Small-Business Success: Lazy Magnolia Brewing Co.

(Image credit: Morgan & Owens/Morgan Owens Photo)

Kiplinger's spoke with Leslie Henderson, 41, cofounder of Lazy Magnolia Brewing Co. (pictured above with her fellow cofounder and husband, Mark Henderson), a Kiln, Miss.-based brewing company, about how they started their own brewery. Here's an excerpt from our interview:

Why a brewery? In 2001, I gave Mark a home-brewing kit for Christmas, and beer making turned into a hobby for us. But we’re not huge drinkers, so we shared our beer with friends, who kept telling us we should go pro. We decided to open a packaging brewery, because our state doesn’t have the population density or discretionary income to support the brewpub model. We became the first packaging brewery in the state since it passed prohibition in 1907. Bars, restaurants and grocery stores in 18 states sell our beer.

You’re natives? Yes. We both attended the Mississippi School of Math and Science, a free, public residential high school, and we majored in engineering at Mississippi State. We stayed to pay back the state’s investment in us, making it a better place with new industry and good jobs.

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Please describe your beer. Our beer is lighter than many craft beers and made to pair with the great food of the South. We use local ingredients, including honey, pecans, fruits and spices. We make one of our better-selling beers with sweet potatoes, and it tastes similar to beers made with pumpkin. We get our hops from the Pacific Northwest. With a girl in charge, we’re freed up from the testosterone-driven hop additions that make some craft beers so bitter that they strip the enamel off your teeth. However, some lovely big beers are a small but growing part of our sales now.

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How did you start up? In 2003, I took classes from the American Brewers Guild, followed by an apprenticeship at the Crescent City Brewhouse, in New Orleans. Mark wrote a detailed and professional business plan that served us well for the first five years. But getting financing came down to me crashing a party and giving a beer sample to our banker, someone who believed in the community and saw the value of what we were doing. We took a bank loan for $170,000, plus about $70,000 of investor capital. We bought used equipment and leased our kegs. We hand-sold our beer one tap handle at a time, and we still do because selling beer is all about relationships.

How have you grown? In January 2005, we brewed our first commercial batch with a 15-barrel brewing system, and in 2007 we installed our first bottling system. Now we have a 60-barrel brewing system and a new bottling system. We have 17 employees. In 2016, we brewed about 14,000 barrels of beer with about $4.5 million in gross sales revenue. Part of that comes from contract brewing.

Do you and Mark divide the work? Mark is all about strategy, planning and large-equipment installation, and I’m all about process. He’s a great starter, and I’m a great finisher.

Secrets of Start-Up Success

Do you take salaries? No. Mark owns another business. As a chemical engineer with a master’s degree, I could make a six-figure salary anywhere else, but I do this because I love it.

What’s your greatest satisfaction? It’s the look on people’s faces after they tell me, “I don’t really like beer,” but they try ours for the first time and their faces light up. That never gets old.

Esswein joined Kiplinger in May 1984 as director of special publications and managing editor of Kiplinger Books. In 2004, she began covering real estate for Kiplinger's Personal Finance, writing about the housing market, buying and selling a home, getting a mortgage, and home improvement. Prior to joining Kiplinger, Esswein wrote and edited for Empire Sports, a monthly magazine covering sports and recreation in upstate New York. She holds a BA degree from Gustavus Adolphus College, in St. Peter, Minn., and an MA in magazine journalism from the S.I. Newhouse School at Syracuse University.