A Familiar Yet Unknowable Brain — Octopi Brewing in Waunakee, Wisconsin — Good Beer Hunting

When Showaki approached Adam Vavrick with his idea to build Octopi, he immediately recognized the opportunity at hand. Vavrick had met Showaki during the 5 Rabbit days, and the Binny’s Beverage Depot brand manager was well known around Chicago for his thick Rolodex of contacts. Showaki told him horror stories about trying to find a contractor and laid out his vision for Octopi. He offered Vavrick the role of “second-in-command” as director of sales and marketing.

“It was at a time of irrational exuberance,” Vavrick says of the beer market at the time. “Everything was great, money was flowing in. One of the best ways to capitalize on that would have been to push up beer rather than make a real estate investment or expand or whatever. I thought the concept [of Octopi] was absolutely fantastic. I love the idea of taking inferior processes and product away from people that shouldn’t be doing it and doing it right.”

With five employees on his bankroll, Showaki opened Octopi on Dec. 23, 2015. Their facility was a brand new, $5 million, 50-barrel warehouse in Waunakee. Showaki and Vavrick were on the road all over the midwest talking to clients. Showaki estimates they made 70 brewery visits in the first year. They took on their first client, Madison’s One Barrel Brewing Co., and that year, they turned out 11,200 barrels of production, making Octopi quickly among the top-5% of craft breweries by volume in the U.S.

Vavrick was brought on to kickstart 3rd Sign, Octopi’s in-house beer brand. Vavrick envisioned 3rd Sign as a brewery on the vanguard, highlighting all the strengths of Octopi’s system. In the early days, they hit well ahead of trends, turning out English barleywines, dank West Coast IPAs, hazy IPAs dosed with New Zealand hops, and a Sumatra coffee English mild. 

But the job also involved trying to court more contracts for Octopi. It was an uncomfortable mid-tide. Vavrick spent all his time exhausting his contacts, learning the Wisconsin market, and trying to launch a brand with an atypical business model, all while hocking a product that was, in Vavrick’s words, “average at best.”

“This was zero to 60 in 5 seconds,” Vavrick says. “Grabbing contracts for that first year and a half was a bit more of a struggle. It was a little early for 50-barrel, just an extraordinary amount of beer.”

The tides shifted tremendously over the next two years. When Octopi opened, Showaki stated that his “absolute dream” would be to hit the 50,000-barrel mark. That dream was exceeded before their fourth year in business. From 2015-2017, Octopi grew over +100% year over year, making it one of the Midwest’s fastest-growing companies of all industries. Meanwhile, 3rd Sign was losing focus, and Vavrick was getting more and more frustrated. He longed to move back to Chicago. 

3rd Sign swapped wholesalers several times in a scant two-year run, shipping out beer that was past its prime and quarreling with distributors who didn’t want to push their beer at the necessary volume. In March 2016, Vavrick quit. A year later, Octopi shut the 3rd Sign down amidst a legal battle with River City Distributing of Watertown, who would not relinquish rights to the brand until Showaki paid $93,000.

“It was apparent to me and everybody else in the market that 3rd Sign was not long for this world,” Vavrick says. “I think expectations were fairly mismatched, and the quality, the consistency, and some of the decisions around that really, really, really crapped out on me.”

The relationship between Showaki and Vavrick dissolved with the brand. But as with prior wreckage, Showaki moved on unabated. By that point, he’d already started up Untitled Art, a venture he still co-owns with Funk Factory Geuzeria founder Levi Funk. Untitled Art and its collection of on-trend and high-quality fruited sours, high-ABV stouts, and hazy IPAs did what 3rd Sign could not, elevating Octopi’s reputation amongst brewers in the region. As a result, Octopi started securing huge contracts, including exclusive rights to make the in-house beer lines at Aldi and Trader Joe’s.

It was these large-scale relationships that allowed Octopi to flourish during the pandemic. While small breweries were being ravaged by lockdowns, Octopi broke ground on a $72 million expansion that included a 200,000 square foot distribution facility and a 300,000 square foot production space. Across the United States, 319 breweries closed, openings decreased, 568,000 jobs were lost, and meanwhile, Octopi was reaching for the 1 million barrel mark—20 times the capacity Showaki dreamed of when he opened Octopi. And he’d need every liter of space, because his supermarket clients were calling Octopi to triple orders as shoppers shifted to the off-premise.

“We were seeing some crazy numbers from the pandemic, where everybody was just buying stuff from the supermarket,” Showaki says. “I grabbed my CFO [Joel Yaeger], and I was like, ‘We’re either gonna go bankrupt, or we’re gonna have the best year of our life, and we have to prepare for both.’”

As Octopi grew, it began to take the shape of the huge corporations that sustained it. While other craft brewers suffered under CO2 shortages and skyrocketing aluminum prices, Showaki was able to broker deals with his biggest clients to get the materials he needed to can products. The clients grew with the capacity, and Octopi also raised mandatory minimums in stride. Some of those foundational clients like MobCraft and Eagle Park Brewery fell out of the fold, and bids went out to Anheuser-Busch InBev and Coca Cola.

Octopi was outgrowing their habitat. Where once it was a haven for upstart craft brewers in the Midwest, now it was set to outbrew Minhas by about 60,000 barrels. There were stumbles, something Showaki freely admits. Octopi shipped bad beer. It missed shipments. People who were once foundational to the business grew disillusioned and left. But the quality got better. Showaki brought in high-end beer talent and automated his processes. He bought equipment that would change the direction of the business forever. As a result, the consistency got better.

Craft wasn’t growing, and its rapid pace had slowed considerably. In 2022, it stalled completely. What once was a riptide in 2010 now felt like a receding tide. Local and regional craft beers had gotten Octopi to the point where it could succeed without them, and if there’s one thing that Showaki learned from the failures of 5 Rabbit and 3rd Sign, it’s that you need to know when to change direction. Even if it means leaving some wreckage. After a half-decade of trying to twist the cap off the craft beer industry, Octopi pivoted to bigger prey.

“When I wrote the business plan, it was all craft beer, all contract brewing,” Showaki says. “Very quickly, I’m like, ‘Yeah, I can’t bet on this.’ It’s unsustainable, there’s not enough money. Thousands of entrants came in, and the category was full.”