The Core of the Little Apple — Manhattan Brewing Company in Manhattan, Kansas — Good Beer Hunting (2024)

Compound Interest

In 2018, Adam Krebsbach and Garrett Paulman were working at the biggest brewery in Kansas. But it was far from the career pinnacle they thought it’d be.

Opened by former geologist Jeff Gill in Manhattan, Kansas, in 2007, Tallgrass Brewing Company became the Sunflower State’s most visible craft emissary, distributing its beers to 18 other states at its peak. In 2015, Tallgrass took a former call center out by the airport and renovated it into a 60,000-square-foot, 100,000-barrel brewery and taproom.

The Core of the Little Apple — Manhattan Brewing Company in Manhattan, Kansas — Good Beer Hunting (1)

But just two years after opening its destination brewery in Manhattan, Tallgrass was in trouble. It lost its brewmaster to Wyoming’s Melvin Brewing. It cut down its portfolio and shifted focus to Berliner Weisse. It brought in a private equity firm, and after 14 months of trying to recapitalize, ended up suspending operations and laying off 20 staff members in 2018. Even though it had secured $7.5 million in bank loans for another expansion, Tallgrass had run out of operating capital. From the inside, Krebsbach, who was working as the head cellarman, and Paulman, the head brewer, had known it was over for a while.

[Editor’s note: This story is part of Good Beer Hunting’s Compound Interest series, underwritten by SMBX, which highlights different ways small businesses can get the funding they need; all of the businesses profiled in this series have worked with SMBX to achieve part or even all of their funding.]

“Towards the tail end, we saw the writing on the wall,” Paulman remembers. “[We were] playing ping pong all the time, not making beer.”

Losing Tallgrass left Manhattan without a proper brewery. In those waning days between expansion and shutdown, Paulman had begun meeting with Jake Voegeli, a former Tallgrass sales rep who had left the company in 2016, about opening their own place and keeping their decades of combined experience at home in Manhattan.

“We just took a step back and were like, ‘What do we really want to do as a brewery?’ We wanted to be Manhattan’s brewery. That’s it.”

“With Tallgrass being gone and out of town, there was a big void in Manhattan for craft beer,” Paulman says. Krebsbach, Paulman, and Voegeli took that as an invocation. They chartered their own brewery with a name that made their purpose obvious: Manhattan Brewing Company.

“Most breweries probably try to come up with a cool, catchy little name,” Voegeli says. “We just took a step back and were like, ‘What do we really want to do as a brewery?’ We wanted to be Manhattan’s brewery. That’s it.”

BEER IN WILDCAT COUNTRY

The city of Manhattan, Kansas, does not rival the borough that shares its name. Its nickname, The Little Apple, acknowledges this comparison with a wink, but none of the city’s 55,000 residents would confuse their prairie town in the Flint Hills for the bustling island in New York City.

The community in Manhattan is based around Kansas State University, the first public university in Kansas, which enrolls roughly 20,000 students every year. Voegeli wrote his first business plan for a brewery in 2007, while he was a senior playing football at K-State, the year after Tallgrass opened. He put the document on ice for over a decade until he got together with Krebsbach and Paulman in Tallgrass’ last days and started scheming.

“We took my sh*tty little business plan that I had written in 2007, and we upgraded it,” Voegeli says. They were assisted by Jeff Koenig, an angel investor and consultant with the Kansas Small Business Development Centers, which Paulman says was a gamebreaker. “We brought our business plan with a Jeff Koenig stamp on it to a bank, and they were like, ‘Oh, you guys are good. If you went through Jeff, your business plan is probably solid,’” he says.

Voegeli wasn’t necessarily looking to stay in the Little Apple, but there’s not a lot of opportunity to open a place without building out a campus like Tallgrass. Kansas is a historically dry state, one of the few that still hasn’t ratified the repeal of the 21st Amendment. The state currently ranks 33rd in the United States in breweries per capita and 32nd in economic impact, according to the Brewers Association, and college towns—inherently transient places whose residents are primed to seek the cheapest buzz possible—are rarely magnets for quality craft beer. There were only 63 breweries in the state when Manhattan Brewing Company was looking to open in 2020, so brewery-ready spaces were hard to come by.

“I want them to prosper because of who they are. The ambiance is amazing, the personalities are amazing, and it’s just so relaxed and you can sit around and mingle and under no pressure and enjoy the beer. The value has been vivacious for Downtown.”

After months of searching, the best the trio could find was the ground floor of the historic Smith Building, a former attorney’s office and hardware store located right between Manhattan’s historic Romanesque bank and the gabled Riley County Courthouse in Downtown. Voegeli was skeptical at first, given the lack of patio and the headaches associated with retrofitting a 1909 building into a brewery.

They planned to open in September 2020, but the COVID-19 pandemic actually helped them complete the renovation earlier. Contractors were able to pull workers from postponed jobs, and they ended up cutting the ribbon on July 8. On their first day, Manhattan Chamber of Commerce chair Summer Dierks was there to hand them their ceremonial first dollar.

“I want them to prosper because of who they are,” Dierks says. “The ambiance is amazing, the personalities are amazing, and it’s just so relaxed and you can sit around and mingle under no pressure and enjoy the beer. The value has been vivacious for Downtown.”

FUNDING A METROPOLIS

Dierks initially agreed to the opening ceremony because she was a beer fan, but in the years since, she’s become a regular, learning from Krebsbach, Paulman, and Voegeli every time she comes in. A lifelong Manhattan resident, Dierks has seen the incredible spirit Manhattan Brewing has brought to the historic building on Poyntz Ave, and she’s since taken it on as a client in her law practice.

“They’re definitely entrepreneurs,” Dierks says. “And they encourage an entrepreneur mindset, they’re so forward-thinking.”

The Core of the Little Apple — Manhattan Brewing Company in Manhattan, Kansas — Good Beer Hunting (2)

It’s not a coincidence that Krebsbach, Paulman, and Voegeli are such nimble businessmen. They’ve been forced into an agile mindset since the beginning. Manhattan never intended to sell its beer outside of the taproom, but since it opened the day after the United States surpassed 3 million COVID infections, it had no choice. The founders invested some of their startup capital in a Wild Goose canning line, the smallest one that the company makes. That first year, they put out 53 different beers, and though 85 to 90% of their beer, according to Voegeli, was sold through the taproom, that number is much lower than they ever intended.

“We’ve always had the philosophy that we want to brew a bunch of beer styles we like, but we’re really brewing beer for people who are coming here,” Voegli says. “Whatever they want to drink, we’re gonna brew it.”

Due to COVID, Manhattan burned through capital just trying to stay open. Because it didn’t open until 2020, it didn’t qualify for most COVID relief funds. Backs against the wall, the three owners went back to their investors in the fall of 2021 to raise money for new tanks, bringing up their production capacity more than 50%, to 1,400 BBLs. Those tanks were delayed until January. Then March. Then April. Voegeli says that winter consisted of “absolute sh*t months,” and they spent all that money avoiding layoffs. When the tanks finally arrived in May, they needed another cash injection to pay off the expansion.

That’s when Voegeli answered an email he’d gotten from SMBX. He knew they could go back to the banks and get the money they needed to survive—after all, they had Koenig’s signature—but something about the peer-to-peer dynamic resonated with him. Throughout the pandemic, with fewer and fewer college students enrolling, he saw the chance to turn regulars into evangelists.

““We saw that 8% as marketing dollars. Essentially, we took everybody and made them even more interested in growing, because now they’re invested. They want to see us succeed.” ”

“We could have got a better rate from a bank, 8% is not a great rate for a loan,” he says. “We saw that 8% as marketing dollars. Essentially, we took everybody and made them even more interested in growing, because now they’re invested. They want to see us succeed.”

Voegeli says they were initially skeptical if they could energize their base, but soon they had local doctors coming in and pledging $10,000 to keep them thriving. Without much advertising, they were able to raise $89,270 from 119 investors, many of whom had rallied around local business hit by the COVID pandemic. Even the city government and Chamber of Commerce were galvanized, passing legislation to allow breweries to sell packaged liquor and building out a streetscape patio in front of the building.

Only two years after opening, Manhattan Brewing is continuing to grow off that work and goodwill. The founders are getting their debt in order, and starting to make payments to their SMBX investors, all while expanding into the second floor of their building. This November, they’re building out a barrel room and private event venue in the basem*nt. Every development—every dollar of finance—is all in service of building up a stronger, more sustainable core in the Little Apple.

“We want to stay here, we want to take care of this town,” Voegeli says. “We want to be more than just the brewery that’s attached to a college. We want to create a beer destination town in Manhattan, really grow this place.”

The Core of the Little Apple — Manhattan Brewing Company in Manhattan, Kansas — Good Beer Hunting (4) Words by Jerard fa*gerberg
Illustrations by Colette Holston

The Core of the Little Apple — Manhattan Brewing Company in Manhattan, Kansas — Good Beer Hunting (2024)
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