The Beer Boom

November 2014

The Beer Boom: With 50 breweries counting, Western North Carolina's reputation as a craft beer mecca continues to grow, but for how long? Experts and brewers weigh in on the industry's future.

WRITER:

Emily Patrick

PHOTOGRAPHER:

Tim Robison

ILLUSTRATOR:

WNC Staff

Mike Rangel, owner of Asheville Brewing Co., remembers the day he expected his beer sales to shrink. “There was a time when Pisgah and Wedge [breweries] opened pretty close to each other,” Rangel recalls. “We figured we were going to lose half our beer-drinking public.”

Opening the brewery had been something of a “leap of faith,” says Rangel, whose main focus had been pizza. In 1998, he moved Asheville Pizza to its Merrimon Avenue location, which was already equipped with a brewery, so he figured he’d try beer. A decade later, when the number of breweries in Asheville doubled, he reassured himself the pizza shop would thrive even if the brewery faltered.

But it didn’t. “We noticed that our sales actually went up,” he says. “There was a moment when I realized that craft breweries operate a lot like really great restaurants; consumers try different things.” Today, with an expansion underway, Asheville Brewing Co. is poised to produce about 13,000 barrels per year. (That’s more than three million pints.)

Rangel has observed what economists call a cluster effect: The more breweries that open, the more momentum the industry harnesses, and the more craft beer sales rise overall. Since Highland Brewing opened as the Asheville area’s first brewery in 1994, the beer business has only grown. At first it built slowly, with the additions of Green Man Brewing in 1997 and Asheville Brewing in 1998; lately, it’s been growing at a breakneck pace, with the addition of 13 breweries in Buncombe County since 2011, for a grand total of 22 (including New Belgium, which is set to open in 2015). That growth is spreading across Western North Carolina. The region boasts about 50 breweries total, from tiny, remote Blind Squirrel Brewery in Plumtree to polished, high-output Oskar Blues in Brevard.

The enthusiasm about growth also comes with some disbelief, and Rangel isn’t the only one who’s been surprised by craft beer’s potential. The industry has survived its teenage years, but as it approaches legal drinking age, what kind of adult will it become? Are we dealing with a burnout or a young professional? In other words, are we facing an industry bubble? One that will eventually burst?

The Multi Pack
If you’re flummoxed by the changes in your college-age child, you call a therapist. If you’re astounded by developments in your local brewing industry, you call Bart Watson, economist for the Brewers Association, a not-for-profit trade organization that promotes independent breweries nationwide.

Like worried parents, callers ask if craft beer is out of control, growing unsustainably. Watson allays fears of an industry bubble in Asheville or anywhere else. “Nobody asked in the ’60s if Detroit had too many car firms, because it’s not like the people of Detroit were the only ones buying those cars,” he says. “Thinking about the number of breweries is less important than thinking about where they are competing and who they are selling to. There’s really a diversity of business models that we see.”

Ben Teague, vice president of economic development at the Asheville Area Chamber of Commerce, says skeptics usually assume beer made in Asheville will be sold strictly in Asheville. “People do wonder about the future of growth in the beer industry, but that’s typically people who think the customer base is in this area,” he says.

The Brewers Association divides craft breweries into three categories: regional, micro, and brewpub. “One reason we created those distinctions is that while, yes, they’re all small, independent breweries, they are focused on different market niches, and their business models are different,” Watson says.

In WNC, Highland, Sierra Nevada, and Oskar Blues are the only breweries that qualify as “regional,” with output of more than 15,000 barrels of beer per year, although that will change as Wicked Weed and Green Man up production and New Belgium opens.

Microbreweries and brewpubs aren’t as clearly defined, but the premise is that a microbrewery sells less than 15,000 barrels per year, with 75 percent or more sold off-site. A brewpub sells 25 percent or more of its beer on-site and often includes a restaurant component. Brewpubs focus on retail; microbreweries negotiate the wholesale market.

The categories are useful because they help distinguish sales strategies. “When you look at a lot of the new breweries that are opening, there are a high number of micro tasting rooms and brewpubs,” Watson says. “On some level, yes, they’re competing in the beer marketplace, but in a lot of ways, they’re competing more against bars and restaurants in the area.” Although the microbreweries and brewpubs aren’t competing with the major players Teague works with at the chamber, they do create a friendly environment for the larger enterprises. “Breweries tend to match their culture to the culture of a community, probably more than any industry I’ve ever seen,” says Teague. “The love and the culture of craft beer is a big reason why the major breweries end up locating here.”

Crafting Camaraderie
You might imagine that the regional breweries hire analysts to help them relocate. Not so, says Bill Manley, beer ambassador for Sierra Nevada. In fact, when the company decided to built its East Coast home base in Western North Carolina, it was mostly looking to fit in. “Generally, people who come to work at Sierra Nevada have common interests—they’re big into music and like the outdoors, things like that,” Manley says. “If we were going to build a second brewery, we wanted to offer something that was similar to the lifestyle and the culture people had gotten used to in Chico” (the California town where the company launched in 1976).

Surprisingly, the exploding microbrewery scene in Asheville was a potential deterrent to Sierra Nevada. As the second largest craft brewery in the country, the company didn’t want to overshadow the locals. “One of the things we were worried about was that Asheville does have such a robust brewing scene and has for a long time,” Manley says. “We wanted to make sure we weren’t going to come in and step on the breweries like the 800-pound gorilla in the room.”

The owner of Sierra Nevada, Ken Grossman, met with the Asheville Brewers Alliance before the company purchased its Mills River site. He ensured locals that the company wouldn’t steal the spotlight at events or attract all the attention of wholesalers. The Asheville brewers, who had heard of the crowds at Sierra Nevada’s California brewery, were not perturbed. Instead, they were so delighted that they invited Sierra Nevada to join the alliance, which it did.

Oscar Wong, owner of Highland Brewing, Asheville’s only homegrown regional brewery (for now, anyway), says the tide of tourists only rises as more breweries open—and those tourists become more diverse. “During the early years, Highland had visits of beer aficionados from nearby metropolitan areas such as Charlotte, Knoxville, and Greenville,” he says. “Over time, this trickle has turned into a flood of visitors, [resulting in] a much broader base of beer lovers.”

Manley hopes Sierra Nevada’s new facility here will accommodate 100,000 visitors per year, and he expects those craft beer enthusiasts will be thirsty for other Asheville brews as well.

Cheers to Our Beers
Sierra Nevada doesn’t actually know how much of its beer is sold in WNC because the company doesn’t track sales that specifically. But Manley and his team aren’t worried about local sales because they’re distributing beer out of Mills River to larger markets all across the East Coast.

But one subset of brewers knows exactly how much beer they sell in WNC because they don’t sell it anywhere else: brewpubs that sell on-site only. For many of these small outfits, distribution is the logical next step, but others have found there’s strength in staying small.

Innovation Brewery in Sylva produces beer exclusively for its railside taproom. “The thing we like about being a brewpub is it’s still very much a craft, and we get to make all different kinds of beers all the time,” says Nicole Dexter, who co-owns the business with her partner, Chip Owen. “Right now, we’re not laying down any plans for distribution.”

Dexter worked at Asheville Brewing Co. for several years before moving to Sylva to start her own venture. She still thinks there’s plenty of room for new players in Asheville; she left for personal reasons. “It wasn’t that we were trying to leave the saturation; we were trying to achieve the lifestyle that we wanted,” she says. “We both come from small towns, and we knew we wanted to settle down in one.”

Dexter wasn’t the only brewer searching for a smaller community, but what qualifies as small is a matter of perspective. Doug and Jess Reiser relocated from Seattle to Asheville to open their brewery, Burial Beer. “In Seattle, we knew we would never be a fixture of the community,” Doug says. “It was important to us to raise our family where the town around us cared about our brand and our company and our employees.”

Between brewing and raising two boys, Doug heads Reiser Legal, a beer industry law firm that represents a range of clients in Washington and Louisiana. So when he first came to Asheville, his experience told him the brewery market was far from saturated. The cluster of beer makers revealed opportunity, not competition. “We saw incredible value in the Asheville brand,” he says. “The name itself, Asheville or AVL, had become an international phenomenon, yet almost none of the Asheville breweries of the time were selling outside of the borders. Highland was the only one.”

For Burial, Asheville will serve as a springboard to the global marketplace. According to Doug, the brewery will always remain small, but an expansion is currently under way. Eventually the Reisers plan to bottle their brews and send them to specialty retailers throughout the country. “We want to get our brand far and wide,” he says. “It’s going to be very selective. It builds on our brand and our mystique.”

The Asheville point of origin is crucial to that approach, Doug explains: “A lot of us who are really forward thinking about the industry are saying, ‘As we continue to develop this Asheville brand, it continues to monetize our ability to go outside our area.’”

Joe Rowland, head of the Asheville Brewers Alliance and owner of Nantahala Brewing in Bryson City, shares that vision. Even in his small town, he sees beer tourism increasing every day, so he’s expanding his facility with a bottling line and an increase in production from 1,200 to 5,000 barrels. He hopes to start bottling later this year.

Rowland knows his success depends on the reputation of the regional industry. “We’re all interested in helping each other grow and helping each other make great beer,” he says. “The more people learn about this area, and the better beer we make collectively, the more traffic will come.” Each bottle of beer that sells outside of WNC is a drinkable invitation to try all the beer the area has to offer, whether that means visiting a taproom or a bottle shop. “More people are noticing [Asheville] outside of our market,” Rowland says. “They realize, ‘There’s a ton of breweries in that area. Sounds like a great way to spend some time, checking out all the breweries in Western North Carolina.’”

WNC Breweries

Boondocks Brewing Tap Room, West Jefferson, Ashe

Flat Top Brewing Company, Banner Elk, Avery

Beech Mountain Brewing Company, Beech Mountain, Avery

Blind Squirrel Brewery, Plumtree, Avery

Altamont Brewing Company Inc., Asheville, Buncombe

Asheville Brewing Company, Asheville, Buncombe

Biltmore Brewing Company (Cedric’s Tavern), Asheville, Buncombe

Burial Beer Company, Asheville, Buncombe

French Broad Brewery, Asheville, Buncombe

Green Man Brewing Company, Asheville, Buncombe

Highland Brewing Company, Asheville, Buncombe