By Karen Knapstein, contributor of Underground Group
⏰ 7-minute read
- Yeast is a vital part of the brewing process for beer, wine and other beverages that contain alcohol.
- White Labs cultivates and sells 68 core strains of yeast that beer brewers working in places from the bathtub to the bar room have embraced; the company banks another 500 strands for specialty use.
- Since 2003, the primarily B2B company has grown from around 20 to more than 200 employees via relationships, ingenuity and a flexible approach to strategy.
Yeast is a brewer’s best friend. The single-celled fungi’s alcohol byproduct after it consumes sugar is what helps make spirits and beer. Add just the right amount: success! But if you don’t add enough, your product can fall flat.
This can apply to business, too. And it does to the story of White Labs, a full-spectrum manufacturer of brewer’s yeast.
White Labs’ success has been part “being in the right place at the right time” and part knowing how to strike when opportunity arises, which has made the company one of the largest yeast suppliers in the world with four locations globally and more than 200 employees.
Grow Wire sat down with the White Labs team to learn how this small homebrewing business rose to become a leader in the broader brewing industry.
White Labs is a manufacturer of liquid yeast with facilities in Copenhagen (below), Hong Kong and the U.S.
Forging a business “pitch”
In 1994, Chris White was a curious biochemistry graduate student at the University of California San Diego. He was also a homebrewer.
Yeast is commonly found in biochemistry labs, since it's simple in structure and genetically close enough to higher-order plants and animals to make it a good testing medium for scientists, Jacqueline Weiss, the director of molecular biology and digital agriculture at the United Soybean Board, explained.
From his time in the lab, White knew how to work with yeast when brewing beer at home. He started growing his own strains in small batches.
Meanwhile, Jack White, the founder of Ballast Point Brewery, opened San Diego’s Home Brew Mart to sell homebrewing supplies. Chris visited during the store’s opening week and struck up a friendship with Jack. He also got an idea: turn his yeast-growing side project into an actual business.
Before long, “I was developing the yeast for Home Brew Mart,” Chris explained.
At the time, brewpubs and microbreweries were enjoying a boom in the U.S.: They exploded in number year-over-year from 1995-6, from 14 to 600 nationwide. (As many of us know, the growth would continue: As of 2018, there were more than 7,000 U.S. brewpubs and microbreweries.) Chris White wanted to capitalize on the surge yet stand out in the crowd.
At the time, brewpubs and microbreweries were enjoying a boom. White wanted to capitalize on the surge yet stand out in the crowd.
He found an edge in the fact that he and his fellow small-scale brewers wanted to brew beer on the same day they got their hands on yeast. (In those days, homebrewers had to cultivate dry yeast before brewing, which could take two to three days. Liquid yeast wasn't readily available.)
Cultivating White Labs
After getting his Ph.D. in 1995, White got a “little loan from his parents” and set up his own shop in the Miramar neighborhood of San Diego. There, he created a strain of “pitchable” yeast. Pitchable yeast comes in larger quantities and is ready to ferment upon purchase. Each vial of White Labs pitchable liquid yeast can be used directly in a brew, excusing homebrewers from the culturing process. The liquid is available in more varieties than dry yeast, so users can experiment more with taste -- a point of differentiation for homebrewers.
“It was really small,” White said of his early White Labs shop. “I kept everything as clean as I could, and I would use the kettles in the back of Home Brew Mart, then bring [the yeast] back to my space to sterilize it.”
Chris White started White Labs by creating his own yeast strains in a small San Diego shop.
In addition to Home Brew Mart and a few other homebrewing supply shops in San Diego, White sold his yeast to Pizza Port Brewing Company, whose leadership he met on the local craft beer scene.
“They were a startup at the time, and we grew together,” he said. “They didn’t even pay me at first. We bartered -- for pizza!”
In 1998, White got a bank loan to move White Labs to a bigger space, where it was “able to scale and grow.” Nearly 25 years later, White Labs has locations in San Diego, California; Copenhagen, Denmark; Asheville, North Carolina and Hong Kong, plus an online shop. It sells roughly 100 strains of liquid yeast directly to both large brewery operations and individual homebrewers.
Growing at the speed of yeast
When conditions are just right, yeast grows rapidly. The same was true of White Labs.
The company was able to quickly able to expand into Copenhagen in 2014 because Troels Prahl, who started with White Labs in San Diego, wanted to move home to Denmark. Instead of letting a valuable team member move on, White opened an operation in Denmark to keep Prahl while expanding the company’s reach. White Labs’ European presence allowed exposure to a new global audience and reduced customs and shipping costs.
Instead of letting a valuable team member move on, White opened an operation in Denmark to keep his colleague while expanding the company’s reach.
A decision to expand and sell to brewers in China led to a Hong Kong operation opening in 2014. White Labs opened its location in Asheville in 2017 after the city wooed it with incentives, including real estate.
And because of the nature of its product, for White Labs, even a market downturn was manageable.
“As a business, we’ve seen annual growth every year, even through the decline of the U.S. [beer] market [around 2013],” said Neva Parker, director of operations. “People were still drinking beer as sort of a luxury. We grew significantly during that time.”
“But, one of the biggest challenges has [actually] been the rapid growth,” Kathyrn Small, special projects manager, said. “For a small company with little internal experience, it was a big learning curve for all of us.”
Small has been a crucial part of the company’s technology and product management since she joined in 2014.
Over the past few years, "we went from the kiddie pool to the adult pool," she shared.
"One of the biggest challenges has been the rapid growth. ... We went from the kiddie pool to the adult pool."
When she joined, Small quickly realized that White Labs manages a lot of product. A homebrewer might purchase a 40-milliliter package of yeast, while larger breweries order by the two-liter, she noted. Small came aboard just as the company added locations, which was complicated because the business wasn’t unified in its approach to technology.
“When I started, we had one building on the block [in San Diego],” Small said. “Now, we have three, plus Asheville and the international locations. We produce, package and ship from all locations.” The company had various software systems and spreadsheets everywhere.
In 2014, White Labs had just one location. Now, it produces, packages and ships yeast from four locations.
Small’s solution was organization. In her first few years at White Labs, leadership would “put me on a project that they wanted fixed or finished,” she said, and that’s still the case today. To ensure the company was poised for successful growth, she streamlined technology decisions and consolidated systems.
Because of the distributed nature of the company, the global team relies on a combination of email, video conferencing and in-person visits from Small. It’s not convenient, but it works.
“I was up until 11 p.m. [for a recent call],” Small said. “You do what you have to do.”
Quality rises above the rest
To accommodate growth, many companies look at cheaper ways to make their products. Rather than cut corners, White Labs has sought to keep quality No. 1 on its list. It’s important that the company is able to deliver a consistent yeast product from all locations yet maintain flexibility in production logistics between facilities.
“Our product is our product, so consistency is a big part of [what we do],” said Parker. “We want it to be as consistent as possible, but with the understanding that we have different [production] sites.”
White Labs' yeast produces craft beer. In the brewing process, yeast quality is key.
White Labs’ production equipment runs the gamut. It has everything from wort production and brewing systems to autoclaves, FlexCell propagation machines, laminar flow hoods, incubators and cryo freezers in its labs. And of course, all of that equipment varies in versions and models that have slightly different sizes and settings, just like any product line. The key is tailoring yeast making processes to local conditions without losing quality.
“We have standard procedures, but also local ones,” Parker said. “So, Asheville has different, upgraded machinery, but a length of tubing might be slightly different to maximize safety or efficiency.”
To maintain its high standards, Small said the company is “always training on quality control and yeast handling. Each location also has a training facility for making beer and improving yeast.”
White Labs' production teams are focused on quality, Small said.
White Labs also reconfigured how it packages its yeast in 2014. Previously, the yeast was packaged after growing. Now, it’s grown and packaged in the same container, which reduces waste, increases quality and keeps the process cleaner overall.
“It’s a whole new system,” said Small. “Lots of employees were resistant … but making the changes and getting everything into the new packaging has helped run a more cohesive system.”
Some employees left White Labs over the change, she added. Ultimately, the team refined itself and emerged a stronger and more eager group.
In 2014, White Labs changed its packaging. It now sells yeast in the same package the product is grown in.
Brewing a future
For White, managing the business has been a little “like graduate school. We sort of ran with it like we did with our projects,” following the path that research -- or in this case, employee passions -- presented. For example, Parker started as a lab tech and was encouraged to grow into her desire to manage operations. Small was originally hired as White’s assistant but soon came to handle technology at the company.
Chris let his employees “find a path that interested them, which led to the growth of the company,” he said.
In the early days, “people who wanted more structure didn’t stay because ‘they didn’t see a future.’ But I saw a future,” he added. “I just didn’t know what it was.”
“People who wanted more structure didn’t stay because ‘they didn’t see a future.’ But I saw a future. I just didn’t know what it was.”
In the coming years, the company wants to stay ahead of the curve, Parker said. It is looking at trends in the marketplace such as sour beer, which, in terms of yeast, is more rapidly-fermenting. It’s also working on yeast strains to support the low-alcohol beverage trend, including strains for kombucha and light lagers, as well as some yeasts for winemakers.
Lastly, White Labs is focused on making the most of what it’s built. All its locations besides San Diego have square footage they aren't using yet and plan to, Parker said, but not without careful thought.
“As we continue to grow our other sites, we have to be smart about how to balance our production outputs across the enterprise,” she said. “We also focus a great deal on continuous process improvement and the use of technology and automation to work smarter, not harder.”