News Column

Downeast Beer Industry Brews Double-digit Growth

May 24, 2013
beer

It's not unusual for people who enjoy the taste of beer to envy those who make their living brewing malt-flavored alcoholic beverages.

Based on the overall growth of Maine breweries last year, even people who don't enjoy the flavor of beer might wish they were in the Maine beer business.

According to data recently obtained from the Maine Department of Public Safety's Liquor Licensing and Inspection Unit, output by Maine breweries in 2012 increased by more than 20 percent for the third year in a row. Over a three-year period, from the end of 2009 through 2012, beer production by Maine breweries has increased from 4.1 million gallons to 7.9 million, or by more than 90 percent.

"It's definitely growing like crazy," Dee Dee Germain of Portland's Allagash Brewing Company said Monday. "It's kind of a thing here [in Maine]."

In 2010, the amount of beer produced by Maine breweries increased by 20 percent, from 4.1 million gallons the previous year to nearly 5 million. The following year, statewide beer production increased 30 percent, from 4.97 million gallons to nearly 6.5 million.

In 2012, all but one of the 13 largest breweries in the state saw their production rates increase from the prior year.

Because Maine is a small state, Germain said, the growth in craft beer brewing is relatively more significant in Maine which, with 33 breweries, ranks fifth in the country with one brewery for every 40,000 residents, according to the national Brewers Association. All, or nearly all of the state's breweries, are members of the Maine Brewers' Guild, she added.

"I think it's great," Germain said of the growth, camaraderie and competition in the state's craft beer industry. "It makes all of us want to make better beer."

Shipyard, the largest brewer in Maine, produced nearly 5 million gallons of beer in Maine in 2012, an increase of about 900,000 gallons or 22 percent over the previous year. Allagash, Maine's second-largest brewer, increased production by 36 percent in 2012 to 1.4 million gallons.

The large brewer that did not increase production in 2012, Gritty McDuff's, basically held even at around 315,000 gallons total at its three locations with an overall decrease of less than 1 percent.

Eight other breweries in Maine, with 2012 production levels ranging from 26,000 gallons to 202,000 gallons, had output increases between 16 percent and 63 percent. Those breweries are Atlantic Brewing in Bar Harbor, Baxter Brewing in Lewiston, Island Brewing of Saco, Kennebunkport Brewing, Maine Beer Co. in Freeport, Peak Organic in Portland, Sebago Brewing in Gorham, and Sea Dog, which has locations in Bangor, South Portland and Topsham.

These increases stand in crisp contrast to Maine sales of non-Maine beers. Of the 10 out-of-state brewers that had the highest sales in Maine last year, only two -- Boston Beer Co. and Canada's Labatt -- had double-digit percentage increases. Boston Beer pumped up its Maine sales by 43 percent, from 1.3 million to 1.9 million, while Labatt boosted its Maine sales by 12 percent, growing from 213,000 to 239,000.

Anheuser Busch, the largest brewer in the country, sold just more than 16 million gallons of beer in Maine last year, an increase of only 1.3 percent. Sales of Miller and Coors both decreased in Maine while other nationally sold brands such as Pabst or Heineken had single-digit increases.

"They've seen their sales decline [nationally] as ours have increased," David Carlson, owner of Marshall Wharf Brewing in Belfast, said Tuesday.

According to Brewers Association, a national craft beer industry group, domestic sales of American-made craft beers increased from around 11.5 million barrels (or about 355 million gallons) in 2011 to about 13.2 million barrels (or 410 million gallons) in 2012. The association defines craft brewers as companies that make fewer than 6 million barrels (186 million gallons) each year, have less than a 25 percent ownership stake by any non-craft beer alcoholic beverage company, and that brew mostly traditional-style beers.

Revenue figures and other specific economic information about Maine breweries are not publicly available. According to state officials, governmental census and employment data likely classify some breweries that have their own pubs as restaurants, rather than as breweries, so public economic data attributed specifically to Maine's brewing industry are believed to be inaccurately low.

According to Beer Institute, another beer trade group, a 2012 industry survey indicates that beer brewing in Maine (not including retail or distribution) directly supports 390 jobs in the state and pays out more than $12 million in annual wages. When beer distribution and retail jobs are added to the picture, the beer industry directly supports 5,800 jobs and generates more than $160 million in wages in Maine each year, the survey indicates.

But how many of those people are staff employees at breweries or brewpubs in Maine is not clear. Shipyard alone -- which owns restaurants, brewpubs and other Maine beer brands -- employs hundreds of people, company officials have said. A significant number of restaurants in Maine do not operate year-round, however, which often causes beer production and staffing levels to fluctuate widely during each year as throngs of tourists come and go.

Still, on a year-to-year basis, the numbers have been going up. Shipyard continues to expand in and out of Maine. Baxter Brewing, which did not brew any beer prior to 2011, has indicated it plans for more growth through 2013.

Allagash also is physically expanding and hiring more employees this year. Germain, communications and marketing manager for the brewing company, said Allagash is almost finished with a project that will double its brewing and retail spaces, each by about 6,000 square feet, and expects to add 15 positions this year for a total staff of about 70 employees.

Germain said many craft brewers across the country are enjoying growth rates similar to the 36 percent production increase at Allagash.

Germain said Allagash's Belgian-style ales sell well in New England but also have followings in California and in the Chicago area. She gave partial credit to the local foods movement for raising the popularity of smaller brewers but she said the notion that a craft beer comes from a specific place, even if it is not local, often is a key selling point for many consumers.

For example, Whole Foods supermarkets in Maine or Texas don't just sell products made in those states, she said. What the supermarket chain specializes in, she said, is providing small-scale producers with a wide base of customers who have an interest in knowing where their groceries come from and how they were produced.

And supermarket industry surveys show that beer is one of the last things the consumers will choose to spend less on when the economy is not doing great, Germain added. Someone worried about their expenses is more likely to buy a cheaper car than to walk out of a grocery store without the beer they want, she said.

"It's not a lot of money," for a six-pack of craft-brewed beer, she said.

Marshall Wharf Brewing, located on the Belfast waterfront, is relatively small compared to other Maine breweries -- it made less than 15,000 gallons in 2012 -- but it increased its production total from 2011 by 27 percent.

Carlson, who founded Marshall Wharf in 2007, said Tuesday that the recent growth of the industry in Maine is due in large part to the early success of the state's larger craft brewers. Geary's, founded in the mid-1980s and followed by Shipyard in 1992 and then Allagash a few years later, all helped establish Maine as a place where high-quality, hand-crafted ales were made, he said.

"We have a great reputation," Carlson said. "We're really blessed now with some good to great breweries."

According to Carlson, the national craft beer explosion in the late 1980s and early 1990s produced some not-so-great, short-lived beers as customers and investors rushed into the expanding market. Some consumers literally were left with a bad taste in their mouths, but the more recent growth in the industry is different, he added. Craft brewers now have more experience, even those starting new breweries, and customers do, too.

"I don't see that happening now," Carlson said about inconsistent quality among new craft beers. "It's a much more informed beer-buying public."

Carlson said he just doubled his workforce this past week by hiring two new employees. He envisions Marshall Wharf expanding more significantly in the future, he added, but over the next few years, he wants to concentrate on making the most of his existing production line.

With the right people, and maybe by brewing more than five days a week, he thinks he could more than double his 2012 output to around 35,000 gallons a year without having to expand his brewhouse.

"There's definitely room for more breweries [in Maine]," Carlson said.

Oxbow Brewing in Newcastle is relatively small compared to better-known Maine breweries -- it brewed just under 22,000 gallons in 2012 -- but its growth rate last year outpaced all others. Production increased by more than 400 percent from 2011, the company's first year of operation, when it brewed slightly more than 4,000 gallons of beer.

Tim Adams, co-founder and head brewer at Oxbow, said Thursday that the brewery plans to keep growing, though not to the size that Shipyard has achieved. He said the brewery has a general production goal of around 30,000 gallons in 2013, with similar year-to-year growth in the next few years.

Adams said Oxbow exclusively uses saison yeast to brew Belgian farmhouse-style ales. It sells some of its beers on site in bottles and growlers, but everything it distributes off site is in kegs. Oxbow has focused on selling to restaurants, where it hopes its ales can be an integral part of the dining experience as much as any wine, he said.

As Maine's restaurant scene has achieved national recognition for its quality, Adams said, Maine breweries are following suit.

"We love Maine," he said of his Oxbow colleagues. "It's an incredibly exciting time to be part of the Maine beer scene."

___

(c)2013 the Bangor Daily News (Bangor, Maine)

Visit the Bangor Daily News (Bangor, Maine) at www.bangordailynews.com

Distributed by MCT Information Services




For more stories covering business, please see HispanicBusiness' Business Channel



Source: Copyright Bangor Daily News (ME) 2013


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters