A former engineer at one of San Diego's best-known craft breweries – Ballast Point – has launched his own software company to take on one of the biggest hangups in brewing: keeping tabs on beer data.
The startup is called The 5th Ingredient, so-named to illustrate how data is a critical element in beer production. As most know, there are only four ingredients in beer: water, malt, hops and yeast. But Pulkit Agrawal, the company's founder and CEO, says "data" is the fifth lesser-known component in creating a good beer.
Agrawal is a 24-year-old Harvard graduate who went to school for both mechanical and software engineering before being recruited to work for Ballast Point in San Diego. Jim Buechler, the former CEO of the brewing giant, was a Harvard Business School grad, Agrawal said, which is how he made the connection. As a process engineer for Ballast, Agrawal saw firsthand how data played a critical role in successful brewing. In 2017, when he left Ballast to do consulting for other breweries, Agrawal said he was shocked to learn just how many companies were tracking their data on spreadsheets, whiteboards and notepads hung on tanks.
That was a serious industry problem, Agrawal said. Brewing beer is an art and a science, but it's the science part that can make or break a beer.
"Brewing is a full-blown science, with chemistry, physics, etc." Agrawal said. "You take your grain, add different temperatures of water, add time in different lengths, and the amino acids and everything inside changes – and so does the flavor profile."
Throughout the beer-making process, breweries typically track over 100 different data points, Agrawal said, including things like pressure, temperature, pH, alcohol level, sugar content, yeast properties and batches of grain.
Tracking this data helps brewers keep tabs on quality, but can also boost efficiency and cut costs, Agrawal said.
The 5th Ingredient plans to target local breweries as its first batch of customers, considering San Diego has one of the biggest concentrations of craft brewers in the country. As of this summer, the county was home to 154 breweries. That's just the tip of the iceberg for The 5th Ingredient's total market opportunity, however, considering there are thousands of breweries across the country.
Founded in 2017, the startup has three paying customers on board: Protector Brewery near Miramar, Latchkey Brewing in downtown San Diego, and Smog City Brewing in Los Angeles.
Breweries pay a monthly fee for access to the software, Agrawal said. The price is tiered based on the size of the brewery, opening up the tool set for smaller beer companies with fewer resources.
The 5th Ingredient is not the first software company to launch for breweries. Two big competitors include Orchestrated Beer in Portland and Ekos Brewmaster based out of North Carolina. When asked how he competes with these companies, Agrawal said Ekos and Orchestrated serve the business side of brewing more than production side.
"A lot of people aren't happy with what's available in the market right now because it's complex – it's not developed with the brewer in mind," Agrawal said. "That's the key difference. These two software programs are designed for the accountant in mind. Ours is designed for the brewer, the operator, the owner."
Agrawal and his chief operating officer Ryan Allis have bootstrapped the company so far, not raising any startup capital and writing all the code themselves (save a few interns and a contractor). They have plans to raise seed money – looking to friends and family round or angels – to hire additional software engineers and support other growth plans in the first half of next year.