redrawn the landscape for restaurants. Brewpubs alone, as noted by the same source, rose 12.2 percent from 1,470 to 1,650 locations from 2014 to 2015. This movement is especially rapid at full-service models, where curated beer lists are becoming as crucial as wine cellars. Brewing in-house elevates menus for both food and beverage. It can trigger major savings and even bigger gains. That’s something Papantonio noticed early on. “Two tanks of beer pay for my year’s salary. The markup on selling the beer here is a large profit margin,” he says. What that means is simple: Papantonio has unbridled rein to shop, imagine, and craft beer as he sees fit.

Having the flexibility of working in a restaurant has also paved the way for his R&D program. Like a similar aspect on Abigaile’s food menu, Papantonio will experiment with flavors in response to customer trends. He’s thrown coconut flavors into porters and plans to try chocolate and vanilla together in the near future.

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Budgeting Brews

This again is made possible by the generous margins afforded by a restaurant’s beverage program. A typical operator will aim at a gross profit margin around 80 percent when it comes to pouring beer from a tap. Bottled beer margins are going to be slightly lower. Remove the distributor from the equation, and Papantonio says he has his pick of ingredients when brainstorming recipes. While most brewpubs won’t tell you what they spend for their base, it’s understood the majority of costs will come up-front.

Sanford says the remodel of Abigaile from Union Cattle Co. cost between “$150,000 and $170,000.”

Average brewery systems will run well beyond that number (depending on the tank capacity and the expected output), especially in today’s market, but Abigaile had the luxury of already having brewery bones in place. A 30 BBL fermenter alone will run about $15,000 without installation. A new 30-barrel system can cost upward of $1 million, and many brewers set $400,000 as a low-ball figure for starting a small operation. “As far as I know, I have no spending limit. But I know [profit margin] is all they talk about on any other side of the restaurant.”

The house-made beers at Abigaile often pour at $6 a pint, while the “Drop It Like It’s Hops” IPA, on tap in early July, was $7. Even though it’s still relatively fresh in Hermosa Beach, Papantonio says he’s well aware of the craft beer oversaturation from his time in suds-crazy states like Colorado. That extends to the restaurant arena.

In response, he decided to emphasize a style many small breweries and restaurants avoid: lagers. The reason for this is that a well-made lager will take longer and is more difficult to brew than an ale. The German word “lagern,” which means “to store,” refers to the lagering process where the beer typically ferments over longer periods of time. A brewer will need to weigh that margin of lost time, especially given how popular ales tend to be and how fast they sell. “Generally, I’ll do three weeks for an ale and four or five weeks for a lager. So it’s not that much longer,” he says. It also takes more water, but Papantonio believes differentiating Abigaile from the incoming craft rush is worth it.

“Not a lot of breweries are making lagers and even less are making very good lagers. I’d like to be a brewery that’s making some real solid ones, and for people to know that about us,” he says. The Vienna Lager-Batch No. 1 (ABV of 5.7 percent) was on tap this summer. He used toasted buckwheat to spice up the recipe, highlighted by a nice malt aroma and clean caramel flavors melded with dry-roasted peanut and toasted bread from the buckwheat.

In the future, Papantonio is hoping Abigaile can set up distribution to the rest of the group’s restaurants. BlackHouse Hospitality operates California concepts Steak and Whisky, Little Sister, Día de Campo, and Wildcraft. “We’re definitely looking at that because I would love to see these beers at all our restaurants,” Papantonio says, noting that the company would probably need to contract some of the actual brewing if that happens. “We would have plenty of options and I think it would be awesome to get people drinking some great beer.”

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