Thursday’s Midwest Entrepreneurs class was a great send-off for Spring Break. Our guest was Eric Hobbs of the Penrose Brewing Company located in the West Chicago suburb of Geneva, IL (http://penrosebrewing.com/).
Below, class blogger Donald Banks recounts the fascinating and inspirational entrepreneurial tale told by Mr. Hobbs. It is a tale of passion for, as Eric put it, “artistically expressed” beer and craft beer culture (discovered, I feel compelled to say, via his frequenting John’s Grocery Store in Iowa City, IA [https://www.johnsgrocery.com/] as an undergraduate student at the University of Iowa [as did I twenty or so years before him]).
Cheers!
Prof. Gabel
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This past Thursday, we had the pleasure to hear from Eric Hobbs, Co-founder and Co-owner of Penrose Brewing Company.
Eric grew up in Geneva, Illinois, which is also where his business is located. He graduated from the University of Iowa with a degree in Communication Studies. You can say that his love for beer began during his college years by experimenting with different kinds of beers with college friends.
Upon his graduation in 2003, Eric worked for a Miller wholesaler for two years, Joseph Huber/Berghoff Brewing for three years, and then Goose Island and Anheuser Busch for six years (after AB acquired Goose Island). While with these firms, he learned all he could about the industry and how to produce and distribute beer. Then, about 18 months ago, Eric decided to take what he had learned and pursue his passion as an entrepreneur.
The other half of the Penrose Brewing Company is brewmaster Tom Korder. He is the engineering brains behind this whole operation. He graduated from University of Illinois at Urbana-Champaign with an engineering degree. He, like Eric, got extensive industry experience before starting up Penrose. Tom worked a total of 10 years, first for AB and then Goose Island. They both come with two different aspects of the business and that is what makes it such a great fit.
Mr. Hobbs explained to the class that finding investors to help start Penrose Brewing Company was a simple as word-of-mouth. Eric said: “Find one millionaire and they usually know a bunch more.” Mr. Hobbs also made a point in class that it is really good for the company to have an Attorney on staff because when he has a question about legal documents he looks towards that person without being charged for billable hours (which can be very expensive).
Eric also informed the class that the building of this exciting venture is founded on four principles: Experience, Building a Brand, Innovation, and The Future.
With regard to Experience, Eric and Tom came to the table with a collective total of 21 years’ worth of industry experience. Even though neither Eric nor Tom graduated from college with a degree in Business, they still managed to obtain the knowledge of how to start and grow this brewery. Everything else they learned along the way to help them get to where they are today. They presently have 10 employees—6 full-time and 4 part-time—that contribute to the major success so far.
One of the key things that Experience has taught Eric Hobbs and Tom Korder is that effectively running an entrepreneurial business is founded on social skills and communication. To make this point, Mr. Hobbs used a quote he had found online made by our very own Professor Gabel on the subject: “I understand the value of skills outside business. It’s important for students to have broad skills, social skills, a broader background, and to learn to relate to people better.” This is exactly what Eric and Tom learned and today apply in their fast-growing business. One of the main ways in which the business has grown is by the building of the taproom, where Penrose beer is sold to eager craft beer consumers. As Eric informed us, the taproom is used for direct consumer connection. This room is 40% of cash flow for the brewery. The remaining production of the brewery focuses on distribution through partners such as Windy City Distribution in the eight counties around the Chicagoland area.
Eric also told us that Building a Brand starts with getting the eyes of the consumer with up-to-date, interactive online communications. Next, you have to engage the consumer outside the event with social media and cross promotion. This means being consistent and always updating so that people know what is going on with new beers that are going to be introduced or festivals and other events Penrose is going to. That is why they have been to over 125 events and poured beer at 25 festivals to keep the name out there for the public.
The third pillar to the business is to Innovate. They have had videos made for the business that show the artistic creativity and passion that goes along with making Penrose’s growing line of craft beers. They have been featured in many newspapers and industry publications for their genius in craft beer artistry.
The last building block is The Future. Here, Mr. Hobbs explained that he and his partners believe that consistent reinvestment in the business and taking a long-term perspective is key. This also is seen in how the company hires new employees. They want to hire only people who share their passion for craft beer culture that can be used to connect with the customer. But the most important thing to Eric is hiring someone who he feels he can be around constantly because Penrose Brewery is a close-knit work group. Also, they need to innovate everyday with beer, people, events, menus, labels, carriers, photos, website, social media, and etc. so that they do not become complacent (which could lead to the end of the business).
Donald Banks
