Grant Pauly had reached a crossroads in life. Not long after earning his bachelor’s degree at Northwestern University, a key team member in his family’s concrete business became ill, leading Pauly to turn down a job offer at Google and return home to help out.
Pauly eventually became president of Kiel-based Wisconsin Concrete Products, and the head engineer who was diagnosed with cancer recovered. But then the Great Recession hit. Business took a hit, and Pauly began to reconsider how he wanted to spend his career.
Throughout his time in the concrete business, Pauly says he learned a lot from his experience in operations and then leading the company — lessons that guide him in his business today. Eventually, though, the work became less gratifying.
“In construction, I realized I loved small business. I loved designing and creating, but the problem with us is anytime we made something, it got buried underground. You hoped you never saw it again, because if you did it meant you’d failed,” he says.
Searching for something more tangible to make, Pauly turned toward a hobby that had grown into a passion: home beer making. Taking a risk to start his own business felt selfish to Pauly, but he took the leap because of his wife’s encouragement — as well as a gift from his friends.
“When my friends knew I was in this crisis of conscience about what should I do, they gave me a T-shirt. It was this little guy at a crossroads. One way pointed to fame, fortune, money, success, which would have been concrete. The other way pointed to waterslides. And this guy, he just didn’t know which way to go. That was it. I had to chase the waterslide and go after it,” Pauly says.
With the help of a “great local bank,” Pauly began to build 3 Sheeps Brewing Co., purchasing brewing equipment and building space in Sheboygan in 2011. In 2012, the company began distributing beer to local and regional pubs and restaurants.
“It was a really nice low risk that if it failed miserably, we could recover. But, thankfully, it didn’t,” he says.
As an ode to that T-shirt inspiration an IPA called Waterslides became 3 Sheeps’ first beer, and 10 years in it remains a staple in the brewery’s lineup.
FAMILY LEGACY
Pauly, who serves as brewmaster, started out in college studying civil engineering but later switched his major to history, with an emphasis on the history of business. He steeped himself in the lessons of titans of industry like the Carnegies and Sam Walton.
Pauly’s own family also has a history in business — one that connects directly to the work he does now. The Pauly family purchased the bankrupt Kingsbury Brewery during Prohibition, running it for a few decades and expanding distribution throughout the Midwest and East Coast.
Pauly’s great-grandfather served as president, his grandfather was treasurer, and his great-uncle was one of the brewmasters. At its peak, Kingsbury produced about 370,000 barrels a year, which is about 20% more than what craft beer giant New Glarus Brewing Co. makes today. Eventually, though, business shifted.
“They kind of saw the writing on the wall with the big Budweisers and Millers growing up, and they ended up selling to G. Heileman, which became Pabst,” Pauly says.
The family got out of brewing but remained in the food and beverage industry. For a time it owned Pauly Cheese, which is still around today. Pauly says his roots in a strong family business have positioned him well for where he is today.
While big breweries still hold a large stake of the beer market today, craft breweries have exploded in popularity. A year and a half ago, the country finally surpassed the number of pre-Prohibition breweries and now has “skyrocketed” past that, Pauly says. In Wisconsin, 3 Sheeps became the state’s 64th brewery, and now there are almost 300.
“The change in 10 years of what beer means and craft and the culture and euphoric love of it [has been amazing], and I’m glad we got to watch it,” Pauly says.
BUILDING A BRAND
For a long time, it wasn’t easy to grow up and decide to become a brewer, Pauly says. When he chose the path 10 years ago, there were only two schools in the country that taught beer making.
Largely self-taught, Pauly also completed a four-month abridged program at the Siebel Institute of Technology in Chicago, which educates brewers from around the world. He apprenticed at a California brewery.
Today, Pauly and the 3 Sheeps team take pride in crafting beer but at the same time don’t take themselves too seriously. That ethos has led Pauly in his leadership throughout the past decade, and that included coming up with a name for the business.
“I just needed something that was not serious. Just something fun where we can just appreciate what we do. I thought naming ourselves after a fluffy, grammatically incorrect animal was a good way to never get too big a head,” he says. “We kind of joke that we’re serious about the beer but nothing else because we appreciate that we still get to make beer for a living.”
3 Sheeps is guided by a “heart and science” mission. For Pauly, science means striving to improve processes and outcomes, while heart leads them to ensure “they’re doing things right.” That translates into a dedication to quality.
While Pauly loves experimenting — 3 Sheeps produces about 15,000 barrels a year and plans to release 30 new beers this year — he also won’t ever put out a beer without doing a “meticulous number of batches” on it.
“Even if a big batch does come, if it’s not perfect, we’re not going to throw raspberries in it or do something to cover it up. It’s going down the drain because that’s not the relationship we want with our customers,” he says. “That’s where the heart and science is, and I think that translates to what our customers expect from us now.”
That’s led to growth for 3 Sheeps and customers seeking out the brand, even on the ever-more-crowded beer shelves. The business is growing 20% to 30% per year, and Pauly is expecting it to grow another 30% this year. Wisconsin accounts for 95% of the brand’s distribution, but it’s also available in some parts of Illinois.
“Every single day he brings new innovation, new ideas to the marketplace, and that’s how you build generational companies. He’s a great testament to entrepreneurship in the county and to what we can build here,” says Brian Doudna, executive director of the Sheboygan County Economic Development Corp., on which Pauly serves as a board member.
3 Sheeps offers a lineup of eight consistent beers available on store shelves at any given time. In its Sheboygan taproom, it serves many more varieties.
The pandemic and people’s desire to try new things when they were stuck at home led the brewery to “double down on one-offs,” and in 2021 it came out with 80-plus new releases as well as debuting Cloudless, a hard seltzer line. Prior to that, it released about 20 beers per year.
The experimentation has been fun, Pauly says, but a few beers have emerged as fan favorites. Fresh Coast, an “East Coast-style pale ale brewed for the Midwest” is 3 Sheeps’ No. 1 seller, followed closely by Chaos Pattern, a hazy IPA that’s only been out for a year and has already become one of the top 10 hazy beers in the state.
Rebel Kent, 3 Sheeps’ No. 3 beer, is Pauly’s personal favorite. It’s a Belgian abbey single, but it uses other ingredients to “pull back on the sweetness and give people what they want in an amber but in a really clean, easy-drinking way that’s unique,” he says.
While the taste and quality of the beer are important, so are the beverages’ names and labels. Pauly says it’s both fun and vexing to try to come up with a clever name that hasn’t been taken already.
“It’s important, especially nowadays as you get maybe a second on the shelf as people glance past your product,” he says. “It’s all meaningful. People want that. They want something more than just a good IPA. They want that connection with the beer.”
Pauly attributes much of the success of the business to his team, which includes co-owner James Owen along with bartenders, brewers, sales representatives and maintenance technicians. They’ve all leaned on one another more than ever throughout the challenges of the pandemic, Pauly says.
“Our team is just so phenomenal, and we’ve pulled so many awesome people over to us,” he says.
HOMETOWN PROUD
Pauly credits the support of restaurants and chain grocery stores for much of 3 Sheeps’ success. As one example, he recalls meeting Festival Foods CEO Mark Skogen at an event early in his career, where Skogen promised to ensure 3 Sheeps would be featured on store shelves. Pauly didn’t expect much, but a beer buyer for the chain called the next day to set up the arrangement.
“That’s just what Wisconsin does. We support each other so well,” he says.
That extends outward for 3 Sheeps as well. All of its brewing and canning line equipment came from Milwaukee and its surrounding cities. It also works closely with nearby Briess Malt & Ingredients, its six- and 12-packs are made in-state, it purchases tap handles from Hankscraft AJS of Random Lake, and even the tape that goes on its kegs comes from InkWorks in Plymouth.
“It’s all right here, and I think that’s why it’s important for us to support local. We are able to buy everything locally. People buy from us, and it’s a crazy, small circle,” Pauly says.
3 Sheeps’ taproom, along with its production facility, has operated on the North Avenue site of a former Coca-Cola distribution center since 2016. It has become a beloved gathering place for community members and visitors alike. During last fall’s Ryder Cup held in Sheboygan County, it welcomed thousands of new customers.
“The 3 Sheeps Brewing taproom has become Sheboygan’s third space, outside the home and office, where people congregate. It’s hard to believe that the taproom and the brewery have become what they are today as part of the rise of craft brewing, and the city is excited to continue to see 3 Sheeps succeed in the market,” says Chad Pelishek, director of planning and development for the City of Sheboygan.
The feeling is mutual for Pauly, a father of two, who says he loves being in Sheboygan because of its natural beauty and outdoor amenities, especially Lake Michigan.
“Sheboygan, it just lives bigger than … a town of 50,000 people,” he says. “We have so much pride in Sheboygan, and Sheboygan and the county have so much pride in us. We’re growing together.”
3 Sheeps’ taproom offers a laid-back, airy venue for people to linger for a beer and socializing. Because it doesn’t serve food, dogs are welcome in the space. Patrons can, however, bring in their own food — another way for 3 Sheeps to support local restaurants — and families often visit on warm-weather weekends and partake in onsite outdoor games like cornhole and bocce ball.
The brewery also gives back to the community and causes through many efforts, including creating a beer for the Black is Beautiful project — a collaborative aimed at bringing awareness to the injustices that many people of color face and donating a portion of taproom proceeds to nonprofits.
At the height of the pandemic, 3 Sheeps created Operation Save our Spots — an effort among 3 Sheeps and other Wisconsin breweries aimed at helping Wisconsin bars and restaurants endure the time when they had to remain closed for dining. Participants offered beers that were only available to purchase at bars and restaurants.
As Pauly eyes the future, he’s aiming for controlled growth and angling for 3 Sheeps to become “part of the fabric of Wisconsin beer.”
“I want to be around for a while. We kind of always joke that we want to grow old making, serving and selling beer together at this place,” he says. “I think we’re going to keep growing and just kind of becoming one of those fixtures in Wisconsin where 10 years from now your dad drank it, so now you’re drinking it.”
