Holy Craft!

How brewpubs and tasting rooms are redefining the beer market, and what we can learn from their success.

By  Melissa Vonder Haar, Tobacco Editor
Angel Abcede, Senior Editor/Content Development Coordinator

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Craft Appeal

According to the Brewers Association, the craft segment is broken down into three technical categories: Microbreweries that produce 15,000 barrels a year or less, regional breweries that produce 15,000 to 6 million barrels a year, and the previously described brewpubs. These definitions can get confusing, especially as larger brewers invest in unofficial brewpubs (at least by the Brewers Association’s definition) or brewpubs increase capacity, technically becoming microbreweries or even regional breweries.

Dogfish Head Brewery is just one of many examples. Founded in 1995 as Dogfish Head Brewings and Eats in Rehoboth Beach, Del., it was the state’s very first brewpub and had the capacity to brew only 12 gallons of beer at a time. The company has now grown into one of the most popular regional breweries in the country, with a 75,000-gallon-a-year capacity and three more beer-centered restaurants (branded as Dogfish Head Alehouses) located in neighboring states.

“The demand for products these brewpubs generate via on-premise brand building should only strengthen off-premise sales for craft in general, with the rise of beer tourism and the locavore movement,” Litz says.

“I see great things from craft brewers and brewpubs,” adds Bump Williams, president of Stratford, Conn.-based Bump Williams Consulting Co., a frequent adviser to craft brewers. “They have worked hard to bring new beer drinkers into their segment, they have actually increased the frequency at which people sample craft beer, and they have increased the volume per shopping occasion for craft beer. These three things are the only tried-and-true way to build a business.”

Perhaps out of a desire to bring new drinkers into the segment, craft brewers have demonstrated an ability to set aside rivalries and work toward the common goal of providing beer drinkers with a bevy of high-quality options. This kind of team spirit has allowed for an impressive number of operators to thrive in brewery-dense states such as Colorado, which The Beer Institute ranked No. 1 in terms of gross beer production and comes in fifth in terms of breweries-per-capita, according to the Brewers Association.

“It’s a competitive environment, but also a very collaborative environment, especially here in Colorado,” says Steve Kaczeus, who opened Bootstrap Brewing of Niwot, Colo., in June 2012. “If I’m low on hops or grains, I know I can call any number of brewers in the area and they’re happy to help me out. Likewise, when we started bottling, an avid brewer let us use his labeling machine when he heard we were doing it by hand.”

Kapraun of Half Acre agreed: “It’s not super-competitive; all the breweries get along. The more people like good beer, the more we’re selling out of what we make.”

A Fresh Experience

While companies such as Bootstrap have benefited from operating in a brewery-heavy location, others are finding success by bringing the craft movement to uncharted territories. When Half Acre’s founder, Gabriel Magliaro, moved from Colorado’s beer mecca to Chicago, he quickly took note of the lack of local beer.

“There was only Goose Island within the city and Two Brothers out in the suburbs, but almost no smaller craft breweries in the city,” says Kapraun. “Basically, it was an empty market, and this is one of the biggest cities in the country.”

Started out of a spare bedroom in 2006, Half Acre now boasts a retail store and taproom, producing nearly 15,000 barrels per year.

“It’s far exceeded expectations,” Kapraun says, pointing out that he expected to take another five years to hit the 15,000 mark. “It grew more rapidly than we thought.”

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