Brewbound Podcast: Smog City's Laurie Porter on the Life in the Middle

"Even during craft's days of double-digit growth in the middle 2010s, Porter, who calls herself an incurable optimist, was eyeing a future when that growth wouldn't be there. So Porter and her husband, Jonathan Porter, built Torrence, California-based Smog City with diversified revenue streams distribution, exports to international markets, four taprooms with over-the-bar sales and an intentional cap on production around 10,000 barrels that allow the company to shore up its business if things go sideways."

"At our level, between the 5,000 and 12,000, 13,000 barrel, a lot of our revenue is built off the taproom, direct-to-consumer, which has a little bit higher profit margin, it helps us float that wholesale, Porter says in the latest edition of the Brewbound Podcast, recorded on location at the California Craft Beer Summit. So if wholesale is struggling or we're seeing dips and changes in seasons and customer changes, we have a little bit more buffer."

"Porter admits that Smog City has looked at what life would be like as a 15,000-barrel brewery but has been apprehensive to break that ceiling due to the loss of the ability to pivot, flex and manage costs. When you hit 15,000 barrels, you are playing so deep in the chain world because it's all about volume, she explained. Chain can be very fickle. It can be really difficult to maintain."

Smog City Brewing built a business model with diversified revenue streams—distribution, exports to international markets, four taprooms with over-the-bar sales—and an intentional production cap around 10,000 barrels to increase resilience. A sizeable share of revenue comes from taproom and direct-to-consumer sales, which carry higher margins and cushion wholesale fluctuations. The company remains cautious about scaling to 15,000 barrels because larger volume commitments make retailers and chains central, increasing exposure to buyer changes and lost shelf space. Local market pressures and lease challenges have prompted operational adjustments, including closing a long-standing Long Beach facility and launching a new restaurant concept.

Read at www.brewbound.com