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How Tapping the Jewish Beer Market Begat a Plan

An earlier version of this story specified incorrectly that Shmaltz Brewing was certified kosher by The Union of Orthodox Jewish Congregations of America, known as Orthodox Union.

SAN FRANCISCO ( MainStreet) -- The craft beer industry can refer to itself as a community all it likes, but it took the help of a much older, tighter community to help Shmaltz Brewing founder Jeremy Cowan get his business flowing.

Back in 1996, Jeremy Cowan thought he would get some laughs by making the country's only Jewish celebration beer. He brewed 100 cases of Genesis Ale and delivered it around Northern California just in time for Hannukah.

Brewer Jeremy Cowan describes in Craft Beer Bar Mitzvah how he turned Shmaltz Brewing from a lark into serious lager.

Fifteen years later, his Shmaltz Brewing and its Saratoga, N.Y.-brewed He'Brew and Coney Island Craft Lagers have outposts in New York, San Francisco, Atlanta and Chicago, a 10-person staff and $2 million in annual business. Instead of following the traditional craft beer marketing formula of growing a regional business around a brewery location, Cowan contracted out his brewing and took it to a few dozen communities across the country with strong, sizable Jewish populations. Cowan even had all of Shmaltz's ingredients and materials, brewing process and brewery conditions certified kosher.

As Cowan notes in his book Craft Beer Bar Mitzvah: How It Took 13 Years, Extreme Jewish Brewing and Circus Sideshow Freaks to Make Shmaltz Brewing Company an International Success, released last year, that nothing came easy for the first decade. At various points, Cowan was tens of thousands of dollars in debt, paying distributors roughly 80% of the company's take and still figuring out partnerships with retailers such as Whole Foods (WFM).

In recent years, however, Cowan has turned potent brews such as the 15-malt, 15-hop, 15% alcohol-by-volume Jewbelation 15 into profit. His business model has become a template for other niche brewers. His beers, meanwhile, have become industry favorites.

He'Brew's Jewbelation 14, Vertical Jewbelation, Bittersweet Lenny's R.I.P.A. (named in tribute to comedian Lenny Bruce) and Rejweventaor 2010 Year of the Grape all took home gold medals at the 2011 World Beer Championships. Its Coney Island, Albino Python, Sword Swallower and barrel-aged Human Blockhead lagers from its Coney Island line also came away with gold.

We spoke with Cowan about his early days as a struggling brewer, how he finally broke even and how the burgeoning Jewish beer market eventually brought him success:

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