McMenamin pub brewery chain continues to grow

Modern Brewery Age, July 12, 2004

AP--Raising his voice over a cacophony of hammering and drilling, Mike McMenamin explains why he and his brother Brian make a seven-hour roundtrip journey from Portland every Wednesday to watch construction crews in Bend tear apart and rebuild the 68-year-old St. Francis of Assisi School.

"Some people would say we're way too involved," he shouts, gesturing around at the project that will soon be the latest in a string of pubs to carry the brothers' name. "But that's just the way we are. We're hands on."

Hands on or not, it seems to work. The Old St. Francis School, as it's called at McMenamins Inc., will open this fall as the 53rd in the company's empire of pubs, theaters and hotels stretching along the Interstate 5 corridor from Roseburg to Mill Creek, Wash.

The Bend complex will be the first east of the Cascade mountains but merely one more in a series of historic renovations for the company.

"They are legends," Paul Shipman, founder and president of Seattle's Redhook Brewing Co. said of Mike McMenamin, 53, and Brian McMenamin, 46. "What these guys have done utterly defies conventional wisdom."

Conventional wisdom in the industry says one-off pubs and taverns always outdraw chain-owned operations because people like the feel of a locally owned watering hole. But McMenamins keeps on growing.

"They got a concept, stayed true to it, built it like they wanted to build it and now they've become the name in microbreweries," said Bill Perry of the Oregon Restaurant Association. The brothers spent a recent day in Bend checking out the bars being built, watching contractors install custom lights and strolling around to get the feel of rooms as walls went up.

"The initial plans are just sort of a starting point," said Mike McMenamin. "You have to wait til a project is taking shape before you know where it's going."

That attitude has lead to midstream changes at nearly all the McMenamins building sites. But that, too, is part of the reason the brothers' vision of iconoclastic gathering spots has captured Northwest beer drinkers' imagination, allowing the company to tap into regional demand for craft brews.

The company has grown during the past decade more or less in lock step with the region's growth in microbrew consumption. More than 10 percent of the Oregon beer consumed in 2003 was from craft breweries, three times the national average of 3.25 percent.

The brothers, majority owners of their private company, are closelipped about financial details. But they say 2003 sales were above $70 million, up from a reported $50 million in 1998.

The brothers bought the 2-acre Old St. Francis School property for $1.6 million in 2002. They now estimate they will spend $3 million converting the school and five adjacent buildings into a sprawling complex with a brewery, a central restaurant and pub, intimate bars, a movie theater, 17 guest rooms, four rental guest houses and a 50-person "Turkish bath."

Mike McMenamin opened a door on a recent day to reveal a muddy courtyard between the complex's two largest buildings.

"It's going to have torches and cobblestones on the ground, beautiful plants," he said. "Once you've been doing this for a while it's easier to visualize what things will be."

Brian McMenamin is the numbers guy. His role is less design and more logistics, checking the layout of the kitchen, for example, or the tanks in the brewery.

The genesis of the McMenamins' kingdom was a 1973 trip to Europe that Mike McMenamin took with his wife. They were charmed by pubs in Britain, beer gardens in Germany, coffee shops in Cypress.

The places served alcohol, but they weren't the dark, smoky taverns found in the United States where a mostly male clientele went to imbibe. Instead, they were cheery establishments where whole families assembled, adults ordering beer, wine or coffee while the children snacked and played.

"We got into the whole pub scene," Mike McMenamin said. "We saw how much more integrated into the neighborhoods they were."

The McMenamins signature business began in 1983 with the opening of the Barley Mill Pub in Southeast Portland. Despite some money troubles in the early years, the McMenamins Greenway Pub in Beaverton and McMenamins Tavern & Pool in Northwest Portland soon followed.

None of the early restaurants was a brewpub, though, because Oregon law prohibited breweries from selling beer on premises. That law was later changed after the brothers became defacto lobbyists, along with Dick Ponzi of Ponzi Vineyards and Kirk and Rob Widmer of Widmer Brothers Brewing Co., among others.

Once breweries were allowed to have their own pubs, the McMenamins expansion began in earnest. The Hillsdale Brewery & Public House opened in February 1984 and began selling beer brewed on the premises the following October.

Since then, the chain has opened an average of 2.4 establishments annually over the past 20 years.

Many of the outlets the brothers have opened involve the renovation of historic complexes, including its 38-acre Edgefield complex, the former Multnomah County Poor Farm, the one-time Masonic & Eastern Star home in Forest Grove and Portland's Crystal Ballroom dance hall.