A New Grip on a New Reality — Culmination Brewing in Portland, Oregon
Tomas Sluiter was using a hammer drill when the auger bit caught. Instead of chipping up the concrete, the tool jerked in his hands, and he felt his grip weaken.
There was never any pain, but in the days that came, Sluiter noticed his third knuckle looked strange. It had sunk beneath the line of the others. When the X-rays came back, Sluiter was tying his boot, and the doctor rushed in and told him to stop immediately. Turns out he’d snapped his metacarpal completely in half.
Sluiter opted not to get surgery, and the doctor referred him to a prosthetics office to get fitted for a splint. He was making small talk with the prosthetist while she worked, and she asked him what he did for a living. When he told her he was the founder and owner of Culmination Brewing, she replied with surprise: “Oh, I’m one of your investors!”
[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.]
Sluiter and his wife April founded their brewpub in Northeast Portland, Oregon in 2014. The brewery immediately stood out in the bustling Portland beer market for its boundless taplist, which included everything from a Bière de Garde to an IPA with sauvignon blanc grapes. In its first year of eligibility, Culmination won Best New Brewery in the Oregon Beer Awards. That tradition continued for the half-decade after: It won four awards in 2020, including Medium Brewery of the Year. But two years of COVID and a distributor’s sudden change of heart have taken Culmination from a leader in Oregon’s world-class beer scene to a brewery on the backfoot.
Our vision with Culmination when we started was always to be an inclusive brewery, where our employees and our community had a say. I guess that resonated enough. And now it goes both ways.
So Sluiter turned to his community to lift them back up. In 2021, Culmination raised $400,000 in small business bonds through SMBX, with folks like Sluiter’s prosthetist—who might not know him by name, but who have enjoyed his beer in the past half-decade—stepping in to carry the brewery into a new phase.
“Our vision with Culmination when we started was always to be an inclusive brewery, where our employees and our community had a say,” Sluiter says. “I guess that resonated enough. And now it goes both ways.”
A CULMINATION OF SORTS
Culmination’s wide scope is a product of design. Most small breweries have a two-vessel system, one where the brew kettle is also the whirlpool, and the lauter tun and the mash tun are the same. Sluiter decided to go with four vessels. Technically, it’s only a 5-barrel system, but Sluiter produces the same amount as a 15-BBL system by running three batches in a single turn.
“It’s a small-batch, high-capacity system,” Sluiter says. “It’s set up to do multiple SKUs of beers, so we can focus on diversity and creativity. At the end of a brew day, it’s a little more running around for our brewers, but we feel it gives us the best of both worlds.”
Culmination’s immediate success meant that Sluiter didn’t have to handhold the business. One-off specialty beers were bolstered by popular flagships like Phaedrus IPA and Pilsner. By 2019, the brewery was taking in $1.5 million in sales, a 15% increase over the prior year.
With Culmination running smoothly, Sluiter started offering consulting services. He calls himself a Brewery Doctor, helping other breweries struggling with performance and scale. In 2017, he helped open Mountains Walking Brewery in Bozeman, Montana, which now boasts five of the 10 highest-rated beers in the state, according to BeerAdvocate. He’s dedicated himself to bridging American and Asian beer cultures, consulting for breweries like Kagawa Brewery in Takamatsu, Japan, and assisting another in Hong Kong. He tried to get a production brewery opened in Vietnam, but the pandemic forced him to switch tactics, and instead he invited his collaborator to Portland, where they opened Fracture Brewing this March. That’s where Sluiter was working when he had his ill-fated encounter with the drill.
Our draft volume went from being 70% of our overall wholesale volume to zero. The only way we’re going to move product was through cans.
All businesses were trending upward until the COVID-19 pandemic hit. Culmination got caught on the rocks as bars closed and drinkers moved to liquor stores for their beer. Right as demand for packaged beer soared, Culmination’s distributor cut its craft portfolio completely.
“Our draft volume went from being 70% of our overall wholesale volume to zero,” Sluiter says. “The only way we were going to move product was through cans.”
Culmination had been depending on mobile canning units to get its product on shelves, but so was everyone else. Demand for that service spun out as well. Prices went up, and so did minimum orders. Sluiter looked over his finances as he would for any of his consulting partners, and he knew he needed to make a change. He couldn’t keep tying up his money to pay for mobile canning. It made more sense to take on some debt and buy a line of his own.
“Cash flow is more important to a business in a lot of ways,” Sluiter says. “We were paying mobile canning to come into the brewery once a week, and it was costing us more than what the debt service on a new canning line would cost.”
Culmination had previously raised some money through traditional financing, but Sluiter wanted to maintain as much cash flexibility as possible. He’d heard about SMBX through another client he was consulting for, and he liked the fact that he could keep his monthly payments low. SMBX’s interest rate was high (8%), but it offered a longer amortization term than the banks (seven years).
“You’re paying [extra money] in margin anyway, it goes into the cost of goods,” Sluiter says. “Why not get a canning line, and then that can eventually bump your balance sheet up as an asset?”
Culmination’s SMBX raise kicked off at the end of October 2020. It was one of the Silicon Valley crowdsourcing company’s first clients, and things grew slowly at first. The brewery needed to raise at least $250,000 to afford a canning line, and two months in, it was only at $110,000. But a little attention from the local news and an informational webinar—hosted by SMBX and attended by local people, including the prosthetist and her husband—got the campaign over the hump. It closed in January 2021, with 252 investors investing a total of $400,000. Sluiter thinks Culmination could’ve gotten to SMBX’s limit of $500,000, but the money raised let the team purchase a high-end canner and pay for the labor and materials to get it in operation.
Sluiter has an analytical eye for his business, but he was also romanced by SMBX’s community appeal. After all, if he founded Culmination to be a place where “great beer, excellent food, friends, family, and community come together,” why not bring Northeast Portland into the financial plan? If he was going to pony up for the 8%, that interest might as well go back to his patrons.
“It fits into our ethos as a brand of community engagement,” Sluiter says. “And it feels better as a company to pay back individuals who support us, rather than like, just a monolithic bank.”
RUNNING PARTNERS
With an in-house canning line and 252 new local investors in hand, Sluiter had one last issue to clear up: getting those cans onto shelves.
Culmination had been with its original distributor since it opened, and its sudden decision to eliminate craft SKUs came as a shock. All Sluiter’s contacts got fired, and he felt abandoned.
“There was just this complete, utter disconnect from the spirit of what we were trying to do in the industry,” Sluiter says. “We were mismatched with our production capacity and our competitive advantage, and even our mission statement to engage in the community.”
One person who intrinsically understood the situation Culmination was in was Logan Marks, who’d worked in sales for Portland-area breweries like Stickmen Brewing Company and Rogue Ales & Spirits since 2014. In March 2022, he left his gig at Ex Novo Brewing Company to work for Culmination and Fracture, and with those eight years under his belt, he knew that getting new, more varied product onto shelves was the way to grow.
“Every store in the Portland area now has all of the good beers, and we’re talking 30 to 40 different cans available,” Marks says. “The shelf space is even more competitive, but it’s from a wider spectrum of breweries now, too.”
Culmination is a known quantity to most Portland drinkers. They’ve heard of Culmination, [but] maybe they haven’t been able to try as wide a range of his styles as maybe they should have been. That’s the secret to really making Culmination grow for the long haul.
During his time at Ex Novo, Marks worked with Philip Birnbaum and his boutique distributor Running Man Distributing. He saw Birnbaum and his team as “advocates for craft,” and so he connected the two. When Birnbaum met Sluiter, the distributor could tell the hard-up entrepreneur was a “kindred spirit.”
“Our mission is to distribute a limited number of these really outstanding breweries to retailers and do it in a customer-friendly way,” Birnbaum says. “Culmination is an unknown quantity to most Portland drinkers. They’ve heard of Culmination, [but] maybe they haven’t been able to try as wide a range of his styles as maybe they should have been. That’s the secret to really making Culmination grow for the long haul.”
Running Man has no minimum orders, and it rarely enforces a delivery mandate. That provided a level of flexibility Sluiter never had with his old distribution partner. Now, he can tap half a batch and package the rest up. But more than that, Birnbaum empathized with his struggle as a small brewer with dozens of styles and no way to serve them, so decided to help Sluiter negotiate his way out of his old deal. The two were officially in business starting in April.
Birnbaum says that Running Man did about 50% of its business in kegs before the pandemic. Three months in, that number was 5%. Now, it almost exclusively sells packaged beer. Birnbaum wanted to keep giving Portland and its omnivorous drinkers the experience of sampling at a bar or taproom in their own home, so bringing Culmination into Running Man’s small 10-to-20-brewery family just made sense.
“Consumers want one-off cans, they want short-run cans, too, because now they’re used to finding this wider range of styles from their favorite breweries,” Birnbaum says. “Tomas is in this really sweet spot where he can both keep up with the demand for his flagship beers and at the same time work on those limited runs, because he controls it.”
A POINT OF NORMALCY
Sluiter says his hand is “pretty much back to normal” now, but little else at Culmination is.
Business is climbing back, but the deal with Running Man is still fresh. The pandemic is still stalking, ready to sabotage taproom and bar sales with any new surge. Who knows what will come of Sluiter’s other ventures, like Fracture or the brewery in Takamatsu, which is supposed to become Culmination Brewing Japan as soon as he’s able to travel.
Sluiter jokes that he always tries to talk his consulting clients out of hiring him. It’s too late for him—he’s hopelessly “swimming with the current” he says—but other would-be brewery owners should take the last two years of Culmination’s business as a cautionary tale.
Even when you come out the gate with stunning beer. Even when you win awards. Even when you weather big threats and find a community that buoys you, you’re still one sweaty palm away from having to reassess everything. Take anything for granted, and suddenly you’re learning to live with a depressed knuckle and a finger that’s 3 millimeters shorter than it was for the past 48 years.
“You spend your whole life with your hand the way it is, and you’re just used to the way it feels,” Sluiter says. “Then it’s a little bit different, and you have to develop a whole new sensory regularity. It’s a new reality.”
Words by Jerard Fagerberg
Illustrations by Colette Holston