Going Coastal with Pelican Brewmaster Darron Welch

Brewpublic ventures out to Pacific City to visit Pelican Brewery, where brewmaster Darron Welch talks about life in coastal Beervana, the award winning beers of Pelican, his love for craft beer, and an exciting new bill legalizing self-distribution of beer in Oregon.

One of the finer plots of coastal land in Oregon is that of Pacific City. With magnificent sand dunes rolling amidst a forested backdrop and majestic views of the imposing Haystack Rock, the winding roads leading in to the town are “a double-edged sword” explains Jeremy Strober of an area development group called Kiwanda Hospitality Group. Strober explains, “While is keeps this area a hidden gem, a secluded piece of paradise, it also makes it hard for businesses to survive in the winter time.” Just a few miles off Highway 101 between Lincoln City and Tillamook, Pacific City offers touring attractions of great surf, turf, and phenomenal beer brewed at Pelican Brewing Company. High prices are justified by a dramatic swing in seasonal business. A large majority of tourism dollars derrived in Pacific City comes during the height of the summer and judging by our last trip there in late June, the hefty cost of hospitality was hardly relating to any slowdown during the country worst economic hardship in years.

The beers of Pelican have won boatloads of awards and the brewery itself has been recognized at the Great American Beer Festival as the country’s best brewery of the year twice. With a recent expansion in 2004 the brewery increased production to about 1500 barrels annually making it fall in the category of a large brewpub. If you’ve ever had the piquant India Pelican Ale, the robust Tsunami Stout, or the one of a kind Doryman Dark Ale, you can understand how spectacular this little 15-barrel brewery is. So is $5.50 a pint and $6 for an imperial (20 ounce) pint too much to ask for in these tough times? “Certainly I do get that feedback with our bottled IPA. We price it so that we’re actually making a little bit of money” said brewmaster and partner Darron Welch in a recent interview. Welch, Pelican’s original brewer is the man responsible for much of the recipe development at Pelican. “When we sell it to the distributor, the distributor needs to mark it up. The retailer needs to mark it up. So we do get feedback about ‘Why is your bottle of IPA $7.00?’ It’s an expensive bottle of beer. I think when we’re able to distribute it ourselves, we’ll see that price go down a little bit.” Welch continued “I’ve always admired what Jack Joyce has done with Rogue. He’s always had this philosophy that ‘We’ve got really good beer and it’s worth paying for. We’re going to charge a price that we feel is fair.’ And, honestly, they’ve had a lot of success with that. I hope that we’re able to replicate that in a small way.” In addition Welch joked “Plus you have this exorbitant head brewer’s salary that you’ve got to pay.”

Self-Distribution

Not all Oregon state bills regarding beer are bad. Despite some politicians trying to squeeze craft brewers for big taxes, a few bills actually serve to benefit the craft brewer making his or her livelihood from within the brewpub walls. “We had a lot of support on this issue.” said Welch “We had a lot of support from the Oregon Brewers Guild board of directors, from folks like Ben Love (Hopworks Brewery), Van Havig (Rock Bottom), and Jamie Floyd (Ninkasi), just to name a few. Other brewers that were really pushing for this and needing this: Roots Brewery gave us a lot of support. The Wild River group gave us a lot of support. Multnomah Brewery. We got a lot of support from the McMenamins group.  They’re called 10 Barrel now, but they used to be called Wildfire-they’ve been hugely supportive as well as Silver Moon, also over in the Bend area. We got support from Cascade Lakes Brewery. And just a lot of support for this issue from brewpub membership as a whole.”

Obviously this is a big deal and everything will be changed from here forth. Before the self-distro law took effect, Pelican was limited to Mid-Willamette Valley, primarily Portland. Said Welch “(F)or bottled beer our India Pelican Ale is distributed in Portland, as well as the populated coast. 99% of our distribution was through Portland. The coast here doesn’t take very much beer. The number of specialty stores is just (places thumb and index finger very close together).” As for seeing kegs of Pelican on tap in the Portland area again, Welch said kegged beer will not be the focus of distribution. “You may see one here or there” said the brewer.  Being in a secluded area during the winter months “means the brewery doesn’t have a steady business volume to depend on” according to Welch. “I think that’s a huge difference from being in a place like Eugene or Portland where you have this base of population, you reach your customers and they keep coming back” he said. “They come back in December, they come back in February, they come back in the summer, they comeback all year long!” The majority of sales for Pelican are in July and August, like most of craft brewers in the state, but on a much more dramatic scale. “It’s like a madhouse here and then, all of a sudden, it’s like you can hear a pin drop in January” said Welch. “After thirteen years, we’ve figure out one or two things. We wouldn’t still be here if we hadn’t learned to make some adjustments to survive. Our business model is truly a feast or famine”

This yo-yo of a business model will likely be supplemented by the new self distribution law that will allow for breweries like Pelican to forgo employing a distribution company in selling their beers to retailers. Optimistically, Welch admits “If we are the ones driving the truck, calling on accounts, and making those contacts, and pushing those sales, then we’re in control instead of the distributor. It’s their job to sell as much beer as possible. When people in the summertime buy more beer, that’s what they want to do. But in the summertime, we’ve got all we can handle (at the brewpub). And what we need to do is offset our seasonality. By self-distributing our beer, we feel we have a little more control over that and we’re not going to be pushing product and posting things off in the middle of the summertime when we can barely keep up as it is. But come December, January, February, we’ll probably have something on post off every month. In fact, we’ve already written the post-off plan, so I can tell you that we will be posting something off every single month during those winter months to drive sales. And since we are deeply staffed, our guys can be out reaching accounts and building sales in the off-season.” In the early days of Pelican, Welch says the difference between the peak and lowest production months was 400%. “That was pretty tough to manage” he said. Nowadays those numbers are down to only about a 100 or 150% differential. “If we had constant demand, we’d probably be producing 3000 barrels per year” said Welch.

More on Pelican

Up until 2004 the brewery was just a cramped little strip adjacent to the restaurant, a run down old pizza joint with blown sand covering much of the roof. Since Pelican and company took over the property, quite a bit has changed. The look and feel of Pacific City has undergone a dramatic face lift over the past decade.Once a somewhat desolate fishing town, the driving force behind today’s economy here is tourism. Time share condominiums were built on the dunes overlooking the ocean in 2007 and much of the look and feel of the town seems quite different from much of Oregon. The Pelican Brewery hosts the annual Brewers Summer Games each June where industry craft brew folks test their athleticism and enjoy the great bounty of beer the Northwest has to offer. Pelican, is just another shining example of why Oregon is the best state in the country for beer.

More on Brewmaster Darron Welch, his passion for beer, and what’s coming up from Pelican

“When I was a young man, I took a year off between high school and college. I had an opportunity to live overseas and I just couldn’t pass it up. I was an exchange student in German. When I left, I thought I liked beer. When I got to Germany, I realized that I was completely mistaken. I actually loved beer. It just had to be great beer. When I came back (to America) I was, of course, disappointed with the regular issue American beer that was available in the mid-80s. So, I’d heard of homebrewing so I thought I’d homebrewing because I thought the worst thing that can happen is that at least it will still have more flavor. It may not be perfect beer, but it will still have more flavor than what’s commercially available. So, I took up homebrewing, and my father was instrumental in that because I was still under 21. So he would go and buy the ingredients and I would make the beer. Half of it was his and half of it was mine. That was a good deal for everyone involved. I did homebrewing all through college and my first career. I got to be a pretty accomplished homebrewer. When I was out in Wisconsin for my previous work life, I had an opportunity to sign on at the local brewpub so I did. So, that was my jump into the ranks of professional brewers. It’s funny, the beer that really opened my eyes…there were actually two beers…that opened my eyes to the potential of flavor in beer and the qualities that a good beer could have. That was a good German Pilsner and a South German Hefeweizen. Neither of which I brew (laughs). For Welch his previous attempts at brewing a Pilsner for Pelican sold slowly and took longer to ferment. “I am happy to see Hopworks making some headway in making some top notch lager in the Pacific Northwest” he added. “As far as craft beer goes, this has been a lager-free zone. There’s been lots of us trying to get people fired up about lager, but so far, not a lot of success. My trouble is, I have time to brew a Pilsner in the winter. But when people really want Pilsner is (in the summer). It would be fun to have a lager strain going and enough tanks to dink around with it…do a Dortmunder, do a Pilsner…”  Pelican will be brewing their special Saison this month and packaging it in early August for release in early September. Look for it in 750 ML bottles.