Brewers say state not saturated….yet

BOULDER – When Davin Helden was writing the business plan for Liquid Mechanics Brewing Co., the city of Lafayette had no craft breweries.

By the time he and his co-founders signed a lease, the city’s first brewery had opened. And by the time Liquid Mechanics opened this summer, it was merely the fourth in town.

So far, business has been good. But he also feels like maybe he got his foot in the door just in the nick of time.

“If I were writing the business plan now, I probably wouldn’t choose Lafayette,” Helden said Tuesday morning. “I’d choose someplace else. Would I still choose Colorado? Yes. I don’t think the state or the nation is saturated yet.”

Helden was speaking at BizWest’s CEO Roundtable gathering of local craft beer executives sponsored by law firm Berg Hill Greenleaf and Ruscitti LLP and the accounting firm of EKS&H.

Like Helden, many brewers believe that there are still plenty of opportunities to get in the craft beer game along Colorado’s Front Range even if some specific communities might seem to be overflowing with beer-makers. The state boasts more than 200 craft breweries, including more than 30 in Boulder County.

“I don’t think we’re in danger of saturation provided that the brewers coming into the business have a quality product,” Boulder Beer Co. president Jeff Brown said. “There’s a lot of room for growth. But it’s going to ultimately be the consumer who decides. If the product is good, the market is there.”

Brown gave a nod to the big boys, noting that Colorado is an ideal place to break into the business thanks in part to Coors Brewing Co. growing up in the state and having a favorable influence on brewing and beer regulations in Colorado.

“As the craft breweries came on the scene there weren’t a lot of roadblocks to being in the beer business,” said Brown, also noting the help Coors gave to Boulder Beer early on with equipment needs and by serving as Boulder Beer’s first distributor.

The rules in many other states are not as favorable, with greater restrictions on who can distribute beer and a variety of different state excise taxes that must be accounted for when Colorado’s growing breweries decide to grow beyond the state’s borders.

“It’s a great state to incubate small breweries but then there’s a big learning curve once you cross the state lines,” said Henry Wood, head of sales and marketing at Upslope Brewing Co.

Still, there are some new brewers who are being cautious. While some are opening with large brewing and packaging systems intent on cranking up production from the start, others, like Very Nice Brewing in Nederland, are taking a more conservative approach to building their brands through their taprooms and local restaurants before taking the plunge on major investments in large equipment and distribution.

“I’m curious to see how this works out for them,” Very Nice owner Jeffrey Green said of those starting off big. “But it seems like they’re taking an approach where lightning is going to have to strike, where somewhere the brand gets out there and takes off like wildfire. In this environment, with so many breweries opening up, it seems like it’s going to be a long hard slog to do that. I’m interested to see how that works.”

Participants in the CEO roundtable included: Davin Helden, co-owner, Liquid Mechanics Brewing; Matt Cutter, founder, Upslope Brewing; Leslie Kaczeus, co-owner, Bootstrap Brewing; Jeff Brown, president, Boulder Beer Co.; Henry Wood, head of sales and marketing, Upslope Brewing; Jeffrey Green, co-owner, Very Nice Brewing.

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