In November 2013, two vessels of liquid yeast sat in a bathtub belonging to John Giarratano, a bioengineer then working at a biofuel company in the Denver area.
Along with colleague, business partner and home-brewing buddy Matthew Peetz, the two had propagated the strains as the unofficial beginning of Inland Island, a lab that would provide yeast to 20 local breweries, six brewery shops and countless home-brewers all over Colorado just a little over a year later. Today, their customer roster includes Black Shirt Brewing, Our Mutual Friend, Mockery, Zephyr, Prost and more; the two also provided the base for Joyride Brewing’s first ever IPA.
Inland Island has the hard-earned luxury of calling themselves the only brewer’s yeast lab in the area, and being local in this industry has some serious perks for both buyer and supplier alike.
“The main thing that separates them from the other guys is service,” says Joyride’s Grant Babb.
“They hand-deliver the yeast straight from their walk-in cooler for maximum health, which also provides savings on shipping,” he says. “They are at the brewery almost on a weekly basis to answer questions and kick around ideas, and have come to the brewery twice to do hands-on yeast training. Their service and quality control provides a competitive advantage for highly efficient breweries like ourselves.“ Joyride was their first customer, which makes sense when you consider that its brewing operation is headed by a former chemist.
Innovators Peak headed to their facility to tour the operation and interview the guys about the biology of a good beer. The place is housed in a former tortilla factory that they had to renovate after years of abandonment, and upon entry you’ll find a row of taps where they test the strains.
Upon entering the actual yeast propagation lab, one is greeted by the gleam of stainless steel vats, glass tubes and beakers harking back to Breaking Bad circa season three, complete with filtered air and giant food-grade sinks. Being fanatics of all things entrepreneurial, scientific and beer-related, we of course had a million questions for the two, so post-tour we sat down with a few brews to pique their brains.
Innovators Peak: John, you studied bioengineering. Can you explain to us non-scientific folks what that is and how it’s involved in yeast propagation?
John Giarratano: So there’s actually several different disciplines in bioengineering. Sometimes it applies to actually engineering cells, so some bioengineers do genetic modification to the cells themselves. My experience was more in the process side of things: plant process, fluid flows, pumps, heat exchanges — that type of thing. It was a little bit of mechanical engineering mixed in with some biology. Doing engineering for the oil industry, for instance, you’re not dealing with a living organism. But in all the applications that I worked on you’re focusing on keeping things sterile and alive.
IP: Matt, you got your master’s degree working specifically with yeast at the University of Colorado. That’s a pretty niche interest. How did you find that path?
Matthew Peetz: My graduate advisor worked with yeast. He’s one of the only people that has a fission yeast lab, which involves dividing yeast in half like bacteria. Across from our lab there was a lady who grew yeast just for homebrew vials at the university, and so it spiraled from there. Every job I’ve ever been hired for I’ve gotten because I know how to grow yeast.
IP: Was your goal always to go out on your own and do it?
MP: No, actually. We worked together at a biofuel company. The CEO was paying himself seven million dollars a year, which is just an insane amount of money, so it was like, “Why am I going to work hard for you to make more money?”
JG: I had wanted to do something of the sort. I didn’t know that it would be for brewing necessarily, but at the biofuel company we both were in charge of yeast propagation. Since it’s for biofuel you’re doing a million liter fermenters, just very large scale stuff, we were ordering $75,000 worth of yeast a week and going, “God, that’d be a great contract to have if I were able to do that.” That being said, we are not prepared to do that kind of volume here. With brewing it’s a little bit more small scale, a little bit more specialized and so we had the opportunity to get into that. As we worked together, we started talking and initially wanted to start a brewery, but as we started looking at all the breweries and especially once we started writing the business plan we quickly realized that, with 40 to 50 of them opening per year, that’s just more competition or more reason why we might not be successful. From a supplier standpoint, for a yeast lab those are all potential customers. So as the craft brewing industry grows, instead of just being one of the many, we are the only one, which is really nice.
IP: So how did you two actually ban together and decide to do this?
MP: John and I homebrewed together, and that’s what got us talking about opening a brewery. Once we realized that was going to be a really big hurdle and maybe not what we were best at we started talking about other options.
JG: We asked ourselves what makes us unique. Well, we both have this very unique experience and yes, we both know how to work with yeast but in different disciplines. From the engineering, lab and bio sides, it just made sense.
IP: What does the process of making yeast look like?
MP: Yeast can do one of two things: they can either ferment or grow. The big difference there is whether you’re adding oxygen or not. When you add oxygen you get 16 times as much energy from every unit of sugar, and so what we do is we grow yeast with a lot of oxygen so we get a lot of energy from the sugar they’re using to produce cell mass. When a brewery uses yeast they’re just adding a little bit of oxygen to get it to double in how many cells there are. At that point they’ve used all the oxygen, and with no oxygen it ferments and produces alcohol. We use as much oxygen as possible to get the yeast to grow instead of ferment. We pump sterile-filtered air into our propagators to get a much higher yield.
IP: What pieces of the puzzle were you most concerned with having in place before you left the more typical, stable career?
JG: The first was getting some sort of funding, so we took out some loans that we burned through very quickly. We’ve gone out and done some fundraising with friends and family. To keep things simple we’ve stayed an LLC, haven’t tried to go out and get shares and become an S Corp, and that’s allowed us to pay ourselves a little bit. We both were somewhat addicted to getting paid every month. With having a mortgage and a family it wasn’t an option for us to be able to work for free for a year before we started to pay ourselves, but at this point it’s just a race to make this company make enough money so we don’t have to get more funding — or so we don’t run out.
IP: How is using local yeast more beneficial to home brewers and breweries?
MP: It never gets shipped. Yeast becomes dormant when it goes into storage and that gives it a little longer to live without starving to death. For anybody who’s growing yeast, the last stage of yeast growth is that it builds all these nice sugars to keep it healthy. Think of a human putting on fat. The longer it goes without food, the skinnier and weaker it gets. So anytime you have to ship yeast or store it, its vitality drops. By having a product that’s down the block, it’s a lot fresher. The kolsch yeast that Factotum just picked up [Factotum Brewhouse’s owner unintentionally interrupted our interview to pick up two gallons from Matt and John] got packaged two hours before he came. You can’t have fresher yeast than that. His fermentation will start up faster and there will be less off flavors because the yeast is less stressed. Having fresh yeast product is huge.
JG: Shipping is also a big hassle with yeast because it is a liquid product. It has to be cold-shipped, so it has to be overnighted. You’re shipping gallons. Factotum is a smaller brewery, seven barrels, but we still gave him two gallons so imagine the cost of overnight shipping two gallons of something. It gets really expensive. What our competition will do is provide half as many cells, which saves them money on both the manufacturing and shipping sides. Since we’re not shipping we can deliver the proper amount of cells and it doesn’t cost us anything extra as far as shipping goes. Which is another thing that our customers have been really excited about — it seems like fermentations are working much more efficiently. We’ve had them run the two side-by-side and we’ve gotten calls back just to tell us how well our product worked out.
IP: Does the brewery usually pay for the shipping?
MP: Yes. We ship yeast to Wyoming and the cost of the yeast is $180 and shipping is $100.
JG: I talked to guys in Silverton and they were telling me that first of all they can’t get it a lot of times up there, and they said 60 percent of the total cost of the yeast was shipping.
IP: So they’re saving a ton of money.
JG: Exactly. We’re not discounting our prices; we don’t want to be the bargain brand. We want to be the best quality so we’re not lower than our competition on the initial price, but consider the fact that you’re getting twice as many cells per pitch and you’re not paying shipping.
Check out any of the aforementioned breweries to get a taste of John and Matt’s hard work and to support local for 100 percent of the process. For those interested in homebrewing, they offer a more stable, less expensive and quicker-fermenting yeast supply to help the brewing newbie find her or his feet and understand the importance of quality ingredients from start to finish.
