Argus Brewery was one of Chicago’s oldest craft breweries but was often struggling. Since launching in 2009 in a former Schlitz horse stable — a relic of when beer was delivered by hooves — Argus always hovered at the edge of the beer drinking consciousness, a curiosity few Chicagoans ever saw, tasted or even discussed.
While other breweries of its era grew into Chicago icons — Metropolitan Brewing, Half Acre Beer Company, Revolution Brewing — Argus sat quietly at the city’s far south end, miles from both its competitors and the city’s best-known beer bars.
Yet somehow it endured — until last month.
On March 28th, Argus quietly stopped brewing. News of its demise didn’t emerge until Chicago Patch reported the closing this week.
Argus founder Bob Jensen acknowledged that his brewery had long been teetering at the edge of collapse. It was never profitable, and in December, reduced head count from 16 to 11 employees. Jensen considered pulling the plug for months. The COVID-19 pandemic made him pull it.
Earlier this month, the Brewers Association said coronavirus may be catastrophic for the nation’s small breweries. Nearly 50% of surveyed breweries predicted they couldn’t survive three months of social distancing.
For Argus, the decision was made in less than two weeks. About three-quarters of its business was draft, an arena that dried up literally overnight after bars and restaurants closed March 16 to stem the spread of the new coronavirus.
But Argus’ demise was rooted in years of not being able to turn a corner, even as a $29 billion craft beer industry grew around it. Argus grappled with its far-flung location in the Roseland neighborhood, questionable commitment from its distributors, growing competition, failure to open a taproom, buy-in from bars and stores and, most important, making quality beer.
Each of the last five years Argus made between 1,000 and 1,280 barrels of beer — about half the production of the average American craft brewery.
Jensen launched Argus as a fun and novel diversion after making millions as president of Hub Group, a $4 billion transportation company he helped take public during the 1990s. He had been a home brewer, and the craft beer industry seemed poised to break out. He was right about that: The nation has grown from about 1,600 breweries when Argus opened to more than 8,200 at the end of 2019.
Jensen acknowledged he was ill-prepared to start a brewery.
“I was kind of naive about how the beverage industry worked,” he said. “By the time we had fixed our beer and redid our image, it was too late.”
But here’s the thing: In recent years, Argus had quietly become a very good brewery.
In 2015, Jensen hired John Freyer, former head of sales at Three Floyds Brewing Co., as president. When he showed up, Freyer said, Argus was backlogged with unsold, poorly made beer. It was little wonder Metropolitan, Half Acre and Revolution had blown right past it.
Freyer brought in two of the most talented people he knew: former Goose Island Beer Co. and Miller Brewing Company quality control guru Mary Pellettieri to revamp recipes and procedures, and Ted Furman, who during the 1990s ran one of Chicago’s original craft breweries, Golden Prairie, to oversee operations.
Gradually, the quality and consistency of Argus beer improved. Rather than chase trendy modern styles, it embraced balanced, approachable lagers.
In 2016, the brewery won a bronze medal at the World Beer Cup for Holsteiner, an amber lager. In 2018, it won a gold medal at the Great American Beer Festival for Doppel Alt, a beer made under Furman’s resurrected Golden Prairie label. During the last six months, Argus landed two beers on the menu at Alinea, Chicago’s only restaurant with three Michelin stars: Cygnus X-1 Schwarzbier and Pegasus IPA.
“Things started getting better when we hired John,” Jensen said. “We were on a good trend. It’s just that I saw how volatile this business can be, and one thing we were fighting against was the market getting flooded with craft beer brands.”
Argus struggled with many nuances of brewery operations, but most crippling may have been its failure to open a taproom where it could serve its own beer while reaping maximum profits. Initially, Jensen said, he had little interest in running a taproom.
Once it became clear that a taproom was the only path to keeping the brewery viable, hassles with city licensing kept it from happening, he said. Jensen said he spent hundreds of thousands of dollars to get his building up to code. Yet, he said, there was always another hurdle.
“All it takes is one thing to hit to turn the corner, and a taproom would have helped tremendously,” Freyer said. “We were always on the edge of turning the corner.”
Argus was briefly hopeful in recent months with a switch to a new distributor, Louis Glunz Beer, which Freyer said “got us more business in the first month than we had in previous two years.”
Jensen figured Argus was still two years from breaking even, and that he would need use his own funds to keep the business afloat until then — just as he’d done for the last decade. Instead, spurred by the coronavirus downturn, he hopes to sell the brewery as a turnkey operation, rather than the equipment piece by piece.
Jensen, 65, said he has homes in Florida and Colorado, but didn’t get to them as much as he wanted. Now he can.
“I’m old enough that I don’t need the headaches or aggravation that come with running a business,” Jensen said. “I’ll ride off into the sunset and enjoy Florida and Colorado.”
Jensen alerted employees March 26 that the brewery would close in two days. He didn’t offer severance, but encouraged staff to apply for the expanded unemployment insurance benefits available through the federal Coronavirus Aid, Relief, and Economic Security Act.