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VOL. 38 | NO. 30 | Friday, July 25, 2014

Going national can wait: Middle Tennessee's craft brewers find success, happiness in smaller batches

By Joe Morris

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The dream of going big – a second location, eventually a chain or even a franchise – is not uncommon among small business owners.

As Nashville’s craft brewing community continues to expand, garnering praise in local and national media for its varied and unique offerings, some purveyors admit to those thoughts.

The vision of custom-made neon signs dotting the windows of bars across the U.S., as well as the sides of trucks rumbling along to make deliveries to convenience stories, is tempting.

And while such whimsy can brighten the long slog of actually running a small business, the reality is that the local brewing community is likely to stay, well, local, for the foreseeable future.

Indeed, a slow, measured approach is the hallmark of the brewing community in Nashville and Middle Tennessee.

Longtime players such as Boscos Restaurant & Brewing Co. and Blackstone Brewing Company, which at 20 years old touts itself as Nashville’s oldest craft brewer, have watched newer players set up shop in recent years, but have been welcoming and even taken elder-statesmen status to help their newer brethren along.

A statewide organization, Tennessee Craft Brewers Guild, acts as a clearinghouse for those who are dealing with the rules and regulations that come with the trade, as well as a central point for sharing tips and tricks.

At the same time, vendors continue to pop up across the region, acting in concert with the brewers to introduce new and existing products to a growing and devoted fan base.

But even with all this publicity and heat, most – if not all – local brewers are not shy about putting the brakes on. In an industry where there’s lots of fermenting and compression, “explosion” is not a word to be taken lightly.

“It’s easy to be flexible in this business; it’s actually kind of your business model,” says Bailey Spaulding, CEO and brewmaster of Jackalope Brewing Co.

“Look at how Dogfish [Dogfish Head Craft Brewed Ales] started – they were one of the smallest commercial breweries in the country, and look at them now.

“But it’s more than numbers. We are focused on our vision as a company as far as quality, what beers we want to produce and what our culture is. We’ll see where that takes us.”

Mention craft beer in Nashville and you’ll likely hear about Yazoo Brewing Co., and with good reason. But even with its increasingly well-known name, it too is likely to stay regional vs. making a big national push, says Linus Hall, brewmaster.

Ryan Dankowski holds a Craft Brewed Bottle Shop glass along with Chip DeVier, proprietor of Craft Brewed Bottle Shop and Tasting Room in Nashville.

-- Michelle Morrow | Nashville Ledger

“This area is hot right now, and could sustain good growth for the foreseeable future,” Hall says. “I think the trend will be a market made up of lots of small breweries selling their beers in a two- or three-state region, with 15 to 20 bigger national craft breweries selling in most of the 50 states.”

Those that try to go big quickly will get squeezed from both sides, he predicts.

“I think the smaller brewers that are selling in a wide distribution area are going to be feeling the pressure from both the smaller local brewers, and the bigger national craft breweries,” he explains.

That’s why organic growth is the plan at Little Harpeth Brewing, says Michael Kwas, executive director.

Little Harpeth recently raised $290,000 in an equity offering to open a brewery and taproom in Nashville, and the company hopes to make a name for itself brewing lagers.

“We will expand through our own distribution and delivery plan, so we can keep a direct contact with our customers, especially in our home market of Nashville,” Kwas says.

“Once we feel like we have a strong presence in Davidson County, then we’ll be expanding outside that area, probably by going through a distributor into the surrounding counties.

“From there, maybe in a couple of years, we’ll head up towards Clarksville and down to Chattanooga, spreading to other towns and cities across Tennessee as we are able to do so.”

At Turtle Anarchy Brewing Co., owner Mark Kamp tells anyone who asks: “We’ll grow as much as we can, wherever we can, as long as we don’t sacrifice the product in any way.”

The brewery, which opened in Franklin July 5, 2012, is in the midst of a move to West Nashville. It currently distributes draft beers through Middle and East Tennessee and soon will be canning its beers.

“We’re growing in a way that makes sense for us, including the move to Davidson County, but we will always focus on the product first,” Kamp adds. “I think anyone in this business will tell you that’s the most important thing, but sometimes people grow too fast anyway, and they have problems.”

Getting any brewer to define “growth” is about as simple as sweet-talking him or her out of a beer recipe. Still, the general outlines tend to include a central brewery and local market saturation, followed by a second or expanded plant and then regional distribution.

But in a world where novelty is a hallmark, no two business plans are exactly alike.

Chris Hartland (left), who co-owns Cool Springs Brewery in Franklin with wife Jane, brews on location with the help of brewmaster Derrick Morse (right).

-- Michelle Morrow | Nashville Ledger

“We’re kind of unique,” says Derrick Morse, brewmaster at Cool Springs Brewery, just to prove the point.

“We’re a brew pub, and our location has been fine for our needs. We’ve decided to expand by building a second facility, which is a pretty standard business model for growing as a brewer.”

The production brewery may be in or near Franklin, but Davidson County also is a contender. Whatever the final location, Morse says the ground will be broken in 2015 if several different factors align.

“It really depends on the hops contract, because we sometimes have to contract for hops two and three years in advance. If we don’t have enough to brew, it doesn’t matter if we have a facility ready or not. You’re looking at $50,000 to $60,000 worth of hops, so we have to be very careful to contract for the right time frame.

“We can’t push the button on our canning line if we don’t have the hops available for us to make the beer,’’ Morse adds.

At 5 years old, Cool Springs Brewery came online when only a handful of brewers were around, and Morse says it’s been fascinating watching the interest, and the competition, grow.

“When we started, it was pretty much Blackstone’s, Boscos and Yazoo,” he says. “We took a different trajectory and have grown a lot slower than everyone else, but our goal was always to be a regional brewery that would service the entire Southeast. We don’t have any plans to go further than that, though.”

The brewery has begun to bottle its beer, and when its production brewery ramps up, will also go to market with cans and large-format bottles, Morse says. In the meantime, the company is working to heighten brand awareness in and around Nashville so that when it does hit the market with these products the audience will be ready.

“We kind of have the reputation of being a weird brewery, and so we hope to keep that going,” Morse notes. “We hope soon to be in Kentucky, Alabama and North Carolina as well as Tennessee, and eventually into Florida and perhaps up to Virginia.”

Regardless of plans to stay local or go regional, most brewers say they want to always have a place where they can try out new recipes on a willing public. Losing that interaction, they say, would be giving up one of the main reasons they went into brewing in the first place.

Craft Brewers Festival

Festivals celebrating craft beers and artisan spirits will help launch the opening weekend of the Tennessee State Fair, Sept. 5-6, part of the 2nd annual Taste of Tennessee celebration, at the state fairgrounds.

The Craft Brewers Festival, with more than 35 brewers from across the state participating, is Friday, Sept. 5, 7-11 p.m. with an early access pass available that lets festival-goers in the gates at 6 p.m.

On Saturday, the Artisan Distillers Festival will take center stage. Doors open at 6 p.m. for those with early access tickets, 7-11 p.m. for general admission.

Family Fest is 10 a.m.-3 p.m. with a variety of events including a flea market, a gentleman’s facial hair contest, food trucks, beer garden and the World Food Championships Regional Qualifier.

Ticket go on sale Friday, July 25, and include admission to the state fair. General tickets are $45 and $65 for early access passes. Only adults 21 years old or older can attend the beer and spirits events.

Information: www.tasteoftn.com.

For instance, Cool Springs Brewery will continue to operate and serve as a test kitchen of sorts for new recipes, and the ones that are popular will be produced and bottled at the new facility.

“We have the capability of being able to do market research where people pay us to do it,” says Morse with a laugh. “That’s what we really enjoy as brewers: Being able to stand next to the customer and watch their face when they test a brand-new beer you’ve never made before.

“We have a full restaurant and beers on tap, so it’s a fun environment for us to keep. No matter what we wind up doing, we believe we’ll maintain this kind of business.”

That kind of interaction is vital on the retail side as well, where vendors make recommendations just as any good wine steward would do in a fine restaurant, says Ryan Dankowski, manager of Craft Brewed Bottle Shop and Tasting Room.

“I could put anything on the shelves and hope it would sell, but everyone here is really passionate about craft beer, and that makes a difference,” Dankowski says.

“We are knowledgeable and energetic enough to greet people and make them feel at home, and then tell them why we like these beers. We make recommendations. These people brew beer all day long, but they have to know how to sell it, and so do we.

“We’re friends with most of the brewers around here, we do a lot of events with these guys, and we back what they are doing. That relationship between retailer and producer is as important as the one between the retailer or producer and the customer.”

Craft Brewed rotates casks daily, and so keeps up with the changes at each of the breweries it works with. Dankowski adds that for the most part, the Nashville brewing community continues to learn a lot from each other, and to be as collaborative as they are competitive. They also are cautious, so he too says that slow growth will be the rule, not the exception.

“It takes so long to raise the money, get everything going and raise that brand awareness,” he says. “They are having success, but if you get too big too fast there’s the worry about making beer that’s up to your standards.

“If you open in another city, or another state, and you’re not ready, then you have to pull beer from your home market to serve the new one. You don’t want to run out of liquid.”

That’s an important point to remember, says Little Harpeth’s Kwas, who only decided to launch his venture after ascertaining that the Nashville market was far from saturated.

“You’ve got Yazoo, in their 10th year of production, still finding a lot of available sales in Davidson County,” he says. “Even as the newest players in town, we feel like we are still selling more and more beer every weekend, and there are more and more opportunities every single week for us to put more taps in bars and restaurants.

“Nobody wants to grow too fast, especially with all the opportunities that are still available here. If you have beer sitting on a shelf far away from home, you don’t have anyone in that market pushing it and fighting for you.

“If you run short, you are in a pickle because you either have to back out of that new market you just entered, or betray your hometown customer. Neither is a good situation to be in.”

For that reason and many more, adds Spaulding, craft-beer aficionados will likely have to travel to Nashville, or at the very least the Southeast, to taste Jackalope’s wares.

“I don’t know that we’d want to be national,” she says. “I think we can maintain all the things that are important to us and become regional, but we would worry about sacrificing quality and identity.

“There are ways to do it, but I don’t know those yet. We’re still learning and becoming familiar with the pitfalls of growth and success, and as we go through them things often only get more complicated.

“I do see us getting into other states, though, and depending on how we manage that we’ll just have to wait and see what follows.”

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