TORONTO (Reuters) - As the jobless rate climbed toward 10 percent this summer, Erica Shea and Stephen Valand, quit their advertising jobs, took $10,000 in personal savings and started selling their 1-gallon home brew beer kits from a stand at the Brooklyn Flea Market, testing the theory that beer is recession proof.
"When you go from an actual salary down to $0 an hour, it's quite an adjustment," admitted Shea, who got the bug for beer making after she stumbled across her dad's old home brewing kit. But when Shea and Valand went to brew their first batch they discovered there was no place in New York to buy the ingredients, sparking their business venture. The kits take up only a foot of floor space and come with everything needed to brew your own beer.
Shea said they opened their stand, which they rent for $100 a day, on the July 4th weekend, but sold just five kits. By the end of the month they had moved 40 kits, which go for $40, or $30 without grain. The kits, which make about 12 bottles through a four-week process, include a 1-gallon glass jug, some tubing, a racking cane, a thermometer, sanitizer and the yeast, hops and grain.
"Generally we make a $12-$15 profit off each kit," said Shea, adding that after an August lull, they are currently selling about 90 kits a week, which has created problems in terms of storing all the grain and finding the time to put all the kits together. Valand has already had to move into a bigger apartment to accommodate the larger grain shipments.
The U.S. craft brewing industry has weathered the recession better than most, with sales up nearly 9 percent in the first half of this year, according to the Brewers Association (BA). The BA, which has more than 1,500 members, also reported that overall U.S. beer sales were down 1.3 percent in the first six months of 2009.
Shea and Valand believe the trend of brewing your own specialty beers will continue to grow and that it will entice a younger, more urban demographic that enjoys the ability to experiment with different flavors.
"I just think that because there are really good craft beers now, there is really a drive for people to explore that and make their own really good beers," said Shea, who has used ingredients as bizarre as lobster and jalapeno. "We're working on an eggnog milk stout, which uses vanilla bean and nutmeg, but also lactose sugar, so it tastes really milky, like a beer-ish milkshake, which sounds really gross but actually isn't."
Valand said in September online sales through their website - www. brooklynbrewshop.com - surpassed in-person sales at the market for the first time and the couple would like to drive more traffic there, but know that entails a major revamp of the site. In addition Shea said they are also looking to get the kits into retail stores in time for the Christmas rush. That will likely entail hiring more people to do the packaging to free up their time to devote to marketing the product better.
"Our challenges as we continue to grow the business are time and space. There's only so many hours in a day that you can be doing things and there are so many ideas that come up that we really want to pursue, but ultimately there are two of us and we get tired."