New Brew;

Tweet

TO WALK THROUGH THE IRISH TEAK doors into Sieben's River North brewery on a Friday night is to think that lightning has struck. It is still shakedown time, but after three months of business the joint is jammed.

The benches and picnic tables in the lower-level beer garden are full, and there is a 15-minute wait for restaurant seats on the platform level several steps above. The 900-gallon copper brew tanks -- the working heart and symbol of the concept -- are polished and gleaming. Beer aficionados, drawn by the chance to sample five different brews right at the source, sit cheek by jowl with trendies checking out what the Chicago Sun-Times has called the city's "most fun" new restaurant. Young single professionals in suits and ties wait with denim-clad couples from the suburbs -- and with a solitary grandfather in a fedora, a nostaligia buff who remembers the old Sieben's, Chicago's most famous beer garden, closed more than two decades ago.

After a 20-year hiatus, brewing has returned to the windy city and been welcomed with open arms. But Sieben's River North is more than a return to the past, regardless of the period advertisements that line the gray walls. It is more than a brewery, too, regardless of the storage cellars hidden downstairs, and it's more than a restaurant, regardless of the exposed beams, lacquered brick, and linen napkins above. Sieben's is a new phenomenon entirely, a "brewpub," a hybrid adaptation of microbrewing that combines manufacturing and retailing. With the brewpub, America's microbrewers have created a niche within a niche, "the most exciting area of brewing in America today," according to Charles Papazian, president of the 10-year-old Association of Brewers. Since 1983, when California became the first of the 23 states that now permit on-premises sales, 32 brewpubs have been built, 9 in the last year alone.

The business plan that spawned Sieben's River North had painted an optimistic picture. As principals of Chicago's first and only brewpub, the corporation's six stockholders would serve a metropolitan market of some 6 million adults. By creating a limited partnership, they expected to raise nearly $1 million in capital, opening virtually debt free. James Krejcie, 33, then president of the corporation and the operation's supposed future general manager, promised gross margins of 44%, $200,000 in pretax profits over the first 12 months of business, and $1.8 million in profits over five years.

The assumptions were wrong. Over the eight months of construction, the original $1-million price tag would double, adding a million dollars in debt. The menu, initially planned as a modest sampling of finger foods, would grow and the margins shrink. Shortly after its September 1987 opening, Sieben's had a competitor, with perhaps two more local brewpubs scheduled to open in 1988.

The income projections were wrong, too. The estimates prepared by the accounting firm of Blackman Kallick Bartelstein predicted the operation wouldn't become profitable until the fourth month. Instead, it was making money within its first 60 days.

When Jim Krejcie sat down to write his business plan in July 1986, he had already put four years into the project. He'd hoped originally to open a restaurant, a high-concept operation like those he'd worked in during his time under innovative Chicago restaurant king Richard Melman, of Lettuce Entertain You Enterprises. But Krejcie, the night manager and co-owner of a liquor store, had shifted his sights after stumbling onto the brewpub idea at a 1982 Colorado microbrewery conference. A brewpub was just another concept, he decided -- like a restaurant built around "a big soup kettle" -- but a good one.

He began putting together a general partnership and turned for brewing expertise to a fellow Chicagoan he had met just before the Colorado conference, Ron Siebel, who as president of J.E. Siebel Sons' Co. is heir to an illustrious brewing tradition. Since 1872 the family firm has served as research chemists and technical consultants to the brewing industry; since 1900 it has run a training school for brewers, the Siebel Institute, the only school of its kind in the western hemisphere; since the mid-1930s it has published the brewing industry's trade journal. Siebel had dreamed of adding a microbrewery to his interests for years but had always been discouraged by the numbers and scale involved, until he too became a brewpub convert. Eventually, his brother Bill Siebel, current president of Sieben Brewing Co., and Joe Pickett Jr., now vice-president, would join the venture as well.

 1 | 2 | 3 | 4  NEXT