Beer connoisseurs defy hurdles to start breweries.
booie
Beer connoisseurs defy hurdles to start breweries.
Published: November 25, 2009
Like scores of other avid home brewers, Shane C. Welch has turned his
personal passion into a commercial enterprise. But he has followed his
own path in marketing his beers.
Mr. Welch’s company, Sixpoint Craft Ales, in the Red Hook section of
Brooklyn, does not sell beer in bottles, for instance. Instead, it
primarily sells kegs to pubs and restaurants in the New York
metropolitan area. If consumers want to drink Sixpoint beer at home,
they need to bring 64-ounce jugs, known as growlers, to the bars to
refill them.
“We are not going to pursue the traditional brewery path,” said Mr.
Welch, who grew up in Milwaukee, a city steeped in beer-making
history. “It doesn’t make sense to ship it halfway around the world.
That is an antiquated business model.”
The economics of the beer business can be daunting. Microbreweries
need to sell thousands of barrels of beer a year before turning a
profit. Until they do so, small business loans can be hard to get. And
ingredients like hops have gotten pricey.
In addition, start-ups are entering a tough competitive field. A wave
of consolidation has left a handful of companies brewing most of the
beer that most Americans drink. Last year, InBev of Belgium acquired
Anheuser-Busch, creating the world’s largest beer maker. Another
merger last year, between the United States operations of SABMiller
and Molson Coors Brewing Company, formed a company called
MillerCoors.
But none of this has prevented beer-making enthusiasts from trying
their luck. Roughly 450 microbreweries operate in the United States,
an increase of almost 25 percent since 2004, according to the Brewers
Association, a trade group based in Boulder, Colo. That figure does
not include nearly 1,000 brew pubs, which primarily sell the beer they
make at their own restaurants.
Paul Gatza, the director of the Brewers Association, said that the
pace of new microbrewery openings had slowed this year with the
recession. Last year, 56 microbreweries were opened, and 10 closed.
Three of those that closed had opened in 2008. This year, the
association has tracked 25 microbrewery openings and five closings.
Even among America’s craft brewers — as aficionados call the
independent breweries — some have grown into larger operations. The
Brewers Association reclassifies microbreweries that exceed 15,000
barrels of production a year as regional breweries. In this way, nine
microbreweries became regional breweries last year.
Mr. Welch, who runs his microbrewery from a 7,000-square-foot former
filing cabinet factory, described the creative process of making beer
as “understanding what people want and matching the reality to that
desire.” He has come up with dozens of beer recipes using a wide
variety of grains.
His approach, which he says is to keep the business as “amorphous” as
possible, appears to be working. Mr. Welch says that Sixpoint is on
track to sell around 8,000 barrels of beer this year — roughly 10
times what it sold in 2005, its first full year of production.
Patrick Rue, who operates the Bruery out of a 10,000-square-foot
warehouse in Placentia, Calif., is pursuing a different strategy.
Although his microbrewery has been in business only a little more than
a year, its Belgian-style beer — which is brewed a few miles from
Disneyland — is sold in states as far away as New York, New Jersey and
Massachusetts.
“We need to sell a little bit of beer in a lot of places,” Mr. Rue
said. “That’s our bridge to survival.”
The Bruery, which shipped its first case of beer in May 2008, sold
about 1,200 barrels during its first 12 months of production. All of
the bottled beer — which accounts for roughly three-quarters of sales
— comes in champagne bottles, with prices ranging from $8 to $14.
“It’s hard to compete with Sam Adams on price, so you have to be
distinctive,” Mr. Rue said.
On the other hand, the Mt. Carmel Brewing Company, which is based in
Cincinnati, is focusing on its local market, where demand has
outstripped the supply this tiny brewery can produce. A recent
investment in new equipment has raised the brewery’s annual production
to 3,000 barrels from 1,000 barrels.
Kathleen and Mike Dewey founded Mt. Carmel Brewing four years ago. Ms.
Dewey manages the office and distribution, while her husband is in
charge of production. They started the business with a $10,000 family
loan, which they supplemented with credit cards while they got their
brewery off the ground. At one time they had roughly $40,000 billed to
credit cards, all of it for business-related expenses. But they have
paid off those cards.
Ms. Dewey said that anyone who wanted to start a microbrewery should
either have a substantial sum of money to begin with — or a great deal
of patience. “It can be very dreamy thinking about starting your own
microbrewery,” she said. “But unless you have several million dollars,
be prepared for a lot of hard work.”
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bbb writes:
I love a good cold beer.
Any good new beers that are out on the market?