It started with a wish to create a special beer-battered fish recipe for his St. Pete Italian restaurant, Bella Brava.
Before he knew it, Mike Harting was offering his chef's homebrew beer on tap. What went from Chef Ty Weaver brewing once a month quickly escalated to brewing two or three times a week at 2 a.m. to keep up with demand. When Harting realized that Weaver's beer was the No. 1 beer on tap, accounting for more than 30% of beer sales at the restaurant, he asked, “Well, what next?”
That's when 3 Daughters Brewing was born.
In December 2012, Harting and his wife, Leigh, started working on a business plan. “We went and talked to some friends in the neighborhood and raised some money,” Harting says. “Friends” is a humble understatement. Harting was a joint venture partner at Outback Steakhouse for more than 15 years, owning all of the restaurants from Brandon to Key West. His network of connections in the hospitality industry expands from restaurant and bar owners to architects and contractors.
Built to Scale
Raising $1.45 million, the Hartings started on the first step of their three-phase business plan, and built a facility that could support an initial distribution line. “If we want to grow this business, we need real estate,” Mike Harting says.
The search for the right place to build was easy. The couple knew they wanted a space bigger than 10,000 square feet in St. Pete. Local zoning limited the search to a 20-block-by-10-block area, Harting says. They signed on an 18,000-square-foot warehouse in the Warehouse Arts District in St. Pete for $5 a square foot.
The Hartings hired 14 employees — including two assistant brewers to help Weaver manage the weekly brew and a University of South Florida intern to help out in their beer lab — to work on quality analysis and material efficiency while brewing.
Their business plan is built to grow as beer sales grow, Harting says. “If it doesn't brew beer today, we didn't spend money on it.” The brewery currently operates a 30-barrel system, brewing Beach Blonde Ale, Summer Storm Stout, and Brown Pelican Dunkelweizen. They also have one barrel of a chocolate porter aged in whiskey barrels, which they plan to release four times a year.
Harting already hopes to start planning the next expansion, two more 60-barrel fermenters, which could cost up to $70,000, Harting says. “We're waiting to see how well we're received in the community before we decide when this expansion will take place,” he adds.
If things go well, Harting says this summer they plan to add 10 120-barrel fermenters, a canning line and grain silos. This will allow him to increase the business six-fold, he says. The last phase of the business plan would be to build another warehouse next door, to allow the brewhouse brew beer 24 hours a day.
Harting has already signed deals with friends from his Outback days to get his beer in local restaurants. The brewery's first big account is with Hooters. Nearly all Tampa Bay Hooters restaurants have a tap of the Beach Blonde Ale. He also worked with former Outback colleagues to get his beer flowing at The Brass Tap and all of the World of Beers locations in the bay area.
Though Harting doesn't mind reaching out to fellow restaurateurs, most of this legwork will be handled by his distributors, Largo-based Great Bay Distributors and Tampa's Pepin Distributing, Harting says. He's worked with both distributors for the last decade and a half, “We won't take anything further than the dock,” he adds. He also recently added another distributor, Sarasota-based Gold Coast Eagle.
The distributors will provide information on inventory turnover and will scout out new accounts.
Growth has so far outpaced Harting's expectations: The brewery has 148 taps in local restaurants, above the 100 Harting predicted by the end of January.
Harting expects his brewery will bring in $1.2 million in sales in 2014. He says the calculation was simple — if each retailer sells 10 pints a day, they'll be on target. From his experience as a retailer, he thinks the goal is easily achievable.
Harting says taking a step back from retail to manufacturing gives the company an advantage of knowing how to approach bars and restaurants. Harting also credits his experience at Outback for teaching him the ins and outs of building a business from the ground up. He says Outback was fairly autonomous. He was in charge of finding the real estate, making deals and finding contractors for each of his locations. Now he's using the same support team of electricians, contractors and the same architect to build his brewery.
Leigh Harting says they also took a lesson from Outback to keep their value statement simple. That's why they made 3 Daughter's Brewing value statement to be “Brew amazing beer,” she says. “It's all about amazing beer at the end of the day.”
There are 57 craft breweries in Florida, ranking it 44th of all states in breweries per capita of adults 21 and older, according to Bart Watson, staff economist for the Brewer's Association. “Given a state of its size, it's surprising it doesn't have more regional breweries,” Watson says. “I wouldn't be surprised if it moves up the ranks pretty rapidly.”
Most likely the lag in growth is a result of Florida being so far away from the Rocky Mountain and Northeast regions that started the craft beer movement, Watson says.
In 2013, Florida craft breweries sold 92,512 barrels of beer, up 43% from 64,531 barrels in 2011. Nationally, craft brewers sold more than 13 million barrels of beer, up 15% from 2011.
Harting hopes 3 Daughters Brewing will find the success that other brewers have in the Tampa Bay area. “What we've learned from Green Bench and Cigar City is home bench really matters,” he says.
Cigar City sold 17,000 barrels in 2012, up 77% from an estimated 9,600 barrels in 2011, according to Watson. The brewery recently signed an agreement with Brew Hub to expand production.
Watson guesses that more breweries will begin to pop up over the next five years in Florida, and their biggest challenge will be to continue to maintain quality while expanding. “It's hard to fool consumers,” he adds.
Harting isn't worried about getting his product into local restaurants, with more than 70% of restaurants and bars in Florida independently owned. “We can sell to anyone we can sit down and talk to,” he says. “Whether we get to sell them a second keg or not, now it's whether or not the beer is any good.”