Season 2, Ep. 6 | From Rice to Glass:
Sake, Brooklyn-Style Transcript

More Elephant Intro

[00:00:38] Jason Rudman: As we continue our series of food and transformation, our guest today is in the tradition of what we've been talking about in the last few episodes, and that is taking something that you're familiar with and building a new tradition of what Brian Polen, who's the CEO and founder of Brooklyn Kura, would say is a new tradition of American craft sake.

His company is building on more than a thousand years of Japanese brewing history, demystifying sake and making it more accessible to all. So it is my honor, I'm really, really thrilled, to reconnect and invite Brian Polen to the More Elephant Podcast.

[00:01:21] Brian Polen: It's a privilege being here, Jason. I mean, I've been following you from a distance and it's a great privilege to be able to chat you through what we're doing at Brooklyn Kura.

[00:01:30] Jason Rudman: Okay. So, we always start Brian with origin stories. Before you even decided one day, that More Elephant moment, that said it's sake for me, let's go all in on sake, could you invite the audience into what got you to that point?

What's your background, what's your history? What are the types of things that typically had interested you before you became a serial entrepreneur?

[00:01:54] Brian Polen: Yeah, I mean, we know each other from our days at American Express, but after graduate school, my first job was with American Express. And, I grew throughout that organization to learn a lot and to really appreciate working for a best-in-class company and with really talented people, but at the core, I always wanted to start a business.

And it didn't really matter what line of business that was, but I wanted to be a part of the creation, organization, execution and the success of being an entrepreneur.

I think because I had always been thinking about that transition, in 2013, I was traveling with friends for a friend's wedding and visiting Japan. And, for those of you in this audience who haven't been to Japan, you should go there. It's compelling culturally as an experience. It's just a beautiful place. But when you go there and you drink locally and eat locally, you see the care and consideration and craftsmanship in everything that Japanese manufacturers do.

And what stood out to me and actually, one of the people I was traveling with who had become my co-founder and brewer, was sake. So, we were enamored, we were traveling around the country and visiting local breweries.

It was an obvious question, why aren't experiences like this available to people in the U.S.? Why aren't people consuming sake like this as a substitute for fine wine and craft beer?

And so, we came home and started the ideation, the whole visualization, the whole home brewing, testing, learning. But really what we were doing is getting the courage to take the step to start something new in a category we were just learning about ourselves.

[00:03:48] Jason Rudman: We should let everybody know that you're a pretty darn skilled risk professional, which I think we'll talk about in terms of the risk/reward equation as it relates to entrepreneurship and balancing a bold stroke with the practicalities of raising a family and doing everything that an entrepreneur does.

And then we should also acknowledge, I, like you, have been to Japan and I call it one of my most mind blowing…and just open your eyes to difference in diversity and just a remarkable culture that I think pulls you up on your heels and forces you, to your point, to immerse and learn and take stock of because it is so different and yet so inviting, at least for me.

[00:04:34] Brian Polen: Yeah. So when we got home from that trip and started to learn more, you learn a lot about a traditional industry, especially a traditional manufacturing industry, that is at the core of food and beverage culture in Japan. 

You learn that Japan is a declining population. You learn that drinking and eating preferences are changing meaningfully, and you learn that the sake industry is a very troubled industry in Japan.

But then you meet these makers that are dedicating their life, their every day, to producing something with such historical significance that's representative of their family and family history. And you're just like, wow, how do I affiliate myself with this? How do I learn more about this and how do I do justice to it outside of the context of Japan?

So, Japanese crafts people have this ethos of perfecting the thing that they're doing. And the result is you can walk into an arbitrary restaurant in Tokyo and get a delicious meal because the people making it care about what they're doing and how well, and with what skill, they're doing it. And so we carry that ideal of perfecting what we're making into Brooklyn Kura. And really. it was among the many motivating things that led us to start this business.

[00:05:52] Jason Rudman: I think that's inspiring because you mentioned a few things there: legacy and history. I've talked to a couple of other entrepreneurs in the food and beverage space and you're not the only one that has said that the unlock and the trigger was history —that sake is…we're talking more than a thousand years of Japanese brewing history poured into this single expression, right?

You and I were talking, I don't know whether you were a sake aficionado or a sake rookie when you went to Japan. I don't know how much sake you'd actually taken on…

[00:06:26] Brian Polen: Yeah, you know, I drank too much sake well before that, but you know, you don't really have access to the quality, availability and the affordability that you do there. And so, coming home, and to touch upon your earlier comment, life at American Express was challenging and there was a lot of potential in being successful there, and even as a risk manager or designing products for risk managers, I mean, there's nothing like creating and executing on something that you yourself thought through and took the risk to do.

And so, I think especially for me, in an industry that's so tied to the things that I love, which is food and beverage and the culture that I wanna be a part of and support. So, back to this declining industry in Japan and relatively small share of the U.S. industry, it felt like myself and my co-founder and brewer, Brandon, we're in a great place to not only have an impact on the traditional industry, but build something special that U.S. consumers and, eventually bigger than that, would be excited about.

[00:07:40] Jason Rudman: You mentioned this thing gnawing away at you while you were at American Express, and we should acknowledge, and we've done this many times, it's with reverence that I think we talk about American Express. But you go to Japan, so you had this yearning to do your own thing. How or why sake then? I think you just went to a wedding and stumbled…would it be fair to say you stumbled on sake? 

[00:08:02] Brian Polen: Yeah. 

[00:08:02] Jason Rudman: And then said, okay how can I make a business out of this?

[00:08:04] Brian Polen: No. So in New York City, there's some great sake hunts, right? They're now owned by friends of mine, right, that have been selling quality sake to New Yorkers that are in dying need of delicious things for 30 years.

And so , I knew that the beverage had a bunch of potential, and it was a part of my life but when you go to Japan, and like I said, when you walk into a brewery there, you see all these analogs.

You see how comparable it is to the craft beer making process, the fine wine. So visiting a vineyard, visiting a distillery, visiting a brewery. But then you quickly recognize that, well that's something we're all comfortable with and expect now to understand more about who's making the things that we're consuming but I don't have that opportunity to meet sake makers, and so I don't really meet the beverage directly as I'm expecting to do with beer, wine, and distilled spirits.

And so we didn't come back with the idea of starting a sake business. Actually, we came back— Brandon is a biochemist and a very talented fermentor. So he and I came back to really make sake in our homes and to go a little deeper with like a small sliver of…maybe this could be something we could take professionally and build a business around.

So I started making sake in my home in Brooklyn [and] Brandon, in his basement in Portland, Oregon. You can't get much more cliche than that. The quality was better than you would expect and I had a better job than I deserved or needed, right? And a very supportive partner at home and Brandon was very eager to become a head brewer and start a brewing business.

And so, he came out to New York City and we, in 2016, in January and then again in September, we started this little adventure.

[00:09:54] Jason Rudman: Okay. Sounds really easy, however, I know that's not the case, right?

So, with you and Brandon, what was the conversation that you had about the leap, this bold stroke of we think we're going to do this?

You've mentioned a very supportive spouse. So you have that conversation, but you've gotta be all in on this if you're going to do it.

So, talk us through a summary of the conversations.

[00:10:21] Brian Polen: Yeah, so 2013, we get back and then Brandon and I became friends and started to brew in our homes together. That was just purely for the recreation.

I was about to have a family. I mean, Brandon is an avid brewer, and it was just a fun way for us to stay connected to our trip and one of the things that inspired us from it and start producing something and explore friendship and grow our friendship.

And then, I think because we became so immersed in it and started learning so much more about the market—the history, the players, the potential—we started to discuss what a business would look like and what that discussion means is really putting together the conditions under which we would start this business.

So this is organizational conditions, financial conditions, location conditions and then the level of understanding that we needed, whether it's regulatory, branding, competition. I mean, you name it in order for us to build a full picture of what we felt was a reasonable plan to move forward.

So, that's from a business side. Can you justify this? This is not a technology startup, this is not a high-leverage, skilled, resource-intensive project. This is a manufacturing project in New York City where you're making something completely out[side] the context where it's traditionally made.

So, there's a lot of things that we needed to convince ourselves of before proceeding. But, I had an abundance of confidence in myself and in Brandon that, given the financial resources and the plan, we would do a good job.

Now what is that good job? Is it a financial outcome? Is it an impact? There are many ways of defining that good job, but I was confident in our plan. And then, I had some financial resources that I could bring to bear and relationships with people that were very supportive of the projects that I wanted to start.

And so, we had the business plan and some of the major hurdles that I was most concerned about addressed. We had the financial hurdles addressed and then, you're absolutely right. Like, Hey, I'm gonna strip away this income and my family and I live in New York City. How are we gonna do this, sweetheart?

Like, this is what I'm interested in, this is what the plan is. These are all the things that we thought through to address our concerns, let alone your concerns. This is what we think the steps will need to be over the next three to five years. And of course it's not a one conversation thing. It was this really intense moment where, it was an opportunity for me to say, Hey, I want to do something that's different.

And it's kind of out of context but I think could have a meaningfully beneficial impact on our lives as people in New York City as a couple and our potential future.

And what I'd say is that conversation doesn't end with the decision to proceed, just so you know but with her support and green light and us being as a risk manager, I mean us protecting our downside to the extent that was possible in terms of other financial decisions we were making, I was able to start the company, we formed the company in January 2016.

Closed some financial transactions early in that year, and then Brandon moved from Portland, Oregon, in September of 2016, to formally kick off deep research and I can run through that phase as well. I don't talk much about the 2013 to 2016 experience, but it was this really natural accumulation of confidence. Understanding market relationships, awareness from my partner, confidence in the outcome that led to this choice. Not a binary, but many micro choices. Do we proceed? Do we proceed? Do we proceed…until the moment that we launched the business.

[00:14:35] Jason Rudman: Yeah, so a statement and a follow up.

My very first guest entrepreneur, Ben Brooks, started a company called Pilot. And he said what has worked for me is I fell in love with a problem. I didn't know how I was gonna get there, but what has made me successful is I fell in love with a problem and I keep iterating across the problem.

And you didn't articulate it exactly that way, but what you've described is that the journey you and Brandon went on is [that] there was an opportunity to continue to share your love of fermentation and passion for sake. I feel like that's connected to exactly what you're describing in that thirteen to sixteen period and all of the work that you put in there to say we're ready to go.

And then my follow-up on how you described, just for the audience to be clear, your first financial raise - was that friends and family, an angel, or was that investment? your investment? And then how did you go about enabling Brandon to move to the East Coast?

[00:15:32] Brian Polen: Yeah, so the way I describe our financial raise was  [that] it was my capital and professional relationships.

So I distinguish between friends and family, and angel with professional relationships because, it was very important to me, given how niche this effort was going to be, that the people who supported it financially had the means and the ability to withstand it not being successful. And also, the sophistication to understand the complexities and challenges that I was going to face in trying to execute on our plan.

I didn't want the cultural piece or the adventurism piece, or the personal relationships with family members and friends to be a motivator for making an investment. I wanted every level of our goals, both to be understood and supported by people who would write me a check.

So actually we went, I mean, so that happened probably in May [or] June of 2016, in advance of Brandon coming from Portland, Oregon, and us kicking off the project. Now, we could talk a while about the fundraising effort for Brooklyn Kura, because it’s had its ups-and-downs for sure. I mean, it's a pretty, like, it's less sexy by many degrees, but…

[00:16:56] Jason Rudman: I think it's actually important. We have celebrated many entrepreneurs in season one, and this is season two of the podcast, and I think that everybody’s path to financing is different. Everybody has said there are ups and downs and pivots and corners. So at that point, you're still brewing in your basement and still tinkering around with fermentation, or at that point, have you moved location, and then Brandon arrives, and what's the next leg of the journey for you?

[00:17:21] Brian Polen: Yeah, so we have some initial funding and Brandon spends a few weeks working with a sake producer outside of Portland, Oregon, and then moves to Brooklyn. And very quickly we secure a small laboratory space, which was located in an old Pfizer headquarters, like I think the original Pfizer headquarters, in Bushwick, Brooklyn.

And the goal in that space was very simple. One, to give Brandon the time to begin scaling recipes in anticipation of a larger commercial brewery that we were in the process of finding and building, right? But beyond that, we really needed to go deeper into the regulatory environment. We needed to start actively reaching out to the sake marketplace, distributors, retailers, producers, to let them know what we're doing and share with them what our goals are and bring them on the journey with us.

We needed to start developing our branding, identity and marketing platform, and our method of communicating what we were doing. And then ultimately, we needed to find a site, right? And that site would be the location of our first brewery, taproom and the foundation of our business going forward. So, it was a complicated period that allowed us to think through the components of what we were trying to do at greater depth and begin preparing to execute on them.

In that period, in addition to coming up with being called Brooklyn Kura and some of our initial branding and identity, producing at a much larger scale, tasting people on our product, meeting restaurants, all those things were accomplished, [and] we started searching for spots.

And this gets back to one of the challenges and why this business is a challenging one - manufacturing in New York City is hard. Like today, I had representatives from the Mayor's office, city planning and the Department of Buildings touring our new twenty thousand square foot brewery, all to talk about exactly this, how practically challenging making things in New York City is and how they can help to make it easier.

But at that time, I didn't know a lot. I hadn't actively searched for industrial property to produce in New York City. So, I was on a tour and I learned a lot; in that tour, I found our home at Industry City.

So, Industry City is a six-million square foot industrial complex in South Brooklyn that was really trying to develop a ‘maker retail’ community to support their commercial tenants above the retail level and also bring manufacturing back to Brooklyn.

And so in March of 2017, after many months of negotiation, we entered into a lease again, a whole topic of conversation for new entrepreneurs. And then in June, we started construction on our new brewery and in December of 2017, we started our first commercial production, selling our first bottle of sake in January of 2018.

The process sounds quick, lots of things happened over that period of time, but as a young entrepreneur with relatively large opportunity costs, like, we need to move, there's no time, right? And the contract that I made with my partner didn't allow for much time we needed to make progress quickly.

[00:22:47] Jason Rudman: The power of scarcity of time and money, I think many of us have felt like we have been able to put lightning in a bottle when those two things come together because it forces those of us who thrive on that energy to make, most of the time, great decisions.

I think what's really, really important, if I peel it back to 2017, is the experience, because this is an experience, and you had mentioned that you needed to find not only space to do the commercial production, but [also] the experience of the tap room. 

So a couple of follow-up questions. In 2017, you took us through an expedited kind of nine-month period of producing the first commercially viable sake.

Did you have a tap room at that point? And then you've produced it, so how are you dealing with distribution? How are you ensuring that people understand that you were ready and open for business?

[00:21:40] Brian Polen: Yeah, so let's talk about the brewery construction piece, right? So the brewery construction piece, for me, an important aspect of the early financial model was having a retail concept. And having a retail concept allows you to not only communicate directly to customers, market directly to them, tell them your story directly, and also bring them along on the adventure of whatever you're doing. And you also have access to retail margins, right?

So, those retail margins in our tap room are like the margins that you would expect of a restaurants, it was important early revenue to our financial plan, and it was essential.

Now, it's very difficult to find spaces in New York City where you can both manufacture alcohol and combine that with retail in a way that the Department of Buildings and Zoning will allow. So, Industry City was a perfect candidate for that.

In the construction effort, in addition to working with contractors and architects and expeditors and all the things you need to do, we also needed to begin sourcing equipment. And that was a complicated thing that we prepared for in advance of securing the lease, right? And so all those things came together relatively quickly, like June to November, and allowed us to start commercial production.

Now in parallel, we're talking to people, we're inviting them to our laboratory space, we're pouring them prototypes of what we intend to produce commercially in our new space. And then I start bringing on PR [public relations] and some kind of support for our communication effort and that was supported by Industry City. Also, I'm a big believer in PR and not as much in conventional marketing. I think there were a lot of people who wanted to tell our story organically, and they were very helpful in building those press connections.

So, while we launched in December, our tap room really didn't come online until February of twenty-eighteen and that's about when PR’s impact started to hit. We were in the New York Times, we were in all these other relevant to New York City food and beverage outlets. People were excited, and they came to see us at the same time. Some of those relationships that we have cultivated during the whole process of doing what we were doing were very interested in carrying our sake. I didn't have distribution at the time, so we loaded up my car and I drove around New York City listening to audiobooks and figuring out what it was like to be a truck driver.

So, with the retail experience, which Brandon and I worked until we were able to hire people to manage it on our behalf, really was the beginning. And it felt like from that moment, we were on this trajectory that was unexpected. And what I mean by that, on this trajectory where we did all this work, all this thinking, all this planning, and we executed well, but then we had this broad-based support, both from consumers and the industry, that was unanticipated and accelerated a lot of our placements.

[00:24:43] Jason Rudman: Well, I think you mentioned the uniqueness of Industry City allowed you from a zoning perspective because New York is tough. I think most places are tough, but New York particularly, and you know, another conversation about regulatory hurdles and red tape, we'll save that for another day.

In eighteen [2018], you're listening to Audibles and you're tailgating out the back of your car all over New York City. When does the first tap room come aboard? 

[00:25:07] Brian Polen: So, we launch it officially–we soft launch it a little bit earlier–but it opens officially in February of 2018.

[00:25:13] Jason Rudman: Twenty eighteen. Okay, great. And what was important to you from a design perspective?I want to connect it back to the power of what you shared and the More Elephant moment, where you were in Japan and you saw all this history unfold in you and the care and the attention in a population that is aging and your desire, with Brandon to carry on that tradition.

What was the first iteration of the experience of the tap room? What were you trying to achieve from an experience perspective?

[00:25:41] Brian Polen: That's a fantastic question. I mean, the whole impetus was to create an environment where people could be more connected to the production of sake, thereby understanding it better and being more open to enjoying it outside of traditional context.

So, it was important to us that people walked into the space and it felt familiar. It felt like a craft beer brewery or distillery or winery that they would seek out and would create a halo around their experience. And so, you could see the tanks, right? The sake was on draft. We had non-traditional, easy food pairings that was fine, but appropriate for the space.

We served our sake in white wine glasses; beautiful stemware that is different than the common expectation of drinking sake out of little ceramic vessels. We tried very quickly to say, ‘Hey, come here. Hang out. It's beautiful and you're going to be comfortable because it's familiar, but try this new thing and learn a little bit about it at a level that you're comfortable with, and will hopefully motivate you to go deeper and explore the category more.’

Now, one of the most fun things about starting Brooklyn Kura for me is, and I love my old colleagues and there's some exceptionally talented people, but there's a whole creative industry that I get to spend time with, whether it's designers, architects, creatives, like people making other physical objects or that are affiliated or adjacent to what we're doing.

One of the couples that I got to work with to design the first tap room was friends of mine now, Sarah and Chris. Their architecture and design firm was called Carpenter and Mason–it's now Sarah Carpenter's firm–and they were just these beautiful, talented, exceptional people that were very design and functionality oriented.

And it was just fun to work with them and create the space with them in a way that I realize I need, I think. Their intentionality and our ability to produce, early on, a world-class quality product plus our expectations on service and education, create an environment that people wanted to hang out in and it was a great platform for our distribution business.

[00:28:00] Jason Rudman: You're making me smile for many reasons. One of them in particular, what you just described, is I have the privilege of leading a team for BECU.

And part of the role is about the physical space, or what we call environmental branding,  and to your point, in a physical space, thinking about emotion and the experience and how you want somebody to feel.

You're making me smile because it is one of the…I have many joys in what I do. That's one of the joys that has been relatively new to me, and I absolutely appreciate what you just said about being in a space with creative people and them pushing you to look at things from different dimensions that, ultimately, delivers the type of experience that you described you wanted for Brooklyn Kura in the first taproom experience.

[00:28:49] Brian Polen: Yeah, actually it was also given the confidence that our developer put in us because developers take risk when they sign a lease with you, right? And they mitigate it very well but they do take it. And so part of that was giving them a retail experience that could inspire their commercial tenants and doing it in a serious way. It was just fun, challenging, everyday issues. But it was more important than I could have anticipated. And I'll tell you why.\

So. Japan sake, industry declining. I've said that numerous times. They're looking toward markets like U.S., China, Europe, South America, to compensate. And so, if you're a Japanese sake producer and you're exporting, you're exporting to the U.S. and if you're exporting to U.S., you're exporting to New York, which is the largest, among the largest sake markets in the U.S. And so if you're going to visit your U.S. market to tour and meet people, you're going to come to New York and if you're going to come to New York, you're going to visit us.

And so these tenth-generation, fourth-generation, fifth-generation brewers are coming into our space, seeing customers that would never engage with their products in the way they are with us. In an environment that they're excited to be in, that it's beautiful and has an aesthetic that's different and industrial, but has equal care to the environments that they're trying to create in Japan…accelerated their acceptance of our effort and its uniqueness, which is pretty incredible. I mean that you can't plan for.

[00:30:14] Jason Rudman: We'll talk a little bit about the long-term partnership in a minute with one of the most respected breweries, which I think is a direct connection to people seeing that you're serious about this, you take care of what you're doing, but we actually can't…you're on the upswing, and then there's that thing called the pandemic that arrives.

For those of you listening, Brian then just closed his eyes, shook his head, and went, okay, we gotta go there. But, you know, once in a lifetime, and we should acknowledge that you were not only trying to navigate your business and your family, but you were also in a city, which at the beginning was the epicenter of death, right?

And so, I don't want to dwell too much on it because I think it is hard for many people from an entrepreneurial perspective. How did you navigate the pandemic when nobody's coming to a tap room? How would you describe that period as a small business owner?

[00:31:11] Brian Polen: So, you know, my background is in risk management, right? And so I am pretty cash conservative, right? So, I'm not an entrepreneur who wants to live month-to-month. That's not what I'm doing. There's better uses of bias, stress, and anxiety than a month-to-month operation.

[00:31:30] Jason Rudman: And your spouse's stress as well. Like, let's be really, really clear.

[00:31:33] Brian Polen: A hundred percent. A hundred percent. So, I've been financially conservative and cash conservative more importantly than anything else. So I had sufficient reserve to where, when the pandemic happened in March of twenty-twenty, when our customers, restaurants and retailers stopped buying sake, when our taproom shut down, we could look at ourselves and say, ‘Hey, we can withstand some time without revenue.’

What are the things we need to stop doing? Who are the people we need to negotiate with to reduce our cash outflow over the period with potentially zero revenue? Then, once we solved some of the costs and expense problem, and we can talk about that in more detail, it was like, okay, what are some alternative revenue sources given this environment that we can pursue so that it's not a zero state until things work themselves out?

I'm describing it as this very thoughtful, analytical exercise and, it wasn't that way, but the result was, I mean, we had good real estate partners at Industry City who were able and willing to allow us to defer and, in some cases, forego paying rent for a significant period of time. We didn't have much other meaningful financial obligations beyond that, which was significant for us. And so, then we started focusing on revenue.

We launched our website, we launched our direct-to-consumer business. We launched a subscription service. And then, we started to work more closely with the retailers, the off-premise wine shops and liquor stores, who are still operating and interested in bringing in our products.

Those two things kept us alive through that September period, which then started with people coming out in New York and sitting outside, sitting masked following certain protocol, but desperate for the reason that they live in New York City. Like, you couldn't turn New Yorkers away.

Now, there was that traumatic March and April, where I got sick and many people got sick and the uncertainty around it. But, you just saw a community of people who were like, I'm here for the people, the food, the beverage, the jobs. I'm not turning it away.

[00:33:56] Jason Rudman: Yeah, I think that's a really, really important point, right? There was this camaraderie. I lived in New York for two decades. Best experience of my life. 

Your point around New Yorkers, the community aspect and also the support of small businesses You and I can look over a thirty year arc of when there has been significant challenge–September 11th, two thousand eight [and] the financial crisis, COVID, And each time, New Yorkers do what New Yorkers do.

[00:34:26] Brian Polen: We galvanize and get back to work. I should have mentioned, I mean, we availed ourselves on PPP and the idle loans from small business. We tried to take advantage of the things that we could to keep people employed. And it was interesting, even when thinking of closing our tap room operations, having conversations with a team, and some of our tap room folks were like, ‘Hey, I know you want to give me hours and try and help me, but it's easier for me to go to unemployment.’

There were conversations like this, and we kept a number of people on staff just because I didn't start a business to just cut people because I need to, right? That's not why I did this. And the result is we were able to do new things that I'm still doing today and has helped me do the things that we stopped even better.

And then during that period of time, I started serious conversations about fundraising for our future. I spent twenty-twenty [2020], in addition to the things I just described, effectively completing my twenty-nineteen [2019] tour for the future of Brooklyn Kura and translating that into a major investment from a traditional Japanese manufacturer.

[00:35:41] Jason Rudman: There's such a great through line just listening to you and how you've methodically, thoughtfully taken risk to build the business. So in twenty twenty-one [2021], you've got the tradition of Japanese sake producers finding you, noticing what you're doing, coming to experience it and saying, these guys are the real deal, you enter into a long-term partnership with one of the most respected breweries in Japan. Talk us through the reason that's important and how that came about? 

[00:36:13] Brian Polen: Yeah, I mean, so while we were in construction in twenty-seventeen [2017], we were already getting visitors from the industry because we were reaching out and talking to people to see what we were doing. And one of those visitors was a woman who worked for Hakkaisan, which is my primary investor and partner. And her experience led to many meetings with their team that were really about what we want to achieve and the future of sake. 

They [the meetings] led to visits to their brewery in Niigata, like essentially fermentation Disneyland. And then in late twenty-nineteen [2019], led to serious conversations about a financial partnership and building scale and having a global impact on our industry.

So, it was a long process and Japanese business culture is meaningfully different than American business culture, very much trust, reputation oriented, and very risk averse, right? And so Hakkaisan and Brooklyn Kura took a lot of time to court, and in April of twenty-twenty [2020] started serious conversations remotely.

And then the process of, as you can imagine, what's the plan? Are we aligned on the plan? And then, extreme levels of due diligence and investment and, I mean, all these things happened. What I can't understate is that Hakkaisan is a century-old business that produces among the best fermented things in Japan and they are deeply invested in the idea of growing sake as a category around the world and see us as a mechanism for that.

The whole process of securing their investment and their partnership was hours of deliberate discussions that took a great deal of patience, understanding, translation, recalibration, missteps, like it's a complicated exercise, right? [It] resulted in us signing a deal in February of twenty twenty-one [2021] which then allowed me the financial freedom to build the brewery that I'm talking to you from right now.

[00:38:26] Jason Rudman: Does that give you access to global markets? As much as it allows you, you're gonna talk about, your pride of what you've got in Sunset Park in Brooklyn.

But the impetus is that was a scale play as much as it is. I'm assuming, right? They came and they, like, really, really appreciate what you've built here. It's a twist on what we've been doing for a century plus. So I get on some level, what appealed to them.

What did it provide for you beyond financing at scale?

[00:38:51] Brian Polen: Yeah. So for me, I mean, they are broadly distributed in Japan, which is the largest sake market in the world. We took advantage of that and sent our first container to Japan in January of twenty twenty-five [2025] to very positive reviews, but a lot of learning about that market and its ability to accept sake at the price point that we wanted, [however] produced in the US.

Beyond that, they also have this expertise in production and scale and so, they were helpful advisors in the design and the building of our new brewery. They also have experience using a lot of the equipment that we needed to source with their support from Japan to produce sake at the scale that we intend to and can in our new facility. And I think those things help to de-risk this next stage of uncertainty introduced by a major capital investment in a larger-scale facility which like is not a fun thing to do.

I mean, it's a fun thing practically in terms of problem solving and execution, and we did it, but from a business perspective, like my capital investments are not my favorite thing, especially when we're building a market, right?

That's the thing. I always tell people that you can build a ten thousand barrel beer brewery in Brooklyn and sell it all in three counties. If you produce that much sake, you need to be nationally distributed, right?

And so it's a different size of market, different familiarity from consumers, a different set of issues but their confidence in capital and my belief in our ability to succeed internationally in Japan helped me justify taking that money and making this investment.

[00:40:30] Jason Rudman: Whether you know it or not, when you mentioned your new brewery in tap room, you actually light up. So I have a feeling that that's one of your little gems and pride and joy. And again, you're smiling and almost going beet red, but I believe wholeheartedly it is connected to this business has unleashed this creative side of you, that you always knew was there and that you just get to do it on a daily basis. And yes, it's hard, but it's ultimately about joy.

And so, you started with a commercial production facility and a tap room. And we've talked about the importance of experience in a retail form and you've opened up a new one. Is that just an extension of what you were already doing?

Was it a pivot in terms of what you've learned and you wanted it to be bigger, bolder, brighter? So what was the impetus behind a new one other than it might have been time to retrofit it?

[00:41:21] Brian Polen: Yeah, I mean it really was three things. One is increasing our capacity; we needed the ability to produce at a level that made this a sustainable, buildable business, right? So, prior to this, maybe like a thirty-five hundred case brand in our old facility. We're now, let's say a five- to six thousand case, we wanna be a twenty-five thousand case, right?

And so, I mean, the marginal cost of building a facility that can support twenty-five thousand cases versus one that can support ten [thousand] is not that big a difference, unfortunately. So, there was benefit and also the desire from our partners at Hakkaisan to build for the capacity that we intend to grow to. And we are working and investing to grow too, so capacity is one.

The second thing is everything is easier in many respects, even though our process is still very manual and labor-intensive, at scale, right? Making sake at the scale we are allows us to be a little bit more precise, a little bit more controlled, a little bit more perfected, which allows us to improve our quality at a greater pace.

And, even though we produce something delicious, we're always working to accelerate our quality, stability, and performance in global competitions, right? And we want people to know we produce among the best sake in the world and, even though we're in New York, there's no difference in what we do and how we do it technically. There's a lot of difference in how we talk about it, present it, and how it fits into menus.

The third thing really was about people. Because of the larger scale and because of the impact on pricing and being a little bit more intelligent on the design of buying business, I was able to hire people to support us in specific roles, whether it's our online business, our private brand business, our taproom business, our director of education for our Sake Studies Center. I was able to recruit talent that could focus on the problems that we were having as a business and help us grow faster. 

[00:43:30] Jason Rudman: All right, so hold on. You know, you snuck in a couple of me. You were like online and private, and then a Director of Sake Education. So we would be remiss if we did not talk about the Director of Sake Education. Why important to the business and what does the Director of Sake Education do?

[00:43:47] Brian Polen: So it's a great question. So remember, the premise of my business, though it needs to be economically successful, is having an impact on our market and growing sake. And so, much of building a category is not talking about my brand or someone else's brand, but talking about the product itself. So, part of this partnership and part of the investment, and Timothy Sullivan, who is our Director of Education, part of his mandate is how do we get more consumers and professionals informed about sake so that they are more confident bringing it on their list, adding it to their shelves, or placing it in their supermarket baskets. It's not intended to be a for-profit part of our business; it's very much a promotional and industry-focused part of our business.

Now, that being said, it also allows us to work with Japanese government, the National Tax Authority, their export trade resources, their Consulate General because we have this independent organization that's focused on advancing the industry and doesn't have a brand agenda driving it. So that's how I justify it. It's also, for me, a way for us to make sure that people in our industry know that we're in it to grow the pie. It's not… 

[00:45:06] Jason Rudman: To grow the category. 

[00:45:07] Brian Polen: Or to grow the category. 

[00:45:08] Jason Rudman: Yeah. We should give a shout out to Tim's podcast as well. So he actually has a podcast about sake.

[00:45:15] Brian Polen: Yeah, it's called Sake Revolution. They taste sake's, they have visitors. It's very niche for the category, but it's very well loved by our industry. And I'd encourage anyone who wants to go deeper and who's listening to this to take a listen. 

[00:45:29] Jason Rudman: We'll make sure we've referenced Tim and Sake Revolution and I did promise you that I would listen, and I'm going to.

So, you mentioned January twenty twenty-five [2025], you did your first shipment into Japan. Well, you, as a small business owner are living through perhaps one of the most chaotic times in recent memory from a tariff perspective and an import and an export and all of that.

And again, for those of you listening, there's a couple of times where I've said something and Brian has no poker face and says, yep, that's so just, you know, because again, I think back to Liz Picarazzi, who is the founder and CEO of CITIBIN, and right now she's confronting, with materials from Vietnam, cost of production has gone up, but you mentioned you were exporting the other way, so we're not gonna get into, you know how tariffs are applied, but you're now global. So, that's a new take and a new implication on managing your business. 

It's August of twenty twenty-five [2025], and could you pin for the audience a couple of key insights in terms of what you've learned, what surprised you, what you're dealing with now as you try to globalize the business?

[00:46:40] Brian Polen: Yeah, I gotta say, you know, this is one of the shocking realities of being a small business in the U.S.--no matter if you're serving a hyper-local market, you are a global business. Your supply chain is global, right? Your customers are global. Your equipment is global. There's no way to detach yourself from the global economic environment.

And it was really shocking to me to realize how vulnerable as a small business I was to exchange rates, to tariffs in twenty twenty-two [2022], when we started buying equipment for our new brewery. There was a twenty-five to fifty percent prevailing tariff on China and we source some of our large-scale equipment from Japan, China and Europe, and that had a meaningful financial impact on our plan.

So, I think today's environment and uncertainty definitely fuels a lot of practical issues for us, but I mean, just the nature of me, I'm looking at exchange rates and thinking about alternative products. It's a part of our every day. So, I think to your point, practically every small business is global, whether or not they're market place is and we're all very vulnerable to the whims of our political powers and financial markets. So, that was shocking to me. I didn't anticipate that.

[00:48:00] Jason Rudman: No, I think you said something there that, again, often gets glossed over by…when the megaphones are megaphoning, as I like to say.

There was a tariff in place in twenty-two, twenty-three. Forget who was in the administration; it was in place when you were building the business. It's been ratcheted up, and again, and I love what you said, which is when you look at the end-to-end supply chain, if you are in some type of manufacturing realm, chances are you're going to have to deal with something that is outside of the United States in order to furnish your end product.

[00:48:28] Brian Polen: Well, all of your suppliers are. So, I buy bottles from a small business in upstate New York, but their bottles come from all over the world, right? And they buy equipment from all over the world.

So, they're seeing price pressure, which means they're putting price pressure on me, which means their competitors, whether or not they're independent from those issues, see some potential ability to increase their margins. There's a gradual inflation for producers in effectively any small business that we feel very intimately and I don't want to increase prices.

Another interesting part of this business is how do you do pricing? What is healthy manufacturing margins? How do you bake into your pricing, the distribution model and all the people taking margin? So, I mean, those considerations are happening at every level, and that pressure is real. It's like, I feel it every day.

[00:49:25] Jason Rudman: {You’ve] taken us on a wonderful, wonderful arc. I want to personalize this as we get towards the end of the conversation. What has the journey reaffirmed or taught you about yourself?

[00:49:35] Brian Polen: I mean, growing up in a corporate environment like American Express and actually doing relatively well, because you develop the skills you need to survive in that environment, reinforces certain positive qualities about your ability to run a company like this.

But, when you start a small business and you have to convince people to support you or do business with you or engage with your products, you really learn quickly whether or not you can be a good partner to them and I feel much more confident around my ability to build meaningful relationships that are mutually beneficial, that are not only economically motivated, that have transitioned into successful business relationships.

And, I don't know if I would've had that confidence without a project like this. So for me personally, it's like, oh my God, look at my friend group, my professional relationship group, my group of mentors. They're so different. And they're different professionally, ethnically, culturally, they're different. Like in socioeconomic terms, right? They're just broad and it's given me this well of confidence that I care about people and that I can convince people to care about me in a way that I'm incredibly proud of.

[00:50:52] Jason Rudman: And ultimately have a positive impact in terms of what you're doing.

[00:51:07] Brian Polen: I mean, Jason, my business is, in objective terms, super cool. I mean, people love to drink our products. They see them out in the places that they want to go, are trying to get into. They see what we do with chefs and other makers and creators.

It's a challenging economic project, right, which will succeed or fail on the economics? But it is a cool thing. Taking that aside, it's a relationship exercise. Are you decent to people? Do they want to be decent to you? Do they want to help you? Do you want to help them? And if the answer is yes, you'll make progress.

[00:51:31] Jason Rudman: Our tagline is listen, learn, live better. You couldn't have said it better because you just talked about the humanity of connection. It just so happens that your connective tissue is sake.

[00:51:42] Brian Polen: I know. But you know, being drunk helps.

[00:51:45] Jason Rudman: Yeah, well, it helped. We'll also say it also helps, right? It greases the conversation quite well. 

[00:51:50] Brian Polen: It does.

[00:51:51] Jason Rudman: There you go. So, okay. Super cool Brian Polen. How do people learn more about Brooklyn Kura? About you, about all the work you're doing? 

[00:52:00] Brian Polen: I mean, I think, you know, there's an abundance of press. But if you wanna visit us, visit us at www.brooklynkura.com. Visit us at uhshochu.com. Visit us at sakestudycenter.com. Follow us on Instagram. Seek us out if you're going to a restaurant that has a sake menu, ask for us. Talk about us. I think if you're interested in learning more about what we've done and what we're trying to do, reach out to me directly.

I mean, I think we're doing a good job, but we need to do better. And I think any ideas or inspiration that this audience may have, I'm all ears. All right. And I'd love to host you and tour you through our brewery.

[00:52:41] Jason Rudman: So there may be a cavalcade coming from wherever to Sunset Park in Brooklyn. Be ready. 

[00:52:46] Brian Polen: We should make it happen.

[00:52:48] Jason Rudman: Yeah. Brian, thank you. It's been remarkable. I know sometimes hard when you're doing most of the talking to know did it land? How's it sound? You know? It's been great listening to you, probing, just hearing more about your story, of which I knew some, but not all. And I just want to thank you on behalf of the audience for spending some time with us.

[00:53:08 Brian Polen: You know, I have low expectations, so as long as we can exceed them. Thank you so much, Jason. And like I said, watching you and seeing you and actually knowing you even in the moments that we worked together, I've always been super proud and impressed, and thank you for giving me the chance to talk about what we're doing.

[00:53:27] Jason Rudman: Well, I’ll say from one great human being to another, I appreciate it. You being the great one and I just, you gave it back to me. So just for anybody listening, I wasn't calling myself great. He did.

Alright, Brian, appreciate it. Talk soon. Okay. 

[00:53:38] Brian Polen: Alright, you too. 

[00:53:39] Jason Rudman: Bye.

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