Co-op Brewpub in San Jose in Initial Planning Stages, Plus Q & A with Driving Force Peter Smith

Since September, there has been a movement brewing to create California’s first cooperatively-owned brewpub in San Jose. All the initial efforts are currently channeled through the San Jose Co-op Brewpub Meetup page, which lists the following information:

“We will look at establishing San Jose’s first cooperatively-owned brewpub. Maybe even California’s first cooperatively-owned brewpub. This process could take 2 to 4 years or more. We will aim to achieve 1,200 member-owners, and possibly more.

“There are now several working models for breweries and brewpubs around the United States – some of which are now operating and some of which are still forming:

• Black Star Co-op (Austin, TX)
• High Five Co-op Brewery (Grand Rapids, MI)
• Flying Bike Co-op (Seattle, WA)
• Riverwest Public House Cooperative (Milwaukee, WI)
• Fifth Street Brewpub (Dayton, OH)

“More reading:

• Some reasons to start a pub co-op are economic – specifically, to save an existing pub.
• More on Black Star and the cooperative movement in general.
• More on High Five. And more.”

The driving force behind this endeavor is Peter Smith, who by day is an IT professional. He recently took the time to share more about this San Jose co-op brewpub that is in the beginning stages of being formed.

What initial activities have there been?

We’ve had 4 meetings now and are organizing our first “awareness” event – to basically put word out on the street about what we’re trying to build, why, how, etc. We’re about to start forming a formal legal structure, etc., too.

Tell us more about the awareness event.

The underlying purpose of the event is for us to do a real work project together. We talked to an org called NoBAWC (Network of Bay Area Workers Cooperatives) – their very strong advice to us was to do some real work projects together since we were all strangers to one another when we met at the first meeting. NoBAWC suggested we needed to know how we work together, whether we were able to work through issues, make compromises, and whether we actually enjoyed it or not. That is why we’re organizing our first event without so much as having chosen a name.

Tentatively, we’re looking at hosting an event some time in December. We’ll see if we can stick to that. We’re looking at several different options for how to carry it out – the space/place we choose seems to be the key driver for all the other decisions about the event – how much to charge, how many people can we have, what will the beer selection/hosting/drinking process actually look like, etc. So at least three of us are looking at various options, from hosting a gathering at the San Pedro Square Market space, to having a corporate host – as in an after-work team-building/enjoyment-type thing, to just hosting at a bar.

What are the initial plans?

Big goals we’ll start to work on as we work towards this “work together/cooperate” event are 1) start working on the co-op bylaws (How will our co-op actually function? What is structure of the board? etc.) and 2) build out the business plan.

Members buy in for $150 for a lifetime membership, no annual dues, etc. The total amount we need to raise may be $700K+, the remainder of which we will raise from the membership through “investment shares” – annual interest from 3% to 6% (give or take), depending on investment level.

Who would be a typical co-op brewpub member/owner?

I would say people get involved in this type of enterprise for one of three reasons, primarily; that is, what do folks really care about:

1) They love beer. About half the members so far are self-declared “beer snobs” – so that’s great.
2) They love locally-grown and owned and managed businesses.
3) They love the idea of co-ops, and democratic governance of businesses, etc.

I fall into 3) most, but love 1) and 2) as well.

One of my side projects (maybe?) is to get us scalable. That is, if Black Star in Austin did this, and we are doing this, and co-ops in Grand Rapids and Columbus and Seattle and other places are doing similar things, then can we make the process easier/repeatable by building guidelines, infrastructure, HOWTOs, etc.? Whatever we do, it will probably be guided at least in part by the 7 Principles of Co-ops. I don’t want to bite off more than we can chew, but this is a personal interest of mine.

This happens to be the International Year of Cooperatives as declared by the UN: http://social.un.org/coopsyear/

What do members/owners get?

You get to say you own a bar, a vote on important brewpub decisions, a free beer on your co-op birthday, patronage refunds (i.e., a bar tab discount at the end of the year), and actively participate in the important and growing movement for democratically owned and managed businesses.

How did you get involved with all this?

I lived in Austin for a few months a few years ago, moved from Palo Alto down there, then back to SF when I couldn’t find a job I really liked, and stumbled upon Black Star. Became a member and volunteer, thought it was the best idea ever – super-excited about it then and still am today – and finally decided I had to at least float the idea here, even if it wasn’t a perfect time for me personally. I figured it was like having a baby – there’s never going to be a perfect time. Fortunately, Meetup.com has pretty good reach and we found some folks interested in the idea.

One of the groups new members, Joe, moved from Austin to San Jose last year. He and his wife are Black Star members. They joined because their house was very close to Black Star, and Joe was very into the idea of locally-owned businesses, reason 2) above.

All of us will keep our day jobs. There may at some point be a part-time paid position to do all sorts of things, especially on the bookkeeping/financial side.

I confirmed with the California Center for Cooperative Development that there are no existing co-op brewpubs in California. The only one they knew about was Black Star in Texas.

Do you have a website?

We don’t have a website yet, but that is coming – right now our public face is the Meetup page. If anyone is interested, feel free to join the San Jose Co-op Brewpub Meetup group – there is no obligation when you join, and we have at least a few lurkers. I guess we can have someone start to work on an FAQ ASAP. We don’t even have a name yet, so we need to start working on that, too. :)

[This post was shared on Examiner.com.]