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Beer Market Increasing in Maine

Maine’s boom in craft beer production shows no signs of stopping this year, a trend that stands to increase craft beer’s share of the overall beer market and raise competition among smaller brewers and national giants joining the fold.

A study commissioned by the Maine Brewers’ Guild found the 35 breweries operating in 2013 plan to increase production by 36 percent this year and triple collective production in five years. This year, another eight breweries have come online, and another five are expected to open.

That growth comes against a national backdrop of craft breweries increasing production by 18 percent in 2013 and opening at an average rate of 1.2 breweries per day in recent years, according to the national Brewers Association.

“Which is insane,” said Bart Watson, the association’s staff economist, especially given that overall beer production last year was down about 2 percent.

But counting the number of craft breweries — the nearly 2,900 independently operated breweries that can be as large as Boston-based Samuel Adams — is not the way to think about just how much the market can sustain, according to Watson.

“Everyone should stop talking and/or worrying about the number of breweries,” Watson said in a 2013 article. “It is much more relevant to talk about capacity and/or market share.”

And that depends largely on changing beer-buyer preferences for dynamic flavors and local production. Peter Bissell, who started the Portland-based Bissell Brothers Brewing with his brother in November, said that leaves a lot of room to grow for the industry generating $92.6 million in Maine sales last year.

“The interesting thing is that the craft beer industry is changing at the same time as our economy is changing,” Bissell said. “Older people say, ‘When is the bubble going to burst?’ and the truth is there is no bubble. … I think the sky’s the limit.”

And national craft brands, such as Sierra Nevada, see something happening here, too. In August, the nearly 1-million barrel California brewery will bring its beer tour to Portland, one of seven cities nationwide.

Nationally, Watson said craft beer makes up just less than 10 percent of the total beer market. In Maine, that number is close to 17 percent by volume, with Maine-made beers making up more than 7 percent of that total in 2013, according to state figures. And Watson said areas such as Portland, Oregon — where craft beers have more than 30 percent of the market — prove more is possible.

When there’s not more market share to grab, brewers in Maine expect competition for producing unique, high-quality beers will heat up.

“It will ultimately create a higher level of quality across the board, and the weaker [breweries] aren’t going to succeed,” said Tim Adams, a co-founder of the Newcastle-based Oxbow Brewing, which expects to put out about 1,300 barrels of beer this year. A barrel contains 31 gallons.

Luke Livingston, founder of Baxter Brewing Co. in Lewiston, agrees that dynamic could be good for the industry, saying breweries that lose focus on quality and “aren’t treating the business like a business” stand to be weeded out. But the newcomers have posed short-term challenges for his brewery that recently expanded and expects to produce up to 25,000 barrels this year.

Livingston said it’s become harder to find space at the tap, prompting his company to look sooner than expected at distribution outside of its base market in northern New England.

“It’s more difficult for more established breweries to get draft access than even two years ago,” Livingston said. “It’s funny being 3½ years old to consider ourselves more established, but this is just how this industry is now.”

Sean Sullivan, executive director of the Maine Brewers’ Guild, said he expects there’s still room to add to the new batch of brewers, most of whom have different approaches, geographic focuses and do not compete directly.

“What we’re seeing is a shift toward a lot of smaller breweries that have different distributions rather than a lot of nascent startups that are looking to total domination,” Sullivan said.

That’s the case for Tim Gallon, founder of the Orono-based Black Bear Brewery. Gallon said he expects to put out around 1,000 barrels of beer this year, up from 850 in 2013. So far, demand in northern Maine has been enough to move that much beer through bars, restaurants and the brewery’s tasting room, which he said opened up his brewery’s local niche.

So far, he said, collaboration with Bangor-area breweries has been a boon to his business. But he acknowledged there may be a tipping point.

“If a brewer opened up next door, I’d feel differently possibly,” he said, but he tries not to focus on competing. “I think there’s a healthy competition there, and you want to be the best you can be for yourself and not worry too much about what other people are doing.”

But that competition won’t come just from within the state. The craft beer boom has drawn attention from companies such as conglomerates Anheuser-Busch InBev and MillerCoors, who are putting more resources into developing and buying up their own craft brewing brands. Anheuser bought Chicago-based Goose Island in 2011, and it inked a deal this year to acquire the New York-based Blue Point Brewing.

In an October 2013 investor presentation, Adam Oakley, the company’s vice president for high-end brands, said year-to-date production of Goose Island was up 67 percent over 2012. Its move to keep Goose Island independent, while providing the resources to boost production and distribution, kept quality high, according to Livingston.

While craft brewers in the state all said quality is the keystone to success, they noted local production and the ability granted by a 2011 law to open on-site tasting rooms still gives them an edge with customers in Maine and across the region.

“We get tourists here who can purchase directly from the brewers, and people are basing entire vacations around that,” said Adams, with Oxbow, which last year tested sending its beer during the quieter winter season abroad to Copenhagen, Barcelona and Rome.

Closer to home, Adams said he’s not worried about bigger breweries pushing into the craft market.

“I think consumers are becoming much more educated and for the most part are able to see through those facades,” he said, noting some upside, too. “Some of those faux craft beers have actually been stepping stones for people to make the transition toward better beers, so I’m fine with it.”

Beer News

Goose Island

Goose Island at Chicago Craft Beer Week 2014

When Goose Island opened the doors to its Clybourn brewpub more than 25 years ago, “craft beer” was barely in Chicago’s collective vocabulary. Now, new breweries open here each year, and we can brag that our favorite beers are made just a neighborhood away. All of that hometown pride culminates annually in Chicago Craft Beer Week—actually 11 days of $4 pint specials, tap takeovers and bar crawls—which runs May 15-25. So, how to prepare yourself? First, you should start carrying around a giant bottle of water … right now. This will serve you well. Next, download the official Chicago Craft Beer Week app so you have access to the full schedule, searchable by neighborhood, on your phone. But because sorting through 430-plus beer events can make your eyes glaze over, we’ve chosen a few can’t-miss parties for every type of drinker.

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Great Basin

Great Basin Brewing Company Takes Icky to California and Oregon

A Sparks craft brewery is taking some of their flagship beers on the road, thanks to some big upgrades. Last year, the locally-owned Great Basin Brewing Co. installed a new bottling system. Now they are churning out ten 6-packs every minute. They are also the home to the silver state’s three largest fermentation tanks.

That extra muscle has made it possible to send some local favorites, like “Icky,” over the state line. Great Basin says they are now equipped to ship more than 5 million bottles every year, to stores and restaurants in California and Oregon.

The company’s beers are already available at more than 400 venues across Nevada. Great Basin owner and brew-master Tom Young calls the new expansion part of his “lifelong dream.”

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Wilmington North Carolina Remains Potential Site for Stone Brewing

The Wilmington area doesn’t have the kind of building that Stone Brewing Co. wants for its new East Coast operations, but that doesn’t mean the Port City is out of the running for the highly sought facility.

At least in Wilmington’s case, the company will look at vacant land instead, Scott Satterfield, CEO of Wilmington Business Development, said Monday.

WBD late last week responded to the Escondido-Calif.-based company’s request for proposals for the facility, proposing the brewer could build on an approximately 20-acre site at Wilmington International Airport, Satterfield said.

Stone Brewing has been pretty specific in what it is looking for, Satterfield said. It seeks an approximately 130,000-square-foot building expandable to 220,000 square feet with 33-foot minimum ceilings and within a mile of major expressways, among other factors, he said.

They won’t just be brewing beer at their facility. There will be a hospitality facility, a retail store, dining options, indoor and outdoor bars and service areas, Satterfield said. No building in the Wilmington area fit the company’s criteria, he said. “However, officials at WBD were in contact with the company, and the company has agreed it’s acceptable to them to send a site proposal versus a building,” Satterfield said.

“The goal is to make the cut,” Satterfield said. Then the area might have the opportunity to lure the company here. “There may be other potential sites that could work but goal one will be to get them to consider the region first.”

The ILM site meets the brewer’s requirements for electric, gas, water and sewer and its location is near downtown but also near Interstates 40 and 140, Satterfield pointed out. Stone Brewing says it is the 10th largest craft brewery in the U.S. It employs 900 and produced 213,000 barrels of beer and topped $135 million in revenues in 2013. “Expenditures are projected to exceed $20 million in the initial phase of the business plan” for the Eastern facility, the company said in its request for proposals.

Production is projected to be more than 120,000 barrels in the first phase and eventually grow to nearly 500,000, it said. “This isn’t the first brewery that we have tried to attract here,” Satterfield said. “Beer is the new wine.”

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North Carolina Trying to Brew Partnership with Stone Brewing Co.

North Carolina is making a push to land another major craft brewer.

Two years after scoring a double victory with the recruitment of New Belgium and Sierra Nevada, North Carolina is among several states now trying to lure Stone Brewing Co. of Southern California, one of the 10 largest craft breweries in the country.

The Escondido, Calif.-based company, founded in 1996, has made public a Request for Proposal in its plans to find a site for an East Coast expansion facility somewhere east of the Mississippi.

The RFP, open to all communities throughout the Eastern U.S., expires Saturday and has generated responses from numerous cities ranging from Facebook page campaigns to songs written about why Stone should choose their particular area.

Andrew Tate, president and CEO of the Henderson County Partnership for Economic Development, said that while his office wouldn’t confirm whether it has submitted a response to Stone because it does not comment on active projects, “We take every opportunity to compete for businesses that complement the area very seriously, and we take our responsibility to respond very seriously.”
According to a report Wednesday by the beer website Brewbound, an economic development representative with North Carolina’s Department of Commerce is spearheading an effort to develop a state response to Stone’s RFP, in addition to those generated by individual cities. The representative, Dallas Hardenbrook, wouldn’t reveal which specific areas of the state might be included in a proposal to Stone, the article states, but he is working closely with several cities that have expressed interest and might be a good fit.

Hardenbrook added that the presence of other big-name craft breweries such as Sierra Nevada, Oskar Blues and New Belgium should act as attraction rather than a deterrent for Stone, but the company may not wish to locate “immediately adjacent” to other breweries.

The craft-beer renaissance in North Carolina is no secret to Stone’s leaders. From 2009 to 2011, three N.C. establishments were named Stone’s “Most Arrogant Bar” in a nationwide competition to find the bar that can sell the most pints of Stone’s Arrogant Bastard Ale, Double Bastard Ale and Oaked Arrogant Bastard Ale, earning special visits from company co-founder and CEO Greg Koch. Barley’s Taproom in nearby Greenville, S.C., has won the past two years.

John Lyda, president of the Asheville Brewers Alliance, said he thinks Stone likely is not looking at Western North Carolina to expand because of the presence of the region’s big three.

“If I was a large brewery I probably wouldn’t want to do it,” said Lyda, vice president and brewmaster at Highland Brewing in Asheville. “I don’t know. Greg (Koch) kind of makes some surprising decisions sometimes, so I don’t know.”

Stone spokeswoman Sabrina Lopiccolo said Thursday the most important factor for the brewery in choosing a location is that it meets the project’s site requirements. The presence of other major breweries “doesn’t really weigh either way” in the decision-making.
“Any cities east of the Mississippi are being considered at this point,” she said. “Our deadline is March 15, and at that time we will look at all the proposals, but we don’t have any preference at this point — it’s all fair game.”

Stone plans to invest $60 million and employ nearly 375 workers during the full five-year build-out, which will include a production brewery, restaurant and distribution center.

Among the site requirements are a 130,000-square-foot facility, with room to expand to 220,000 square feet, and a municipal wastewater facility capable of processing 100,000 gallons a day from the brewery. The site would also need to be within 1 mile of a major freeway/access routes.

Requirements for a proposal response also include a description of why Stone would be “a good fit for this community and this location.”

Places such as Myrtle Beach, S.C., and Blount County in eastern Tennessee have teamed up with marketing companies in their creative attempts to lure Stone. Community leaders in Myrtle Beach established a Facebook page called “Stone Brewed on the Beach,” which had more than 2,100 Likes as of Thursday, while Blount County — a finalist in the recruitment of Sierra Nevada — hired a musician to write two songs for its pitch to Stone.

Tate joked that “we don’t have a qualified vocalist in the office” for such an effort, though he said the Henderson County group wouldn’t be opposed to engaging companies at such a creative level.

In the end, however, “What I can say is that it’s a very expensive proposition on a project that is still in the very early stages of even collecting information. I think that songs sound like fun, Facebook pages do, too, but they won’t make up for a lack of substance or infrastructure, culture. They can’t outweigh the critical elements and the required elements of the project.”

Beer News

The great cities and their breweries