Building a $10M Brewery starting in high school: The 30 Year Journey of Ska Brewing

Alan Li (00:01)
Today's guest, Dave Thibodeau, is the founder of Ska Brewing, one of the pioneers in American craft brewing. Since their founding over 30 years ago, it's been a crazy ride with them building their own manufacturing plant to opening a brick and mortar location the day of COVID shutdowns. And ultimately a sale of the company last year in 2025. Dave, we're really excited to have you on the podcast opening soon.

Dave Thibodeau (00:20)
Thanks

Great, yeah, I'm happy to be here. Thanks for having me.

Alan Li (00:32)
Cool. So I really want to dive into what went on with Scott Street, Bruce Stillery. But before that, we need to understand a little bit more about Scott Brewing, the founding story. Can you give us an overview of what Scott Brewing is?

Dave Thibodeau (00:51)
Sure, it's, I mean, like you said, we started almost 31 years ago now, and that was kind of before, you know, the real boom in craft brewing happened that kind of took place over the last like 15 years. ⁓ It's gone through these cycles, but this was, we were relatively early on. ⁓

starting in the mid 90s. And ⁓ at the time, you know, we were pretty young. We were punk kids and ⁓ we were really into ska music and punk rock. We were into beer. We were party kids in high school. We got into brewing because we actually ran across a ⁓ log book in my dad's bookshelves when we were in high school that ⁓

It said beer book and just the word beer peaked our curiosity so we opened it up and it was all his log sheets from home brewing since the late 60s and so he was yeah, he was home brewing long before Jimmy Carter made it legal to homebrew in the United States and we got in there and we were trying to figure out where he made the alcohol and when he added alcohol and we realized he made the alcohol

Alan Li (01:49)
wow.

Dave Thibodeau (02:03)
And that was just like a light bulb going on for us because we weren't old enough to buy a beer, but all of a sudden we figured out we could drink it. So we got into brewing in high school. And so we were, you know, the things that we were into, like I said, ska music and punk rock, and we were into comic books. And so we just kind of started brewing in our kitchen and we got better and better at it, but we always called it Ska Brewing Company. And we started making labels with the early, early...

Alan Li (02:18)
Yeah.

Okay?

Dave Thibodeau (02:33)
Macintosh computers ⁓ and giving them out as gifts and it was really novel at the time and then ⁓ fast forward a number of years till we're we're through college and ⁓

Alan Li (02:45)
And

sorry, when you were when you're brewing in high school, were your parents OK with this or were you just doing it ⁓ sneakily?

Dave Thibodeau (02:54)
Yeah, actually my dad was totally stoked. ⁓ He jumped right back in with us. Yeah, so, and that was cool because he had a friend in Wyoming, this was in Denver, so a few hours north, a few hours drive north to ⁓ Wyoming, and he had a friend who sold home brewing supplies out of his basement. so we went up there, made a little journey up there and bought all of our original stuff and then yeah, started brewing again with my dad.

Alan Li (02:59)
wow, you got cool parents.

Dave Thibodeau (03:23)
⁓

right, you know, kind of right out of the gates. And he brewed a lot with us in those first early years. And then we just kept brewing together. My friend Bill Graham and I, who I started the brewery with and, ⁓ and that's how we got, you know, we brewed all through college, every, every project I did in college as a communications major, whether it was a video or a technical writing paper or speech, it was all on brewing beer. And, so pretty much consumed our lives after once we started to kind of figure it out. And then.

Alan Li (03:25)
That's fun.

Nice.

And

was college local near home or?

Dave Thibodeau (03:58)
Yeah, yep. I went to college at Metropolitan State College in Denver and Bill went to school at CU in Boulder. So we were maybe 45 minutes apart from each other. yeah, need. Yeah, either. Either at my house or at Bill's house. Yeah, yeah. And it was, you know, I guess kind of the kind of the theme when we would brew, we had a couple of criteria we had to whenever you would brew, you had to listen to ska music.

Alan Li (04:07)
Awesome. And you're still doing the brewing at your house or on campus or?

Dave Thibodeau (04:27)
and you had to drink your previous batch of home brew. And so it was kind of, and then that's, once we got to where we actually started the business, we just ran with the comic books, the ska music and the craft beer. And basically that's the foundation of this place that we've had for 30 plus years now.

Alan Li (04:30)
Wow.

That's

incredible. Tell me a little bit about the scale of this. How many bottles were you brewing or how many kegs or how do we think about this?

Dave Thibodeau (04:57)
Yeah, when we first started, ⁓ we started in a little warehouse. We're in Durango now, and that's where we actually started the brewery in 1995. Durango is kind of a small rural town in southwestern Colorado. ⁓ so we started ⁓ brewing in a little warehouse. ⁓ Actually, the back corner space in a little warehouse in an industrial park right outside of town. And at that time,

Alan Li (05:21)
Mm-hmm.

Dave Thibodeau (05:26)
You know, our first full year, we probably, I think we brewed like 78 barrels of beer. And a barrel of beer is 31 gallons. And you might know ⁓ what a regular keg looks like. That's considered a half barrel. So a regular keg's 15 and a half gallons. So two kegs is a barrel.

And yeah, we probably, we probably brewed 78 barrels, I think was actually the number that first year. And then over the years we peaked in about 2016 or 17 at about 36, 37,000 barrels. So yeah, quite a bit.

Alan Li (05:47)
I see.

Wow,

that's incredible. And I know that throughout the journey, you had also invested into your own manufacturing plant. Is that correct?

Dave Thibodeau (06:19)
Correct. Yeah, so we've got, well, there's a few things there. There's our breweries relatively large. I don't know where we fall. There's about 10,000 breweries in the country right now, maybe just under that. And I think we are about, we're close to the top 100. We're what's called a regional specialty brewer. And that's anybody that brews over 15,000 barrels in a year. And...

So it's, guess, yeah, to kind of put it in perspective, ⁓ it's, I mean, when we peaked, it was close to a half a million cases of beer that year. So kind of gives you an idea. So that is all in, you.

Alan Li (07:07)
Mm-hmm.

Dave Thibodeau (07:11)
Kind of confusing question because we did have an actual ⁓ canning line manufacturing plant, but we also have our brewery which is manufacturing. assuming you mean the brewery, that's a, yeah, it's a good size brewery. wasn't just, in fact, when we started, it was only a brewery. There wasn't a tap room or a tasting room at all. So we were making beer just to sell it at bars and restaurants and stores.

Alan Li (07:39)
I see. And

a case of beer is just a normal 12 pack or 24 pack. Okay. Okay. Okay. And how much, how much does a case of beer sell for?

Dave Thibodeau (07:43)
24, yeah. Now it's all cans for us. So yeah, so 24 cans.

⁓ right now it's probably our average price on the retail shelf is 40 to 45 dollars for a case. So 10 to 12 dollars a six pack. Sold by six packs to the consumer.

Alan Li (08:11)
Gotcha. Okay. Well, that's quite sizable with half a million and then, you know, selling at that amount. That's, that's quite big.

Dave Thibodeau (08:17)
Yeah, think,

you know, when we peaked, do have a tasting room and a restaurant now. And then of course, Street, which you brought up was the same thing, ⁓ we had, I think we were doing about, we were doing right around 12 million when we had our peak in a year. Yeah, in dollars. So, and I think we're nine to 10 now, probably.

Alan Li (08:35)
Mm-hmm in 2016. Okay.

Yeah.

Okay. And how did you get the word out and sell it to customers? Was it mostly to local bars or was it through distributors or end retail or all the above?

Dave Thibodeau (08:56)
Yeah, that's a good question for us in particular because we, ⁓ there's distributors or wholesalers. It's very regulated obviously because it's alcohol. A lot of politics involved as well. But... ⁓

But generally there's what's known as the three tier system, which means that there's the supplier, which would be us as the brewer. And then there's a wholesaler or distributor. And then you go to the retailer and then the retailer sells it to the consumer. So you can see, you know, there's a lot of middlemen and a lot of margin disappearing at every step of the way. ⁓ so we actually, Colorado was one of a few states when we started that allowed you to self distribute. So it kind of,

Alan Li (09:27)
Mm. Yeah.

wow.

Dave Thibodeau (09:39)
didn't

adhere to the traditional three-tier system. So we were allowed to self-distribute our beer. So we actually started our own distribution company and eventually ended up selling beer in our neck of the woods for other brewers as well from all around the country. Yeah, yeah, so that was that helped us a lot because we controlled it and we we didn't have to give up that margin. So

Alan Li (09:56)
that's nice.

Uh-huh. So

I guess for other, ⁓ other breweries that aren't in Colorado, ⁓ when they have a tap room or people coming in to drink beer, that isn't part of the three tier system because it's at the brewery or is that separate from being able to sell direct to the customer?

Dave Thibodeau (10:23)
Yeah, that's that's kind of separate. So a lot of breweries now only have Just their taproom. So they have a small brewery, know, they brew beer and they only serve it By the pint in their own taproom and that's obviously

the most profitable way to sell your beer. Every step you take further from the brewery eats a chunk of your margin and it's better to control quality as well, obviously. your best bet, your most profitable revenue stream is your beer directly over the bar that you made in-house. And a lot of breweries do only that.

Some breweries have a model where they do that, but in multiple locations. And then when you get like us, you try and find different distributors ⁓ for different parts of the state or the nation or even internationally. ⁓ So we sell beer in other places in the world actually, and we've sold beer all the way on the East Coast. We don't currently, but we have at one point in time. there's a lot of different models. And then there's breweries who do...

Alan Li (11:28)
Mm-hmm. Okay.

Dave Thibodeau (11:32)
who don't have a tasting room at all and only distribute wholesale.

Alan Li (11:35)
Yeah.

⁓ so when did you, ⁓ open your tap room for your brewery and like, give me the timeline of like, when you open the space that was the bigger brewery and then when you decided to add on the tap room and invite people into.

Dave Thibodeau (11:42)
Thanks

Okay, cool. Yeah, we were, so we had this really interesting little space and like I said, we were pretty young. We didn't have any money when we started. So we kind of bootstrapped things together. And ⁓ when we started our first tasting room, I only knew of one other brewery, two other breweries in the state that had a tasting room at that time. And that was in the late nineties. And it was, ⁓ it was interesting because we didn't even know

we didn't understand the rules of that sort of retail outlet ourselves, even though, you know, that was who we sold to wholesale most of the time. But so it was very informal, very relaxed. And we probably gave away a lot more beer than we sold ⁓ that first year or two in our tasting room. But that was in the late 90s. And then ⁓

We were able to buy that building that we were renting from after a number of years. We bought it from the owner. He was willing to carry whatever the bank wouldn't loan us. And that turned out to be one of the defining moments, I think, of our growth, especially early on. And then we advanced.

Alan Li (12:59)
So he basically

assumed a cellar note on the piece or the land.

Dave Thibodeau (13:05)
Yeah,

so the building itself had a number of tenants in it and we were the smallest and

just coincidentally as other tenants were moving out, we were growing and we were able to take a little more space. And then eventually the guy who owned it decided to build another building for his sheet metal business and asked us if we wanted to buy his building. And we still had other tenants in it. And he just said, go to the bank, see what the bank will loan you. And then I will, yeah, I will carry the rest for you. So, and that's.

Alan Li (13:16)
Mmm. Yeah.

Nice.

Okay. And when

you started off, how many square feet did you have? And then when you ended up, you know, buying the building, how big were you guys?

Dave Thibodeau (13:45)
⁓ we started out and it was probably, it was probably close to a thousand square feet. It was pretty small. maybe a little bit more than that. If you include the little mezzanine that was in there. ⁓ and then when we finished, it was probably.

Alan Li (13:53)
Okay, yeah.

Dave Thibodeau (14:04)
My guess is we probably had about 8 to 10,000 square feet. It was kind of interesting, like we were just cutting through the walls and moving equipment in and then what eventually ended up happening was we sold that building in 2008 and that we basically doubled our money just on the real estate. That was the best business move we ever made was a real estate transaction.

Alan Li (14:09)
wow.

2008

but during the recession?

Dave Thibodeau (14:32)
Yeah, we did it right in the nick of time. Yeah, pretty much. You 2008 was, everybody always used that as a reference point to the recession, but that was kind of when everybody started to realize it was happening. So was still, you know, early 2008, just in the nick of time. And we basically, we bought that building for $750,000 and sold it for 1.5.

Alan Li (14:34)
Right before it? ⁓ wow.

so you got out in time.

Nice.

Dave Thibodeau (14:58)
And then we used all of that equity as a down payment to build the building that we're in today, which is now about 24,000 square feet. So, yeah.

Alan Li (15:08)
Okay.

Gotcha. And this, new building that you're in today, you spent, know, 1.1 and half on there. It's also a brewery plus a tap room. And is there a restaurant attached to or food?

Dave Thibodeau (15:23)
Yeah, yeah, and we actually, we spent a lot more than that. That was just what we had as a down payment. Yeah, so it was, I think we spent about five million building the building back in 2008. And then at that time we had ⁓ some friends of ours actually had a little taqueria in our outdoor beer garden.

Alan Li (15:28)
I see.

Dave Thibodeau (15:45)
in an Airstream trailer. So it was kind of, it was kind of like ahead of the food truck craze, you know, it wasn't, that wasn't such a big thing yet. And so it was kind of cool. It was kind of novel and unique and it was a nice, they had a great business model. They had a brick, one brick and mortar space in Durango already. And then he all along, he said, Hey, I want to get another brick and mortar space on the end of town that we were located in. When that comes up, I'm going to move. And he did.

And so we built our own kitchen attached to the building and we built it out of shipping containers. And it turned out to be really cool. Yeah, and that was kind of early before you saw much of that going on too. So, and we've expanded it a few times and expanded our beer garden. So now it's about, you know, we have a big outdoor beer garden, good size restaurant.

Alan Li (16:21)
wow.

Yeah.

Dave Thibodeau (16:39)
and Tap Room and it's two stories. We have a lot of events. We have space that nonprofits can use and it's worked out. It's worked out great for us. Yeah.

Alan Li (16:45)
Mm-hmm.

Nice.

And for the five million that it costs to build everything out, was that ⁓ like a bank loan or was that raised through friends and family?

Dave Thibodeau (16:57)
Yeah, that was okay. So we, didn't mention our third partner after our first year, ⁓ Bill and I, ⁓ we didn't really, it was fortunate that we had a friend who was really into home brewing and we got to know him that year, ⁓ through brewing.

but he really wanted to be a partner of ours and we hit our slow season during goes very seasonal and we were only selling, you know, a few count accounts around town and it slowed down and we ran out of cash right away early on our first year and he expressed interest at that same time and we needed him because he was just, he was knowledgeable and ambitious and few years younger than us. So we took on his name is Matt Vincent and ⁓

So

we took him on as our third partner. still until we sold it this past year, it was Matt and Bill and I the whole time. ⁓ That was from all the way from 1996 until just this past year. Yeah, so was three of us. We never had any other investors other than borrow. All we did was borrow from the bank.

Alan Li (17:52)
This was in 2009 or something.

⁓ okay.

Okay.

Dave Thibodeau (18:08)
So nobody else, there was never any other owner, never any other investor. We got a mortgage from the bank to build the building and then anytime we needed money or our line of credit or whatever, after that it was always the same bank for all those years.

Alan Li (18:22)
Yeah.

Gotcha. ⁓ So, you know, the space that you're in currently has a taproom, has a restaurant, has the brewery. ⁓ What was the sort of makeup of revenue then? Was it, you know, the distribution? Was it the taproom? Was it the restaurant? How did you think about the makeup?

Dave Thibodeau (18:41)
Like kind of the way we're currently set up or yeah. Yeah. It's interesting. It's, ⁓ we're fortunately, we're able to simplify things a little bit. had the probably the most complicated business model of any brewery. know because we had, we had a, ⁓

Alan Li (18:44)
Yeah, the revenue mix.

Dave Thibodeau (18:59)
We had our own distribution company and there's laws that prohibit or allow you to stack certain types of liquor licenses. So you can have maybe this license and that license, but not this other license, depending on what your model is. So we had to get kind of...

Creative, know our spouses actually owned the distribution company ⁓ But so we had a distribution company That we would it was our own company. So we would sell wholesale to our own company and then that company would you know sell to the retailer and then of course we had the retail in our tasting room, which was food and beer then we also have a space that we can rent for

Alan Li (19:26)
Mmm.

Dave Thibodeau (19:49)
So we rent out to groups or parties, Christmas parties, let nonprofits use it. We have catering that we actually do in a situation like that. It's got its own special menu and so we'll cater when someone rents the space. It's a little different than just our regular restaurant. ⁓ And then, ⁓

Alan Li (19:53)
⁓ yep.

Dave Thibodeau (20:11)
Yeah, without even getting into the Scaw Street, it was pretty interesting. And then we also distributed other beer for other people and wine and spirits as well. So we had a fleet of vehicles.

Alan Li (20:24)
Wow. Did

Scott Brewing only distribute to your wholesale company or your distributor or you also probably sold to other distributors too, right? Okay.

Dave Thibodeau (20:36)
Correct. Yeah, all

around the country. So yeah, so it was kind of a, you know, it seems.

Alan Li (20:41)
So you had like 10 different revenue streams.

Dave Thibodeau (20:44)
Yeah, it was a lot of different revenue streams. And obviously, like I touched on earlier, you know, the most profitable is just selling your own beer right across the bar by the pint. you know, and selling, like shipping costs are a huge one for us because we're in a rural area. So you have to go over some pretty high mountain passes to get in and out of here. So shipping across the country, eventually, we eventually stopped distributing on the other side of the country because the costs were just too

Alan Li (21:01)
Mmm.

Dave Thibodeau (21:13)
much ⁓ and ate into the margin. just wasn't worth doing. And ⁓ so yeah, you kind of really have to look at all those different revenue streams and see what's really working. And some of it was out of necessity. ⁓ And some of it was out of creativity, where we thought we could probably make more money.

Alan Li (21:18)
Yeah.

Dave Thibodeau (21:33)
And now, now since we sold it, we've closed our distribution side and we're with another local distributor. And then we, you know, we have other distributors in other states and even in Colorado.

And, ⁓ so to simplify it, guess, you know, our best profit and our best revenue stream is the stuff that we sell right here at, at the brewery. We call it the world headquarters, but it's just kind of a joke. ⁓ and then, yeah. And then, then our wholesale sales, you know, that's kind of like the least profitable. ⁓ and it takes them, it takes a lot of attention at the same time. So you work hard to make very little as you grow.

Alan Li (22:00)
It's true.

Dave Thibodeau (22:15)
that type of model.

Alan Li (22:17)
Okay. I see. I mean, I'm curious because you have done so many different things and I think, you know, brick and mortar owners always find new ways to generate revenue through events or through selling the product or through licensing their, their, you know, brand having done, you know, six, seven different revenue streams now like shuttering a few. What are your thoughts on either one?

because both of them could work, but is it just less of a headache to simplify and then just focus on what you're good at? Or did you also appreciate the time that you had a more diversified revenue stream?

Dave Thibodeau (22:57)
Yeah, both of those are true. ⁓ I think at certain times when we had that diverse of revenue streams, was helpful and we learned a lot.

But now, you know, now that we've, we've sold it and just to clarify, we sold it last summer, but I still work here full time. Um, so it's very similar to what my job was before I sold it. And, uh, but not having that distribution company and actually being able to focus, you know, on our tasting room and just a few wholesalers, um, is it's so much simpler and less complicated than it used to be. And, you can get, you can get pretty creative, like.

We would always wonder, should we be?

You know who should be making the money? Should the distribution company make more money than the brewery? mean, how is the pricing? How should we be working that? And there's, you know, there's all these factors that you have to take into consideration and there's pros and cons to doing things any particular way, but it's great. will say right now to, have it simplified much, much simpler than trying to run all the, and then the company that owned the real estate was also a different company. So, you know, we had one.

Alan Li (23:44)
Mm-hmm.

Dave Thibodeau (24:11)
basically one accountant the whole time that was trying to you know move all these numbers around

Alan Li (24:15)
Do everything, yeah. I guess

⁓ maybe a simpler question would be, did you wish you maybe didn't even do the distribution back then and just focused on scott brewing since the beginning?

Dave Thibodeau (24:33)
No, I don't think so. I think it was good that we did and I think a lot of the reason why was just what we learned. ⁓

Managing a relationship with a distributor is not an easy thing. ⁓ we learned a lot because we had the perspective of both sides. A distributor is carrying a lot of other brands. And so a lot of brewers will get pretty upset that they don't have enough mine shares, kind of the term we use within a distributor's house. ⁓

And it's frustrating when sales are hurting for whatever reason or something goes wrong. And we learned a lot about managing that relationship and communication because we had to do it from both sides with other suppliers. So if they were upset with us, we could understand why and maybe how we might not want to, or maybe we do want to react or.

Alan Li (25:17)
I

Dave Thibodeau (25:32)
or manage our relationship with our wholesaler that way as well. it was, I'm grateful that we did it, even though was very complicated for a lot of years.

Alan Li (25:38)
Yeah.

Yeah. It makes, makes you smarter understanding both sides. So now it positions you better as a brewery and managing that relationship. That makes sense. Okay. ⁓ this is all super great. And I think also a great setup for what Scostri, Bruce Stillery is. So, ⁓ talk us through what that concept was and what happened.

Dave Thibodeau (25:48)
Totally, totally.

Okay, so Bill and I also owned a distillery ⁓ In another part of the state and it was called Peach Street distillers We opened that in 2005 with another friend of ours unrelated to Matt. Matt was not part of that business

Matt later actually opened a fabricating business making canning lines called Scott fabricating. Bill and I weren't part of that business. Anyhow, the three of us and our, our COO at the time, he's now our CEO. and another, our sales guy from Pete street got together and, ⁓

Alan Li (26:28)
Gosh.

Dave Thibodeau (26:42)
Basically started another business. It was really a Scott and a peach street thing. We just needed some more money So there was more people involved all good people that that we work with and ⁓ And we decided to create a brew stillery So we would have a brewery and a distillery and a restaurant in one space very complicated from a licensing perspective in Colorado, but

Alan Li (27:06)
Do

people do this? Is this like a one-of-a-kind thing or has this happened before?

Dave Thibodeau (27:10)
At the time, I think we were the only one in Colorado and I knew of a couple others around the country, but very unique and really difficult to get licensed in Colorado. had to, there was a lot of hoops we had to find to crawl through and. ⁓

Alan Li (27:18)
Yeah.

Sure. And the distillery is

what type of spirit?

Dave Thibodeau (27:30)
So that distillery did a lot of stuff, but our focus was bourbon. But we also did clear spirits gin and vodka, but bourbon, different types of whiskeys. yeah, and so that was, so we did that in Boulder and ⁓ it took us a good part of the year. It was in a former ⁓ brew pub space.

Alan Li (27:35)
Okay.

Okay, got it.

Dave Thibodeau (27:53)
Brewpub being a brewery that has a restaurant and a taproom. Just a regular manufacturing brewery generally doesn't have the restaurant part. So that's the difference. This is 2020 when we opened it up. So it is to have most of.

Alan Li (28:03)
Yeah. And what year is this?

But the preparation, even before you opened it up, like, when did you guys start?

Dave Thibodeau (28:17)
Yeah, most of 2019. So we started in early 2019 and then we were, we opened our doors on on March 16th of 2020, which is the same day that all the bars and restaurants got closed down in Colorado due to the pandemic.

Alan Li (28:36)
How big was the space that you guys got in Boulder? How much were renovations? How much money did you put into it? Yeah, I'm curious.

Dave Thibodeau (28:45)
We spent, you know, it already had a brewery in it,

And the brewery had been seized by the, the brewing equipment had been seized by the state. And because I think it was taxes or something that the previous owner didn't pay. Um, so they had an auction and we were, we were able to get all of the equipment for, for a good price, I think right around a hundred thousand dollars, um, for all the brewing equipment. And we had most, a lot of the distilling equipment too. We spent a little bit of money there. Um,

Alan Li (29:18)
Mm-hmm.

Dave Thibodeau (29:19)
We each put in some money and then we borrowed the rest. And I think we were able to actually get open for about half a million dollars. ⁓ It wasn't bad because it was a beautiful functioning kitchen. The kitchen was great. The restaurant, we just used all the same furniture. We changed it, painted, updated everything. ⁓ But the space was great.

Alan Li (29:26)
⁓ that's not too bad.

Dave Thibodeau (29:41)
⁓ I think that, I think there was just some mismanagement with the previous owners, but they had a good thing going in a good place. And we were really fortunate in that our, our COO at the time, ⁓ his good friends were actually the landlord. ⁓ that was kind of coincidental. So we got them, we got the equipment from a state auction and then we knew the landlord and we're able to negotiate a lease with them.

Alan Li (29:58)
Nice.

Dave Thibodeau (30:09)
turned out to be a little bit of a problem once things didn't totally work out. yeah, so we were able to get in there for a good amount of money. mean, it wasn't exorbitant considering what we had. It was a nice, big restaurant. bigger than what we thought it was. Oh God, I can't remember exactly, but I bet it was, I bet it was maybe,

Alan Li (30:14)
Yeah.

How many square feet was the space?

Dave Thibodeau (30:40)
God, it was probably 8,000 square feet easily. Yeah, yeah. And ⁓ it was nice. Yeah, I can't remember the exact capacity, but quite a few people could fit in there. ⁓ So it didn't need a lot done to it, just enough to make it look a little different, you know? It was all very functional.

Alan Li (30:44)
Okay, okay, yeah, it's pretty sizable.

Mm-hmm.

So was it true that the day you opened was the actual day of shutdowns? That's crazy.

Dave Thibodeau (31:06)
Yeah, so we actually

had a grand opening on Monday, March 16th and we started at five o'clock and at 5 45 our governor came on TV and had his press conference and said we're shutting all the bars and restaurants down and we bought everybody his shot and and shut down.

Alan Li (31:29)
my

god.

Dave Thibodeau (31:29)
During

our grand opening it was an hour and 11 minutes long it was 71 minutes long Yeah, we were open for 71 minutes before the stage shut it down

Alan Li (31:36)
Must be a record.

And I know, yeah, it seems like, you over the next couple of years, you know, you were open, not open because of obviously COVID restrictions, but ⁓ do you think that it's just because of COVID where if you had opened maybe a few years earlier, the concept would have worked?

Dave Thibodeau (32:05)
I feel so- I feel it would've. The space was great, it was kind of, you know, everyone thinks of Boulder as a college town. This was kind of-

out of the campus area, kind of not in the middle of where all the students are. It was kind of more of an office park really. And I think there was a little Google campus there. so it did a lot of its business at lunch and at happy hour, which was great for us. We didn't want like a party crowd. We wanted lunch and happy hour and close early. And unfortunately, as everybody knows what happened with COVID was that any, ⁓

commercial space, particularly office space, never still hasn't come back. ⁓ Yeah, so it was it was great because it had the built-in crowd that we really wanted, know, fairly affluent and and you know, it was like the right age as far as the demographic go. They were all craft beer consumers. The other brewery had done fairly well as far as total revenue goes. I don't know what their profit looked like, but ⁓

Alan Li (32:49)
Yeah.

Mm-hmm.

Dave Thibodeau (33:12)
We had some of their financials before we ever ended up getting the space and it wasn't bad. so I think, yeah, I think it was, everything was right except for the timing. Yeah, and I don't think we could have opened it there anytime after COVID, but had we opened it a couple of years before, we might've been able to survive. But as you mentioned, you know, we...

Alan Li (33:23)
Good timing. Yeah, that's unfortunate.

Yeah.

Dave Thibodeau (33:37)
We were open with all kinds of restrictions for the over the course of almost two years before we just said this isn't going to work and we ended up closing it down permanently. Yeah.

Alan Li (33:47)
I see. ⁓

What's the top line of something like a brewery pub like that, you know, in an 8,000 square feet? What is realistic and how does someone think about it versus just a normal bar versus a restaurant? Is it just combining both or I'm assuming it's more alcohol sales a little bit, but.

Dave Thibodeau (34:08)
Yeah, you know, we, because we did have access to the financials of the previous brew pub that was in there. So our projections for the first full 12 months were at about three million. And it was very close to 50-50 food to alcohol. Yeah, and it's...

Alan Li (34:25)
Mm-hmm.

Okay.

Dave Thibodeau (34:35)
You know, that's the crazy thing because even here at where our headquarters are now, we're probably...

like 60 % food, 40 % beer and alcohol, whereas those numbers were flipped before COVID. You you had people out here playing games, standing room only drinking beer, and then COVID kind of forced tables that were six feet apart from each other. And it just changed the behavior of our core customer. ⁓ And so, yeah, and so at that time, you know, like I said, with beer being fairly profitable, it's more profitable than food if you do it right.

Alan Li (35:00)
Yeah.

Dave Thibodeau (35:10)
⁓ And so it was the model was great because what we would be doing is selling our own a lot of our own beer that we made where it was more efficient here at our world headquarters Selling it to ourselves at the brew stillery and then brewing, you know unique one-off fun batches smaller batches of beer up there But all the flagships, know brew it on our big system down here in Durango where it's we can do it Less for less money and and more efficiently ⁓

Alan Li (35:39)
Yeah.

Dave Thibodeau (35:39)
And then, you know, then all of sudden we're our own best customer. So the model was great. ⁓ You know, I really believed in it and we were really, really excited before, before we actually opened.

Alan Li (35:52)
Yeah,

that's unfortunate timing in a parallel universe. It would have been a hit. It makes sense to me. What do you think about just the overall industry of less consumption of alcohol? And have you felt that with your brewery? have you seen that? Because you see all these charts where alcohol consumption is at a 30 or 40 or low or something like that. And the Gen Z don't drink anymore.

Dave Thibodeau (35:59)
Yeah.

Yeah, that's great question. It's absolutely true, but to frame it a little differently, it's not as much less consumption overall, because at the same time, the population is growing so much too. It's more things like you said, where Gen Z drinks less than millennials did. ⁓

Alan Li (36:34)
Hmm.

Dave Thibodeau (36:43)
And so you are seeing different demographics that drink less. Obviously a lot of my friends, know, in my, I'm in my fifties. So a lot of my friends are drinking less beer just for health reasons or, whatever it might be. ⁓ you know, they just don't go out as much. so that's all true. And we've definitely felt it. ⁓ I still feel like, I still feel like the pandemic changed some of that behavior is, and that's still kind of, haven't ever, we haven't really come out of.

Out of that, you know, it just changed hanging out at at a pub, you know, that's that's taken some time to come back and I think that's part of why you're seeing that but But you see in our space a lot of people, you know, they're brewing non-alcoholic beers. We actually have a THC Beverage now a super low dose THC beverage. We have non-alcoholic seltzers and ⁓ And we have CBD drinks and so it's

Alan Li (37:41)
You guys are making non-alcoholic and non-alcoholic seltzers?

Dave Thibodeau (37:41)
You know what I get?

Yeah, yeah, we have a, it's, yeah, it's called Skagua. ⁓ That's something we've had for years and years. Yeah, it's, you know, it's like just sparkling water, flavored sparkling water. ⁓ We don't distribute that very broadly. It's just around Southwestern Colorado. ⁓

Alan Li (37:48)
wow.

Okay. like Agua. Okay. I like that. It's fun.

Dave Thibodeau (38:04)
But yeah, so it's, you we try to have offerings like that because the crowd's pretty diverse that comes in here. There's obviously a lot of people that are still really into craft beer. And then there's, but a lot of them have friends that either, you know, they're trying to drink less or maybe there's a gluten sensitivity, you know, and then there's, you know, there's just, there's all the health warnings and... ⁓

And then, you know, generations of people that don't drink as much. ⁓ All that being said, I have faith in beer. It's been around for thousands and thousands of years, you know, and I think a lot of the other stuff you see is kind of trendy and it'll come and go. You know, a lot of the functional drinks, I think some will come and go. You'll see a lot of... ⁓

Alan Li (38:44)
Mm-hmm.

Dave Thibodeau (38:50)
⁓ You know the ready-to-drink cocktails there's you know hard teas and Lemonades and anything you can think of mixed into a can you know some of that's gonna come and go and it has in the past there was things like Zima or Bartles and James way back when you know and it they're they're trendy and maybe they're good at the moment But beer somehow stands the test of time, know and beers beers always there and it always has been and I think it always will be but it's

Alan Li (39:07)
Mm.

Yeah.

Dave Thibodeau (39:20)
always gonna have its peaks and its valleys.

Alan Li (39:22)
Yeah,

I think that's, I think that's right. Cause I remember seeing the chart and it was saying like lowest consumption in 30 or 40 years, but the chart, looks like this. It like oscillates between a band of 45 and 55%. And then obviously they make the Y axis really dramatic and like make it look like it's a huge drop, but the actual drops like 4%. So I, I agree.

Dave Thibodeau (39:32)
Yeah, absolutely.

Yes.

Yeah, and

if you look per capita, you know, it's not so drastic, but if you do it generationally or whatever, the graph can show a different picture.

It's gotta be, you know, and it's funny because there's so many articles about it and sometimes you just don't know what the context truly is. ⁓ But there's no doubt about it. know, people are drinking, I mean, there's less beer being consumed overall, but not that much overall, you know, so.

Alan Li (40:09)
Yes.

Mm-hmm. Yeah.

And then, so with Scott Street, Bruce, bruxillary, you ended up closing that in, it was 2022. Is that correct?

Dave Thibodeau (40:29)
Correct, yeah.

Alan Li (40:30)
Okay.

And then the focus was back on to, you know, scop brewing and you ultimately sold last year. So I guess talk me a little bit through the decision to sell in 2025.

Dave Thibodeau (40:42)
Yeah, think, you know, I think there's a couple, there's a couple lessons there. The Bruce Stillery, that whole exercise definitely made us kind of gun shy as far as ⁓ we've always been pretty progressive and fairly averse to like, I mean, we were willing to take risks pretty much throughout our entire existence, but then the Skawstreet episode.

That at least changed for me, changed the way I started to think about things. I started thinking about, know, wow, I have a lot of personal guarantees. My house is on the line and maybe everything isn't going to succeed, you know? And ⁓ so I think I became a little gun shy. And it was also, it took a lot of energy. So I was, it was exhausting to go through that. So.

So I think that coupled with, you know, was kind of the perfect storm. There was COVID, there was generational things happening with less alcohol, shelves being more crowded with different types of beverages. A lot of that stuff is called Beyond Beer, you know, whether it's ready to drink cocktails or whatever it might be. ⁓ And,

Alan Li (41:54)
Mm.

Dave Thibodeau (42:00)
And so it just became, and obviously more breweries, know, suddenly we're looking at almost 10,000 breweries in the country. All of this was happening at the same time, ⁓ in the late teens into the, into the 2020s. And, ⁓ so things did definitely get very tight for us. I feel like we were really fortunate in that we, we bought our real estate along the way, ⁓ with plans to do more. own some land.

Right next to us and ⁓ so we had these other assets Tied to the business, but not necessarily the business and Things started to get tight. ⁓ the land for example

We never built anything on it. We bought that just before COVID and then once COVID hit everything changed and so we didn't our vision you know wasn't going to come to fruition so but we still had to pay for it you know. Well things started to get tight and ⁓ also distribution got more expensive so we started shrinking our footprint. ⁓

Alan Li (43:03)
Mm.

Dave Thibodeau (43:05)
And so yes, sales just slowed down for us and it was still manageable. It was still great. It was, it was still a lot of fun, but I think the complexities with our particular business model ⁓ made it kind of like we were on the verge of maybe not paying our bills later that next year. You know, it was definitely getting tight at the same time. Two local guys that had been in the beer business. ⁓

and owned the distributorship here in town, ⁓ the distributorship that sells Coors beer, those guys had expressed interest, we've known them for years, they'd expressed interest in buying the brewery and the real estate and the distribution from us.

Obviously there's some synergies there because then they can move the distribution of our beer in the Durango area Over to their distributorship and we're very we're very have a solid foundation Our sales are really strong in our backyard and so they get that you know, and then they own the brewery that Shed me of all the debt ⁓ and my two partners Matt and Bill

And so it just kind of, you know, it seemed like a great idea for all of us to consider it. And I, you I always thought this would be something that stayed in my family, you know, forever. And I just never pictured myself doing anything else.

And I think we were really fortunate that Bob and Dave, the new owners, were there at that time. they're having fun with it. And that was kind of the idea. And I think if we can, without that debt as part of the actual business model and with some of the resources they have due to owning their own better distribution company than ours,

I think we'll climb out of this kind of down climb that the industry has seen and we can weather that little bit of a storm maybe longer than some other breweries. And I think the resources that are at our disposal now, all of that together, it just made perfect sense. things are looking bright, there's renewed energy and ⁓ it was just.

Couple years there where things were really tight and and it did feel pretty desperate So we sold all the real estate the distribution company the brewery all of it to these guys and and they're either retired and ⁓ But they're Durango guys, so everybody knows them, you know, so it's nice nice to keep it local

Alan Li (45:27)
Yeah.

Hmm.

Dave Thibodeau (45:42)
They let me stay around and they're well known in the community and that's kind of, that's one of our core values that I didn't want to go away is being helpful and strong in our own community. So all of that gets to stay. So it's kind of the best of both worlds for me.

Alan Li (46:00)
Yeah.

Yeah, you still get to run the business and steer it over the next few years with ample resources to continue growing. that's great. Yeah, sometimes you just have to like, seems like to weather some of these downturns that are industry wide. And who knows like what's going to happen in the next few years when everyone has a newfound discovery of craft brewing and it becomes nostalgic for

Dave Thibodeau (46:13)
Yeah, yeah, great.

Yeah.

Alan Li (46:33)
you know,

millennials and whatnot, so.

Dave Thibodeau (46:36)
I think that's exactly what we're going to see happening. that's, to me, it just seems great, you know?

Alan Li (46:40)
It's, yeah, it's

interesting because I'm partly in the photo, ⁓ photo booth business. ⁓ and photo booths were basically kind of dead for the last, ⁓ 10, 15 years, but in the last couple of years, there's been a huge resurgence of interest in photo booths, especially amongst Gen Z because everyone is so chronically online and on their phones and computers and digital.

that they actually want to go to a physical space to take pictures and get photo strips. ⁓

Dave Thibodeau (47:13)
Yeah, I mean

we've hired somebody that we know that has a booth too like our last couple anniversary parties just because people love it now, you know? It's great!

Alan Li (47:24)
Yeah, things

can always change. ⁓ Dave, yeah, this has been super awesome. ⁓ You've had a crazy journey over the last 30 or plus years. I'm curious with all the knowledge that you have now, is there anything that you would have changed ⁓ going back?

Dave Thibodeau (47:48)
You know, there's certainly some lessons that I learned. ⁓ I don't... It's hard for me just where my head is nowadays. There's not much that I regret. You you learn from your mistakes and probably wouldn't get to the point, you know, that I am, which I'm stoked about. ⁓

without some of those things happening. there's, what I know now, I can see a couple stages along the way where I wouldn't do the same thing that I did, but I don't regret that I did them then.

Alan Li (48:22)
Yeah.

Yeah,

that's fair. Which one are those stages that you would have done differently?

Dave Thibodeau (48:30)
You know, there's two things that jumped right to mind. One is ⁓ making decisions that I'm uncomfortable with or that we're uncomfortable with because of fear of scarcity. An example of this was we thought we were not going to be able to get the hops, the type of hops we wanted in the quantities we wanted.

because it just seemed like there was going to be a shortage and we signed a bunch of contracts for a lot of hops to get a good price and they were like five-year contracts and then consumer preferences changed and it turned out you could buy them on the spot market for a little bit more and suddenly we didn't need all those hops. ⁓ The beers we weren't using those hops for the styles of beer we were making but we were tied into five-year contracts that we had to buy out for hundreds of

Alan Li (49:14)
Mm-hmm.

Dave Thibodeau (49:23)
thousands of dollars with hops that we didn't even want to use. So, and that was just because fear of scarcity, you know, and it was like.

There was a whole nother way to approach that. And we weren't the only ones who did it. ⁓ you know, there was, there's, it's, it's been that way. Like if you're using a lot of raw materials as a manufacturer or whatever, as a food producer, you know, that's, that's, that can happen a lot. I mean, climate plays a big role there, you know, transit shipping, all kinds of things. And sometimes you get nervous and I certainly wouldn't sign these long contracts. And it's even that brings.

me

to the other thing like when we sold we had another contract that had successor language in it and it was for our co2 ⁓ contract really understanding what's in a contract and having having an attorney really go through it and point everything out you don't don't just take a big contract for granted and sign it we signed a contract for our co2 that

Alan Li (50:20)
Mm-hmm.

Yeah.

Dave Thibodeau (50:29)
had a lot of clauses in there for force majeure that they could implement. And then they just kept upping the price, upping the price until it was ridiculous, but we couldn't get out of the contract. And then even when we sold, they had successor language in there. And this is the company is one of the biggest companies and corporations in the world, the parent company. So I'm not going to mention it, but they obviously had quite a team of lawyers put this thing together, but it had personal guarantees. So I thought

Alan Li (50:49)
huh.

Dave Thibodeau (50:58)
We ended up getting working our way out of it, we almost had to buy our way out of it for $500,000. ⁓ Yeah.

Alan Li (51:05)
my God. And you're saying CO2

as in like gas for the brewery? ⁓ wow.

Dave Thibodeau (51:10)
That's what carbonates beer. Yeah. Yeah, it's

crazy, crazy. So, and then, you know, same with even the like, even getting out of the lease when we closed down Scott street, you know, we had personal guarantees and it was a friend who was the landlord and it turned awkward. really looking at personal guarantees, like, you know, a lot of suppliers.

They want your business no matter what. You shouldn't just accept an initial contract. That's definitely something I've learned. Don't just guarantee everything because that seems like the way it is. You could just say, no, I'm not signing a personal guarantee. And you're still going to get their business, or they're going to get you.

Alan Li (51:55)
Yeah,

I love that. ⁓ Especially as when you're an up and coming player, you assume this is the standard and you don't want to step on people's feet, especially if it's like a bigger company and you assume like everything needs to be this way, but it's everything's negotiable in business at least. So.

Dave Thibodeau (52:08)
Totally.

Yeah,

regardless of what you want to say about attorneys, ⁓ it's still worth having one look at your complicated contracts.

Alan Li (52:22)
Yeah. ⁓

final question for me actually is, ⁓ cause it came to mind. Do you use AI now to read your contracts to do these drafts, stocks, et cetera? And how do you do some at Scott?

Dave Thibodeau (52:36)
Yeah,

I use AI quite a bit now. yeah, looking at things like contracts, fortunately, our CEO now, I stepped down and our COO, Steve Bresley stepped into the role of CEO. ⁓ And he's the guy that has to deal with most of our contracts. But going through that whole sales, selling the business, that...

We had teams of lawyers on the buyer side that were really looking at stuff. So I was really just starting to understand the potential with AI when we first started working on that. So I didn't really get into that with contracts now, but I would definitely use that for any contract that I had to use. But I use it all the time for just kind of general research. I use it to help write press releases. I use...

I mean, we use it for kind of marketing campaigns. ⁓ And I like to, you know, I don't like, I still feel weird about.

robots doing too much for me and too much of my thinking, you know? So I like to use AI as a starting point for any given project, but then just jump into taking it from there, you know? And it could be anything. I mean, I use, I am quick to go to AI ⁓ for whatever I might be looking to find out, you know, or do.

Alan Li (54:02)
Same,

Yeah, no, but to your point, I don't want to lose my critical reasoning ability. I want to still be able to analyze things, ⁓ but it's so easy to just have AI do it. So we'll see what happens. But ⁓ Dave, thank you so much for joining the pod. If people want to follow up or send you a message, what's the best way for them to do so?

Dave Thibodeau (54:09)
Very nice.

Sure is. Yeah.

Yeah, you can reach me. It's at Skabrew Dave on Instagram. Easier even is just Dave at skabrewing.com probably. I'm always looking at emails still and those are probably the easiest ways to reach me. ⁓ And even old school, you can always call me right at the brewery. yeah. That's right. Yep. It's actually me.

Alan Li (54:51)
Awesome. I love that. It'll be you answering, not an AI, Dave, right? I love it. Great.

All right. Well, Dave, I really enjoyed this. do you guys distribute in California?

Dave Thibodeau (55:01)
Cool.

We used to, we don't any longer. It's come up recently, getting back out there, so I have a lot of good friends out there. I spend a lot of time in Southern California and I'd love to have our beer back out there again at some point.

Alan Li (55:10)
Okay.

Cool. Well, when I'm in Colorado, I'd love to come by and take a look and a drink. So, all right. Thanks, Dave.

Dave Thibodeau (55:25)
Please do. Thanks,

Alan. I appreciate it.