Greetings all, Franz Solo here with another episode of the annual Look Back/Look Ahead Series, Turtle Mountain edition. It’s been an interesting time with some changes afoot at Turtle. Some pieces are going to be moving, and hopefully some old favorite events will make their triumphant return. Let’s get into it shall we, as we jump in on my conversation with head brewer David Pacheco and owner Nico Ortiz, who were gracious enough to take the time out of their hectic schedules to meet with me.
Solo: So another year, you got your North taproom open, moving the brewhouse is up next, I’m guessing.
David: Yeah, doubling our demand (with a second location) really got us realizing where exactly our new chokepoints were. We always thought that our chokepoint was the cold room, and how much beer we can physically put in there. But now, it’s really just every square inch. We’ll have two or three things going on back there and it’s really hectic, we’re stepping on each others toes, for sure. So, just these new revelations about production, new workload, a lot more data management. The demand itself has forced us to kind of rethink how to do everything here, essentially.
Nico: We were under restricted occupancy until July 1st of 2021, so David was under restricted brewing until July of 2021. But then, we opened up the new place on December 29th, so he only had six months to get back to where we were in 2019. And then, we opened up a place the same size as this Turtle, so he went from restricted brewing to literally doubling production in the span of six months. This after spending over a year with a 50-percent reduction in brewing. Now we have a 100-percent increase in production, so it was definitely a challenge.
We had issues with the hot liquor tank having some leaks in the jacket, the system was manufactured in ’96 so it’s coming on 26 years old. Stainless (steel) is not bulletproof, over time it shows wear. Having to double up the production requires some additional tankage, and with the brewery being shoehorned into the back of the building here, there’s nothing we can do to bring tanks in. David pretty much made the call that we needed to relocate the brewery. A, we needed to buy a new hot liquor tank, a bigger one, to accommodate the increased brewing schedule, but we also need additional tankage so we had to relocate it. Luckily there was a space directly next to the new Turtle Mountain up in Enchanted Hills that’s available.
Solo: And then, of course with ramping up, getting all of the supplies you need is a bit of a challenge, especially now.
David: Certainly in the past, supply acquisition has been a somewhat normal practice, but this is a whole other issue of contacting all of these different contractors, making sure all of these things happen at the right time when they come in. Of course, something is going to go wrong. If we talk about shipping alone, there’s some crazy stuff, so we’re almost just expecting speed bumps with regulation, or contractors and communication. But, we’ll see how it goes. We’ve never really built a brewery on this scale, but I think we have the right team of contractors on our side.
Nico: We’re grappling with the fact that the water in North Rio Rancho is significantly harder than the water in South Rio Rancho, even though this water we’re currently using is getting much harder than it has been. So we’re now having to put in for a reverse osmosis system. I know Marble uses R.O., and a lot of other breweries do as well, but it was something I was kind of hoping to avoid if possible. So we’re going to have to have an R.O. system up at North for brew water, which will allow us to make more stylistically accurate beers, because we will start with perfect base water and then we can add in whatever minerals we need.
So that will be good, but the install is just one additional headache, we just signed and sent off the deposit for König Brew Systems. Brad McQuay, the guy who used to own Newlands before it went belly up and DME bought them out, he restarted a company called König Brewing Systems which is just down the road from where Newlands used to be. This system was originally an NSI system, and I wanted him to work on the tank because he originally built this system back in ’96. I wanted to try to have consistency with the manufacture and the look of the tank.
Everything is a four-month lead time. The actual 30-barrel hot liquor tank was the first thing that we needed to get in process so that we are not waiting on the tank so that we can do everything else. I bought some NSI tanks at an auction in Rhode Island a couple months back that have been sitting in storage in New Hampshire, and I’ve been waiting on us signing the lease on this new space so that we can actually bring these tanks in. Three 10-barrel brites, and a 20-barrel brite, so we’ll have 50 barrels of increased capacity.
Right now, we just have fermenters and servers, and the servers or fermenters act as brite tanks. But, when you ferment and then age in a fermenter you can’t brew into that fermenter, it’s stuck. We currently have three 10-barrel fermenters and one 20-barrel fermenter, so we’ll be able to brew, crash, and then transfer into brites, and then David can brew right away into those tanks again. That way we can increase, I’m hoping almost double our production capacity just with the introduction of 50 barrels of brite space. This will also help quite a bit with lagers. We’re looking forward to that, because right now David’s been under the gun, and the beers are still good but by the hair of his chinny chin chin. We are constantly running out of our flagship IPA and Wooden Teeth, and people get upset and of course they blame the brewery.
David: Yeah, we can only do so much and rush the yeast so much.
Nico: So we are looking forward to giving David the tools that he needs to actually keep these beers on tap as close to year round as possible. Happy customers means happy brewer, and happy brewer means happy beer.
Solo: It’s a cycle of happiness. Apart from keeping up with what you have going, do you have other plans beyond that, or are you trying to catch up?
David: Strictly just pedal to the metal, to the light at the end of the tunnel. Just trying to survive every month and talk to the next professional I need to talk to, and set up the next date, and so on. The job has become much more abstract than just conducting the brew schedule, it’s more of a head of brewery operations now. And, I finally understand the difference. But, that’s about it, man, we’re just trying to establish our presence in the next 10 years, and then so on.
Nico: On the restaurant side of things, we’re grappling with the same labor shortages as all of the other restaurant breweries. It was great to have a restaurant in ’20 and ’21, but we’re back to where it’s a liability. It’s ridiculously difficult to find kitchen staff, which, the only reason I mention that is that one of the great things a restaurant brewery can do is have brewmaster dinners and beer dinners. We haven’t had a beer dinner since 2019. Obviously, it was COVID in 2020 and 2021, but now we can have these events again, (only) we don’t have the staff to do it. It breaks my heart having two big really nice brewpubs and not being able to have these beer dinners.
Up North, we’re starting to ease our way into having small wine pairing tastings, and we’re going to start branching into beer tastings soon. In 2023, the big goal is obviously the move, giving David what he needs to actually make lots of good beer and not run out of beer, but my secondary goal from a personal perspective is to get some beer dinners and beer events back up and running. We haven’t had one in three years and it breaks my heart. The one thing about having a kitchen is this is what you can do, it’s an advantage we have over breweries that don’t have a kitchen, one of the very few advantages, so that’s definitely my goal for 2023 is to get beer events back in house and to be able to celebrate all of these types of things. I miss it, and right now we’re not there, but I’m going to make that a top priority.
Solo: I think what we’ve noticed with beer dinners is that they’ve been outsourced to other restaurants that happen to have enough staffing, but it’s not the same. It is heartbreaking to not see these things at brewpubs.
Nico: The kitchen staff used to love doing this because it was something different. It was a different menu, (and) we got a chance to sit and taste beers together. The kitchen staff and brewery staff would get together and talk about beers, flavors in beers and what foods would pair well. It got the two sides of the operation to sit down and break bread and talk about what each other does, and it was great to talk beers with the brewer, talk food with the kitchen, and then see where they can meet. I always had a blast spending the afternoon planning these dinners and stuff because it was one of the enjoyable parts of the job, and the fact that it has been denied for three years has frustrated me.
Solo: I think it has reduced the connection between brewery staff and kitchen staff, and not just here. There was a camaraderie that was defined by collaboration and doing these things together. And when you’re not doing these things together, you lose the camaraderie, you lose the connection, the passion, it impacts all of the intangibles that you can’t teach, you can’t force.
Nico: It’s frustrating. 2020 and 2021 we were in crisis mode, you do what you have to do to survive. But, we’re almost at the end of 2022, we’ve been out of crisis mode for the whole year, but we’re still kind of in crisis mode because we’re still struggling with staffing. We’ve had to curtail hours, the new restaurant only opened five days a week because we knew we had an issue with kitchen staff, and we didn’t want to over promise and under deliver. But, the original Turtle Mountain had been open seven days a week since our inception, back in 1999, and we finally had to make the determination that we were going to close on Mondays because we didn’t have the staff to be able to stay open. So for 22 years, we were open seven days a week, and then we had to step back a day. In the grand scheme of things, it is nice to have a day where we can keep up with cleaning and maintenance without any customers, but it’s the principle of being forced to do that rather than choosing to do that of our own accord. That happened back in May, and we’re now seven months later, and we’re still no closer to being able to open up that Monday. And, it’s frustrating that seven months to a year can go by and we are no closer to being able to open up for full operations. It’s a tough time to be in the restaurant business.
David: It’s a weird new reality.
Solo: Yeah, a very weird new reality.
Nico: I’ve never seen it like this, ever, and I’ve worked in restaurants my whole life. I’ve owned a restaurant for going on 24 years, never seen it like this before. I understand the reasonings behind it, but it still is very frustrating. Joe’s Pasta House, they were up the road, almost as old as I am, in any case, they just sold out. Fritz sold the bistro down in Corrales, they walked away, citing labor costs, the difficulty in getting labor. Old-school places are starting to have their owners walk away and it’s tough.
Solo: The cost of everything rising, literally everything.
David: Especially food, man, and I can say no different for the beer. Hops for sure, grain is going up, every other month now I’m seeing an email saying, “We’re sorry, but we are actually charging this now” kind of thing.
Solo: And, it’s just going to keep going, that’s the real difficulty that we all face.
David: We heard that there was a 30-percent less yield in German hops in this year’s crop, and the alpha acids were down 30 percent, too, so now everybody is in a mad scramble to try and secure their hops, too, for this coming year.
Solo: Either get the hops you can or get extract to make up for the difference in alphas. You’re having to throw literally the kitchen sink just to keep some sort of par with the way things were.
David: I feel like things are going to be a lot harder in the coming few decades to just keep a consistent product as a brewery. Water profiles change, water availability. Looking at Jackson, Mississippi, for instance, how do you even operate a brewery when you have nothing but awful water because of improper maintenance of the municipalities? No different for malt, no different for hops, we’re all striving after this agricultural product and it’s a crazy world.
Solo: And, when the terroir, the world itself changes, all of your ingredients change and that’s what we’re facing. The best you can do is kind of keep up with whatever tools you have, enzymes, other additions to make it what you want it to be.
David: Substitute hops, or the next best malt.
Solo: At least in the case of hops there are quite a few new strains that have come out recently that can cover a lot of those bases, but they tend to be a lot more expensive because they are still trying to pay off all of the money that went into developing them. More more more.
David: I’m all for more variety, it’s a good time to be alive, and it’s also a weird time to be alive, and brewing at the same time. We’ve never seen such diversity in the offerings of so many hop genuses, but we’re also faced with global climate change where it could very well hurt whole annual crop yieldage. Shaky times.
Solo: Shaky times indeed.
Nico: One thing we definitely not looking into doing, moving into a 4,000-square-foot facility, is canning. People are always asking me if we are looking to get into the canning market and I’m like, “nope.” I get why the canning breweries are doing it, the bigger ones have to because they are production breweries and they don’t have the outlet to sell all of their beer through their taproom network. Bosque does the best at having so many places to sell their beer, but they still have to can their beer and put it into stores. Bosque, Santa Fe, La Cumbre, Marble, they have to can their beer. I don’t want to do it, as David said, we have headaches with grain and hops, (and) aluminum cans is just another one of those potential headaches.
Talking to Rod (Tweet) up at Second Street, with their two locations they’ve gotten into canning and by the time you factor in your labels, your six-pack holders, your cases and the rest, but the margin on a case of beer is in the single dollars. You have to sell a lot of cases of beer at a single dollar amount per case to make any kind of a difference versus selling beer at $6-to-$7 a pint through the taproom. Per Rod, it’s necessary because it provides stable cash flow, but from a profitability standpoint it is by no means the profitable aspect of the operation. But, you need that cash flow when you’re buying cans by the truckload. Are we going to have room for a canning line? Yes, but am I ever going to want to get into that? No. Is David going to lose sleep over thinking about getting into canning? No.
David: Yeah, that’s scary.
Nico: He’ll have even more of an existential crisis if I’m like, “Hey, David, we’re going to move the brewery and we’re going to put in a canning line, what do you think?”
David: Just when everything’s right and proper in its space.
Solo: I think you’re making a wise choice.
Nico: Am I losing out on potential business? Yes, but am I losing out on potentially lucrative business? No.
Solo: In terms of profitability, pints are the way to go.
Nico: I always admired Allen from Hair of the Dog Brewery (in Portland, Oregon). Did he get into canning? No. He was more than happy to make a few thousand barrels of beer a year, and he was around for 30 years or so. Hair of the Dog put out phenomenal beers and he totally could’ve made 10,000 to 20,000 barrels a year, easy. But no, did not want to do it. He was more than happy to do his couple thousand barrels a year and that’s it. No visions of expansion, no visions of grandeur, a humble guy making beer and that’s it.
David: And, there’s some quality in that.
Nico: I mean, I’d like to make as much beer as I can sell through the two restaurants, but even with our offsite wholesaler’s license for a while, taps up around town, it wasn’t worth it.
David: It was just kind of another job, really. I had a two-week countdown in the back of my head where I’d have to vacate my own office and go clean lines, etc. We just didn’t really have a team for that. We couldn’t responsibly give them beer without checking in on our accounts.
Nico: You have to keep track of cooperage, which is expensive, you have to clean the lines, it’s just a pain in the ass. Once you factor in all of the stuff you have to do to support an off-premise draft program like that, you’re selling the half barrel at $130, and your cost is $80 or $90, so your spread is only maybe $40 a keg gross, but you spent $40 to $60 supporting that keg. I’m like, we’re not making any money, so we let the license die. The ironic thing was Rod and i were the two that fought so hard and we got that license through when we were on the Guild board as a way to have restaurant breweries be able to self distribute their beer. We fought and fought and we got it through. Both of us got our license, and now I’m to the point where I don’t need this anymore. After fighting so hard to get it through and to get brewpubs this ability to say we don’t need it, that’s something.
Solo: Yeah, factoring in the actual cost, unless you have 50 accounts or something, it’s not worth it.
Nico: Then you have to have dedicated people and a dedicated vehicle, so it’s one of those things where it’s just not worth it. (Mark) Matheson and I talked about it back in the day, if you want to play in distribution, if you want to play in packaging, 5,000 barrels a year is probably the smallest brewery that you can feasibly have a packaging wholesale program and still actually make money. If you’re under 5,000 barrels, you ain’t going to do it. You’re either a brewpub doing 1,000 to 2,500, or you’ve got to make the investments and ramp up to 5,000 or more. And then, you want to be at 10,000 to 15,000 to really start making the money, but what a nightmare that is.
Solo: That’s a lot less hours of sleep.
Nico: I’ll be happy if we can do 2000 barrels a year, 2,500 max, that’s fine. The price per pint pressure is slowly going up. I was reluctant to go from $5 to $6 on a pint. I know what it’s like to go out and buy a beer, man, (and) $6 strikes me as a lot of money. Now it’s commonplace, but the next threshold is $7 pints. I know some places are creeping towards it with $6.50 pints, but $7 is a lot. Turtle opened up at $2.75 a pint, that was our regular price and it was $1.75 during happy hour. I know it’s 20-something odd years later, but man, $7 a pint is just a lot of money. $7 a pint for a 9-percent double IPA, that’s perfectly reasonable, but 7 bucks for a 5-percent lager, that’s tough. That’s a tough sell. But, it’s coming that way. I’m sad about it, but there’s not much we can do.
Solo: You have to keep up with being able to pay for the rising costs of everything.
Nico: The only losers unfortunately are the consumers, because I’m like damn, 7 bucks a pint, that’s a lot of money. Bars are going to be even more because they’re actually paying for the kegs. Breweries have the advantage of making the beer, and just serving it right there from the server, so we don’t have to worry about any middle people.
Solo: Yeah, $8 to $9 pints at the bar kind of thing.
Nico: I travel a lot, and it’s not unusual in DC or New York or LA to spend $8 or $9 a pint, not at all. That’s just the cost of doing business.
Solo: The wave is coming, unfortunately, and we’ve just gotta roll with it.
Nico: That’s why you’re very smart making your own beer at home. Your cost of goods is very low and it’s just your labor. You have lots of delicious beer on tap at home and you don’t gotta worry about paying $9 a pint.
There are exciting things in the works with the coming brewery move to Turtle North, additional tank space for more of David’s delicious beers, and hopefully a return of beer dinners, which have always been a lovely coming together of brewery, kitchen staff, and beer aficionados in a delicious dialogue of the senses. So head over to Turtle, have a pint and a bite and I’ll catch you on the next episode.
— Franz Solo