The Busy Bees of Brewing

Eugene is home to many breweries, but Blue Dog Mead is unique among them. Its product is wine made from honey rather than grapes, an ancient beverage now gaining in popularity with a new generation of aficionados. You can find Blue Dog Mead at more than forty Oregon locations—and it’s all the result of vigorous effort by three industrious University of Oregon students.

“We all have different backgrounds but share the common interest of entrepreneurship,” says Chase Drum, a junior physics major. The other owners are Simon Blatz, a senior in business, and Simon Spencer, a senior in general social science.

Spencer says that mead currently commands a small market, estimating U.S. production at a couple hundred thousand cases annually (this compares to three quarters of a billion gallons of wine and oceans of beer). There are only about 150 “meaderies” in the United States according to industry watcher Vicky Rowe, a director of the Mazer Cup International Mead Competition, which bills itself as “the de facto standard for mead competitions in North America.” Mead can be sweet to dry, flowery to spicy, and even include carbonation like beer. The UO trio’s formulation yields a product similar to a white wine.

Blue Dog’s headquarters, a nondescript warehouse near the railroad tracks in an industrial section of Eugene, is a hive of activity. In the back room, large tanks bubble as yeast devours sugar, creating alcohol and carbon dioxide. A fan bellows, keeping the room at 70 degrees, ideal for making mead.

This batch began on “brew day.” At the outset of the process, members of the team pour buckets of Sue Bee honey (the same kind you find in the grocery store) into large kettles—600 pounds of honey per batch to be exact. After adding water and a few other ingredients, the partners bring the mixture to a boil, causing it to foam. They funnel the mixture through tubes to a device called a chiller and then into fermentation tanks where yeast is added.

After thirty days, the fermentation process is complete. Using a semiautomatic production line, crews will subdivide the liquid into about 1,000 bottles. If you do the math, that’s more than half a pound of honey per bottle.

What ends up in the glass is important, but branding is also key to success in a business where customers may be unfamiliar with the product. “It was something I had never heard of, never tried,” confesses Drum. Many other manufacturers play up the historic roots of this drink (think of the stuff one might quaff from a flagon at a Renaissance fair), but Blue Dog brands its product with twenty-first-century attitude, the kind of hipness appropriate for the millennial generation and their billions in disposable income. Blue Dog’s bottle features a dichromatic image of Drum’s tough-guy German shepherd and the slogan, “The Original Liquid Sin.” The edgy tone continues throughout the company’s marketing materials with assertions such as “Blue Dog is more than a beverage, it’s a lifestyle full of swag.” One poster succinctly articulates Blue Dog’s freewheeling ethos: “Screw Leashes.”

The attitude is not all for show. The trio aspires to be the focused hard-hitter described by tech and business pundit Randall Stross in his book eBoys: The First Inside Account of Venture Capitalists at Work: “A winner. Someone with integrity off the charts. Scrappy. A nail-eatin’, nut-crushin’ decision maker.”

This brash swagger is new to the company, which began a decade ago as a small enterprise run by Valerie Hiveley-Blatz, Simon’s mother. Overhearing some male colleagues at her work site talking about home brewing, Hiveley-Blatz decided if they could do it, she could, too. She named her mead after her dog Blue, an Australian Shepherd with big blue eyes. Though she sold her mead, it was mostly a hobby. She says she produced only thirty or forty cases annually, as opposed to the 100 cases Blue Dog now sells each month. Several times, she thought seriously about giving up—the brewing and the bottling and the selling were taking their toll. But her son saw a future opportunity for himself and asked her not to quit. “I saved it for him in a sense,” she says.

Time passed and the younger Blatz went to the UO, where he joined the Entrepreneurship Club, sponsored through the Lundquist Center for Entrepreneurship. There he met his future partners, all of whom grew up around Portland and the Columbia Gorge. They became friends and teamed up for an entrepreneurship competition. The chemistry among the three worked, and they soon hatched the idea for entering the mead biz. They scraped together $50,000 in loans and investments to launch their venture.

Upon taking legal control of the company, the new owners revamped the product, tailoring the branding and tweaking the recipe to better fit the tastes of their target market.

“I think they might have a real edge,” says Drum’s mom, Peg Leslie of Hood River. “They’re at a time in their life when socializing and having drinks with friends is a big deal. They might have insight as to their audience.”

Running a meadery is not just an excuse to party, though. It is hard work and they make little profit from the fledgling business. “We have been paying ourselves what we need,” Drum says. “Most of it goes to cover basic survival.”

All three work twelve-plus-hour days tending to the responsibilities of both the brewing and business aspects of building a mead empire. In the beginning, they sacrificed a lot of sleep. Once, working at 2:00 a.m., they spilled some honey—not just a little honey, but a barrel of the sticky stuff. “It was upsetting,” reflects Spencer, hardly amused (though Blatz laughs at the memory). “It was hilarious, but we were too tired to laugh at that point,” he says.

Being students adds to and complicates their long list of daily jobs, tasks, deadlines, and responsibilities. But the business, Blatz says, gives him the opportunity to directly apply what he is learning in his classes.

Drum concurs that the UO has been invaluable to the business, where “the big thing is connections,” he says. “And we got to meet Kurt Widmer [’78] of Widmer Brothers Brewing.” Drum encountered the pioneering Oregon brewer several times at Entrepreneurship Club events. “It’s a cool experience to meet the people behind the products,” he says.

The trio also built a close relationship with the Entrepreneurship Club’s faculty adviser, Dick Sloan, who serves as an instructor in the Lundquist College of Business. They still call him for financial and marketing advice.

Sloan’s take on the young businessmen: “They’re very bright, very innovative, and very driven.”

While working constantly to increase sales of their basic brew, the three have also recently added a second product, carbonated honey-apple-vanilla mead. Blatz, who prides himself on thinking and dreaming big, sees continued expansion and projects revenues of $14 million in five years.

Should they ever get to the milestone of those millions, it is easy to imagine bottles of champagne (or carbonated honey-apple-vanilla mead) being cracked in celebration. But for now, the challenge of cultivating the business is the task at hand—the thoroughly exhausting task at hand. And thus far, when the three have marked the smaller achievements and incremental accomplishments along their grueling path, the celebrations have been on a far more modest scale. “I think last time we went to [local eatery] Cornucopia and had some nachos and beers,” recalls Blatz. Between bites and sips, they discussed how tired they were.

By Melissa Adele Haskin

Brewer Among Beneficiaries of Scholarship Support 

Blue Dog Mead’s Simon Blatz is among the 415 freshmen who entered the UO in the fall of 2008 as the first cohort to receive aid offered through PathwayOregon, an innovative program to help academically qualified, lower–income Oregonians attend the state’s flagship university. The program guarantees four years of tuition and fees (and in some cases housing) while providing comprehensive advising, academic support, and career guidance.

PathwayOregon “made it possible for me to go to school and stay in school,” says Blatz, who graduates this June. “I was getting extremely helpful guidance from an adviser who guided me from day one. That was huge.”

The total number of students—freshmen through seniors—now benefitting from the program is near 1,500, with a new group slated to arrive in the fall.

Resources for PathwayOregon come from federal, state, and University programs, including funds provided through private donations.

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