A Young Solution to an Old Craft Brewing Issue

Posted by on Dec 12, 2013 in Featured Stories, Innovation Tuesday | 0 comments

Listen to Steve Young’s interview with KMOX Radio’s Charlie Brennan from Tuesday, January 7

By Alexandra Bates and reposted with permission from HelloStl.com

Steve Young has a vision for craft beer, from the way it’s sold to the way it’s enjoyed. A shift from the archaic bottle to a modern-day appliance.

This vision, a new invention he calls the Sinek System, will offer craft-beer lovers a fresher, more ideal way to enjoy their favorite local brews. Named after the man who inspired its creation (author Simon Sinek), the device combines the convenience of growlers with the freshness of draft beer into what is essentially a “countertop kegerator.”

“It’s kind of like bringing the bar home to you, without going to a retailer and paying a lot for the beer,” Young said. “So it’s creating a new culture for it.”

Young, a stock analyst turned entrepreneur, was inspired to create the system not by his passion for craft beer, but by a desire to solve a problem faced too long by craft breweries: high margins and low volume.

With the current state of the market, craft breweries have two options, Young said.

“They can either do high volume, which is retail shelves—but it’s a very low margin,” he said. “Or they can do really high margins where it’s out of the brewpub, and that’s only the people who come into the place. You can only drink so much beer within a brewpub.”

If everything goes according to planned, the Sinek System will create a third avenue with the benefit of both high distribution and high margins, a win-win for craft breweries and their patrons alike.

With the device, customers would purchase beer—essentially 144-ounce bags (12 beers)—directly from brewpubs to bring home. Unlike with growlers, once inside the refrigerated, pressurized device, beer would have a shelf life of 30 days—up to six months untapped. And, unlike with kegerators, the Sinek offers the ability to swap out different styles and brands more frequently.

More than anything, Young hopes this “third avenue” will open the door for craft breweries to increase profits and grow.

“I hope that it gives them distribution that can actually make money, because if they make money, they’re going to offer more styles of beer, they’re going to expand like we’re seeing with Urban Chestnut and Schlafly over the years,” Young said. “Because, right now, they’re really strapped. You can talk to any of them, they’ll all say it.”

And it was one of their own, a Cleveland craft brewer, who sparked Young’s initial interest in solving the problem that, until now, seemed to have no clear solution.

Young, previously a stock analyst, hopes the Sinek System helps craft breweries.

“At one of these silly financial meetings I was talking to one of the local brewers,” Young said. “He told me, ‘I think you’re going to find something crazy about this industry—nobody makes any money.’”

Difficult to believe, it took some convincing before Young could fathom just how deep the problem ran.

“I sat in this board of directors meeting, and for an hour and a half these guys talked about two things: how do we get more distribution and how do we get higher margins,” Young said. “I said to the guy, ‘this is unbelievable.’ He said, ‘we’ve been having the same conversation for 12 years.’”

So, with the help of his brother, an electro-physicist at Boeing, he came up with the current design for the Sinek System—which is currently patent-pending. And although it has yet to go through the final design stage, Young has already received much attention for his “countertop kegerator.”

The idea landed him a spot in the 2013 Arch Grants’ top 40, and he recently made it into StartUp Connection’s top 30 with the chance of making it into the top six.

Within the next two months Young hopes to have a working prototype of the system and start shipping it in early 2014. His ultimate goal: for the Sinek System to be in everyone’s kitchen, alongside the coffeemaker.

“Beer is one of those things where there hasn’t really been any innovation,” Young said. “It’s still being sold in glass bottles. It’s just a really primitive way to distribute and to drink. I want it to be a normal kitchen appliance…”

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