HIGH PROFILE: Russell Bert McDonough III’s path to beer entrepreneur is a long one

Russ McDonough’s path to beer entrepreneur is a long one. But he uses all his knowledge in business to help an ever-growing restaurant group handle the current covid-19 crisis.

“I think I enjoy children as much as any person — certainly as much as any man I have ever met. It was a great time to spend a few years just with my kids and really focus on them.”
(Arkansas Democrat-Gazette/Cary Jenkins)
“I think I enjoy children as much as any person — certainly as much as any man I have ever met. It was a great time to spend a few years just with my kids and really focus on them.”
(Arkansas Democrat-Gazette/Cary Jenkins)

The topic of Russ McDonough's attire never came up during an almost two hour interview.

But a few days later, he casually mentioned in a text message that he only wears blue jeans, a brown polo shirt and brown boots, every day -- 365 days a year. As proof, he texted a photo of his closet, which shows more than 30 brown short-sleeve shirts on wooden hangers.

No, he is not a UPS employee. He is the co-owner of eight Arkansas restaurants and a microbrewery that just won a national best brewer of the year award.

"It's literally all I ever wear, day or night, Brave New [Restaurant] or Taco Bell," he says in a text message about his daily uniform. "It's so liberating. I never give it one thought."

And all of that time he saved on selecting his wardrobe seems to have been spent opening many businesses, raising a blended family of six kids and tending to a houseful of dogs.

McDonough is the son of Nancy and Russ McDonough Jr. His father went to Georgia Tech on a Navy scholarship and then Harvard Business School to obtain an MBA. The family was living in New York, where the elder McDonough worked at American Standard when then-Gov. Winthrop Rockefeller was seeking a person with specific qualifications to run Winrock Enterprises. The younger McDonough was 6 years old.

"Gov. Rockefeller hired an executive search firm, and he wanted a Harvard MBA with ties to Arkansas. And there probably weren't many at the time. And so my father came back as CEO of Winrock in 1969," he says.

Winrock Enterprises is a for-profit group of small businesses that the former governor owned. Rockefeller sold the company to the elder McDonough in 1975.

"My mom was a law professor and a brilliant woman, and my father was certainly very bright," McDonough says. "I grew up in a kind of really loving interesting house of ideas, and dinnertime conversations were incredible. It was just really idyllic in a lot of ways."

The family raised McDonough and his older sister Lee in the Foxcroft neighborhood of Little Rock, which at the time was considered the western edge of the city. McDonough graduated from Hall High School, where he was student body president, and went to Vanderbilt University in Nashville, Tenn., graduating with a degree in English.

After graduation, he returned to Little Rock to work for his father at Winrock Enterprises, setting up a computer network for the company. It was the early days of the personal computer and the self-taught McDonough assembled components from more than a dozen manufacturers to create the system.

After gaining some work experience, he enrolled at Emory University in Atlanta to obtain an MBA. While he was there, he also started a mail-order clothing company with a friend. He had a chance to stay at Emory after graduation to teach, but while he loved the amenities of Atlanta, he hated its "horrendous" traffic.

He and his friend ran the clothing company for a couple of years before closing it. McDonough then went back to work at Winrock Enterprises, which he eventually took over.

"In the mid-90s when I came back to Winrock, ultimately becoming president and then CEO, my father had built Winrock into an amazing company over the previous 25-30 years and had made it into a tremendous success," he says. "Even when I became CEO, he was still very much there day-to-day and I was by his side, learning from him every step of the way. I learned more from him in those years together at Winrock than getting an MBA ever taught me. Those were definitely the seminal years, working under him in my development as a business leader."

MAGAZINE MAGNATE

By 2001, Winrock sold its largest business -- a PVC pipe company in Siloam Springs.

"I owned 7.5% of the company, which I didn't think was enough for me to pour my whole life into rebuilding it with new endeavors. So I started looking around and I ended up buying At Home in Arkansas magazine."

As CEO, McDonough added At Home in Memphis, At Home in New Orleans and Little Rock Monthly magazines. Eventually, he ended up owning the Oxford American magazine with his friend Albert Braunfisch and author John Grisham. The men ended up giving the Oxford American to the University of Central Arkansas.

He ceased publication of At Home in New Orleans and Little Rock Monthly and sold At Home in Memphis to a Tennessee company and he semi-retired. He was only in his late 30s.

"I think I enjoy children as much as any person -- certainly as much as any man I have ever met," he says. "It was a great time to spend a few years just with my kids and really focus on them."

By then, he had a blended family -- four children with his first wife and two more step-daughters he "inherited" when married his second wife, Kim. Before his second marriage, McDonough was a single dad for seven years.

"It was a lifestyle choice. I've done well but certainly there were wealthier people on the block, let alone in town," he says of retiring so young. "We were well off financially but not incredibly well off and I knew I would work again, but I just wanted to take a few years and really focus on the kids."

His children are Emily, 31, the mother of his only grandchild, Owen; Ellie, 27; Russell, 23; and Will, 19. Kim has two daughters -- Madison, 26, and Hannah, 23.

"We are a modern-day Brady Bunch," Kim McDonough says. "You hear nightmare stories about blended families all of the time and I think we got lucky. I think we really focused on our family and that's first and foremost our top priority and I think they saw love for one another that we shared. They are just like biological siblings. They love each other so much and the way they communicate with one another is really a miracle."

BEER OF THE YEAR

When the children were younger, she encouraged her husband to go back to work.

"She said, 'Honey, you're great, but your boys were really small the last time they actually saw you get up and go to work. You drive them in carpool in your pajamas and that really doesn't help them understand how they have a roof over their heads.' I said 'OK. I get your point.'"

Around that time, Scott McGehee and John Beachboard were looking for a person to invest in and help manage their restaurant business. "I would have never thought I would have gotten into the restaurant business, but here we are today," McDonough says.

Their company, Yellow Rocket Concepts, owns and operates Zaza Fine Salad + Wood-Oven Pizza Co., Big Orange, Local Lime, Heights Taco & Tamale Co. and Lost Forty Brewing -- and has about 500 employees. With new locations opening in the near future around the state, McDonough expects the number to grow to 700 next year.

In October, Lost Forty Brewing won the Mid-Size Brewing Company and Mid-Size Brewing Company Brewer of the Year awards from the Great American Beer Festival Competition -- the largest commercial beer competition in the world.

McDonough says there isn't a category for large breweries and the competition is among breweries that produce between 15,000 barrels to 6 million barrels a year. "Which means we won among every midsize and large craft brewery in the country. And we barely qualified, by making 16,000 barrels last year."

The idea of creating Lost Forty happened during a brainstorming session on McDonough's back porch with McGehee and Beachboard. "John tends to throw out a lot of ideas and I tend to filter them." The group was discussing how to expand their company but all agreed they did not want to travel and go out of state.

"He was throwing out all of these ideas and I was shooting them down and he said, 'How about a craft brewery?' -- and I just stopped in my tracks and I said, 'That's brilliant.'"

Over the next four to six months, the trio visited breweries in Arkansas, Texas, Tennessee, Missouri and Louisiana to learn more about the business -- "We knew nothing starting out." But Yellow Rocket had a few employees who were home beer brewers. Their first batches were brewed in a garage.

The Yellow Rocket owners began looking for a space and settled on an old candy factory in what is now called the East Village area of Little Rock. The men originally planned to serve cheese, crackers and beer with no intention of building a full-scale restaurant. But the plan quickly changed when they realized they just couldn't serve "simple food." The brewery opened in November 2014.

"I am still so incredibly impressed with his brilliant business mind," Kim says of her husband. "I could just listen to him talk about business ideas and strategies all day long."

The brewery is named after the Lost 40 in Calhoun County, a 40-acre tract of virgin timberland that was spared from logging. Numerous stories are told about the origin of the tract's name and the reason that it was never logged varying from an ownership dispute to foresters recognizing the rarity of such mature trees.

Amber Brewer, creative director and brand manager for Yellow Rocket Concepts, says McDonough is the "springboard" for hatching new and innovative ways to improve and expand the company.

"I got more excited about the future of our company after I met him," says Brewer, who is married to Beachboard. "He made me even more excited to work with this group and buy into a brighter future for this group."

She adds McDonough makes every person feel like an equal whether he is a dishwasher or a longtime customer.

"When he is at the table I can always trust that he is listening," she says. "He is a true believer and advocate of this group."

While the covid-19 pandemic has taken a heavy toll on all restaurants and bars, many of which had to shut down for months and reopen with limited capacity, Yellow Rock Concepts has seen an increase, meanwhile, in the sale of Lost Forty beers. McDonough attributes that to the availability of Lost Forty products in grocery and liquor stores in Arkansas and surrounding states.

"But even though our bar and restaurant business all disappeared in March and our taproom business went completely away at first, people were still drinking," he explains. "So our package beer sales went up dramatically."

Prior to the pandemic, about half of Lost Forty's profits were made in draft beer sold in kegs to bars and restaurants. When those closed, all of that money dried up.

"We were still up for the year because people are staying home and they are drinking. That's no big secret. Everyone knows that. So it's been a good year for Lost Forty. We are very fortunate that we have a strong regional presence."

Prior to the pandemic, Yellow Rocket's restaurants made more money than the brewery. But the roles have now reversed. All of their restaurants are now open and follow the state mandate of 66% capacity, he says.

FAMILY LIFE

While McDonough is proud of Yellow Rocket and all of its accomplishments, he is most proud of his family. Kim works at Yellow Rocket and is also a pharmacist. She currently also is working at the Veterans Affairs Hospital in Little Rock helping to oversee a covid-19 vaccine trial.

Emily has a master's degree in education and works for a real estate appraisal company in Little Rock. Ellie is a lawyer in the Washington area. Will is a freshman at Hendrix College in Conway. Madison is a nurse at Baptist Health. Hannah is a nurse in Dallas. And Russell was a racecar driver.

Wait. A racecar driver?

"He loves it. That's his true passion in life and if he can find a way to stay in that industry, he will certainly do it," McDonough says.

After racing cars for three years, Russell currently teaches at a racecar driving school in Atlanta.

And then there are the McDonough pets. Lucy is a smart, fun-loving English Pointer. Win and Dex -- "appropriately named since we follow them around with a bottle of Windex all the time, cleaning up the messes they leave behind" -- are twin miniature dachshunds.

And then there's Delta. Last year, McDonough noticed a puppy on the edge of the interstate after he dropped Ellie off at the airport. He circled back around, pulled over and tried to rescue the pup. She started barking furiously and ran off into the woods, nowhere to be found. He knew she had been abandoned.

For the next week, he drove by the spot three times a day to check on her. He took her food, water, a kennel, a sleeping pad and toys. But every time, she ran off into the woods.

"She did drag the sleeping pad out of the kennel I had placed at the edge of the woods and laid it by the side of the interstate to sleep on, which made me happy. Finally, after a week of no changes in our routine, and her not allowing me to get any closer, I asked a friend for a name of someone to help us trap her."

He and the man set a trap filled with hot dogs. She couldn't resist.

"When we put the trap inside my car, the man warned me that because she had barked so ferociously at me for my 25-plus visits the previous week, it might take her a while to warm up to us once we got her home. He also said that frequently, when dogs are abandoned by the side of a road, they never leave that spot because they assume it was a mistake and that their owners are coming back for them. And they don't want to not be there and miss them when they return.

"Once I was in the car with her, I opened the trap and she jumped up in my lap and started licking me nonstop with her tail wagging like crazy. And over the past year she has been every wonderful story you hear of a rescue," he says.

Delta is a German Shepherd that was only 3 months old when McDonough rescued her.

"And today she is a 15-month-old dream who is the most grateful, loving, appreciative, happy dog, who fits in perfectly with our other three, and never wants to leave your side or quit licking you," he says. "To say we just love our four dogs would be a massive understatement."

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