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Sep 15, 2014

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American Beer Month
The next generation of American brewing

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Who are these guys?
So who are these big little guys? More important, what breweries might we be talking about in 10 or 20 years? A story in this magazine four years ago stated, "There are perhaps 30 such (regional independents) in the United States and Canada." Expect more. Will it eventually take 100,000 barrels for admission to the club? 300,000? Perhaps we'll talk about sales instead, and rather than discussing a "second tier" it will be a $20 million tier.

It's obvious that Boston Beer, Sierra Nevada and New Belgium belong, but would we have predicted it when each was only a few years old? When these five brewpubs - Deschutes Brewery, Goose Island Brewing, Great Lakes Brewing, North Coast Brewing and Rogue Ales - opened in 1988, who knew each would grow to be a nationally recognized distributing brewery?

Will some of today's breweries with buzz, such as Stone (up 44 percent in 2002), Victory (28 percent) and Dogfish Head (45 percent) continue to grow; or will Hawaii's Kona Brewing (with growth and barrelage numbers much like Stone's) quietly surge ahead?

Quite honestly, not even the owners of these breweries can say.

"A year and a half ago we set a goal to get to 70,000 barrels in 10 years," said Abita Brewing president David Blossman, whose brewery sold 39,400 barrels in 2002. The Louisiana brewer recently installed a new highly automated Merlin 100-barrel brewing system, so there'd be room for even more growth.

"We could do six brews a day. Do I think I'm really going to want to? No," he said. "When we get to a point where we are comfortable with what we are doing locally we might look again. The potential might be there but I don't think we are going to want to."

Abita is available in 30 states and the District of Columbia, but that doesn't mean Blossman wants to see it become a national brand. Seventy percent of sales are in Louisiana, and he'd be happy to see that number go higher.

"We are part of the culture. In Louisiana we make our lifestyle around the cuisine. We brew beer that goes with the food, the nightlife," he said. "If the culture gets exported, so do we. When a restaurant that serves our beer (out of state) opens up that serves our beer (in Louisiana) they expect it to be available. To try to do more would take an investment we're not willing to make." Boulevard Brewing, based in Kansas City, has taken a similar go-slow approach. Focusing on the states contiguous to Kansas and Missouri, it hadn't opened any new territories in five years until heading into Minnesota this year. In the first half of 2003, sales were up 16 percent, and July was the single best month in the 14 years since Boulevard opened.

"When we started out we wanted to get to 7,000 barrels in seven years, grow 1,000 barrels a year," president John McDonald said.

Goals change. Expansion could boost capacity to between 500,000 and 750,000 barrels. "We'd like to think there's still plenty of growth where we already sell," McDonald said. Eventually, plans are to enter Texas, Colorado and go beyond the St. Louis suburbs in Illinois, but that's it.

Endearing and enduring
Regional breweries in the '50s, '60s and '70s weren't focused on growth, but on survival. "The '50s were really the toughest time," said Dave Casinelli, executive vice president of the Yuengling Brewery. Yuengling, the oldest brewery in America, will brew more beer than anybody but the Big Three in 2003.

Despite attention because of the 1976 Bicentennial, Yuengling was still a struggling brewery when Dick Yuengling Jr. took charge in 1985. Since then, the company has built a new brewery and acquired one of the shuttered Stroh breweries, and its capacity is three times current sales of 1.2 million barrels. Casinelli expects to grow into it.

"Most regional brewers were going out of business because they couldn't find a way to be successful beyond their immediate local market," said Casinelli, who joined the company in 1990 when sales were 125,000 barrels. "It was a process. First, we looked at our distribution network. Second, internally, we took a look at our packaging, we needed to make changes in the way we presented out beers. After that, it was a matter of reinvesting, continuing to do things one brick at a time."

Yuengling's products are not counted as specialty beers because they aren't all-malt products. However beers such as its Porter, Black and Tan and Lord Chesterfield Ale aren't in the pale lager mode, and Yuengling competes with specialty beers for tap handles from New York to Florida.

In fact, 40 percent of Yuengling sales are draft, about four times the average of mainstream products. Draft has always been a strength for specialty beers - and a weakness.

"I have never heard a bar customer say, 'Gee, this bar does a lousy job of maintaining and cleaning their lines,'" Jordan said in her speech. "They say that the beer they ordered is lousy."

"It's a problem. A lot of the new retailers aren't educated about cleaning lines," Casinelli said. "In our home state (Pennsylvania) you are required by law to clean your lines once a week. We know that's not happening, and I think it has to come back to us to see that it is done."

McDonald seconds that at the top of his voice. "It depresses me how deplorable the state of draft lines has become," he said. Boulevard has put an employee in the field, working alongside sales representatives but answering to the brewing side. He deals with distributors, with wholesalers and at the retail level, showing them how to clean lines and talking about how beer is dispensed.

The quality of draft beer is a top priority at Boulevard - understandably, since 58 percent of sales are draft. "There are obvious things all of us can do," McDonald said. "It is getting better (in) some places. New Belgium is out there working at it, other brewers are talking about it."

Boulevard is poised to be one of the leaders of the emerging second tier, but as important, if you value diversity in your glass, is that McDonald, Jordan and a growing number of others talk like we want leaders to.

"To put it simply, to succeed as an industry, we must work very hard to be both enduring and endearing," Jordan said in New Orleans.

Oly stubbies? Still endearing.

Olympia, the brewery? No longer enduring.

Beginning of story

This story was written in the summer of 2003.

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