business

On New Year's Eve, the bubbly in Jason Alvey's glass will be beer -- and he'll have more to toast than 2010's arrival.

He also can celebrate the success of the Four Firkins, his small but well-stocked craft beer specialty store in St. Louis Park, which opened in May 2008.

Despite the recession, the Four Firkins will end its first full year in business with sales of more than $500,000, Alvey said. That's well beyond his projections for 2009 and about 25 percent ahead of last year's pace.

Not a bad start for a 36-year-old guy who began drinking craft beer -- brewed by traditional methods with high-quality ingredients -- only in 2001 on post-ride breaks with mountain biking buddies.

That was not long after he moved to Minnesota -- the home state of his wife, Heather -- from his native Australia.

"I think we are doing so well because we are so different," said Alvey, who had spent close to eight years at Erik's Bike Shop, managing the Bloomington location for 3 1/2 years before launching the Firkins. "Having an extensive retail background, I had some ideas as to how we might do things a bit different here. To survive in an economy like this, you have to do something different."

In Alvey's case, doing something different includes:

•Opening the Twin Cities' first craft beer store, and naming it, evocatively, after an Old English term for a quarter-barrel of beer or ale (four firkins, then, is a full-sized barrel).

•Stocking the shop, on any given day, with 700 to 750 microbrews from across the country and around the world (and not a drop of Big Beer suds among them).

•Offering customer service more in the mode of high-end wine stores. Alvey and his sales staff hand-sell their specialty brews, learn customers' tastes, offer recommendations and host frequent tastings.

•Building a loyal community of regular customers, both through in-store service and through new media and social networking tools. Alvey and his staff -- store manager Sean Brush and salesperson Dan Stavig -- upload online product review videos, tweet and e-mail about new arrivals and post detailed descriptions of what's on the shelves.

"It's the best beer store in the universe, as far as I'm concerned," said Nick Johannes, a systems administrator and Firkins regular for the past year.

"If there's any problem with the Firkins, it's that everybody knows there's good beer there. It's not like other liquor stores where things sit around. If you want something that he puts out an e-mail about, it's kind of a race to the door."

Longtime craft beer fan Greg Overall said he has struck up friendships with other regulars to get together to indulge in new Firkins finds.

"They've really brought my beer game to a new level," said Overall, who is in IT sales. "They've introduced me to things I didn't know were out there. They took the time to learn my taste, like a tailor or a personal shopper. I've probably got $500 worth of beer in my basement [from the Firkins]."

Podcasts evolve into research

Before he ever had the idea of opening a craft beer store, Alvey had been whetting appetites for one through a series of video podcasts.

Alvey and a cycling buddy, Phil Nelson, produced two dozen podcasts exploring the world of microbrews (still posted at www.whatalesthee.com).

The podcasts unintentionally evolved into market research, of sorts. They demonstrated to Alvey both the surprising lack of a craft beer store here and -- based on the growing crowds lined up for craft beer promotions -- the potential of such a store to be a hit.

"We saw a line of people line up around the corner all the way down Hennepin Avenue," Alvey said, recalling a microbrew event at Surdyk's in downtown Minneapolis that drew hundreds -- at 7:30 a.m. on a Thursday in 2007. "That's when I turned to Phil and said 'We're wasting our time. There is an untapped market here, and I'm going to do this.'"

Alvey declared his intentions in the final podcast.

"We were announcing it to the beer community who were following us," Alvey said. "When we opened the doors, because of this podcast we had a ready-to-go customer base who were very excited to be here. Our grand opening was insane, just absolutely packed."

To get to that point, Alvey spent about 18 months writing a business plan, getting a Small Business Administration loan, getting a liquor license and finding a location.

"They don't hand out liquor licenses to everyone," said Alvey, who made extensive efforts to get a license in Minneapolis before finding St. Louis Park more accommodating. "I imagine if this had been a chocolate shop or a teddy bear store, things would have been a lot easier."

Alvey also has formed a separate consulting company, Craft Beer Consulting. He consults with liquor stores, bars and restaurants on beer menu makeovers and with start-ups on licensing, working with city officials and neighborhood groups, getting financing and developing business plans.

Focusing on one store

Customers are asking when he's going to open new stores. But he doesn't want to water down what he has at the Firkins.

"There's not going to be a second or third store," Alvey said. "The whole idea for this was for me to do something that I love and enjoy my time here with my friends and customers, and if I made a living out of it, even better. But I'm not going to grow for growth's sake. We'd rather focus on running a very good business and keeping our customers happy."

The expert says: Roy Burns, a retired Dayton Hudson executive and counselor with the Minneapolis chapter of the Service Corps of Retired Executives (SCORE), said Alvey appeared to have done many things right in launching the Four Firkins and taking a cautious approach to growth for now.

"Trying to expand too fast, that's often a mistake, they get expansion beyond their cash flow," Burns said. "He's got a unique niche, and the more he can build on his brand, using electronic media to reach out to the generation that's interested in his product, the better. In this market, it's going to take investment for somebody to try to copy him, so that gives him lead time in terms of his competitive advantage."

Alvey, who met with a SCORE mentor before opening his shop, likely will want to consider opening another location at some point, Burns said. When he does, Burns said he will need to know more about his customers and what has made his storefront successful. He can use that information as he looks for potential new locations.

"I don't think he ought to rush into it," Burns said. "Slow is better now in this economy."

Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com.