DC Beer
Uncategorized

Tell DCBeer: What Do You Think of Breweries Expanding to the East Coast?

In the past six months or so, several large craft breweries have announced East Coast expansion plans. Sierra Nevada, Oskar Blues, Green Flash, and New Belgium have all announced plans to come east. A fifth brewery, Lagunitas, also announced plans to build a second brewery in Chicago. These brewery expansions are far from small. New Belgium’s press release noted, “We are looking to open with a 150,000 square-foot facility and a planned annual brewing capacity of 400,000 barrels.”

The DCBeer staff recently weighed in on our thoughts about these east coast expansions. We’re sharing those thoughts with you here and hope you’ll chime in in the comments.

Andrew: I understand the reasoning behind expansion and believe this level of investment speaks volumes about how confident these owners feel about craft in general. But I can’t help but feel confused about what this means for the authenticity and character of each growing brewery. Will the move make you feel any different about any of these breweries? What will this mean for established Asheville breweries that have literally created that scene from scratch?

Bill: I thought the moves would make me feel different about these breweries, but the more I think about it, the more ambivalent I become. It’s not like Sierra Nevada tastes different by virtue of being in Chico. The terroir aspect of their beers is pretty minimal aside from a few beers in their line-up. Sierra Nevada Pale will taste exactly the same coming from Asheville and Chico, and since I don’t reside in either city, I don’t care much where mine comes from. I think the local community in Asheville will still focus on the homegrown brewpubs and breweries more, but if you look at the response to the big breweries coming in, they got a lot of support from the local little guys.

Chris: I’m of two minds about this one. I’m happy that these breweries are doing well and are going to expand their distribution. In general, these guys are doing it right and putting out good stuff, so I don’t begrudge their success. That said, I’m a bit worried about what will happen to the “drink local” thing. I hope that craft fans will keep a spot in their fridges for their home grown stuff, but it’s possible that some little guys operating on a slim margin might fold. As long as this means craft market expansion and there’s not a bloodbath in the local scenes, I guess I’m cool with it. There will be a lot of nostalgic people who miss the days when micros didn’t have to compete head to head; I vote for more choice and a community self-policing for craft breweries acting like macros.

Jake: Like the rest of you, I’m conflicted about it. I’m excited for fresher and maybe cheaper beer but worried about what it means for local scenes and the concept of terroir in beer. I’m concerned that larger craft breweries are choosing Asheville, NC because the city itself is already a brand. Asheville won the “Beer City, USA” contest and tourism, including beer tourism, is a huge draw to the area; it seems like some breweries are counting on Asheville as a brand to rub off on them. I hope these breweries are able to pay the city back for its coolness, and given that both New Belgium and Sierra Nevada are socially responsible, I’m guessing that they will. Still, there’s a certain “ick factor” involved. Asheville, and Chicago (Lagunitas is opening a brewery there), became great beer cities on the strength of local brewers. If one can afford to open a second brewery thousands of miles away, one can also afford to undercut these local breweries, which have less cash on hand, and lack the purchasing power and economies of scale of larger craft breweries.

As for terroir, there is currently one craft brewery that makes large amounts of beer in multiple locations: Samuel Adams. They do an excellent job; a Boston Lager made in Ohio tastes exactly the same as one made in Kansas City, but that’s a huge challenge, and I wonder if we’ll notice any differences in a California-made Torpedo IPA compared to one made in North Carolina. The hops and grains will all come from the same location, and I assume that a great many steps will be taken to ensure that the water supply is homogeneous, but at the end of the day, we’re talking about two beers and finicky yeast made on different equipment by different people. Moreover, though global supply chains are what they are, Asheville isn’t exactly the most accessible place. The cost of getting hops and grain to this location undercuts some claims of environmentalism. I’d like to see east coast operations experiment with ingredients grown closer to new brewing facilities; let’s see if we can taste regional differences (I bet an NC-grown cascade hop tastes different from its CA counterpart), something that’s been forgotten in the name of growth.

Nate: I too am excited for the possibility of fresher and potentially cheaper beer for our area, but am curious to see how the influx of bigger breweries will impact any local scene. What do you think your attitude would be if Sierra Nevada had chosen Virginia instead of Asheville? About the same? More resistant?

Chris: A few additional thoughts: it would be nice to see some westward expansion to complement this. Commenters, which east coast breweries could you see going west? Also, if there is any noticeable regional style variation left, does this type of expansion wipe it out?

Nick: Currently, the expansions don’t make me feel anything different about the breweries; however, over time, they may feel the effects of a dilution of their culture as they expand. To run their businesses in a consistent way across that kind of geographic distance, these breweries will be forced to roll out much more detailed procedures (e.g., become more “corporate,” bro), which of course runs the risk of stifling the creative spirit that drives craft breweries.  Not to put on my consultant day-job hat too much here, but the need to drive consistency across an organization, particularly across such large distances, is very real and can certainly sap a bit of the laissez-faire attitude that brewing has.  These breweries wouldn’t be doing anything wrong business-wise…but culture–wise?  It remains to be seen.

Personally, I’m less concerned about the terroir of beer as, like Bill said, a Sierra Nevada Pale from North Carolina will taste the same as one from Chico.  Let’s not kid ourselves – these guys are professionals and will make sure quality is consistent across geographies.  This could change as breweries focus on growing their own malt/hops, but if you can taste the difference in 2-row pale from two places in a finished beer, I salute your palette.

The issue I have, and this is a “wait and see” kind of deal, is that they could introduce a mega competitor into a smaller craft beer market. With a major player in town, the battle for shelf space gets even harder in the local area. On the other hand, this could actually drive more market power for craft as a segment, increasing the overall customer base and taking some of the shelf space away from the big guys. This depends more on distributors and retailers than the breweries themselves.

Mike: I appreciate what all of our writers have said thus far, but I think the “wait and see” aspect actually trumps all of the projections we’ve made. Yes, we can pretty much bank on Sierra Nevada’s Pale Ale tasting the same from North Carolina as it does from California…but what if it doesn’t? How will Sierra deal with it? Speaking on terroir, we know very well that Virginia Cascade hops taste much different in a finished product than California Cascade hops. Wouldn’t it be great if Sierra used this to their advantage? Market power is a finicky thing, but you cannot argue with craft beer’s overall growth. Not so long ago Lagunitas was a tiny brewery looking to expand its brand. Now people are voicing concern that it may undercut the local craft market. Well, that’s a reality but what’s the alternative? How are the really small brewers going to open distribution lines? I think a nuanced view is best as sometimes the expansion of a once-small brewery can actually encourage a greater distribution network for some presently-small, local, breweries.

The reality is you’ll never get me to complain about getting fresher Sierra Nevada, Oskar Blues, New Belgium, or Green Flash, I’m all for it. You may get me to not buy a beer if you tell me that said breweries’ plan is to put all other smaller breweries out of business; still I’d be dubious of that claim. Part of the reality is that for these hop-forward or best-drank-fresh beers (pale ale, IPA, etc.), as long as the price isn’t ridiculous, I’m going to buy the local anyway. But just to add a bit more perspective, in 1867 it is estimated that 3,700 breweries existed in the US. At that time, 45 of those breweries were in Baltimore. Likewise, DC was once home to 20 breweries. Sometimes its nice to return to history to gain a little perspective on today.

Sean: (Ed. Note: We asked Sean Dalton, a friend of DCBeer and someone with roots in North Carolina, to weigh in on this issue as well)

Sure, it’s become a bit of a punchline among the craft beer industry (“My other brewery is in Asheville!”), but the news that three of the biggest and most respected breweries in the country were expanding into Western North Carolina was nothing short of huge for the area. My roots are in Henderson County — about 11 miles from the newly-planned Sierra Nevada facility, as a matter of fact — and my family still lives in and around Asheville and Hendersonville. Despite the vast majority of them being teetotaling Southern Baptists, you’d be hard-pressed to find any of them who aren’t happy about the expansion news. WNC has been hammered for so long with the loss of tobacco, textile and furniture manufacturing that the bright economic potential presented by these breweries’ expansion plans, and the rosy future of beer tourism in WNC, is like the proverbial plate of food served to a starving man. The potential of an Oskar Blues production facility in Brevard, for one, is enormous; the departure of major employers DuPont, and then Agfa, from Transylvania County have meant that there is nothing — NOTHING — left in town but a national forest and a tiny college hanging on by its fingernails.

As craft beer drinkers, we can’t help but ask whether this eastward expansion by sizable breweries is a good thing. After all, the reputation of Asheville as “Beer City, USA” was built by upstart, local small brewers like Highland, Green Man, and Asheville Brewing Company — brewers who stuck their necks out long before most beer drinkers were choosing locally-crafted beer over the macros crowding store shelves. But the local beer culture that has grown up around these pioneering breweries already embraces and supports the independent brewing spirit; the increased accessibility of Sierra Nevada or New Belgium’s products in WNC isn’t likely to push out other smaller brewers, since you can already find Sierra’s and NB’s offerings on store shelves and taps right now. Beer drinkers in Asheville love their locals, and that isn’t likely to change.

Some have questioned the tax incentives offered to Sierra Nevada and New Belgium to lure them to WNC, and it’s fair to do so. But arguments that no such incentives were offered to other local startup breweries miss the point; most, if not all, of those startups had access to low-interest small business loans and private investment from those who believed in craft beer’s future, so it’s not as if they were without any financial help. Further, the scale of the incentives offered were tailored to the size of the West Coast breweries and their financial impact to the region, both in terms of jobs created and money that will be poured back into the local economy. Local breweries like Craggie or French Broad aren’t in a position to create 150 new jobs, so arguing that they’re being left out of the incentives largesse is a bit of an apples and oranges comparison. What’s more, the locals already established in WNC themselves aren’t complaining. Just look at the high road being taken by Oscar Wong, owner of Highland Brewing, in response to questions about the impact of the big boys coming to town: “It will make a huge difference in everything here, including real estate. This goes way beyond anything I ever dreamed of seeing here, that’s for sure.”

If those brewers most directly affected by the expansion plans are welcoming their West Coast brethren to town, I think we can make room for some Torpedo next to our bottles of Shiva and Gaelic.

So, commenters, we’ve all chimed in. What are your thoughts? Any thoughts on east coast expansion and if we’ll see any east coast breweries expand west any time soon? Let us know and let’s get a dialogue going!

Related posts

#SAVOR Week 2014 Events: The Black Squirrel

Bill DeBaun

DCBeer Is Headed to CiderCon; What Do You Want to Learn?

Bill DeBaun

Port City Hosts New Brewers Meet-up

Chris Van Orden

Leave a Comment

Sign up now for the Weekly Pour!

Get the latest news, events, and info about what's happening in craft beer in the DMV delivered directly to you every week!

Sign up now for the DC Beer Weekly!

Get the latest news, events, and info about what's happening in craft beer in the DMV delivered directly to you every week!