Brewing, Cideries & Spirits  July 5, 2013

New beermakers ‘elevate the game’

Dale Katechis watches the current wave of new craft breweries flooding the area and acknowledges that there’s probably a tipping point someday where not everyone will be able to make it.

As someone who remembers well the startup days of regularly pawning his truck to make payroll, the founder of Oskar Blues Brewery LLC knows you don’t just open the doors and magically start printing money.

But in an industry where the biggest problem seems to be that breweries can’t churn out beer fast enough to meet demand, the threat of oversaturation barely resonates.

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In Boulder and Broomfield counties combined, there are no fewer than 30 craft breweries and brewpubs operating. Five of those have opened since the start of the year, including three in late June. At least five more are on the way before the year is finished.

As with just about everyone you talk to in the industry locally, all Katechis really sees is opportunity – for the new guys and established breweries alike.

“Craft beer is on fire, and it’s great to see a lot of people getting involved at a grassroots level,´ said Katechis, who projects Longmont-based Oskar Blues’ revenues to hit about $50 million this year. “I think it’s going to elevate the game and make the pie bigger.”

According to the Boulder-based Brewers Association’s statistics, the number of craft breweries in the United States jumped from 1,970 in 2011 to 2,347 in 2012. While 409 opened, only 43 closed. Sales by volume grew by 15 percent. And yet the craft beer share of the market is roughly only 7 percent by volume of all beer sales, which is why so many are optimistic about the room for continued growth.

With Boulder Beer Co. the local pioneer, opening in 1979, the 1990s saw brewers such as Avery, Left Hand, Oskar Blues and Twisted Pine become major players as well. But the beer boom has gained steam recently, with at least 17 breweries and brewpubs opening their doors in Boulder and Broomfield counties during the past five years.

“Really, they’re happening so fast it’s hard to keep track of,” Brewers Association director Paul Gatza said of the national growth.


Summer of suds

This year has seen J Wells Brewing and Fate Brewing open in Boulder in January and February. Kettle and Stone Brewing opened on June 26 in Gunbarrel. Twelve Degree Brewing had its grand opening in downtown Louisville on June 29. Front Range Brewing had a soft opening in Lafayette in late June as well. That’s not to mention Crystal Springs Brewing (Louisville) or Bru Handbuilt Ales (Boulder), two licensed breweries that had been distributing out of garage operations and have moved into new facilities.

Many are going with the concept of neighborhood brewery, smaller operations with a tasting room and maybe some food trucks parking outside.

“I think most of them are like me,´ said Tom Horst, who expects to open his Crystal Springs location in the Colorado Tech Center within the next month. “We aren’t looking to become the next New Belgium or Budweiser or anything like that.”

While many of the new breweries are being opened by longtime home brewers, a good number also are being manned by folks who are big names in the industry or were groomed at some of those earlier breweries. Kettle and Stone co-owner Eric Huber cut his brewing teeth at Mountain Sun and Oskar Blues. Post Brewing, slated to open by the end of the year in Lafayette, has hired Bryan Selders, who made a name for himself as head brewer at Dog Fish Head Brewery in Delaware and as a co-star on the Discovery Channel’s former show “Brew Masters.” Two of the three co-owners opening Sanitas Brewing later this summer, Michael Mesmic and Chris Coyne, spent several years brewing at Boulder Beer.

Plenty see the value in heading east in a sort of beer gold rush.


Untapped market

While Boulder and Longmont have seen their share of success stories, Louisville, Lafayette and Erie had not a single craft brewery between them when Gravity opened in Louisville last year.

Louisville has since added Twelve Degree and Crystal Springs. Lafayette has gotten Front Range, with Post on the way and Odd13 Brewing gunning to open by early August. In Erie, Industrial Revolution Brewing is under construction downtown, right around the corner from where Frederick-based Echo Brewing Cask and Barrel plans to open a second location in the old fire station on Briggs Street.

“It’s just an untapped market,´ said Katy Dukes, who co-owns Echo with her sister, Melissa Richards, and two brothers, Dennis and Daniel Richards.


Not all frothy fun

Getting up and running comes with plenty of pitfalls.

Ryan Scott, a home brewer opening Odd13 with his wife, Kristin, said they’re looking at close to $270,000 in startup costs. While Ryan is head brewer, the couple also has hired a part-time assistant brewer from another local brewery to help out.

“That’s going to make it a lot more feasible for me to keep my job, which makes this a lot less risky for us,´ said Scott, a software engineer at Rally Software.

Plenty of breweries in the planning stages don’t make it. Odd13’s space at 301 Simpson in Lafayette had seen 40 Degrees North Brewing sign a letter of intent for a lease last year before scrapping plans.

While his original concept of brewing Belgian beer and serving Belgian frites has remained, Twelve Degree’s Jon Howland hit plenty of bumps along the way, including trademark issues with his original brewery name and having to walk away from his first planned location. In all, it took about two and a half years to line up a location and funding, then build up to the June 29 grand opening.

“It’s definitely been a process,” Howland said. “It’s been a long time coming.”


Beer bonanza

Of course, the rewards of persevering through to opening day can be high.

For one thing, you’re instantly part of a fraternity where craft brewers look out for each other, knowing that if just one brewery is making bad or inconsistent beer it can hurt the industry as a whole as it tries to gain market share. Established brewers such as Oskar Blues and Avery often offer to help, lending their testing labs to smaller brewers, offering advice on distribution channels and even off-loading surplus hops at discounted prices to a brewer in a pinch.

Adam Avery started Avery Brewing with his father in 1993 with about $90,000. He said breweries such as New Belgium and Sierra Nevada helped Avery immensely in the early days, and he’s happy to pay it forward. Avery has plans to break ground on a new $26 million facility in Gunbarrel by the end of the year.

“The camaraderie in our industry is, I think, unlike any other industry,” Avery said.
Breweries that open their doors also have that seemingly insatiable thirst for their product. Just five years after opening, Upslope Brewing in Boulder this year spent about $1.5 million to open a second location.

Seeing some breweries go small to start only to grow out of their brewing capacity in a year or two has led some new operations to open with that growth in mind, banking on the future. Sanitas is opening a 15,000-square-foot facility with a 15-barrel brewhouse.

“We’re not really using a lot of it to start,” Sanitas co-owner Zach Nichols said. “But with all of the (industry) growth, we really wanted to set ourselves up where we could grow into that space.”

Like Oskar Blues’ Katechis, Nichols said he sees a shakeout at some point.

“But,” he added, “I don’t think it’s anywhere in the near future.”

Dale Katechis watches the current wave of new craft breweries flooding the area and acknowledges that there’s probably a tipping point someday where not everyone will be able to make it.

As someone who remembers well the startup days of regularly pawning his truck to make payroll, the founder of Oskar Blues Brewery LLC knows you don’t just open the doors and magically start printing money.

But in an industry where the biggest problem seems to be that breweries can’t churn out beer fast enough to meet demand, the threat of oversaturation barely resonates.

In Boulder and Broomfield counties combined, there are no…

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