144. Starting a Small Town Brewery with Terry Sando

Our guest on today's episode is Terry Sando. Terry is the founder of Goose River Brewing Company, located in Hillsboro, North Dakota. And I actually had the privilege of speaking in a community just like a stone's throw from Hillsboro, and a local radio personality reached out to me when they saw the article in the paper. And Doug said, hey, I know you. And then he said, did you stop by Have you heard of Goose River Brewing? And I said, I did not, because I did not actually drive back through Hillsboro. And he said, it's a pretty cool story. My cousin and her husband opened up this brewery a couple of years ago in Hillsboro. And as he continued to share a few other things, I knew right away that I wanted to get this couple ideally on, on the podcast. Terry alone joined me, but he's a retired colonel from the Air Force and they weren't originally from this community. And he bit off the exceptional task of starting a brewing company in a small town. And so this— he joins us to talk about why, why Hillsborough, how he found his way back there, which again, I think is always instructive for all of us that are thinking about attracting new people to our communities. And then he started a really labor-intensive and craft-intensive business like a brewing company. And I think again, it just reminds us that we never know who our latent entrepreneurs might be. And he is a delight to talk to. I can't wait to go and visit his, his brewing company soon. So sit back and relax. Enjoy this conversation with Terry from Goose River Brewing. Well, hi, Terry. Welcome to the Growing Small Towns show.

Well, thank you, Rebecca. And it's really pretty awesome to take and be able to visit with you as someone who's looking at small towns. And I apologize for missing your presentation at Mayville. I was busy that day, but it's great to have those advocates out there that are looking at how to take and get our small towns on track and growing and prospering.

Thank you. I— well, it's super fun work and honestly, always it's the people, Terry. That's, that's what makes the difference in communities. At least that's my belief. And so when I am told about somebody like you— so yes, I was in Mayville, just a stone's throw away from where your brewery is located. And then mutual acquaintance of ours sent me a text and was like, hey, I know you, and hey, did you go to Goose River Brewery? Brewing company. Brewing company. It's brewing.

Brewing. Yep.

And I said to him, I was like, oh my gosh. I mean, I love a good brewery. And I said, I didn't, I didn't even get to come back through Hillsboro, but he connected us and I'm so happy to be talking to you. Find out all about how you started and why Hillsboro and why beer. And let's just start there.

You bet. Well, why beer? Let's say, let's kind of explore that a little bit. When I was in the military, as I retired out of Tyndall Air Force Base down in Florida, I had a co-worker that was a microbrewer. He did his own brews. He actually brewed up a batch of beer specifically for my retirement, put a label on the bottle with me from my college days and stuff. And so I put it into my bucket list that I wanted to learn to brew beer simply because, uh, the craft brewing industry back in the you know, the early 2000s was really starting to pop and grow. And so it kind of piqued my interest. So that was why I had it in my bucket list. I had an opportunity to come back to North Dakota after retirement, worked for the University of North Dakota for a while, the Grand Forks Region EDC, then eSmart, and then a Mobile Recon, a startup company for a small UAS. And so I had to keep that bucket list kind of full there. I didn't get the chance to finish everything off. Well, I kind of got interested in a potential brewpub here in Hillsboro simply because as mayor for 4 years, I basically was looking at a way to make downtown Hillsboro a destination. I looked at Revelation Brewing up in Nahalock and Icewind down in Mapleton and how the success of being able to pull people off of the interstate or, you know, people outside the city and region to come in and do that. So I thought, wow, this would be a great project for Hillsboro. So that was kind of where the whole thing started. Look for some partners and bought some equipment and stuff. And then COVID hit. We actually were going to take and build Goose River Brewing out on 2 acres that I bought out along Interstate where the interchange is, the off-ramp is, and we have that in the new Riverwalk development. We're sitting on that right now because COVID caused us to take and reevaluate our business plan. And we moved it to downtown Hillsboro. There was a blighted area on Caledonia where the old Banner Building that was built, I think in 1906, said it was really run down, falling in, and in an old cement pad where the bowling alley used to be. So I bought that property and we basically tore everything out and started new from the foundation up. And the COVID crisis, Rebecca, actually did cause some perturbations for us. The cost really got out of, you know, out of control because of the products and contracting, hard to get that. We had bought a used 15-barrel brewing system from High Sierra Casino in Sparks, Nevada, just north of Reno, and had it shipped back. It's one of the lessons I learned that I would have bought a brand new system instead of a used system to take and upgrade our 3-barrel system. But, you know, hindsight's always perfect. But We got the building up and going. The pub has been open for over 2 years. We just had our first batch of beer brewing in July with 2 beta batches, uh, cream ale and, uh, APA American Pale Ale, that we're still working on trying to perfect, uh, the, uh, the brewing system itself to get the efficiencies going. But that move to downtown Hillsboro again hopefully is going to attract more people coming off of Interstate once we get onto the beer apps and things that are working out in the website and being able to evaluate the beer and geolocate with those apps will be a big thing, I think, for Hillsboro.

Wow. Okay, so there's so many things in there. I want to go back to— you were the mayor of Hillsboro for 4 years, is that correct?

Yes, that's correct. We had a situation in Hillsboro there where, uh, where nobody was running as the, uh, the mayor, or the president of the city commission is basically the proper title.. And so I threw my name in the hat, got elected, and then basically did 4 years. And it kind of took another one of those things out of my bucket list. But I learned a lot about, you know, the city, how to take and get some of the things instituted, working on the Renaissance Zone and some of those things that we use for the brewery to be able to do that. So kind of a learning curve there of how to take and, you know, work on using the city and the policymaking branch as mayor to be able to get some of these things done. For example, we had to go back and change the city code for a brew pub and outside seating and things that would basically be able to be available— a brewery and a pub like we have here. So change some of those ordinances to be able to reflect a more modern version of what the, uh, Century Code has and kind of plagiarize some of the other cities and brought some of those things in as ordinances.

That's really cool. So are you from Hillsboro originally?

Nope, from Valley City originally.

Okay, so what, what caused you to land in Hillsboro?

My wife was working for the FSA office, Department of Ag, here in Hillsboro. We were living in Grand Forks at the time, and she was going back and forth traveling every day, a business day. And so we decided to build a new home here in Hillsboro, and that was completed in 2014, and then moved from Grand Forks to, uh, to Hillsboro here, then I ended up commuting every day back to Grand Forks as I got the other jobs up there. So, which was, was, was okay. Yep, that was kind of the reason that we looked at Hillsboro to expand in.

Okay, yeah, that's fast, that's fascinating. And I think that's also a story to call out of this because it's important for everybody to remember that there are people that will move to our small communities that aren't from there, and it doesn't mean that, it doesn't mean that we're out of the running just because they have no connections or no ties. Now, your wife had a job there, clearly that, that helped. But, um, because for our listeners that maybe don't know North Dakota, because all of these cities are in North Dakota, Hillsboro is only how far from Grand Forks, which is the city center?

It's about right in the middle, uh, between Grand Forks and Fargo, about 38 miles either way, 40 miles either way. And that strategic location is another reason that we're working on the Riverwalk development. Another follow-up from my days as mayor, worked with Pat Mueller out there and developed the Riverwalk development. It has both commercial and residential lots there. And so we're looking at, uh, you know, about 3,000— this is dated, uh, information— but about 3,000 cars and workers travel back and forth between Grand Forks and Fargo every day. If we could get some of those people to relocate to Hillsboro, not only would it drive more business for, uh, brew pubs like we have or the cafe, but it also would be a shorter commute and an ability for those basically to live here and bring those families here. But a shorter commute and some of those things that would help not only bring Hillsborough up, school enrollments and those types of things, but make us more competitive with some of the other small cities in the region.

Right. I mean, this is really fascinating because a brew— a brewing company is not a small thing to tackle. I mean, like you said, you're messing— you said you're messing right now with kind of the efficiencies of it, but actually turning a product like that, I mean, so where did you study it somewhere? How did you get started in actually making beer? Because it's not easy. My uncle made some beers and we always teased him. Like, we'd eat, we'd drink them at Christmas and they were okay. I'm not going to run my uncle down on a podcast, but it definitely is an art and a science. I mean, it's probably a blend, right?

That's true. And so I started out getting certificates from the University of Vermont online. And currently I'm working on a Master of Science in Beer Brewing and Operations with Auburn University, using my VA benefits basically to pay for the courses. So it's all online. And I wish I would have had this knowledge before I got into the 15-barrel. I would have probably modified my business planning a little bit to a smaller size scale. And again, it goes back to that new versus used piece of equipment. So that's kind of been really interesting. In fact, I'm working on a course right now, Brewing Engineering, and it's driving me crazy because I'm not a math person. And so the algebra is killing me, but it's really been quite beneficial in learning about the ingredients, how the process works, and, you know, some of the questions that I can ask my professors basically real time to take and help me with some of the problems that I have. The canning solutions, the kegging solutions. Some of those things that we can work on when it comes to distribution and how to get those two new revenue streams that we're looking at with the brewery side of the house going there. So one would be taps and learning the ingredients using what we call BeerSmith as our recipe maker. And so you enter in exactly what type of beer you want to take and produce. BeerSmith will come out then and you can kind of tweak that software so that it'll give you exactly what ingredients you need to have. When you add the ingredients, what the water temperatures have to be for how long, getting the boil up when you add the hops to give the flavoring and the bittering, the different things, dry hopping once it's into fermentation and some of those things. So I've been learning quite a little and it's been interesting. But also there's a safety factor that I'm learning that has to go along with it too, that you're working with hot liquids up to 185 degrees sometimes with the water. And some of those things that you're putting into the mash to stop it. The boil obviously is when you have that hour where you're decontaminating the wort, basically turning it from a sweet wort into what the beer becomes for fermentation. And then one of the things is learning about fermentation too, that there you got a lager and an ale type of yeast that you use. A lager is a lower temperature and it kind of basically ferments on the lower part of the fermentation tank. Ales basically are yeasts that are warmer and ferment at the top of the tank. So it's been a real learning experience. And like I say, I wish I'd had this, this knowledge a lot sooner before I got into the brewing process itself.

Yeah. So currently, what, are you serving any of your beers?

We are. It's beta beers. We're kind of taking and testing that. Again, it goes back to that efficiency, being able to determine exactly how much efficiencies the system gives our mashing for the, the sweet work that we produce. And so that's been kind of a learning process there. But yes, we have put some out, mostly from a marketing perspective, to get feedback on those beers as to how people like them or not.

Right. In the future, what are you finding out?

The cream ale is really a pretty popular one. The APA, because it was dry hopped as a hop beer, it's more like India Pale Ale. And so you have to have that select group of people that like the hoppiness that goes with that. So that's kind of the feedback that we've been getting so far. But yeah, it's been pretty interesting that way. And then once we get into the regular schedule of our beer brewing, we will take and see about having a tapping of the keg event every first Friday of the month where people that come in, that first 1/6 of a keg will they will get free beer if they give us feedback and be able to give them their emails and stuff to be able to take and get some information from them.

Yeah. So I'm super impressed by just the depth and breadth of what the things that you're talking about and that you didn't have experience in this and that you just jumped into this with both feet like this. That is not a common— that's not common, especially with a food-based business that's so highly regulated, obviously, safety regulations. And just it's not easy what you're doing. I mean, like, if you want to start a business in a small town, there are lots of ones you could have started that would have been simpler.

I agree 100%.

And realize this, it paid to be aware of it.

But I agree 100%. And finding a good brewer to work with, that, you know, I've had the opportunity to work with a brewer out of Grand Forks. And so having a mentorship like that is really important because again, they can come and show you how to do it.. And for me, I need to have repetition a couple of times, you know, to be able to take and pick it up. I'm working on being able to establish an operations procedure book that has pictures. And so if I'm gone, or as I transition it to a local team, that they would be able to take and have reference materials there to be able to do it. So been interesting that way.

So you said you've been open for 2 years. As I looked at your website, it looks like you're open pretty regular hours. I mean, you have open almost every day of the week?

We're closed on Sundays right now, but it is a struggle, Rebecca, that finding— especially I'm trying to— the goal of this is to be able to take and transition to a local team. I'm older than average. In fact, I'll be 70 in October. And so I want to take and build a team that I become more of a silent investor and then have that team take over the operations that are local. Have that local flavor there and the interest of the community to go with that. So, uh, but finding help nowadays, as you're well aware, is difficult. You know, it's difficult to find those people that want to come in since COVID and, and be able to do it, even though we're paying better for our cooks than, uh, Laris, for example, in Grand Forks. We're still struggling being able to do it. This week's a perfect example. Our one cook is, uh, sick this week, so yesterday and today we've had it closed down because we don't have a cook, and it doesn't pay to take and be open if we're not able to take and have that food going out the door. Uh, this weekend is another problem that we don't have a, a cook for Friday night and Saturday, so we'll probably end up being closed then because it's just not feasible to have, uh, the beer and, uh, liquor carrying the pub for that amount of time. So yep, finding a good team to be able to take and help is kind of a problem right now that I'd like to take and find more potential partners that would come in and help with that.

Sure, sure. And I, you know, I think, but I think I'm going to just say this because I, I really do. It takes hopeful endeavor. The fact that you, that you did this and you did it during COVID too, you operate from a lot of hope. That's very clear. You're not a person that lets fear dictate the next steps that you take, which I think is really admirable. And I think that's what we need in communities like ours. We need people willing to take risks. But I think the way you're approaching this and the fact that you're thinking long term, you're thinking about the fact that you're talking about like a series of SOPs or just a, a manual that people can take. All of that is really setting somebody up really well that has an entrepreneurial spirit that wants to do something of significance in a community like Hillsborough. I mean, I, I think that this is a really cool opportunity for you and even partnering with people in the Fargo-Moorhead area and the Grand Forks area and talking about this opportunity as a real relocation opportunity for a younger family or somebody that has that entrepreneurial— because it's crazy. There's a lot of people that want to run businesses. They don't always know what they want to do. And this at that point will become fairly turnkey once, once you get it to that point.

So I appreciate it. And hopefully your podcast will help illuminate that some more for people out there that might be interested in an opportunity. But we also are looking at— we have a lot of malt barley growers here in the Hillsborough region, and BSG Roar Malting has a small elevator up on just north of Hillsborough. So we're also looking at building the relationship with those farmers, for example, that are producing the malt barley that we use. And so that relationship is important. We're trying to do that as part of our marketing plan. And then we also are spent grain we can have up to about 1,000 pounds of what we call spent grain, the mash that we use to make the sweet work with. And so we have a local young lady that has cattle. And so what we do is she comes in and cleans out the mash or the spent grain, puts it in her cattle ration basically. And the cows just love that sweet grain after it's been processed. So we look at it from a marketing perspective of how we can engage with our community, but also kind of have that holistic approach that, you know, all that spent grain goes into the cattle rations. And maybe one day we might be able to get her to take and sell us a half of beef or something like that, that we can use then in the pub as part of our, our meal prep and some of those things too. So we try to take and leverage everything locally, which has been a struggle. And kind of going back to when we built the building and stuff, that was another kind of surprise that I had that we got local contractors. I was really interested in trying to use local contractors as much as possible to keep the money in Hillsboro, kind of that perspective. And it was tough because COVID, like I kind of mentioned, was a big issue for us because it drove the price of everything up. You had people that were sick, they couldn't work all the time. It delayed the whole buildout probably by about 18 months. And drove up the prices. But it also goes back to working with our small town bank, Goose River Banking. Again, we didn't have any comparables in our small towns around us that were able to be used as kind of the foundational financial planning for what it would cost for a building like ours and grew by about 38% over what we estimated. And so again, that was an issue that I wish I'd had a little bit more experience that we could have went back and said, okay, I would add 50% above what we estimated. So we went in and we worked with the Trail County EDC here, and they've been very good about helping us get in a flex pace loan and some of those things. The city of Hillsboro, we went with the Renaissance Zone, so we got the property tax abatement for the 5 years. There's a lot of paperwork that goes with that, but those things were all kind of important. But also, if I was going to talk to other entrepreneurs going forward, that that would be something that I would try to take and bring up and raise with them, that, okay, be cautious on your projections and what it costs. And fortunately, I have a good military retirement, so my wife and I have been basically living off of that, reinvesting everything back into the business.

Right. I can so appreciate COVID and the supply chain and the costs and the inflation and all of that because I built our building at that same time. Purchased the building at the end of 2020, and then the renovations went through July of '21. Well, really till the end of '21. It took way longer, you know, it just took forever for certain things to come. Yeah, and that is— it's really hard. And so again, I want to reiterate how lucky the community of Hillsboro is to have somebody like you who didn't just quit, who didn't just have an idea and then start and then quit, because it would have been easy to do that, right? Like It would have been easy to say, look, we've raised, we've raised what was there, we're just gonna sit on it. I mean, you could have— it would have been sunk money, right? But you could have just made that decision because it is— it was a really, really hard time. So kudos to you for just continuing to take another step in front of the other. It's, it's really tough.

Well, and I appreciate everything you're doing down there in Oaks too. That, that's pretty awesome that, uh, I read, wasn't it, your, your grandparents' Ben Franklin store.

It was.

Yeah, that's pretty awesome to be able to keep that in the family and going forward. Those— it's hard to take and find those connections sometimes now in the small cities and it's reaching back and have that being able to reminisce. But not only that, make it into a prosperous business going forward too. So kudos to you.

Thank you. Thank you. Well, I want to touch on the local farmer angle because I was going to ask you about that. That's really, really cool. What about hops? Are you able to get hops anywhere locally?

There's the hops farm down at the Peterson Farms there in, in south of Moorhead that we've kind of talked to, but we've been basically sourcing our hops out of the Northwest because kind of going with a known product and we've been using BSG is mostly for our hops right now. But in the future we might take a look at it. Hops— growing hops is a really intensive type of an operation, you know, 3 to 10 acres is a huge farm. But the thing about hops, you have to keep them fresh. We use pelletized right now.

Okay.

And so they're easy to take and store. They've been condensed down so you have it. When you're using fresh hops, they're more for trying to filter basically your beer as it's going to the bright tank, for example, or if you're dry hopping, putting them in there.— but there's so many different varieties of hops now. And in fact, we've got inquiries from New Zealand that they would like to sell some of their hops over here. New Zealand hops are becoming pretty popular right now. They haven't been exposed to some of the funguses and different diseases and stuff that some of our hop growers have experienced. And then you have the noble hops over in Europe that go back to the traditional beer making in Europe that are still pretty popular too. So you have a lot of varieties and it goes back to that recipe, being able to determine what type of beer you want will take and then categorize what types of hops you have to, to, to use. And so, uh, again, I think that the local growers don't have that variety right now that might fit for everything that we want to do. So, yep. Another part going forward with the, uh, brewing is we'll have to take and figure out a couple flagship brews that we want. The cream ale, for example, has been really popular. AVB, alcohol by volume, is about 4.5 to 4.8, which is a smooth drinking beer. So if you're a light beer drinker, it's been very popular for those types. Going into the APA, you're looking more towards that 6.5 to 7.3, little bit more bitterness there, the IBUs, International Bitterness Units, uh, that make it a, a more specialized beer. So Figuring out in the future going forward, we'll have to take in, okay, how many do we want? 3 or 4 beers that we're putting into distribution and keeping those pretty popular, brewing those really on a regular schedule, and then keeping our— we have 24 taps right now. We'll take 12 of our taps over and have 12 of our beers on those, rotating them out every month basically. But the tap beer is really where the profits are. That revenue stream is pretty pretty huge. So looking forward to getting that established.

Yeah, good for you. I really am going to do my level best to get up to Hillsboro and come and check out your brewery.

Well, let me know, we'll walk you through and give you a tour.

I would love, I would love that because I actually really do. This cream ale sounds delicious to me. I really do like craft beers, but I can't drink super hoppy beers. They, they don't agree with me. So yeah, that's, that's, and again, I actually had the— I had a cool opportunity to sit down and learn from a guy that in Yankton, South Dakota, that has a hops farm. And just listening, like you said, it's, it's fascinating to me because every part of brewing has its own, like, many, many processes within it. Like you said, hops is not just hops. There's— it depends on whether they're wet, whether they're dry, whether they're fresh. You know, this guy was, uh, he was talking about the shipping mechanisms that he needs to have in place to ship wet hops. It was wild. And again, just all of these pieces. And then if you miss that window and they go bad, then they're wasted product. It's things like that. I just don't think the average person— and I don't claim to know a lot about it, but it's quite an intensive process. So, wow. And then the fact that you're going back to school for it and you're taking all this time to study it, it's super impressive.

Yeah, and you're exactly right, the transportation issues with, you know, when you take the hops off the vine and you want to get it into the brewing, into the beer itself, you have to have 'em aerated. That's why they freeze dry 'em out in the northwest part of the country with the different varieties that they have out there, pelletize and then freeze dry 'em, and then it allows them to be shipped. But if you have containers with hops in 'em and you don't have that aeration that goes with it, they go bad very quick, so they get mushy. And the lupin is what makes the beer that kind of gets ruined.

So yeah, it was an incredible thing to hear all about. And that was just that one piece of it. So do you typically do tours?

When I'm there and people ask to go through, I'll take and walk them back. And I think from a marketing perspective, as we get more into the brewing side of the house, that'll be an important part is to be able to take and do those tours. Explain the process. And then, uh, when it comes to the beers out front, uh, being able to have a good beer menu that kind of talks about the ingredients that go into it. But until you actually walk through and start to see how the process works, the size of the equipment, and then obviously trying to keep the place clean so that you don't get any wild yeast or anything like that in your transfers is an important part because it can ruin a batch of beer. And, you know, a batch of beer is pretty expensive when you have a 15-barrel system. Sure, sure.

Well, it's an amazing business. It's an amazing story. I'm really glad that Doug reached out and mentioned you. Really, really happy to have you on the show. I'm excited to come and visit you sometime soon. Thank you for all you're doing to keep a town like Hillsboro thriving. It's people like you that makes all the difference in the world.

You bet. And I just wanted to kind of mention, too, to kind of follow up, that when you have a brewpub, It appears that the state will allow you to have 3 different sites. So if we wanted to expand, or the entrepreneurs that take over for Goose River Brewing, if we expanded to the 2 acres out by the new site, then you would be able to take and have 50% of the production of your beer out there could be matched by the original brew house. So again, there's an expansion opportunity from a marketing perspective to be able to use up to 3 sites. And so there is some potential business opportunities that would expand into that too. But where that could go also is another site in another fairly close small town that might be able to take and then again help with getting those people off of interstate, but being able to have a larger brewing operation, a more modern one. So for example, there's a new membrane system that they use for mashing right now that takes the place of the lauter. And so it's more efficient, less water, and you can take and squeeze that mash so much more productively to get that sweet wort out and use it for the, the beer process. So there's some new technologies that are coming online for the craft brewing business that also will be able to take and allow for future expansion opportunities or, or some of that getting a huge canning system. Also, now some of the new ones are just so automated where boom, you can do it. Another one is when I was down in Denver visiting our kids and granddaughter, they had a Unican basically that they just took it right out of the tap and then they sealed the top off. Now it's not going to stay as fresh as a regular canning system because it doesn't flood it with CO2 at the end and then a little bit of nitrogen to top it off. But basically it's allowing you to take that 49 ounces home and enjoy it for, you know, the next week basically, and it'll still keep fresh enough. So being able to have a small machine like that right out in the counter where people are actually— customers are actually being able to watch you, uh, seal up a can of a 49-ounce beer for them on the different varieties is probably another unique marketing opportunity that we'll probably explore in the future.

Very, very cool. Thank you so much for taking the time this morning. Excited to come and visit you.

You bet, Rebecca, and thank you so much, and appreciate the opportunity to take and talk about Goose River Brewing.

Thanks so much, Terry.

You bet.