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Making The Jump: A Q&A with Brad Dahlhofer and Paul Zimmerman of B. Nektar Meadery

Brad and Kerri Dahlhofer's basement is probably the most important room in their house. It's the space where the young couple first came up with the idea for B. Nektar Meadery, with their friend and fellow Ferndale resident Paul Zimmerman. That was nearly five years ago. Today it's the nerve center for their growing business.

The trio of 30-somethings now employs six people besides themselves, selling about 100 cases of the fermented honey alcohol a week across Michigan and into a handful of states. They even have international ambitions.

And it all started when their day job security started to go south. Kerri lost her graphic design job in early 2008, followed by Brad losing his IT job a few months later. The homebrewers were forced into a corner by the Great Recession. It turned out to be a blessing in disguise.

"We were either going to go for it all the way or I was going to try and find another job," Brad says. "We just decided to go for it. The whole reason the business started is because Kerri got laid off. She said, 'Instead of going to work for someone else, wouldn't it be more fun to sell mead?'"

After spending months researching Michigan liquor laws and educating themselves about potential legal hurdles they started brewing in a small industrial space in Ferndale. As Brad says, "It's not like there are a lot of mead layers out there."

The day they opened their doors they started to wonder why there wasn't.

"It's been wild," Brad says. "We were hoping we could sell 50 cases a month. Now we're at full capacity, producing more than 400 cases a month. It's selling as fast as we can make it. The hard part is keeping it all in stock."

Brad and Paul invited Metromode's Jon Zemke into their basement office, a combination of ad hoc workspace, storage shelves and low ceilings. The two spoke about craft brewing, taking the entrepreneurial leap, and why Ferndale is Metro Detroit's small business Mecca.

What were your expectations when launching your business? There aren't a lot of stories about successful mead producers.

Brad: I just wanted to be able to pay my mortgage and keep my kids fed. Coming out of an IT job and Paul quitting his job, we just wanted to survive. We saw some potential there, and thought if other people saw it as cool we might just be able to scrape out a living doing this.

Paul: We didn't realize how big it was going to get until we opened the doors. It took on a life of its own right then.

Most people look over that cliff and say, "I'm not jumping."

Brad: If we didn't have such a great opening, none of us would have even thought of trying it. When you're this little company making a product no one has ever heard of in a warehouse district half a mile from Detroit and you get 300 people who show up at your door on opening day and you're not even a retail business… We were all shocked. This could be something.

Paul: When the doors opened and we were so busy, at the end of the night we took a deep breath and said, 'Wow.'

Would you guys have started this had everyone been fully employed?

Paul: No.

Brad: It was totally Kerri's idea. Everybody who homebrews has those moments when they say, "God, I'd love to open a brewery." But like you said, everybody walks up to that ledge but who actually jumps? It's not easy for the husband who is into the hobby to say, "Hey, we're going to give up everything and start a meadery." But when you're wife says it, you say, "Hmmm… Maybe I should go along with this." Had I not been laid off in early 2008, this would have been a nights-and-weekend business. And we would have fallen flat on our face.

Why did B. Nektar Meadery begin selling at other bars and store shelves instead of the more well-worn craft brewing path of opening up your own place?

Brad: It goes back to the original business model of nights and weekends. We thought this would have been cool just to have it on the shelf. None of us had the time or the desire to work a retail job, and we didn't have the funding to hire people. Also, when you have alcohol involved the government gets in right up front. ...The federal and state liquor commissions won't issue the liquor license unless the city approves it. When the city found out I wanted to do it in the basement, they were like, "He he he… No."

Craft brewing typically accounts for 5 percent or less of beer consumption. Do you think the industry would lose some of what makes it special if it began capturing significant market share?

Paul: Whenever I have this conversation with people I bring up Sam Adams. I ask, 'How big of a market share do you think Sam Adams has?'

Less than 1 percent.

Paul: You know that because you're into it. The average consumer says, 'They must have 20 percent.' Sam Adams is tiny compared to Anheuser-Busch, Miller. We have a long, long way to go before it loses any sort of cachet.

Brad: But look at what the craft beer geeks think of Sam Adams. ...Even Bell's is becoming less cool. There will always be those hipsters who think it's cool because it's small batch. It's cool because the brewers aren't making any money. Once the brewer starts making money it's not cool anymore. ...If the beer is good, it's good.

Paul: That's why I like drinking Sam Adams. I don't care what anybody says about it. Craft beer is a good thing overall because it means this country is getting back to its roots. Before Prohibition, there were lots and lots of breweries. Detroit alone had hundreds of neighborhood breweries and distilleries.

How do you guys choose which flavors to use? It seems a bit random at times.

Brad: We're foodies. It's all about blending different flavors and aromas together.

Paul: There is a process, but sometimes it's, 'What happens when we throw these things together?' We have made at least 30 different recipes to date.

Brad: At least. We release a new one every month, and we have done it since the beginning.

What's your view of Michigan's liquor laws? How does it need to change?

Brad: Breweries need the ability to self-distribute their own products. Bottom line. Even if you have to cap it at breweries that only sell so many barrels a year, they need to do it. If I wanted to start a brewery on my credit cards and a prayer, I would have to find a distributor who would pick up my product and put the time and effort into handling it, which is next to impossible. If I don't have the ability to self-distribute it to the local stores in my immediate area and build up a following, how can Michigan expect itself to become the great beer state? You're hindering innovation. You're preventing people from entering a business they might otherwise thrive at and grow to the size of Bell's Brewery.

Ferndale has a vibrant business community that is arguably made up entirely of small businesses. Do you have any theories on why this happened?

Paul: You have a core community here that wants to support small businesses.

Brad: Probably because they are small business owners, too.

Paul: That's the thing. It's a self-perpetuating thing.

Brad: I feel Ferndale has something going on that is bigger. There is Garden Fresh and Livio Radio and ePrize in Pleasant Ridge. I am actually reading the founder's book right now. First, people are attracted to the night life of Ferndale. Next you have low housing costs that bring people to live where they like to play. Then you have an economic situation that might force the more creative types from their career paths. Their creativity allows them to take that leap like we did and turn that passion into a business.

Paul: Also, when we first approached the city about opening a business here, it welcomed us with open arms. ...They really make an effort to make this a community that everybody wants to be a part of. It's infectious. The more people get into it, the more other people get into it and it keeps growing.

All three of you are from different regions of the country, sections that are popular with young people, like Colorado and California. What is the easiest thing Michigan can do to make itself attractive to young people from outside of the Midwest?

Brad: You need to get off this whole anti-mass transit thing. You need to invest some money into a decent mass transit system. You also need programs that let people start businesses with a minimal amount of red tape. I'm not talking subsidies. I am talking about getting out of the way.

Paul: That's the problem. We know another business that tried to open its doors in the city of Detroit and failed because of all the red tape.

Brad: Valentine Vodka. Now he's in Ferndale.

Paul: And guess what? They made it as easy as they could for him.

B. Nektar Meadery's name and logo scream mead, honey and bees. What does your thin blue bottle have to do with any of those things?

Paul: The best decision we made was that bottle. All three of us said we wanted a blue bottle.

Brad: The tall, slender just looks cool. We knew we wanted it to be edgy. This is Detroit. We're not selling flowers and kittens here. This is hard, industrial Detroit.

Paul: We get a shit load of compliments on that bottle. Every time we take it to festivals, there is someone taking pictures of it.

Jon Zemke is the Innovation and Job News Editor of Metromode and Concentrate. He is also the Managing Editor of SEMichiganStartup.com. He conducted and condensed this interview. His last feature was Full Press Success: A Q&A with John Gongos.

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All Photos by David Lewinski Photography

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