Thursday, February 2, 2012

Interview with Paul Halayko, President, Newburgh Brewing Company

In the heart of Newburgh, New York a new brewery is being created.  Paul Halayko a CPA by trade working in the trenches of Corporate America decided to give it up to follow his passion.  He partnered with his high school buddy Christopher Basso who previously worked as a Brewer at Brooklyn Brewery to open Newburgh Brewing Company.  Well, it's not open yet, but soon - April 2012

I recently spoke with Paul about his choices, education, family and beer. (Chris's interview will be coming in a future post)


How did your passion for craft beer begin?  What drew you to it?
My passion for craft beer began overseas, actually – in my previous professional life, I worked as a financial consultant, and I spent most of 2007 in Germany for a client engagement.   While there, I began to taste all of the fantastic beers that local German breweries were producing.  When I finally made it back Stateside, I found that my palate had dramatically shifted, and I no longer wanted to drink the same old beer I had been drinking since college.  Couple that experience with the fact that Chris was working at the Brooklyn Brewery and there was always an abundance of Brooklyn to be drank whenever we hung out, and I became a committed craft beer drinker. 

What drew me to the industry itself was a variety of different things – I love the cooperation and camaraderie amongst breweries; I love the high growth of the industry; and in general, I love the people involved.  It’s a terrific industry to be a part of.   The hardest part about being in the industry is actually getting your doors open.  I’ll discuss that a bit more below. 

What did you do before you decided to follow you passion?
I’m actually a Certified Public Accountant, and I spent the first part of my professional career working at Deloitte in the audit group.  My client-base was all start-up companies – primarily in the software and biotech sectors – and that is where my love of entrepreneurs and the start-up environment began.  I left Deloitte’s audit practice to join their financial consulting group in 2007, which is what took me to Germany.  The last stop on my pre-beer career was at JPMorgan, where I worked as a Vice President in the Treasury and Securities Services group.  Needless to say, the shift to operating a craft brewery has been an interesting and challenging one for me.  Oddly enough, being a CPA didn’t prepare me for piping together a brewing system. 

How old were you when you had your first beer, who were you with, what was the brand and what did you think?
Do the local authorities read this blog?  My first beer… let’s see… I think I was probably 18.  Yes, I definitely was.  It was my second semester freshman year of college.  I managed an entire semester of college without beer, but no one ever gave me an award for this monumental achievement.  In fact, I think my very first beer was a Busch Light and it was given to me by my friend Ian.  I drank it, and thought “what in the weasel?  This is awful.  I think this beer has gone bad or something.”  Then he gave me Peppermint Schnapp’s, and that was far more delicious.  I remember thinking: “yeah, now this stuff is tasty.  How come people drink beer when there is all this delicious Peppermint Shnapp’s floating around?”  Later, I would learn that being seen drinking Peppermint Schnapp’s all night would likely destroy my game with the ladies.  Anyway, my taste buds gradually learned to accept the college-beers of the world (i.e. Busch Light, Bud Light, Natural Light, etc).  A big night in college was a Bud Light night – that meant we were rolling in cash. 

What  styles of beer will you be focusing on?
The overall portfolio of our beer is focused on “sessionable”.  What this means, simply, is that the beers are lower in alcohol content (but in no way lower in flavor profile) – so, you can enjoy a “session” of beers without stumbling out the bar.  This means that many of our beers will fall in the 4-5% ABV range.  However, one of the big things for Chris is that he has the flexibility to brew anything that he wants – which means we could very well come out with beers that tend to the higher ABV range.  Our first offerings will be a Brown Ale, Cream Ale, Belgian-Style Saison, and Peat Smoked Stout.  As the year goes on, we’ll offer seasonals and specialties as well.  Depending on the success of our first 4 offerings, they could become year-round staples, or they could become seasonals as well.  We’ll let the drinking public decide. 

Where do you see the brewery and yourselves in 5 years, 10 years?
I’m actually not even sure where the brewery will be in 2 years, but let me take a stab at the time range in the question.  In 5 years, I’d love to see us with a strong presence in the Hudson Valley.  One thing that amazed me when I lived in Germany was that people didn’t order brands of beer, they ordered styles of beer.  In other words, they knew that wherever they were, there was a local brewery nearby, and if they ordered a lager, it was coming from that brewery.  That’s an amazing thing.  In the US, we are miles and miles away from that.  But it would be great in 5 years if we had a permanent place in many of the bars and restaurants in our own backyard – the Hudson Valley.  We’re always happy to tell people that we are fortunate to live in one of the most densely populated parts of the country – we could triple, quadruple, or more in size without ever having to leave New York State.  We’ll also be canning or bottling our beer within the next 5 years, as we are only offering kegs to start.  In 5 years, it would also be great to have a big following in the 5 boroughs and Long Island as well. 

10 years?  If you had asked me 10 years ago “what would you be doing in 10 years”, I’m pretty sure “opening a brewery” wouldn’t have cracked the top 3,478 items on the list.  But for Newburgh Brewing Company?  In 10 years, it would be nice to be popping up in other states in the US, primarily in the Northeast.  And who knows?  Maybe the next financial consultant at Deloitte who ventures to Germany might be able to have a pint of Newburgh at a local German bar. 

Who are some of your greatest mentors in the industry?
Coming from outside the industry, I can’t say I have any specific “beer” mentors.  Although I’ve never personally met them, Steve Hindy and Tom Potter provided a lot of inspiration to me – in reading their book “Beer School”, I got a great insight into what it’s like to open a brewery – all the trials and tribulations, and just the general roller coaster ride of the craft beer world.  But as someone who is opening a new business, there are other people who have been great mentors to me.  To start – my parents, Steve and Peggy.  They are 2 of the hardest working and most organized people you’ll ever meet, and I like to think that a little bit of that rubbed off on me.  From back at my days at Deloitte, I worked for a Senior Manager named Kelly Delaney, who even all these years later, I still look back at all she taught me.  She was a hugely influential figure in my professional career – from her I learned how to balance excellent client service with also delivering the needed results.  And lastly and mostly recently – my boss at JPMorgan, Essya Hanachi.  From her, I learned how to handle difficult situations with a great deal of poise. 

Why did you choose Newburgh to open your brewery?
Well, I’m relatively local – I grew up in Blooming Grove and went to Washingtonville High School (Class of 2000).  Chris was the one most passionate about opening in Newburgh, and he chose the location before I was involved in the project.  But I share many of his same sentiments about Newburgh – it’s a city with so much potential for greatness.  And we hope to be able to play a small part in the overall economic and cultural revitalization of Newburgh. 

What type of equipment investment is needed to begin and open a brewery?
Let’s see… first, you have to promise a few people your first unborn son (not quite, but almost; most institutions will accept your first unborn daughter as well).

The capital investment is tremendous – without divulging specific numbers, the cost of opening a brewery can be a bit overwhelming.  When you look at the industry and see the success of so many breweries, I think the tendency can be “well, why doesn’t everyone just open a brewery?”  The biggest barriers to entry are know-how and capital.  For know-how, we have Chris, and his 6 years of experience as a brewer at the Brooklyn Brewery.  But capital is something that required a tremendous amount of work on our part.  This is why we worked on a business plan for almost 1.5 years before taking any kind of action towards opening.  We wanted to ensure we were properly funded.

In terms of specifics – you’ll need property, and then the leasehold improvements to that property in order to fit it to be a brewery.  We made the investment in purchasing our property rather than leasing.  The brewing equipment itself is the next most significant equipment investment – something that shouldn’t be skimped on, because it’s going to be brewing your revenue at some point.  Next is packaging – which for us, is only kegs.  After running the numbers, we elected to purchase our kegs rather than lease them.  Those are some of the bigger ticket items. 

When people come to your brewery, what can they expect to experience? (ie - will you have food, music, special events, hours of operation etc..)
When people visit us at Newburgh Brewing, we want them to feel very welcome and comfortable with spending the entire day with us.  To start, we’ll only be open on Fridays (5-11), Saturdays (12-8), and Sundays (12-6; but don’t hold us on any of those hours, as they could change before we open in April).  Our taproom will be set up in the style of an indoor beer hall, with longer tables and benches.  The eastside of our taproom offers spectacular views of the Hudson River, so we are putting a small ledge all along the side of the building so people can enjoy the view and rest down their beer.  Chris is a graduate of the French Culinary Institute, so we will have a kitchen that will offer a small menu of well-made, locally sourced offerings – typically those that would be considered foods that are natural pairings with beer (sausages, hand-made pretzels, Belgian waffles, frites, etc).  One of the benefits of being closed Monday through Thursday is it frees us up to do all sorts of events throughout the week – whether it be a homebrewing competition, a private holiday party, or a charity auction.  And the jury is still out on live music, but as a lover of live music, I think it’s safe to say that we’ll have that at some point as well.

Your neighbors with George Washington here in Newburgh - if George was alive today, do you think he would come over for a brew?
If George came over to our taproom for a beer, that means he’s a zombie, so first we’d run.  After establishing that he is in fact not a zombie, I think non-zombie-George would be delighted to have a Newburgh with us.  In fact, he was fond of brewing his own beer.  I’d probably ask him his opinion on the Constitution as a living document, the legality of income tax, and if he thinks his white wig actually looks good. 

A little personal information since you are going to begin to be in the limelight.  We can get ahead of any rumors that may be brewing with your beer.

Are you married? have a significant other? kids?
Nope not married, and no kids.  I do have a girlfriend that I’ve been dating for 3 years named Jessica.  She’s an equity analyst on Wall Street, so she’s my sugar mama. 

If you are married or have a significant other, what did your he/she  say when you decided to go into business together and start the brewery
She was supportive from day 1.  I wouldn’t have done it without her support.  And I only had to feed her 10 craft beers before I told her, too.  But seriously – she’s been great throughout the whole process.  I am living upstate now and she’s still down in Manhattan, and she’s incredibly supportive. 

Do you have any hobbies?
Besides drinking beer?  I really enjoy running – I’ve completed 13 marathons, and 2 ultra-marathons (a 50 mile and a 36 mile race) – I suppose unsurprisingly, my running has taken a bit of backseat with the opening of a new business. 

Does anyone in your family share your passion for beer?
Absolutely – in fact, my Uncle Charlie is our Head of Sales!

What type of car do you drive?
A Scion – it’s actually my little sister Megan’s car, but she’s studying abroad in Ireland at the moment, so I got to commandeer it while she’s away. 

What is your favorite craft beer?
It’s a tie between 2 breweries – Lefthand and 21st Amendment. 

When not drinking beer, what do you drink?
I’m pretty boring when I’m not drinking beer – I’m not much of a wine or liquor drinker.  I will say that I’ve totally and completely committed myself to Diet Coke.  I remember a point in my life when I would drink a Diet Coke and think “who drinks this nonsense?  This tastes like Coke if Coke decided it no longer wanted to taste delicious.”  I wish I could sit that version of Paul down and say “son, Diet Coke is delicious.  You shut your mouth.” 

Do you have a favorite food & beer pairing?
Hmmm… not particularly I enjoy a good smoked beer (like our Peat Smoked Stout) with a smoked meat offering of some kind.  In general, I’m a dark beer guy – so anything that pairs well with a stout, porter, or brown ale, I’m in for.  


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