- July 19, 2019
Craft beer brewer Jeremy Joerger has awoken at 2 a.m. with the definitive middle-of-the-night entrepreneur nightmare: Will he make payroll? Will he be able to pay vendors?
The founder of Sarasota-based JDub's Brewing Co., Joerger, 35, has always come through on both counts. But, coming up on his first full year in business, Joerger has navigated a maze of regulations, legislation, industry lawsuits, taxes and production hurdles. He started the micro production brewery with a mid-six-figure investment, a combination of retirement funds, savings, family and friends.
“If this thing goes belly up I have nothing,” Joerger says. “Everything I ever made, I gave it up for this.”
JDub's, of course, isn't all anxiety. For one, Joerger, a tattooed U.S. Army veteran who quit a federal law enforcement career to start JDub's, gets to make beer every day. The beers are made in a 5,000-square-foot manufacturing facility north of downtown Sarasota, where six fermenters hold 465 gallons. The company then sells the beer in a taproom and beer garden area for walk-in customers and to bars and restaurants through beverage distributors. Beers include Up Top! IPA and Poolside Kolsch Ale. Says Joerger: “The most important part is the quality of the beer.”
Sales, which started slow when the business opened in February 2014, have doubled month-over-month since last fall. The company has nine employees, and Joerger hopes to hire five or six more this year. “We have been on fire,” says Joerger, who declines to release specific revenue figures. “The market was so underserved, so we knew there was a thirst for this.”
Getting the chance to quench that thirst — and keep on quenching it — is Joerger's primary struggle.
One particular challenge is non-production costs. After a $3,000 state licensing fee, Florida taxes beer at 48 cents a gallon, the ninth-highest suds levy in the country, according to the Tax Foundation. That tax comes on top of a federal tax of $7 a barrel. The upshot: JDub's, says Joerger, pays $650 in taxes for every 30-barrel batch of beer it makes. A barrel equals 330 12-ounce cans of beer.
The craft beer industry also battles regulations, potential new legislation and lawsuits from deep-pocketed segments of the beverage industry that Joerger says want to squash startups. An issue that came up in the 2014 legislative session, for example, is whether taprooms are really a way to avoid the standard state beverage distribution model. The Florida Retail Federation sued the state Department of Business and Professional Regulation in January, in a challenge to the taproom approval process. That suit, supported by associations that represent Anheuser-Busch and MillerCoors distributors, has since been withdrawn. In return, the state agency agreed to revisit the taproom rule that dates back to the 1960s.
Craft beer brewers have, so far, successfully fought anti-taproom legislation and related lawsuits. But Joerger remains vigilant. “Without taprooms, the majority of craft breweries would not be able to survive,” says Joerger. “They are trying to crush us.”
Joerger also faces challenges common to any new company, especially access to capital. For instance, he wants to buy six more fermenters, the lifeblood of beer production. But fermenters cost about $25,000 each, so Joerger will wait. “We are not at two years yet,” he says, “so no bank wants to talk to us.”
In spite of the threats, Joerger would rather be in beer than his past work. That's when he investigated procurement fraud and public corruption for the United States Postal Service Office of Inspector General. It sounds prestigious, but Joerger says he was miserable.
Joerger had brewed beer at home since 2003, so he decided to follow his passion, not a paycheck. He quit his job in late 2012 and moved to Sarasota, where his wife's parents live. He began the JDub's process in early 2013. Says Joerger: “I fell in love with craft beer.”
Follow Mark Gordon on Twitter @markigordon