Beer lovers in our area just can’t seem to get enough of the craft drafts. The more microbrews produced, the more microbrews consumed. As supply increases, consumers remain thirsty for more. And this pattern holds true all across America.
According to the Brewers Association, a Boulder, Colorado-based nonprofit that advocates for American craft brewers, craft beer’s slice of the total beer market share increased by 12.3 percent in 2016, which means craft beers now make up $24 billion of the $108 billion beer market.
That trend is consistent in Washington, where competition for that lucrative and large financial pie is growing. In 2011, Washington had just 136 craft breweries, while today, our state has 334 of them.
Eastside breweries are feeling the competition, too. As the craft beer market matures, many local breweries are striving to find ways to set themselves apart and capture more local market share. That may mean adding additional seating; square footage; adding food to a taproom; or focusing on distributing beer to bars, taprooms, and grocery stores.
Postdoc Brewing in Redmond, for example, has been in business more than two years and sees its greatest growth potential on the wholesale distribution side. With its proximity to Marymoor Park, Postdoc gets excellent traffic flow from the park and Highway 520, said Debbie Chambers, one of Postdoc’s four co-owners.
Currently, sales are evenly split between in-store retail sales and wholesale distribution.
“We’ve seen a lot more restaurants and bars serving local craft beer,” Chambers said. “The wholesale accounts want to see something new and fun. This is great from a brewer’s point of view; they can make all the beers they’ve ever dreamed of.”
The challenge, she said, is that bars and taprooms don’t want to give each brewery a permanent tap handle.
“They want to rotate it,” Chambers said. “They want to put your beer on, and when it’s done, they want to put someone else’s on.”
Dan Lee, managing member of Odin Brewing Company, is in tune with the high level of competition in the industry.
“There are still some bright spots, but there are storm clouds too,” Lee said.
Odin isn’t as new to the scene as many craft brewers. The Tukwila-based brewery sold its first keg in December 2009, when it was the 118th licensed microbrewery in the state of Washington.
“Since then, the industry has tripled the number of suppliers, and there has not been a corresponding number of distribution outlets,” Lee said. “The pie is getting split ever thinner.”
Each brewer needs to plan for future sales, he said: “There are some folks doing incredible things, but no one is interested in yet another IPA or Hefeweizen.”
Lee, with his strong marketing background, believes the future may be in hybrid products. Though the purists may cringe, Lee foresees a future in beer fusions with coffee and tea. In a step toward that direction, Odin recently acquired Pier Cold Brewed Coffee. The coffee is processed and packaged at Odin in Tukwila, and distributed through its distributors to retail outlets. It’s also sold on site.
“From my standpoint, I’m just trying to keep the doors open and the lights on,” Lee said. “We need to stay diversified.”
Odin Brewing started in a 5,000-square-foot facility, but recently moved to a 13,000-square-foot space on Baker Boulevard in Tukwila that includes a kitchen and is a half-mile from Southcenter Mall. The brewery operation takes place in 10,000 of those square feet, with the restaurant and office occupying the other 3,000.
“Finding that combination of legitimate retail space along with enough warehouse space was like trying to find a unicorn,” Lee said.
Odin outsources its distribution, and its sales mix is about 60 percent wholesale and 40 percent retail. Though retail is a smaller percentage of Odin’s business, it’s crucial.
“If you start a brewery today and don’t have a significant retail component, I think you are crazy,” Lee said.
Many taprooms have not ventured into the food business, but Lee believes the restaurant is “a lifeline.”
He’s not alone in that thinking. Jeremy Hubbell, owner of Geaux Brewing, also believes food is an essential component to the brewery business.
Hubbell, who opened his taproom about four years ago in Bellevue, said he’s been told time and time again by his customers that they wish he sold food.
Geaux recently opened a new 7,000-square-foot location in Auburn that features Cajun fare in its New Orleans-style taproom. That location also will house all the brewing equipment.
The Bellevue location will begin to serve food later this year or early next, Hubbell said.
Hubbell sourced out the restaurant development to Bread & Circuses Kitchen, which already operates a kitchen inside Two Beers Brewing taproom in Seattle’s SoDo district.
“I have essentially hired them to develop all of our food portion of the business,” Hubbell said. “They know how to control food costs.”
The younger Chainline Brewing, which opened in 2014 and sits right off the Cross Kirkland Corridor, boasts a food truck most nights, said Eric Wallace, who handles sales and marketing for the brewery. Chainline is still the only tasting room in Kirkland. Its appeal is its large deck, which is about to get larger, Wallace said. And business is booming, too.
“We are selling as much beer as we can make,” Wallace said.
Beaux Bowman, co-owner of the 8-year-old Black Raven Brewery in Redmond, still is seeing growth, too, but said it’s getting harder and harder to make gains.
Black Raven Brewery opened in 2009 in 4,400 square feet of space with a 30-seat taproom. Over the years, the brewery acquired the leases of its neighbors and now occupies 17,000 square feet in an industrial building.
The brewery is growing at a rate of about 30 percent a year, mostly on the wholesale side, Bowman said.
“With more competition, we still have growth, but it takes more energy,” he said.
Black Raven has its beer in taprooms across the state, in Alaska and North Idaho, as well as grocery outlets such as Safeway, QFC, Fred Meyer, Trader Joe’s, and many independent grocery stores.
Bowman is optimistic that the demand will continue to grow.
“Craft brewing has been around since the 1980s, but now there’s more available,” he said. “It’s on the grocery shelves, in the media. Consumers are becoming more and more educated.”
He compares the interest in microbrews to that of fine coffee, wine, and cider.
Despite the challenges, Geaux Brewing’s Hubbell said the labor of love of craft brewing is worth the ups and downs of the industry.
“It’s a good time,” Hubbell said. “Everyone is really into beer; no one is pretentious. It is fun to make something and see people appreciate and enjoy it.”