Black Star Co-op Interview Part One

[Interviewer Niko Tonks informers interviewees of informed consent document and certifications] STEVEN YARAK: My name is Steven Yarak; Y-A-R-A-K.

JOHNNY LIVESAY: I'm Johnny Livesay; L-I-V-E-S-A-Y.

JEFF YOUNG: I'm Jeff Young. [inaudible]

NIKO TONKS: All right, so essentially my questions break down into four areas: first is kind of history-related stuff, second is beer-related, third is talking about locality and fourth is talking about co-op, so I am just going to jump right in, I tried to make these questions as open-ended as possible, so you guys can just say whatever comes to mind.

So, my first set of questions have to do with the history of Black Star and your guys' personal history. Just starting really generally, what made you guys decide to open a co-op, to open a brew-pub and to do it in Austin?

SY: We were in Austin, all three of us.

The - I think the question actually kind of goes to the heart of why all three of us are sitting here, because each of us kind of brought different elements of that - of the points you hit on in that question, really. Each of us had a part in making the whole come together.

When I called the very first meeting, my idea was pretty theoretical, just a bar, a beer bar that was owned by the regulars, is kind of how I phrased it, I think, and Johnny was on the board of Wheatsville at the time, and - was one of the staff board members, and said what you are describing is a co-op, and here's the structure, and Jeff said we should be more than just a beer bar, we should also have our own beer. So, that was where the brew-pub came from.

As time went on, I mean the level of participation that you had in the kitchen (pointing at Johnny) that evolved later with the outstanding food that we've got, and

NT: So how long have you guys been organized formally?

SY: April 17th, 2006, I believe, is the incorporation date, April 2nd 2006 was the formal meeting, the very, very first kind of planning meeting was January 2006.

NT: So we're talking about five years.

SY: Five years now.

NT: And so I moved to Austin in 2009, and when I got here you guys were doing things like the beer socials and having events like that. Since I wasn't on the inside of that - how did that work? Just talk about the planning stages a little bit.

JL: So when we first started that spring of 2006, there was a pretty serious snowball on the trying to get things going, organizationally, getting some documentation together, bylaws, and so on - what are we gonna be?

And in order to really actualize that I think we were pretty smart to actually open it up to the public pretty quickly - in august of that year we had our first beer social, at Monkeywrench books, kind of piggybacking on their community -

SY: Was the very first one in August, or was it the first one that we had house beer in August?

SL: I think the first beer social was in August - we had parties at Milly's and then - the first beer social - because we

SY: Yeah - I definitely remember hauling like Live Oak kegs to beer socials in the backyard of Monkeywrench, though, and I want to say August was when we had

JL: the house beers?

I think that was the first beer social that we ever had, not the first one with our stuff. I don't think we were brewing yet at that time.

JY: It would have been like homebrew five gallons or something in a keg -

JL: Yeah I don't think we had our setup going yet.

SY: Okay, I can dig it up because I was I emailing the Chronicle because I was freaked out that the way they listed it was going to attract the attention of TABC and actually, it did.

JL: Maybe the first thing that happened was at Christian's house - was that the first beer social, and that did attract some TABC attention (laughs).

Yeah, but the first beer social, the one in August, whether we had our own beers or not, which I can't really remember, was y'know, pretty small, it was like 40 people or something. It was not very well attended, and by the time you moved here, there were like 900 people, or 700 people or whatever.

NT: So how were you [I don't trust that thing] producing beer before you moved in here, just out of curiosity?

JY: Well we had - well, as a homebrewer, you know, I was taking my personal liberties and making beer at my own place and y'know kind of prep for me to play around with ingredients and then recipes, but also good fun for friends and people interested in coming over to hang out and taste things that might eventually show up, and initially get some feedback, so it was just homebrewed.

NT: So even by the time you had 900 people coming, you were doing it all at home?

We stopped

No, no, we don't even talk about it.

JY: Yeah, by that time we were - it was sort of an up and down with the homebrewing.

SY: I think one of the kind of inflection moments for our success was after we'd had the formal organization and raised the first membership capital, which was like 1200 bucks or something like that, we took - we were willing to risk the overwhelming majority of it right away to buy homebrewing equipment,

and we did that, and we built a homebrewing system far beyond the scale of your average homebrewer's system, and that enabled us to start doing beer socials and start doing the brew days where we had some of the beer that went to beer socials and some of the beer that homebrewers took home and that, I think that started the beer socials, but by the time they were really taking off, we'd outgrown the ability of our own system to supply the beer. We had a couple where - well more than a couple, we had several where we had both homebrewed beer and commercially purchased beer, and the homebrewed beer would be gone in like 30 minutes, it was just crazy.

JL: Yeah, the uh - it's worth mentioning though, that when we started, like he said, we took pretty much - I guess all of that capital and - at that point, and we found three stainless steel 55 gallon drums from oak ridge laboratories - for real - and found a rideshare and had someone bring it to us from Tennessee in their car, and I mean, that's pretty much the ground level, like, even at that level we were like organizing things through people, y'know, like, we can get this guy to bring it to us for a couple hundred bucks, and that's cheaper than shipping these heavy stainless things that we had to really clean out, and I mean, we turned it into a pretty nice homebrewing system from what I -

JY: It took up the entire garage.

JL: For two years

NT: That's almost two barrels, I mean -

JY: Yeah, it was two barrels, yeah.

JL: And we made some really good beer on that, and it was like Jeff said, it was really an opportunity to get the people who were interested at that time involved, and hands-on, Chris Booth, one of the guys that works on the pub team and does a lot of selection for the commercial beers, he was around then, Mark Walkner, our board president, was around then, like, they'd pay in a little bit of money and help pay for ingredients to make this beer, and they'd take home a carboy and ferment it and have their own beer, and we'd also have a keg or two to give away at that point. But we really stopped doing that when we started looking for a location, because we didn't want to be drawing any unnecessary -

SY: We were pretty directly told stop doing this, so but I think the thing that can't go unmentioned on beer socials that - beer socials were fundraisers by and large, I mean it was an enormous amount of volunteer labor, but by the time we got the large-scale beer socials, 20 volunteers were necessary to run the things, y'know

and we made a little bit of money later on, by doing glass sales, the TABC says you have to give someone a cup, it doesn't say how big it has to be, so we had like little cups and you got three free refills, and you could either have that or you could have a glass, and so we had a number of regulars who came back every single month who would start complaining about how their entire cabinet was full of Black Star glasses because they wanted to buy one every single time, and they were like can I just give you five dollars and not keep the glass, and the rules say no, you can't, you have to have - it has to be clear you are buying the glass and not doing any kind of quid pro quo for the beer,

but the other thing that we did that was for the membership. And so the - from a finance standpoint it was always a losing proposition, because we'd be in the hole on membership equity, we'd get back the cash, then we'd have to book a loss, every single time.

There was a point, I think 08 or 09, late 08, where I tried to push for switching the beer social reports to accounting for the profit or loss based on joining fees instead of membership equity, and everyone hated - like the whole board revolted because they were just like this means every beer social loses money!

NT: So, a quick question - how many members did you have when you started construction on this place?

JL: Oh....A thousand? 1200?

SY: I could look it up.

JL: I think like 1200. Last January we had a thousand or 1200 members.

NT: Yeah, ballpark is good enough, and what are you at now?

JL: 2500?

JY: 25, 26.

SY: So we started construction in April or May.

JL: Yeah, we do have data.

NT: I believe that you do have a lot of data.

JL: We do have a lot of data, and photos.

SY: April 2010 we had 1641 members.

NT: Ok.

SY: Yeah, it didn't quite double, and then in May we had 1760.

NT: Ok, well, thanks for looking that up. The last question on just background. Going forward, what do you guys see as the vision, I mean, what's the goal, I mean, I know that you're here, you're open, but going forward...

SY: To be the best venue in Austin for the production and enjoyment of high quality beer and to expand the co-operative movement into new and innovative sectors. I believe that's - its not verbatim.

NT: That sounds like it came off...

SY: That's not verbatim the mission statement, but it's pretty damn close.

NT: Okay, alright. So like I said my next set of questions is more or less just beer related.

So, this is a pretty open-ended question and I don't want to seem like I'm always talking about mission, but what do you guys see as craft beer's mission in the world, in America, in particular?

To get people drunk.

JY: Yeah.

Tastily.

JY:panty-droppers.

NT:That's going in the paper.

JY: Uh, you know, it seems - that's such a personal question, I think, different for different people, but for me, it's just like anything else, an appreciation of something that goes deeper than what is commonly fed to you.

And I grew up in NASCAR country where, you know, it was always Busch and Bud Light, and to find this little niche of products that actually had some pride, some depth to them, it really changed my world, when I found - as much as I don't like it right now -

Guinness, you know, it was just like whoa, Guinness is a craft beer, and you know, it's really not, but the point is in Alabama at that time, that just kind of opened up my world to this really interesting sector and y'know, to expand on that is basically trying to share that love for an appreciation of something with as many people as you can, because I get satisfaction out of sharing it, and I hope that when I share it with people, or we as a company share it with people, they get satisfaction out of it and shit, we get even more satisfaction out of it, because other people are appreciating it, so for me it's a bit of a purpose, it's a purpose of really appreciating something.

JL: One thing, like Jeff - Jeff definitely is making me think about this, is it's an element of service too, now, and I'm sure if you asked us, service is a big part of what we're doing, we're a co-op, and we're member-owned and that's a big part of drive in the community of this, but when you love to do something, and you can do it as a means of service and make other people happy, that's a really, really, deep, rewarding thing, you know, Jeff really cares, and loves what we does, so when someone has that frothy smile, you know, that's gonna feel good, you know?

You can get that sense of satisfaction out of knowing that somebody is enjoying something that you enjoyed making, you put a lot of labor of love into it, that's a really rewarding thing, so craft beer is actually one of the more accessible things people can do -

JY: Yeah, for sure.

JL: Around the country to get people satisfied with the product. You look at Dogfish Head, or Sierra Nevada, SN in particular or Sam Adams, whose beers have been out for a while, there was kind of a void, they've been filling a niche that made people happy for a long time, and that's good, that makes people happy, and that in turn makes the people that brew that beer -

JY: It resonates -

SY: Yeah, I mean, we're selling legalized drugs, right?

I think, for me, being the kind of business-team end of it, the thing that I see with craft beer or more specifically for the brewpub is that no one would do it unless it was a labor of love, and the way that -

I mean, the way I can exemplify that is I had requested some financial figures from a colleague of mine in California, the Arizmendi association of cooperatives, and they have a network of bakery and pizza restaurants, which in many ways, you would expect to be very similar to breweries, right, I mean, you're taking in basically raw commodity products, adding value, turning it around into a high value craft kind of product,

and the thing that was amazing to me, looking over the financial statements from these businesses, was that they employ - they are able to employ, create about as many good jobs, they gross about the same, the margins are comparable, but the main thing is that the capital investment is much, much higher, because of that equipment right there, you know,

and so it's like if you were just looking at it from a purely "I want my return on capital invested," by just about any metric, you know, even if it's it - even if it's not financial return, I put in this capital and I want my money back, but it's I put in this capital and I want to create good jobs, or I put this capital in and I want to serve more patrons, you know, whatever it is, you can do it, you can maximize that by not having a brewery. Like, no one would choose, by the numbers, to do it with the brewery. You don't do it unless you really want to.

NT: Fair enough, and we may have already answered this, but, so, do you think that on the part of the consumer - although that might be a dirty word in here - is choosing craft beer reflective of something other than taste, something more than taste, or is it literally just -

SY: I mean, we're definitely starting to see a lot of snobbery.

NT: In here, or in general?

SY: Both.

JY: Both, yeah, definitely in general, you know, snobbery isn't that new, it's been kind of coming around and just getting bigger and bigger, but again it just goes back to the appreciation of it, and its ability to engage people? Because there are a lot of products out there, even a lot of really nice products, that don't necessarily engage people like craft beer does, and then you put it in a social setting, and it's just gold, because to have something so engaging and so able to bring people together, and you know, we talk about that all the time, is we just want to create a space where people can come in and enjoy life, and it just happens to be over a beer that of course we love and put a lot of effort into, over some food that we think is fantastic, and in a space that we are really proud of.

JL: Yeah, I think the snobbery is unfortunately, again, kind of an intrinsic factor, because any level of connoisseurship.

(all agree)

JL: you know, whether it be food, wine, cigars, beer, cars, you're going to get people that are like, oh, my beer is better than your - what I like is better than what you like, and that starts to be kind of a point of pride, but that also builds community, I think, in a weird way, it's the people that like - that have that similar sense of snobbery, they ultimately find each other -

When we first started, we tried to tap into the homebrewers in Austin, and I think that's kind of what my - that, we did, but it took a while, and I think that we had to crack through that sense of snobbery, we had to prove our worth with them -

NT: Really, you guys met resistance?

JL: They were like hmm, what are they guys trying to do?

SY: I think the homebrewer psychology is a little different, I mean there is definitely an element of snobbery there, and you have to kind of prove that we had

JL: They're DIY, you know. They're doing it for themselves.

SY: But I think the homebrewer case is, especially, just about every homebrewer in the country dreams of having a brewery.

JL: Maybe it's not snobbery, but its jealously (laughs).

SY: So asking them, so to ask them to say here's a way for you to have a brewery, but it's not really what you had in mind, required giving up a little bit of their dreams, you know, and - I think that's why the homebrewers were always a tough sell.

The younger ones - the older ones are easier, right? The dewberries? They know they're never going to have a brewery. But the younger ones were definitely harder.

JY: They still have dreams.

SY: They haven't been broken yet.

NT: I will admit to being guilty to having those aspirations.

SY: You can own a brewpub for the going rate of 150 dollars!

NT: I understand that's a possibility now.

Just really quickly, to go back to what you were saying about engagement, when you're talking about engagement, on a sensory level? That's more or less what you're talking about when you say engagement?

JY: Uh - yeah, yeah. You know, we could probably get philosophical and expand on that, but I think sensory is

NT: As far as the beer goes. Just the beer.

JL: I don't know, I think, I mean, the philosophical debate there is probably important right, it's like the sense of space and location and all that is definitely a level of engagement - people do have a sense of pride about this organization and they have for a long time, even before there was a brick and mortar, people were like that's my brewpub, when there wasn't even a brewpub, and I think we were able to engage them at that level with just a dream, and I think that's a very powerful thing -

I mean when we're in the weeds and trying to knock shit out, we don't think about that anymore, where it's like no, this is - we really floated for a long time on the dream of getting to this point, with a lot of people wanting that, and I think that level of engagement is really important.

They were just throwing their money into a pot at that point, you know what I mean? It was being burned up as fast as we got it, and here we are, so...

NT: So, again, another sort of loaded beer question, but do you think that you can see craft beer as a quote unquote movement, and if so, do you see craft beer as sharing affinities with other so called movements like slow food, or locally supported agriculture, or something like that?

JY: I always wonder, because when you're in something, it seems like it's much bigger, in the world, than somebody that is living up in Pflugerville and doesn't give a shit, so I often think that my ideas are kind of biased, or my perceptions are obviously biased, but then you see things like the craft brewers conference that has like damn need 40,000 people attending in a weekend, and

JL: You mean GBF?

JY: GABF, yeah, not CBC -

GABF, in Denver - ok, you know, it's like amazing, and I would just venture to say that's a little bit bigger than a lot of things, but as far for me to gauge that -

SY: It's definitely a - you know, a consumer trend. I don't know - I don't know if I would call it a movement. I mean, is twitter a movement?

NT: Again, it depends who you ask.

SY: I mean, a movement, in my mind, denotes some kind of profound social change, right? The civil rights movement, women's suffrage as a movement, Egypt's revolution is a movement. I don't see - I see craft beer as

JL: HB 660 ---

SY: As making people happy -

JL: That's the beginning right? That's mobilization, that's a movement.

SY: That's not - that doesn't change the way you live -

JL: True

SY: That doesn't change the way that you perceive your life. It's - I think Jeff really hit it on the head - people enjoying themselves and having an anchor in this space, and I think that's valuable, I mean, I'm not in any way trying to disparage what we do, I take enormous pride in it, even when I am just sitting there washing glasses for 8 hours on a shift.

But, I don't see it necessarily - I don't want to be self-aggrandizing, you know, I don't want to try and say that we are doing something that we're not. I think that what we're doing has a value for social capital, without a doubt, I mean, people coming together -

we had a group here from one of the progressive churches that, you know, I was bussing their tables and they were talking about their church's position on social justice, and they were having their meeting at Black Star and I was just like damn, that's awesome.

I think that's where - if we're not a movement in ourselves, then we provide a space for movements to build, we provide that kind of social capital, and we provide the gathering place for those things to take root.

JL: Maybe there's another way to think about it too, which is, you opt-in - the co-op movement is a thing that people talk about, and we've attached ourselves to that through the love of craft beer, and I think that's kind of where it was born for this, you know, we're - craft beer is kind of like what's going on with gourmet food right now. It's all peasant food being aggrandized.

JY: It is.

JL: And before prohibition, beer -

SY: And that goes back to snobbery too, because if something is like the peasant version, that just somehow lets you be more snobbish about it, you know?

JL: Craft beer, you know, prior to prohibition, was just beer. And I think that's kind of the thing, right? It's the return to the right way, I mean, you don't have things like CAMRA in England because people don't give a shit about their beer. Maybe craft beer in itself isn't a movement, but it is definitely attached to an ideology that people want better product. And it might not be its own movement, but it definitely has that social underpinning of people wanting more than lone star.

SY: I think - my critique would certainly also apply to slow food or CSA.

JL: Are they really movements?

SY: Are they really a movement, but they definitely are a manifestation of the ethos you're describing, like people wanting something that is real, is - that they have some connection to the supply, that they have some - they feel that it is rooted, you know, and that I think that we definitely feel that.

JL: To piggyback right on top of that, I think with the slow food movement and CSA, that - I don't - I'd say the same thing, I don't think they are movements. Maybe that's the truth. It's really a return to the way things are supposed to be - I don't want to say that...

SY: It's a movement of the affluent.

JL: -- the way things used to be. A simpler time.

SY: It's a faux-movement.

JL: You know what I mean? CSA was the way until 50 years ago. Every community had its farm that supported it, gave it food, and everybody cooked at home, and it took a long time for people to make food. It wasn't like some chi-chi yuppie had a slow cooked pork roast and wanted to have his friends over to drink Champagne, you know? I mean that's where its at not, but that, craft beer, and CSAs and all of that, it's all just a return to the way things used to be when there wasn't a choice for that to be the way that it was. That was the way that it was. There was good beer, there was slow food, there were farms.

SY: But like as you say with gourmet food, right? Pork belly, oxtail, --

JL: Offal, in general.

NT: So if it's just - just to throw it out there, if it's a movement of the affluent like you said, which I can't help but agree with on some level, where do you fit into that?

SY: I disparage it as a movement of the affluent if it's a movement. I don't really think it is. Where we fit in is, we - we certainly have - we are not chasing the budget-conscious consumer. There's no doubt about that.

Like, if someone were to walk up to me when I was working point of sale on Friday night and ask what our specials are, I would laugh in their face. It's like, look at us, you know? We don't have any specials tonight, because we don't need any specials tonight. But in return we are able to have this space, we're able to provide really good jobs, we're able to do all these other things.

The investments that we've made, I'm sure our landlord thinks we're crazy that we spend 250 dollars a month on composting. Even having not optimized hardly any of our systems, I would put us up against any restaurant in Austin, being one of the, if not the, greatest restaurant in the city.

JL: We generate one bag of trash a day in the kitchen. Trash trash. And some of that can be - and some of that can be diverted, end of the night compost, you have to put the dust pan, you have to dump it out somewhere and there's food in there, and you're like there's food in there, I hate to put it in the trash, but oops, there it goes.

SY: So, if we're guilty of being part of the movement of the affluent, we're at least taking affluence and then putting it into good investments. The uh, movement, where do we fit into that?

Because if you think about where Rochdale came from, it came from the working class, well no, that's not true, they were all artisans that were put out of work by industrialization, but the whole thing was about justice. It was that a pound weighed 12 ounces and the coal had rock in it, and stuff like that.

JL: So one of the things that it makes you think about, and you guys can see what I think is shocking about this too, is that if this is a movement of the affluent, or movements in general that are kind of geared towards that, I think we've done a poor job of capturing that market. We - though not for lack of trying, I think we've tried to market ourselves to wealthy people.

SY: I mean, you're absolutely right.

JL: But, you know, why they don't want to be part of Black Star? Because the question "what's in it for me" is the first thing they ask, and there's not really anything you're going to get back at the end of the day. There's no profit, you're not going to make a ton of money, and so if you're wealthy and we're asking you for an investment, they're like yeah, 6 percent on my principal, that's not a whole lot, and it's not guaranteed, even. And we did an event in the summer, piggybacking on some other people, and it was at House and Earth, and I'd say that was a pretty - that place is geared towards that - so this thing, it's actually the people I grew up with, and they started a showroom for-

NT: I've been there.

JL: So, green building supplies. And that's definitely not geared towards anybody but people that have money that are going to spend 20,000 dollars to put pergo down in their - or cork countertops, you know, that's the thing, and I don't think - that got some exposure for us but I don't think that's the kind of thing that -

SY: No, you're right. In terms of that - what we're describing, the slow food, the CSA, that community, we have never been able to tap into it. And it was - I mean, we have a very large membership. 2500 people. Even if we only have 10% of that, that's still 250 people, that's not an insignificant quantity, but I do feel like we've always kind of, we've sort of viewed that as a natural base and they've never actually come out for us. The other example where I thought you were going to go that's related to green stuff was we did this finish out of this space as a LEED certified green building, and incurred quite a bit of expense associated with that, the biggest one, which thankfully was the one I could point to that the engineer said would pay for itself, is the higher efficiency HVAC, it was a $14000 add.

Just - the exact same system, just one step higher efficiency. And in the spring we - one of our board members is well-connected in Austin's environmental community and in the spring we said ok, we're building this in the environmental community, these people need to come out with some money, because we're doing what they're supporting, they should step up.

And we publicized an event, green brewpub investment forum, learn about what we're doing, step forward, make an investment, and this director, to his credit, he publicized it as much as he could, and in the kind of Austin eco network and the people he knew. I think we had three people show up for that? One of whom is the old guy who rides his bike in the biking shorts.

And it's just not the kind of people who would be shopping at house and earth was who we were trying to get. No one was interested in that, and I think we even got that listed in the Chronicle, it was not for lack of trying on our part.

JL: And that's -

SY: And I know we're talking about the green scene is not the same as the CSA scene, but -

JL: But I think they're - I think we do get a little more cross over from CSA people, I mean I definitely think people see what we're doing with food, ok, I get that same thing in my box, and when I get my carrots, the Johnson's Backyard Garden - we have JBG carrots right now, but they recognize that. Oh, I'm eating these at home, or that kind of thing.

But I think that's more - I think a lot of people who aren't that wealthy go through CSAs, too. I think CSA is making a comeback in the middle class, the lower middle class, because it's like ok I can get some good vegetables and not have to go anywhere.

SY: How many of our customers, do you think, though, have any idea? I mean, we're serving 1500-1600 checks a week at this point.

JL: And they're not all members, and who knows. I don't know, it's hard to be - survey time?

SY: Yeah, I have no idea, but my hunch is that most of those folks have no clue that the pork - what Richardson Farm pork means, you know?

JL: Niman ranch.

SY: Where it comes from, you know.

JL: It's true. And like you said, that consumer is a dirty word, that's the downside of consumerism, that it's just pork, and its just a sandwich, and it maybe a badass sandwich and they like it, but -

SY: Yeah, they think it tastes delicious, and they order it, and that's great, because it means we sell more of it, that means that the producer has higher demand.

JL: Right there, you know, Round Rock Honey, we don't have to spend 50 dollars on a gallon of honey, but we do.

NT: Yeah, presumably not everybody that walks in the door knows - is paying attention to the beer either, it's all the same.

JL: It's those dark beers.

JY: I think there is definitely something to be said about just us being able to say those things and be excited about it that helps the sales of those things. Whether they really appreciate it or really even understand what we're saying, they show the enthusiasm that we can name where the ingredients came from, and all that, and I think that just - if nothing else, gets them excited like yeah, I'll take that. I mean, whenever we suggest something 9.9 times out of 10 they are going to take what we suggest, I think, because we just love it so much.

SY: I think the best example of that would be up on the board for the snack plates, salt and time is a whole section, and people always ask what is salt and time, and all it takes is 30 seconds to say they make artisanal charcuterie here in Austin and it's going to be a Spanish style chorizo, the Genoa salami, and people will snatch that stuff up immediately.

NT: Yeah, name recognition is a big part of it.

SY: Well, generally they don't know what it is, though. That's what I'm saying.

NT: Just the name.

SY: Yeah, having the name at all.

NT: Yeah, I know people like Alice Waters in California, that's how California cuisine got built in part, and I shouldn't be talking to you, but just putting the name on the menu, you're right, is an enormous effect.

SO my next question would be just in general, you mentioned HB 660 before, what your guy's thoughts are on craft beer in Texas right now, as a state that is still more or less under-served but up and coming.

JL: Boomtown. I mean, it's coming back, I think.

JY: It really seems like it. I would like to see, compared to other cities, maybe we can look in the New Brewer, and see, but it just really seems like it is a boom town right now, and people, what's his name, Mark Sutor was just in Chicago, and he stumbled into an Illinois craft brewing meeting at one of their pubs up there and he said he just stepped into it and just started talking to him, and they all knew who we were, they knew about Austin, the knew about Black Star, the HB 660, even our bills and everything.

So we're known.

SY: We're the second biggest beer market in the country, behind California, so if there was going to be a place for it...

JL: I mean, they just put the report out, or maybe it was Lee Nichols, there are 11 new breweries or brewpubs popping up in Austin this year. That's crazy. And you're talking about a place that 17 years ago had Waterloo brewing, and that's it. And that was the first one, and after that it didn't happen again, and that was it, and then it was like the draught house and other places, Lovejoys, NXNW, when we started there were four places.

SY: When we started there was just Lovejoy's, NXNW and the Draught House.

JL: And then Uncle Billy's opened about 7 or 8 months after we started.

NT: And that's brewpubs, and then...

SY: And then production breweries, and the thing is right now, we are the only brewpub other than Flick's Brewhouse, which, isn't that contract brewing?

JY: And yeah, Uncle Billy's too..

SY: Yeah, yeah, yeah I'm talking about like genuinely new places.

JL: But breweries, you've got Jester King, Thirsty Planet, Circle.

SY: But there's good reasons why they're all taking that path, because it's a fuckton easier. You could start a brewery if you've got the capital for the equipment, with two people. You don't have to have all the service staff, all of the -

JL: You don't have to be paying retail rent.

SY: But I think the boomtown, I think the only thing that concerns me about the boomtown is the boom town, it's Austin ---

SL: San Antonio, I think, to their credit for what San Antonio is.

SY: Yeah, San Antonio has two, Houston has the Houston Ginger Man, Southern Star in Conroe, of course St. Arnold.

JL: Any brewpubs?

JY: I think that in the last southwest news it still has no brewpubs.

JL: Really? In all of Houston?

JY: Isn't that crazy?

JL: This couldn't have happened in Houston - I don't think we answered those first questions very well, but I don't think this could have happened in Houston, I mean they don't unify like Austin does, if that makes any sense. You could maybe do this in the heights, and that's about it, you're not going to see this happening in Memorial, Kady, you know what I mean? It's not going to happen, people are going to be like, what's in it for me? Oh, I don't get anything, I don't care. I'll make my own brewpub, that's a good idea, I'll make some money. And then they're like oh no, that's too much work.

SY: Yeah, I mean, so the fact that we don't see that happening state wide, is what's going to make this difficult, or what makes the prospects of HB 660 difficult. Of course the legislature is the Texas state legislature, and the Texas legislature generally has an antagonistic relationship with the city of Austin, because the city of Austin is far bluer than the legislature is.

So I'd say that's the only thing concerning me is that we've got all this stuff in Austin and I would love have my hunch proven wrong, I would love to see it all flourish, you know, but I just - I worry that it's kind of a bubble in Austin right now. We've already had - with the glass night tonight, we said, partner with AHS, and you could buy a beer from any of the breweries that have held the title of newest Texas brewery since we opened and that was five! I mean, in five months, that's one every month. And there's how many on the way? South Austin, Austin Beerworks, Hops and Grain, I can't, I mean, Lee's probably got the rest. There's so many out there and I just don't see all of them, I don't see there being space for all of them.

JY: I have been fairly impressed with, because my concern with that in any kind of dilution of scene is the bad quality, but the fact that everybody has come together, anybody that just kind of has an idea for a new place, they've really come out there and they've become part of the group, and we know all of the new people coming up, and they'll come to Real Ale, I mean, we had people for the AHS brewers come in here a couple times, just kind of checking things out and getting some ideas for theirs, so it's a very embracing scene, where if you have just a little bit of effort put into it you're going to do fine, you're not going to put out crap, because we're all kind of here supporting each other, so I don't think there's going to be a dilution of quality. At least we haven't seen it yet. I mean, even Circle was making some pretty badass beers, if not standard.

NT: So the next section of questions that I wanted to talk about were things related to talking about locality, and this is where I go out on a limb and it's completely up in the air, so-

I'm thinking about the French concept of Terroir -

JL: Should we take a beer break?

[END OF PART 1] [44:21]