Interview with Paul Halayko, President, Newburgh Brewing Company

How did your passionfor craft beer begin?  What drew you toit?

My passion for craft beer began overseas, actually – in myprevious professional life, I worked as a financial consultant, and I spentmost of 2007 in Germany for a client engagement.   While there, I began to taste all of thefantastic beers that local German breweries were producing.  When I finally made it back Stateside, Ifound that my palate had dramatically shifted, and I no longer wanted to drinkthe same old beer I had been drinking since college.  Couple that experience with the fact thatChris was working at the Brooklyn Brewery and there was always an abundance ofBrooklyn to be drank whenever we hung out, and I became a committed craft beerdrinker. 

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

I’m actually a Certified Public Accountant, and I spent thefirst part of my professional career working at Deloitte in the auditgroup.  My client-base was all start-upcompanies – primarily in the software and biotech sectors – and that is wheremy love of entrepreneurs and the start-up environment began.  I left Deloitte’s audit practice to jointheir financial consulting group in 2007, which is what took me toGermany.  The last stop on my pre-beercareer was at JPMorgan, where I worked as a Vice President in the Treasury andSecurities Services group.  Needless tosay, the shift to operating a craft brewery has been an interesting andchallenging one for me.  Oddly enough,being a CPA didn’t prepare me for piping together a brewing system. 

Do the local authorities read this blog?  My first beer… let’s see… I think I wasprobably 18.  Yes, I definitely was.  It was my second semester freshman year of college.  I managed an entire semester of collegewithout beer, but no one ever gave me an award for this monumentalachievement.  In fact, I think my veryfirst beer was a Busch Light and it was given to me by my friend Ian.  I drank it, and thought “what in theweasel?  This is awful.  I think this beer has gone bad orsomething.”  Then he gave me PeppermintSchnapp’s, and that was far more delicious. I remember thinking: “yeah, now this stuff is tasty.  How come people drink beer when there is allthis delicious Peppermint Shnapp’s floating around?”  Later, I would learn that being seen drinkingPeppermint Schnapp’s all night would likely destroy my game with theladies.  Anyway, my taste buds graduallylearned to accept the college-beers of the world (i.e. Busch Light, Bud Light,Natural Light, etc).  A big night incollege was a Bud Light night – that meant we were rolling in cash. 

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 flavorprofile) – so, you can enjoy a “session” of beers without stumbling out thebar.  This means that many of our beerswill fall in the 4-5% ABV range. However, one of the big things for Chris is that he has the flexibilityto brew anything that he wants – which means we could very well come out withbeers that tend to the higher ABV range. Our first offerings will be a Brown Ale, Cream Ale, Belgian-StyleSaison, and Peat Smoked Stout.  As theyear goes on, we’ll offer seasonals and specialties as well.  Depending on the success of our first 4offerings, they could become year-round staples, or they could become seasonalsas well.  We’ll let the drinking publicdecide. 

I’m actually not even sure where the brewery will be in 2years, but let me take a stab at the time range in the question.  In 5 years, I’d love to see us with a strongpresence in the Hudson Valley.  One thingthat amazed me when I lived in Germany was that people didn’t order brands ofbeer, they ordered styles of beer.  Inother words, they knew that wherever they were, there was a local brewerynearby, 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 fromthat.  But it would be great in 5 yearsif we had a permanent place in many of the bars and restaurants in our own backyard– the Hudson Valley.  We’re always happyto tell people that we are fortunate to live in one of the most denselypopulated parts of the country – we could triple, quadruple, or more in sizewithout ever having to leave New York State. We’ll also be canning or bottling our beer within the next 5 years, aswe are only offering kegs to start.  In 5years, it would also be great to have a big following in the 5 boroughs andLong Island as well. 

10 years?  If you hadasked 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 poppingup in other states in the US, primarily in the Northeast.  And who knows?  Maybe the next financial consultant atDeloitte who ventures to Germany might be able to have a pint of Newburgh at alocal German bar. 

Coming from outside the industry, I can’t say I have anyspecific “beer” mentors.  Although I’venever personally met them, Steve Hindy and Tom Potter provided a lot ofinspiration to me – in reading their book “Beer School”, I got a great insightinto what it’s like to open a brewery – all the trials and tribulations, andjust 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 mostorganized people you’ll ever meet, and I like to think that a little bit ofthat rubbed off on me.  From back at mydays at Deloitte, I worked for a Senior Manager named Kelly Delaney, who evenall these years later, I still look back at all she taught me.  She was a hugely influential figure in myprofessional career – from her I learned how to balance excellent clientservice with also delivering the needed results.  And lastly and mostly recently – my boss atJPMorgan, Essya Hanachi.  From her, Ilearned how to handle difficult situations with a great deal of poise. 

Well, I’m relatively local – I grew up in Blooming Grove andwent to Washingtonville High School (Class of 2000).  Chris was the one most passionate aboutopening in Newburgh, and he chose the location before I was involved in theproject.  But I share many of his samesentiments about Newburgh – it’s a city with so much potential forgreatness.  And we hope to be able to playa small part in the overall economic and cultural revitalization of Newburgh. 

Let’s see… first, you have to promise a few people yourfirst unborn son (not quite, but almost; most institutions will accept yourfirst unborn daughter as well).

The capital investment is tremendous – without divulgingspecific numbers, the cost of opening a brewery can be a bit overwhelming.  When you look at the industry and see thesuccess of so many breweries, I think the tendency can be “well, why doesn’teveryone just open a brewery?”  Thebiggest barriers to entry are know-how and capital.  For know-how, we have Chris, and his 6 yearsof experience as a brewer at the Brooklyn Brewery.  But capital is something that required atremendous amount of work on our part. This is why we worked on a business plan for almost 1.5 years beforetaking any kind of action towards opening. We wanted to ensure we were properly funded.

In terms of specifics – you’ll need property, and then theleasehold improvements to that property in order to fit it to be abrewery.  We made the investment inpurchasing 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 yourrevenue at some point.  Next is packaging– which for us, is only kegs.  Afterrunning the numbers, we elected to purchase our kegs rather than lease them.  Those are some of the bigger ticketitems. 

When people visit us at Newburgh Brewing, we want them tofeel 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 thosehours, as they could change before we open in April).  Our taproom will be set up in the style of anindoor beer hall, with longer tables and benches.  The eastside of our taproom offersspectacular views of the Hudson River, so we are putting a small ledge allalong the side of the building so people can enjoy the view and rest down theirbeer.  Chris is a graduate of the FrenchCulinary Institute, so we will have a kitchen that will offer a small menu ofwell-made, locally sourced offerings – typically those that would be consideredfoods that are natural pairings with beer (sausages, hand-made pretzels,Belgian waffles, frites, etc).  One ofthe benefits of being closed Monday through Thursday is it frees us up to doall sorts of events throughout the week – whether it be a homebrewingcompetition, a private holiday party, or a charity auction.  And the jury is still out on live music, butas a lover of live music, I think it’s safe to say that we’ll have that at somepoint as well.

If George came over to our taproom for a beer, that meanshe’s a zombie, so first we’d run.  Afterestablishing that he is in fact not a zombie, I think non-zombie-George wouldbe 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 theConstitution as a living document, the legality of income tax, and if he thinkshis white wig actually looks good. 

Nope not married, and no kids.  I do have a girlfriend that I’ve been datingfor 3 years named Jessica.  She’s anequity analyst on Wall Street, so she’s my sugar mama. 

She was supportive from day 1.  I wouldn’t have done it without hersupport.  And I only had to feed her 10craft beers before I told her, too.  Butseriously – she’s been great throughout the whole process.  I am living upstate now and she’s still downin Manhattan, and she’s incredibly supportive. 

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

Absolutely – in fact, my Uncle Charlie is our Head of Sales!

A Scion – it’s actually my little sister Megan’s car, butshe’s studying abroad in Ireland at the moment, so I got to commandeer it whileshe’s away. 

It’s a tie between 2 breweries – Lefthand and 21^stAmendment. 

I’m pretty boring when I’m not drinking beer – I’m not muchof a wine or liquor drinker.  I will saythat I’ve totally and completely committed myself to Diet Coke.  I remember a point in my life when I woulddrink a Diet Coke and think “who drinks this nonsense?  This tastes like Coke if Coke decided it nolonger wanted to taste delicious.”  Iwish I could sit that version of Paul down and say “son, Diet Coke isdelicious.  You shut your mouth.” 

Hmmm… not particularly I enjoy a good smoked beer (like ourPeat Smoked Stout) with a smoked meat offering of some kind.  In general, I’m a dark beer guy – so anythingthat pairs well with a stout, porter, or brown ale, I’m in for.