Basqueland beer 2021 Spain entrepreneurial success story - When Kevin Patricio, CEO and co-founder of Basqueland, arrived in Spain in 2011 from New York the craft beer culture was practically non-existent, despite being one of the countries with the highest consumption of this drink in Europe. "Here, as in other countries, the vast majority of people drink beer to cool off, not to enjoy it like a good wine, which is the experience that a craft beer offers." A very different environment than the United States, where this type of beer currently brings together 20% of the market, while here it barely reaches 1%.

Kevin is actually a cook and has extensive experience in haute cuisine. In New York already stepped into the kitchen of some of the most prestigious restaurants in the Big Apple, as The Red Cat and Blue Hill, and came to Spain to work with some of our most prestigious chefs, such as Juan Mari Arzak.

He soon joined the project to open the restaurant La Madame with his wife, Maite Montenegro, a native of San Sebastian, and soon realized that his attractive proposal of fusion cuisine with Asian touches, very New York style, would fit a high-level beer, handcrafted, that can pair with dishes like a good wine.

Basqueland beer 2021 Spain entrepreneurial success story

Perhaps driven by the success of his peculiar genetic mix —born in Baltimore, an immigrant father from the Philippines and a mother of German origin— whose union with Maite has resulted in three children of extraordinary exotic beauty, he decides to start making his own craft beer, initially in small quantities, just to be able to offer it in his restaurant. "For me it is always very important to be able to complete an experience, you can not enjoy a delicious meal without accompanying it with a special drink," he confesses.

Some of these great chefs who already knew him, such as Arzak himself or Martín Berasategui, were surprised to try these first proposals, which they quickly incorporated into their restaurants. In a few weeks, they were already asking for more in the face of the success they were having in their exclusive pairings.

Together with his partner, Benjamin Rozzi, they created Basqueland Brewing in 2015, with just 4 employees and a small 500 square meter premises, an initial investment of 1.3 million euros and a production of 150,000 liters (a small amount next to the 10 million hectolitres that, for example, Heineken produces in Spain). 80% of the investors, all private, were Americans and 20% from the Basque Country. "One of the Spanish investors emerged at a wedding, for which we prepared a special beer with the image of the bride and groom. When they tried it, they liked it so much that the same day they decided to invest in our company."

Basqueland beer 2021 Spain entrepreneurial success story

The excellent reviews from the beginning began to receive for the quality of their beers, especially the Unstoppable, an IPA (Indian Pale Ale, a style of beer, more hoppy and alcoholic, a multitude of flavors and aromas), the claim assumes that great chefs to offer it on their menus —"they learned to appreciate this beer at the same time that its customers, offering them wine tasting in our factory," says— and the slow but certain evolution of the craft beer culture in Spain —"we have gone from 1 craft beer for every 200 in 2015 to 1 for every 100 today"—, drive the almost family business of Kevin Patricio to convince him and his partner that he can have a viable and profitable future.

Of course, it has not been an easy path. Quality in a craft beer is crucial. "We had to try a lot and throw away a lot of beers that we felt were not of sufficient quality and that costs money. I don't care, the moment we lose that quality, the damage will be irreparable, it would be the end of the business", clarifies the founder of Basqueland.

That level of demand has paid off, since it has been recognized as the Best brewer in Spain in the Spanish Beer Championship in 2017, 2019 and 2020, and has recently swept the Barcelona Beer Challenge —considered one of the most prestigious international craft beer competitions in the world—, reaching the highest score in the history of this event, in which 232 brewers participated that presented 1,167 beers to competition. "It costs a lot to get this award, because we are only as good as the last beer we have released. We cannot fail."

Basqueland beer 2021 Spain entrepreneurial success story

The investment continued through own funds, 2.6 million, and also through more traditional financing from banks. And, after 2 years of losses, from 2018 Basqueland began to give significant benefits. This year they even expect to double their operating result from last year. Currently the company invoices 2 million euros (2020), has 19 workers, a processing plant in Hernani and a restaurant in San Sebastian (Basqueland Izakaia) and these days they are under construction to expand their factory. Its production for this year is 650,000 liters and, with this expansion, the goal is to double that figure by 2023.

They are also investing in other lines, such as an installation of solar panels to reduce CO2 consumption, a station for the sanitation of machinery and a centrifugal clarification system. This will also allow them to reduce some costs to be more competitive against industrial beers, much cheaper. Without a doubt, one of its great challenges. "We have to be able to make the consumer see that the fact that they pay 2 or 3 times more for a craft beer has an explanation and that is that the experience is going to be different. In a place that served our Unstoppable IPA, a customer began to call it Unpayable because he was not willing to pay more than for an industrial beer. The bartender explained that he would pay double but enjoy 10 times more. In the end he tried it and loved it."

But, until the culture of craft beer to spread in Spain —"I don't think we get to the levels of the united States, but I consider that a 5% share in 2025 and in the future we get closer to the levels of countries such as the Uk, with a 10%, it is reasonable"— one of the most effective options is to control the distribution and that passes through 3 channels: online sales, the opening of more local such as San Sebastián and the alliance with local and bars that share your culture beer and put your references among its offerings.

Basqueland beer 2021 Spain entrepreneurial success story

"Our online platform is going very well and growing, so we want to invest more to provide a better service. And of course we want to invest in our own premises, our goal is to have 3, 4 or even 5, initially here in the Basque Country but also in Barcelona and I would like the first outside Spain to open in Paris, and then, why not, my dream would be to have a local in New York. But one thing I have clear: in the Basque Country we will never have Basque food in our premises, here there are already excellent restaurants, ours will offer other cuisines, pizzas, tacos... now, outside of Spain I would like our locals to have Basque food."

Currently, 30% of Basqueland's production is exported outside Spain, either through the online platform or through specialized premises that include it in their beer offer.

The growth plans are ambitious :" Once we finish building the other plant next to the current one in Hernani, and reach the figure of 1.2 to 1.5 million liters per year, the time will come to consider a new stage, which will probably be to build a much larger plant elsewhere, which will involve an investment of at least 4 million euros to be able to produce 4 million liters per year".

Basqueland beer 2021 Spain entrepreneurial success story

For this, for the moment all the investment comes from your cash flow, but when the time comes to make the leap they will need investors and help. Some are already coming from the Basque Government, in a recent order from the Ministry of Economic Development, Sustainability and the Environment to boost the wine, txacolí, natural cider, craft beer and bottled water sectors.

Large distribution chains and supermarkets, at the moment, do not enter into their plans. "Our beers have a higher price than industrial ones and that's something that fits badly in the philosophy of the supermarket. In addition, they require special care, proper refrigerators and their shelf life is much lower than industrial beers. And they need large quantities that we can't produce right now and they ask us for very large discounts, which we can't afford. All this makes it very difficult for our beers to get into these surfaces."

Basqueland beer 2021 Spain entrepreneurial success story

There are currently more than 500 craft breweries in Spain, most of them in Catalonia, with a total turnover of around 70 million euros. It's a growing sector. There is also an association, AECAI (Asociación Española Cerveceros Artesanos Independientes). "We collaborate with other brewers, both in Spain and in other countries, and we help each other to improve our beers. It's very important that we all offer great quality because if someone tries a craft beer and doesn't like it, we've already lost that customer forever."

For their part, the large beer companies in Spain are betting on craft beer through the association or acquisition of small independent craft breweries, such as Heineken with Madrid's La Cibeles or the American Lagunitas, Mahou San Miguel with Founders or AB InBev with La Virgen.

Basqueland beer 2021 Spain entrepreneurial success story