The global health crisis that has been devastating many small businesses ended up being a catalyst for Adam Esker and friends to launch a company of their own.
The concept for Rivalry Brews — a Medina-based craft beer delivery service currently shipping Northeast Ohio-made suds to three states (Ohio, Pennsylvania and Virginia) and Washington, D.C. — was set by CEO Esker and his managing partner, Jon Swaim, years ago as they were flying out of a sales conference in Las Vegas.
Lots of folks ship wine, they thought, so what about beer?
"Craft beer is exploding, and we want to be at the forefront of a business that doesn't really exist in other places," Esker said, especially as it relates to a focus on Ohio beers.
Options from more than 20 craft breweries are currently offered on the Rivalry site, ranging from Thirsty Dog Brewing Co. (Akron), Fat Head's Brewery (Middleburg Heights) and Sibling Revelry Brewing (Westlake) to Masthead Brewing Co. (Cleveland), Penguin City Brewing Co. (Youngstown) and MadTree Brewing (Cincinnati). Esker doesn't ship the most widely available craft brands, like Great Lakes Brewing Co., because the idea is to offer products that wouldn't be as readily available elsewhere. This gives Rivalry a bit of a slant toward smaller manufacturers, which tend to more exclusively self-distribute.
Moving from concept to reality became a bit trickier than expected, though, as securing a wholesale liquor license in Ohio, similar licenses in other states and approvals to ship alcohol in a highly regulated industry became an arduous and time-consuming process. This is partly because Ohio has never before licensed a business quite like Rivalry, which procures craft beer at wholesale price through distributors. Customers then buy online via customized pick-your-own bundles that are mailed to their homes. Either UPS or Esker himself make the deliveries, sometimes as quick as same-day when Esker is making the run.
The going rate on a 12-pack from Rivalry is approximately $48, depending on the products. That's roughly half the cost of some other national craft beer delivery outfits like Tavour, which charges between $90 and $115 for 12 beers. Being a small operation right now helps keep Rivalry's prices down. And Esker said nearly every cent earned at this point is being invested back into the business. Some sales, like those tied to Cleveland Beer Week — which founder Christopher Lieb, who owns the Butcher and the Brewer and Tremont Taphouse, said wouldn't have worked this year without Rivalry shipping boxes — even include small cuts to charity.
Both Esker and Swaim are craft beer aficionados and football fans. Esker's team is the Ohio State Buckeyes, and Swaim is with the Michigan Wolverines. That dynamic inspired the Rivalry name. Swaim lives in Michigan and is working on getting that market online both in terms of receiving Ohio beers and shipping Michigan ones.
It was more than two years ago Rivalry formed its LLC. While Esker and his business partner worked their day jobs, Rivalry was more of a passion project. The plan was to officially launch the business this summer.
Then came the COVID-19 shutdowns and an economic downturn.
As many businesses contracted, Esker was laid off from his job as a strategic account manager with Beachwood's INSIGHT2PROFIT. Not only did this free him up to get Rivalry going, but the timing was serendipitous as shutdowns created an opportunity to bring craft beer to people who could no longer go to their favorite taprooms. Craft breweries industrywide began packaging more beer in a shift to capture off-premise sales.
"We were a business that, unfortunately, was kind of helped by COVID," said Peter Krafcik, who's helping Rivalry as its chief financial officer. "But at the same time, I know we helped a lot of brewers sell product they might not have been able to sell otherwise."
Among the first breweries to partner with Rivalry was Akron's Lock 15 Brewing Co. Co-owner and brewmaster Joe Karpinski said that while Rivalry is a small operation right now and Lock 15 is not moving a ton of product through the company, "We are definitely moving some and getting our name out there through their distribution network."
Without Rivalry, Lock 15 beers wouldn't otherwise get to curious craft fans in other states.
Esker said the vision is to hire employees in the future. They could do more marketing to get their name out there, and Esker will eventually need more help one day packing and delivering orders.
"We'd like to make this a family-type business, shipping Ohio beer across the country," he said, noting he has no shorter-term plans of building the business up to sell it off.
Krafcik said Rivarly is ambitiously shooting to end 2020 with about $70,000 in sales.
"Our long-term vision is to grow into as many states as we can ship to," Esker said. "But I want to hold on to this. I've worked for several different companies, and I like being part of a team. But I'd like to be my own boss and hire my own employees. That is a goal of mine."
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November 21, 2020 at 04:00PM
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Ohio craft beer delivery business Rivalry Brews uses the pandemic to its advantage - Crain's Cleveland Business
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