Wheat Ridge, Colorado
Barrels for Brewing
Founder Skyler Weekes posted an old wine barrel on Craigslist five years ago and demand was overwhelming.
That first sale has since blossomed into the Rocky Mountain Barrel Co., a purveyor of oak barrels that generated more than $4 million in revenue in 2014.
After that experience, Weekes, who has a degree in culinary management and is a certified chef, started importing wine barrels -- today they come from 16 countries -- which he primarily sells to brewers in Colorado, where the company has a 95 percent penetration rate.
"The primary focus is to fill them up with beer," says Jon Levy, who does double duty as the company's chief financial officer and chief operating officer.
The company's rapid growth forced it to relocate from a 1,500-square-foot warehouse in Denver to 8,000 square feet in Wheat Ridge, where it has plenty of room to expand. Levy estimates the company will nearly triple its revenue in 2015 but is unlikely to add many employees as sales increase.
"The model we've built is quite scalable," he says. "We're on track for $10 million this year." Is that growth driven by craft brewing? "Almost exclusively."
As part of an internal recycling program, Rocky Mountain Barrel started making some of its barrels into custom furniture such as shelves, wine racks, and sinks, which mainly are sold to consumers. "We find the furniture to be popular in new home design, log cabins, restaurants, and bars," Levy says.
The company does not sell barrels to Colorado winemakers, who generally use new casks for their products.
"Oak contains tannins that make wine taste dry," Levy says. "After you've run a batch of wine through a barrel, you've extracted the tannins and the barrel is said to be consumed. Beer guys don't care about tannins."
Challenges: Rocky Mountain Barrel's biggest challenge is finding enough barrels for its customers. "There's a shortage of American oak," Levy says. "It's only getting worse, so it will drive availability down while driving demand up."
And at about 150 pounds each, it's a challenge to find freight carriers to move the bulky barrels around. "We've partnered with YRC Freight to develop some custom handling solutions," Levy said. "That was quite an effort."
Opportunities: The increasing demand for Scotch is consuming used bourbon barrels. "The output from Scotland has multiplied by 10," Levy said. "We're backlogged at least 10,000 units."
Needs: For now, Rocky Mountain Barrel needs more barrels. "If you brought me 20,000 barrels, I'd have them sold tomorrow."