Saint Arnold Brewing Co.

A good businessman knows the value of consulting experts.

As investment bankers, Brock Wagner and Kevin Bartol already knew what a good company looked like. So, before they opened Saint Arnold Brewing Co. in Houston in 1994, they made sure they knew what a good brewing company should look like. Homebrewing guru George Fix, another Texan, offered advice about brewing. Paul Shipman, the CEO who took the Redhook Ale Brewery public and sold part of it to Anheuser-Busch, provided help on the business side.

Kevin Bartol and Brock Wagner.

And microbreweries across the nation opened their doors when Bartol and Wagner showed up to visit their brewhouses. "Everybody was incredibly helpful, and we've tried to return that, helping people when they ask us for advice," Wagner said. Walking as he talked, he stooped noticeably. "I remember touring Full Sail like this," he said, laughing.

While Bartol and Wagner have had limited use for mergers and acquisitions skills at the brewery -- particularly in the early days, when overseeing distribution meant Bartol also drove a delivery truck and being in charge of brewing meant Wagner also mopped the floor -- they did put their business training to immediate use.

"We'd been in front of people. We'd had to go out and sell these companies," Bartol said. "We'd seen so many businesses, so many that succeeded and so many that failed." When they toured other microbreweries, they would show off the financial models they had come up with. "Most of them hadn't done anything like that," Bartol said. "We wouldn't have thought about trying to sell a business without them."

That may be one of the reasons why, while national sales of craft beer slowed to 5 percent in 1997, St. Arnold grew 26 percent on top of a 74 percent gain in 1996. And it accomplished this in Texas, where the battle for market share between Anheuser-Busch and Miller Brewing Co. is intense, and those brewing giants spend heavily on advertising.

"You can't play in the big boys' territory," Wagner said, talking about flavor profiles and frequent pricing wars. "We sell ourselves on one thing, the taste of our beer."

Wagner makes beer a homebrewer would be proud of. "Last year, we had homebrewers running around saying, 'This is the best pilsner ever brewed,'" he said. "If you are doing this just because you want to make money, your beer has no soul."

Making money is part of the St. Arnold plan, but Wagner said that, these days, he might make 25 percent of what he did as an investment banker.

The brewery occupies 18,000 square feet in an industrial park with room to produce 20,000 barrels per year with additional fermenters. Right now, there are six fermenters, and two more are on the way. On days when Wagner, Dave Fougeron and Pete Nordloh brew, they make two batches in a 30-barrel DME kettle, filling a 60-barrel fermenter.

For a while they worried the brewery was cursed. Then beer writer Michael Jackson suggested they post a picture of St. Arnold. Things have have run smoothly since.

Each fermenter is named for a different saint, and of course, the brewery is named after the patron saint of brewers. "For a while, we thought we had the curse of St. Arnold," Wagner said, because the brewing kettle blew up, then the man putting together the bottling line died. About that time, beer writer Michael Jackson visited and told the partners they needed to post a picture of St. Arnold in the brewery. They did, and things have run smoothly since.

The brewery even calls its house yeast "St. Arnold." Wagner tried scores of yeasts before finding this one in a yeast bank. You could still order the yeast from the same bank, if you knew what to order. "I share everything (about recipes) but the yeast," Wagner said, smiling.

The flagship St. Arnold Amber Ale, which accounts for nearly 50 percent of sales, shows off the light fruitiness of the yeast perfectly. It is a deceivingly strong beer (original gravity 1.054, 5.5 percent alcohol by volume) made with two-row and Belgian Caravienne malts. The amber is hopped at the beginning and in the middle with Cascades and at the finish with Liberty, and has 31 IBUs.

St. Arnold sells a small portion of its Amber Ale as "real ale," putting it in firkins for a half-dozen bars in Houston, Austin and the Dallas-Fort Worth area to serve via handpump. "I started doing it because I wanted to drink it," Wagner said. He pulls the beer for "real ale" from the fermenter near the end of the cycle and racks it into casks, then dry hops it. Since no place in the brewery is exactly cellar temperature, the casks sit out for a day, then go into the cold box. ("St. Arnold" yeast continues to ferment at 50° F.)

By the time the beer leaves the brewery, it's pretty well conditioned, and bar owners need only to insert a soft spile and hook up the firkin to a handpump. "Most of them seem to move a cask in three to five days," Wagner said.

He noted that the process is "pretty much what homebrewers do all the time." To make and serve real ale at home he suggests:

Get the beer off most of the yeast. Move it over when most of the fermentation is complete.

Prime it a bit.

Dry hop it. (St. Arnold uses Liberty plugs for dry hopping.)

Have a bunch of friends over and drink it quickly.

Serve it through a beer engine with a sparkler, if possible. "That really makes a difference," he said. "The sparkler brings out the aromas."

St. Arnold Brown Ale and St. Arnold Kristall Weizen are the other two year-round beers. The brown ale, 1.053OG/24IBUs and made with five malts, is an English-style brown with just enough hops to balance the malt. "We use a very, very tiny amount of chocolate malt, but it goes a long way," Wagner said. Kristall Weizen, 1.049OG/18IBUs, is made with about 40 percent malted wheat. It has a palate-coating creaminess, with a hoppiness that cleanses the palate in the finish.

The brewery has done particularly well with seasonal beers. Wagner first brewed St. Arnold Christmas Ale in 1995, making a 30-barrel batch for draft customers. That lasted less than a week, so in 1996 he brewed 300 barrels for kegs and bottles. That was sold out by Dec. 1. Last year he doubled the batch, and it lasted until Christmas.

St. Arnold Summerfest, the Bohemian-style pilsner, was particularly challenging. "One malt, two hops, but a tough beer," Wagner said. The Durst malt tends to get doughy and clogs the hydrator. "It's expensive and hell to work with, but worth the trouble," Wagner said. Summerfest starts at 1.050, is hopped with Czech Saaz and Tettnanger and has 41 IBUs. St. Arnold himself looks particularly different on the tie-dyed Summerfest label, where he is surrounded by palm leaves and sports sunglasses.

St. Arnold beers are loosely filtered and not pasteurized, so Bartol and Wagner chose a distributor who agreed to keep the beer cold and pull six-packs that are older than 90 days. "Typically, you find (St. Arnold) beer on the shelves that is one to three weeks old," Bartol said. Still, the partners pull bottles from every batch, keep them at room temperature in the lab and subject them to fluorescent lighting to see how they are standing up.

Through similar attention to detail, they have lowered the amount of air in each bottle during the bottling process and still kept the percentage of beer that makes it from the bright tank high. The bottling machine was built in 1953, while the labeler was new in 1957 and previously slapped Shiner labels on beers from the Spoetzl Brewery.

"You have to be strong in your local market, serve your local market."

Shiner, of course, is the consummate "Texas" beer, although St. Arnold is arguably more Texan, since it's only available in the state. The brewery started with 25 accounts in Houston and today has more than 1,000 in the city. About 80 percent of its beer is sold in the Houston area, although it is also available in Dallas, San Antonio and Austin. About 45 percent of sales are draft, in a state where draft beer accounts for just 4 percent of the market.

"You have to be strong in your local market, serve your local market," Wagner said. When the brewery opened, it self-distributed. That changed 2½ years ago. "We had to decide if we wanted to be in the distribution business or the beer-making business," Wagner said. Of course, it was easier to cut a deal with a distributor once the brewery was established.

St. Arnold proved itself while spending virtually nothing on traditional advertising. The walls of its tasting room are covered with stories about the brewery and thank-you letters and commendations from organizations that have held special events in the St. Arnold "tasting room," a section of the brewery with a handmade bar and a view of the brewing kettle and fermenters.

"We probably host two or three events a week," Bartol said. "Whenever we get people into the brewery, we consider that a success." One night the brewery might be used for a folk benefit, another night, someone could rent it for a wedding. A party in the brewery is guaranteed to bring in a top-dollar bid in a local charity auction. Bartol estimated that the brewery has already helped charities raise between $200,000 and $300,000.

Of course, a little luck can help as much as a good plan. When the producers of the film "The Evening Star" chose the house next door to Bartol's as a location site, it gave him the opportunity to pitch his product.

Sure enough, bottles of St. Arnold beer showed up in the film, sitting on a restaurant table in front of Donald Moffat and Shirley MacLaine.

Sometimes, it helps to know who to talk to.

This story orginally appeared in Brew Your Own magazine in August 1998.