Innovation guides Lakefront through competitive craft brewing market

Made in Milwaukee

Last updated on July 3rd, 2019 at 07:23 pm

Every Friday night, Lakefront Brewery’s beer hall fills with diners looking for a fish fry and a chance to catch up with friends and family. They also come for tours of the brewery that continue all weekend long.

But when the kitchen isn’t serving up fish and the tour guides aren’t dishing out jokes and cold beer, the brewery shifts from an entertainment venue to a production facility that produces 45,000 barrels of beer per year. For Russ Klisch, Lakefront owner, founder and president, it’s like running two separate companies. 

The bottling line at Lakefront Brewery.

Lakefront Brewery Inc.

1872 N. Commerce St., Milwaukee

INDUSTRY: Craft brewing

EMPLOYEES: 63 full-time, 60 part-time

For either business, it is important to be innovative and take advantage of opportunities for growth, Klisch said.

“I feel we’ve done a good job of seizing opportunities and being innovative. The difference between us and other businesses is we were able to understand and see the opportunities out there when other business owners didn’t,” he said.

The innovations Klisch pointed to included pushing for a change in the law that allowed the brewery to be the first to produce a gluten-free beer, producing a beer from all Wisconsin ingredients, and making the first organic beer, the first packaged fruit beer and among the first pumpkin beers. The brewery has also developed a “My Turn” series that takes advantage of a trend of craft brewers producing one-off beers and allows each employee to create a beer.

Those innovations have served the brewery well, particularly as the craft beer market has become more competitive. Having the first gluten-free beer helped put Lakefront on the map nationally, creating opportunities with distributors for the rest of the brewer’s line.

Competing out of state is still harder than selling in Wisconsin, where Klisch said Lakefront sells the third-most beer to state residents among Wisconsin breweries. The market is increasingly becoming hyper-local, he said.

“The large breweries like Sam Adams, Deschutes, Sierra Nevada are seeing sales declines right now because the local breweries are kind of eating into their sales, but local breweries in Milwaukee are not really eating into my sales,” Klisch said.

Lakefront has largely sought to keep its recipes the same over time, only refining them to improve consistency. Better equipment also helps make production less labor intensive and easier on employees.

“When we first started 30 years ago, everybody built their own,” Klisch said. “You didn’t go to a trade show and find a brew kettle and bottling machines made specifically for small breweries.”

But better equipment doesn’t mean Lakefront doesn’t face some of the same challenges as other manufacturers.

“In a lot of ways, you’re still making widgets,” Klisch said, noting there are personnel, financial and equipment issues that come up. “You run any company you’re going to have that; just because you’ve got beer doesn’t exempt you from it.”

Just like many other manufacturers, Lakefront has to fill its workforce needs, but Klisch said he’s skeptical of those who expect the education system to prepare the workforce completely for their industry.

“We never had a Milwaukee Area Technical College class; we don’t have a brewing school in town. We’ve got to take every employee and bring them into our place and teach them and educate them,” he said.

Lakefront’s workforce has grown to 63 full-time employees, with about two-thirds involved in the brewery, and another 60 part-timers working on the entertainment side.

The brewery announced plans in 2014 for a second facility on the other side of the Holton Street bridge from its current location. While that project hasn’t gotten underway, Klisch said it is still moving ahead.

“It’s always in the works; We’ve just got to sell some more beer and save some more money,” he said. “I’m more of, as bankers would say, a conservative brewer.”

Klisch said when he hears about other craft brewers entering into strategic partnerships or bringing on additional investors, it suggests to him they’ve run out of money.

“In the year 2050, no one is going to sit here and say ‘They didn’t expand in 2017. That was terrible; they had to wait until 2020.’ No one is going to care,” he said. “But the fact you’re there in 2050 is going to be the important part.”

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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