Scale Ale: How a Home-Brew Hobby Launched Third Rail Beer

Third Rail founders Larry Koestler, left; Loren Taylor-Raymond, and Kaitlyn Haubrich
Third Rail founders Larry Koestler, left; Loren Taylor-Raymond, and Kaitlyn Haubrich
Third Rail Beer

New York City is not exactly a friendly place to launch a brewery. Space that's large enough to hold equipment is scarce, and what exists is expensive. But for Larry Koestler, Loren Taylor-Raymond, and Kaitlyn Haubrich, opening elsewhere was not an option -- all three of them were born and raised in New York City, and they wanted to sell their beer in their hometown.

It was the production space about which they'd have to be creative, then, and so they joined a growing group of tenant -- or gypsy -- brewers, who rent tank time at bigger breweries. They found a facility in Rhode Island that was willing to take them on, and Third Rail Beer launched in August, releasing a pale ale and a farmhouse ale.

Taylor-Raymond first started home brewing in college when a chemistry professor introduced him to the process. He was fascinated by it -- it was a tasty practical application of his organic chemistry minor -- but it was nothing more than a casual hobby for several years. When he and Haubrich, whom he'd met in college, moved back to New York City, they began a serious home-brewing habit, and they began making more and more complicated beer, including a turbid mash lambic, a traditional Belgian-style ale that requires a constant nine-hour boil.

The pair brought an IPA they'd made to a softball game, where they ran into Koestler, whom Taylor-Raymond knew from childhood. Just an acquaintance at the time, Koestler was wowed by the beer, and the trio forged a friendship and partnership that would become Third Rail.

Like all serious home brewers, the founders dreamed about opening a brewery. But they were given the push they needed to make that reality when they dropped off a sample of their beer at One Mile House as a thank-you to the owner, who'd hosted a party for them. "He was floored," says Haubrich. "The first thing he said was, 'Can you reproduce this?' I said yes. Then he said, 'When can I get a keg?' He also told us we had to have the launch party here."

A year and a half later, they did.  

Scale Ale: How a Home-Brew Hobby Launched Third Rail Beer
Third Rail Beer

So you have a couple of new releases. Kaitlyn Haubrich: Our saison is Field 2. It's named for a softball field in Central Park, which is actually where we met Larry. We always say saison should be consumed in a beautiful meadow, but as New Yorkers, the only dirt we play in is there. I was our first commercial batch, and making it was terrifying. But it was crazy -- the mash smelled same, and the readings looked the same, as making it on a smaller scale. We're thrilled that people are really enjoying it. Loren Taylor-Raymond: It was weird to stick our noses in the kettle and realize that this was the same beer we'd been making on our stoves. I expected inaccuracy in the scaling up process. It was totally surreal. It's a very dry saison. The yeast strain really does all the work -- it's a very aggressive wild yeast relative, and it's very aromatic. The head brewer [at the brewery where Third Rail is making its beer] looked at it under the microscope and freaked out -- he thought it was an infecting wild yeast from outside. Third Rail also released a floral American pale ale called Bodega.

What's it like to scale up from a home-brewing operation to production on this scale? LT: It takes a lot of patience and planning in the licensing process -- you have to accept that there's nothing you can do. No amount of effort you can put in to make it go fast. Things will go wrong. We operated that way. In terms of budgeting time and money, we assumed there would be unknown problems, we just didn't know what yet.

For the recipes, you have to accept what's out of your control. You have to pilot-batch and test extensively, and you need to know what you liked and why. A lot of home brewers have one or two batches that went spectacularly well -- the key is to then try to reproduce it so you know what, in particular, led it to be better. And then when you have a perfect recipe, you should assume that it's not going to be the same at a large scale, so be ready to make changes. You hope that you can get it good enough to sell even if it's not as wonderful as the test batches. Our pale ale, especially, was challenging -- hop profiles are different year over year. So same hops in does not get same results out.

What's been the hardest part of this? LT: The biggest challenge thus far was that we have this yeast strain that we love so much in our farmhouse ale, and it's very aggressive -- it needs a huge amount of sugar. When you're working with yeast on this scale, you get it shipped from a commercial lab in top shape, so it's going to eat through much more sugar than the yeast you buy in a home-brew store that's been sitting on a shelf. So we use this yeast, and by every metric, it had finished -- the beer was dry. So we kegged it, but the yeast kept going, and that led to extremely over-carbonated kegs. We had to go to a launch event, schmooze, and then go shake kegs, because that's how you settle the carbonation. KH: We're lucky it's such a collaborative industry -- we fixed the kegs by hand to get through launch week, but you have to shake each one for three to five hours apiece. So for the rest of the kegs, there was no way. How can I make sales if I'm shaking kegs all day long? We called in a favor at Greenport Harbor, and that was a huge help. They said, "Our tanks are open, if you want to bring the beer out, pump it into the tank, reset the carbonation, and pump it back into the kegs." We could fix all of our kegs in 24 hours that way. We could not be more grateful for that. They're paying it forward, and we're excited to pay it forward one day.  

Scale Ale: How a Home-Brew Hobby Launched Third Rail Beer
Tiago Grisi

Tell me a little about gypsy brewing. It seems like that's become a popular way to launch a brewery in New York City. KH: A couple of years ago, it was really frowned upon. But now, the entire approach has changed. We're not just emailing the recipe to a brewer; we're going in to do it ourselves. LT: There was this perception that craft beer doesn't come from that arrangement -- a lot of breweries that were looking to cash in on craft created a brand and just found someone, anyone, to make a beer. Seeing a label that said a beer was brewed somewhere else than the brewery it was representing was a marker that it was made with less care. Over the last few years, some of the beer that's been made this way has been carefully made and well thought out, and it's phenomenal. So that's shifted the conversation. Groundbreaking brands ahead of us have local and national success with this. Grimm. Prairie, who's now building a beautiful facility, but started working with partners. Take one sip of that beer, and you know that a lot of thought went in; this is not a recipe that was emailed to someone. And then the Bjergsø brothers, at Mikkeller and Evil Twin, both make spectacular beer like this. KH: I think maybe it's so prevalent here because no one buys their first apartment -- you rent. We've always been comfortable with that, so we don't mind using someone else's equipment. Some people in the industry say, "If it's not your equipment, it's not craft beer." I think you're an idiot if you say that. Would you say it's not your dish if you don't make it in your kitchen?

I imagine piloting when you're brewing this way is terrifying. LT: Well, most breweries have a home-brew sized system, too -- that's what they use when they're conceptualizing new beers; they brew it there first. So they know how to tweak that to scale up. That's how most breweries test, so that's not a disadvantage. But we're home brewing our pilot batch. Then we sit down with the brewer at our facility when we have a sample that is right where we want it to be. I scale the recipes up, pitch them to him, and then he fact checks. He'll say, "Okay, I get that you're getting 88 percent conversion in your home mash tun, but we get 91 percent, so cut back malt a bit." Or, "Hops are usually 25 percent more efficient in a big system, but mine is more like 21 percent."

This is why we went with this brewery. We talked to potential partners that were less invested in how it would all turn out -- their business is in contract brewing. They wanted to get our beer in and out, and being that in-depth was not something they were interested in. Here, we get to go brew the beer plus utilize the knowledge they have with the system and years of commercial brewing. That's one thing that makes a gypsy operation a really good model -- if you do it this way, you don't have the five years of experience with being a shift brewer, but you get to work with head brewers and shift brewers. And [our facility brews] different styles of beer than us, so they excited to do something different. We go up three to four times per batch, but when we're not there, it's important that head and shift brewers take gravity readings, and determine if your beer is clear enough to package.

So who is your host? LT: Newport Storm -- we're the first tenant beer they've ever had. KH: We're a perfect filler for them -- Newport is a beach town, and it kind of shuts down in the off-season. This is a way for them to brew year-round.

And the goal is to eventually have your own brewery? LT: Yes. We're so laser-focused on having a facility of our own, this just made the most sense. We're from New York, so being anywhere else was not an option. KH: A lot of people said, "Well, if you're brewing in Newport, why not sell your beer in Newport?" That baffles me. This is where I was born and raised. This is where I want to sell my beer. LT: And this is absolutely where we're going to be. We're looking for facilities here. The way that commercial property in New York works, you have to build your facility and get it operational in 10 weeks tops, and then incredibly profitable in three to four months, and then your lease ends in three to five years. You don't get long-term, and you need returns so quickly that it's only restaurateurs with well-established brands that can capitalize. It takes a long time to build sales -- we have to grow slowly and build relationships one at a time. But we'd like to get something small set up, within the five boroughs, that we can use as a warehouse facility and bring our our cold storage in house. Then I can start licensing a small system. We'll continue production with our partners and start brewing some of the out-there stuff that we cannot wait to do.  

Scale Ale: How a Home-Brew Hobby Launched Third Rail Beer
Third Rail Beer

Tell me a bit about the state of the New York brewing industry. KH: We're really excited about what's happening right now. Barrier, Other Half, Grimm -- these are small breweries putting out awesome stuff. And it's exciting to see restaurants that didn't open with craft in mind now shifting to local stuff. As a New Yorker, I'm stoked and proud. To be a part of that is great. LT: It's a weird landscape -- this is the largest market in the country, so it's potentially the largest beer market in the country. But per capita, we have lower craft beer sales. We've wondered why for a long time. This is a progressive town. Is it just a cocktail city? Is beer too blue-collar? The cost of real estate is a huge part of it [because it's hard to start a brewery here]. And there's a big consumer piece. People here are not as aligned with the initial craft-beer revolution -- in the 1990s, craft beer meant ambers with a lumberjack on the logo. Now, we're seeing more progressive, artisanal beers come out, and people slowly become aware of that. My other hope for the industry is that there will be a few breweries in every town, and that's what you drink in that town. I love a lot of the breweries in California, but I'd like to see more localization and less national brands. We're still far underserved.

What's the biggest obstacle to your success? LT: Being a really small operation in a market that's volume-based. Big distributors in this city are working with cheaper beer and offer large volume discounts, which also apply to craft portfolios. The little guy can't stay profitable when he's kicking back some of that money, so it's hard to get on tap at places that aren't craft-only. Right now, it's building awareness. There are a lot of people fighting for tap lines. Wheeling and dealing salesmanship isn't natural to any of us. We're producing great beer, and I'm confident that it's going to get better. It just takes time. But we're competing against some of the lower-priced craft-ish big distributors.

What about the industry at large? LT: There's a big opportunity for a stronger NYC trade organization to come together and find ways to educate consumers. If consumers knew more about local brewers, that would raise awareness, and that would be huge. Maybe the fact that a lot of New Yorkers are not actually from here makes the local piece less compelling. Friends of ours are young professionals who drink craft beer, but they're not interested in remembering a brewery or beer names. We need a way to connect consumers and producers in the craft beer category. KH: People have great taste -- they're going to new hot restaurants, and they think fancy cocktails are wonderful, just they're now opening to craft. They have the refined taste and wallets. They just need to be exposed to how good it can be.

So what's coming out next? LT: One of the challenges of being a tenant is that introducing variety is difficult. If I want to make 15-barrel batches of 10 kinds of beer, I need a brewery that can't make enough of its own beer to fill its 15-barrel system that often, and that's not going to happen. But we're hoping to brew an IPA using the same techniques as the APA but with different hops. (Hops are citrusy and floral in the APA versus piney and earthy in the IPA.) It'll be an interesting comparison, and it'll showcase how different hops can be. We're also working on a chile porter. On the last test batch we finally said, "Okay, this is ready to go." We're aging the beer on different chile peppers, and we blind tasted to determine what worked the best. The two that were our favorite were the chipotle, which brings this wonderful smoke without heat, and then guajillo peppers, which brings a little heat, but the spiciness comes on late in the finish. When we blended the two, you taste smokiness up front and then taste the porter and then spiciness. I'm really excited to do that one. That's another tenant challenge -- when you want to do fun stuff, you have to gently approach your partners and say, "I want to throw chile peppers in your fermenter. You okay with that?" You never know. KH: We also sourced two chardonnay barrels from Paumanok Vineyards in Long Island, and we'll put some Field 2 into those barrels, add some bret, and put it in larger format bottles. I'm not a white wine drinker, but I'll drink that chardonnay. It was great going out there -- the owner was very excited about us and what we're doing. We're excited to keep it local and use what's here and get creative.

Find out where Third Rail is pouring by following the brewery on Facebook, Twitter, Instagram, or Untappd.




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