Beer brands continue to grow by creating destination breweries, bars around the U.S.

You can’t always win on the shelf. When I walk into my local grocery store’s craft beer wing (it’s big enough to deserve that noun), there are exactly one zillion choices on the shelf and in the coolers. It’s even harder to get into bar taps — well, unless you’re running those taps. Hmmm … that’s an interesting idea: satellite stores, breweries or bars.

It’s an idea that’s been gaining momentum as it appears competition for national distribution is hitting a chokepoint for the beer industry, but there still is growth potential by expanding your portfolio and profits into regionalized pockets with a local presence. Last Wednesday, less than one year after opening the doors to its second brewery in Virginia Beach, Va., Green Flash Brewing Co. announced it was expanding into the Midwest and opening a third location in Lincoln, Neb. The brewery purchased a 10,000-square-foot production facility and tasting room with a restaurant in the Nebraska state capital. I quote CBB scribe Chris Crowell:

The move reveals Green Flash’s long-term strategy to increase their strength as a national brand by establishing regional footholds in key cities across the United States.

“We hope to become a local favorite in our new Nebraska home,” stated Mike Hinkley, co-founder of Green Flash Brewing Co. “And we’re excited to be closer to our fans across the Midwest. We’ll be sending them fresher Green Flash beer and hope they will visit us in Lincoln.”

Franchising and/or creating a chain is certainly not a new strategy — even in beer. Gordon Biersch has more than 30 brewery restaurants locations across America. Iron Hill Brewery and Restaurant has decreed its 14th location will open in the Summer of 2018 in Rehoboth Beach, Delaware. While those examples feel more like eateries than drinkeries, breweries of all sizes are jumping at localized, destination opportunities, and they’re not sticking in the same state. They’re traveling across the continent.

The Orange County, Calif.-based The Bruery announced last week that it will be opening up an East Coast beer destination in Washington, D.C. From The Bruery blog:

This fall, we’re branching out and bringing our beer directly to the East Coast by opening a premier retail store that’s within driving distance for thousands of fans of independent craft beer. Located in the heart of one of Washington, D.C.’s most exciting urban villages, The Bruery Store at Union Market District will provide easy access for Society members to pickup online purchases, along with onsite bottle and can sales, merchandise, gifts and potentially eight rotating taps for growler/crowler fills for Society members and the general public.

Instead of just creating replicant restaurant-style brewhouses in their home region, craft brands are seeing opportunities to create pockets of business across the country in areas where they see opportunities, softer markets or bigger, more sophisticated beer drinking populations. They’re also not building carbon copy locations in an Applebee’s format. They’re revamping old facilities and bringing their unique culture and character while representing the region in both beer selection and environmental style. Stone Brewing Co. is one of the best at this.

Stone continues to construct craft destinations to promote and brew its famous California-style beer brands around the world, yet each facility really captures the experience of both Stone and the region. It opened a magnificent bar and brewery in Berlin, Germany, with the most taps in Europe. It opened up a good portion of its East Coast operations in Richmond, Va., last year, including a new brewhouse, retail store, tasting room and its East Coast distribution center, but it’s also currently constructing a restaurant and beer destination in Richmond that will be located along the James River in a revamped version of the Terminal Warehouse building (watch a video of it here). Stone will even be adding another location — in wine country of all places — and it’s chosen to rework a 10,000-square-foot building in downtown Napa, bringing its bold and flavorful craft beer to locals with local flair.

Ballast Point sells for $1 billion, Anchor Brewing sells for $85 million. What’s the big difference?

Of course, Anheuser-Busch InBev is way ahead of the game on this. For years AB InBev has been expanding into regional markets big time via destination breweries with craft brands it already owns or brands it’s creating from scratch. Here’s just a rundown of a few:

• Since Golden Roads’ acquisition by AB InBev in 2015, LA’s biggest brewhouse has been aggressively expanding in distribution all over the United States and in brewing destinations all over California. The brewery is currently constructing a brewing outpost in Anaheim, has already secured space in LA’s Grand Central Market and even opened a restaurant at LAX (its Point the Way Café). Golden Road has also announced new destinations in both Sacramento (last year) and in Oakland.
• Beer Voltron is opening a chain of pubs based on its Goose Island Beer Co. brand in the Euro community. AB InBev is planning two Goose Island pubs in London, along with a third destination in its home country of Belgium.
• AB InBev announced it was adding another brand to its High-End portfolio with the launch of Veza Sur Brewing Co. in Miami this summer. The beverage rollup has turned to two of its properties, Colombia’s Bogota Beer Co. and Oregon’s 10 Barrel Brewing, to make it all happen.

Of course, there are many variables on how, when and where to expand your brewing business with new locations, but maybe instead of thinking local, consider an untapped market somewhere other than your home state or city. When Cleveland brand Fathead’s Brewery decided to open up its new brewing destination, it choose Portland. Why would Fathead’s open a spot in one of the most competitive beer markets in America? Hops for one thing. From an article on All About Beer with Owner and Brewmaster Matt Cole:

My best friend who helped me in Ohio was also general contractor for the brewery. He took a job with a restaurant group in Portland, and his group approached us about bringing a brewery out there. I fell in love with the city instantly. It’s a very educated consumer and an incredibly beer-savvy town. I love the food scene there, and I have only scratched the surface.

It puts us also in proximity to our hop growers and having better relationships with our hop growers. I will go now two to three times leading up to and during the hop harvest so I can see the harvest taking shape and know what’s going on. I think our beers can hold their own out there, and hopefully consumers will continue to feel the same in a very demanding market. It’s started out very well, and very welcoming.

And in an exclusive feature we have coming up soon, Cole explains that they approached that Portland brewpub how they normally would — with killer BBQ (sorely lacking in Portland) and hop-forward beers — but by also allowing that location to adapt and develop its own beers to meet the unique local demand. Again — not a cookie-cutter location. Cole says the Portland spot is doing well, despite having a lot of naysayers at the time (“People thought we were crazy,” and the brewery is very close to opening a third brewpub in Ohio and another totally new destination in North Carolina in 2018. Be on the look out for our entire Fat Head’s expansion feature in the coming weeks.