Could This New Countertop Device Turn the Beer Industry on Its Head?

The PicoBrew Zymatic gives beer lovers the ability to make the brew of their choice in their kitchens simply, cheaply, with little preparation or cleanup, and have it on tap in a week's time. Does this new countertop device have the potential to disrupt the beer industry?

Jun 2, 2014 at 10:22AM

For four years, former Microsoft vice president Bill Mitchell has been toiling away, building what he sees as beer brewing's Tesla (NASDAQ: TSLA) Roadster. It's a sleek, stainless-steel countertop brewing system that can make top-notch craft beer in as close to a set-it-and-forget fashion as someone not named Ron Popeil could pull off.

The first models of Mitchell's PicoBrew Zymatic were shipped last month, and production on hundreds more is starting to ramp up with a Seattle manufacturer that will start to bring Zymatic machines to the masses.


The first five Zymatic machines are being prepped to ship. Source: PicoBrew

At $1,700, the Zymatic won't appeal to every beer drinker out there. But Mitchell and brother Jim see their new product creating a market that may eventually make a top-quality homebrewing machine a common kitchen appliance. They intend to look for ways to bring down that price point as they scale production, and will consider less-expensive models in the future.

Does this new product have the potential to disrupt the fast-growing craft beer industry, snatching away sales from brewers like Boston Beer (NYSE:SAM), Craft Brew Alliance (NASDAQ:BREW), Sierra Nevada, and countless other smaller players?

At this point, it's far too early to say, but there are a number of things that make the Zymatic appealing to beer lovers beyond the already devoted homebrewer.

Easy brewing, easy cleanup
First, the machine is easy to use. You place your ingredients – grains, hops, and any adjuncts like orange peel – into their assigned bins. You fill a 5-gallon Cornelius keg with water. You attach the water supply hose. And you upload the recipe from your computer or smartphone. Then, you walk away and let the Zymatic go to work. All that's needed after that is a chiller or some ice to cool the full keg down, some yeast to add when it's cool, and an airlock.

In about a week, you have top-quality beer on tap, ready to enjoy and impress friends.


The Zymatic ready to go to work. Source: PicoBrew

That's a far cry from creating a batch of homebrew the old fashioned way, with big pots, stove-top boil-overs, screens to collect hops and grains, and a heavy but fragile glass carboy to store your beer while it ferments. A lot can go wrong along that process, and sanitation – of any item that might come in contact with the liquid – is crucial. One rogue microbe ruins a whole batch of beer.

The Zymatic is also just as easy to clean. The bins get tossed in a dishwasher. And the machine, because it heats water to a boil to brew, is self-cleaning. Traditional homebrewing requires a lot of cleanup. Remember all those pieces of equipment you used?

Brew a rare beer at home, and cheaply
Second, the machine is consistent. Because it uses an automated process, batch after batch of any particular recipe turns out tasting the same. That's a near-impossibility in traditional homebrewing.

It was those two difficulties – the lengthy, complicated process and the wild variability of batches – that got Bill and Jim Mitchell thinking about how they could use technology to make better beer.

"We just felt like there's got to be a better way," Bill Mitchell told me in an interview.

Third, the Zymatic lets a brewer make really good beer, really cheap. Mitchell says the Zymatic can produce 2.5 gallons of a popular style like an India Pale Ale for as little as $13 – or a little more than you could expect to pay for a six-pack at the store.

The time is right
The time for such a machine might be perfect. Craft beer has never been more popular. Craft brew was a $14.3 billion market last year, up some 20% from the year before. Even big players in craft like Boston Beer are growing sales at 35% per year. What's more, craft beer sopped up 14.3% of the overall U.S. beer market, the most ever.

Drinkers' curiosity continues to grow as they venture into new labels and new styles. Some beers have achieved rock-star status. Russian River's annual release of its Pliny the Elder draws a pilgrimage to its Sonoma County brewpub.

Those beers, unfortunately, are hard to get your hands on. They are often shipped only regionally and produced in limited supply. With PicoBrew technology, however, an owner can download a cloned recipe and have their hands on the equivalent of more than a case in just over a week.

"This is the goose that lays the golden eggs," Mitchell said.

Taking steps toward a vision
So, what's the true potential market for PicoBrew?

"I think the market is as big as the craft beer market," Mitchell said.

He compares the company at this stage to an early Telsa. Elon Musk didn't create the Roadster because there were high-end car buyers clamoring for an electric vehicle. He did so because he believed that his vision for one would create a market. With that success, car buyers in the high-middle range started to show interest. Enter the Model S. Now, Tesla is seeing interest from people who be otherwise shopping for Hondas and Toyotas.

Bill and Jim Mitchell come into this with a similar drive.

"We really want to spread great craft brewing practices," Mitchell said. "We want to share it with the world. This product is a first step toward that vision."

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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