Other Scenarios
Sometimes the path to success in a brewery’s home market means first making it far from home.
“New Hampshire is a difficult market to break into for a small brewer,” said Peter Egelston of Smuttynose Brewing in Portsmouth, NH, “because retail is dominated by three big supermarket chains.”
Instead of initially becoming known as the local brewer in Portsmouth, Egelston positioned Smuttynose as a New England regional brewer, concentrating his “local market” efforts in all of New Hampshire, southern Maine, eastern Massachusetts, and parts of Rhode Island and Connecticut. Success in those markets caused local wholesalers and grocers to see Smuttynose in a different light and to begin requesting beer, such as Shoal’s Pale Ale.
“We had to circle back to grow in our immediate local market,” Egelston said. “It’s the opposite of what you would normally expect.”
Imagine starting a microbrewery in Chico, CA—home of Sierra Nevada Brewing, an incredibly well established and successful brewery with annual sales of almost 600,000 barrels. Tom Atmore of Butte Creek Brewing in Chico said he realized that in order to be successful, he had to come up with a new approach.
“After three years we became an organic brewer,” Atmore remembered. “Our specific target was to sell our beer to whole food stores and specialty upper-end food stores, as these types of stores grew across the country.” As a result, Butte Creek now sells its beers (led by Organic IPA) in 17 states, although 75 percent of sales occur on the West Coast and in Colorado.
Sudwerk Privatbrauerei Hubsch in Davis, CA, is an example of a brewpub that became a microbrewery. “Initially, we were a restaurant brewery that became too successful, so we added more tanks and kegging and bottling equipment,” said Jay Prahl. Today Sudwerk sells 60 percent of its beer as a microbrewery, primarily in northern California. The brewery’s Pilsner, Märzen and Hefe-Weizen are almost equal in sales.
A completely different path to becoming a local microbrewery (of sorts) is that taken by Bayhawk Ales in Irvine, CA.
Originally formed as Orange County Brewing, the brewery was part of the now-defunct Microbrews Across America, which included Nor’Wester Brewing, North Country Brewing, Mile High Brewing and Aviator Brewing. Only a few of these breweries still exist. When the Microbrews Across America plan of establishing a network of small breweries across the United States failed, Orange County Brewing re-formed itself as Bayhawk Ales.
Bayhawk is now located inside a McCormick & Schmick’s restaurant, and the brewery specializes in brewing house beers for restaurant chains and pubs throughout California, Arizona, Nevada, Hawaii, Texas and Colorado. Bayhawk writes on its website: “We just might be the greatest beer you never knew you drank!”
Karl Zappa, who took over as Bayhawk’s general manager, said that the brewery sells 97 percent of its beer as draft and 60 percent as private label beers. The 40 percent of sales under the Bayhawk label (such as Hefe Weizen) take place almost exclusively in California, so an argument can be made that Bayhawk is a “local” microbrewery.
