June 11, 2018

Craft beer is shifting to focus on intimate community connections

Tom Anderson, co-founder of Seven Saws Brewing in Holden, pours a beer at the new brewery. The brewery is now one of 160 in the state.

CraftRoots Brewing doesn't really have any plans to grow production far beyond its projected 500 barrels for 2018.

"We're pretty darn happy with 500," said co-founder Maureen Fabry, despite initial expectations the brewery would double its 300 barrels from 2017.

The Milford brewery opened in March 2017 after brewing just 20 barrels out of Fabry's home in 2016. That's a large enough growth rate to place the brewery at No. 1 on national industry group the Brewers Association's list of fastest-growing craft brewers in 2017.

Doubling the 500-barrel mark next year won't happen, but that's by choice.

"That really would change the purpose of our business," she said.

The brewery's model is one built on sustainability in a rapidly changing craft beer market necessitating a scaled-down approach as new breweries threaten to crowd the market.

Craft beer is still booming, but the number of barrels of craft beer produced in Massachusetts last year rose by just 12 percent – according to the BA – the lowest mark since 2011 despite nearly 100 new breweries coming online since the start of 2015.

More breweries, slower production

According to Mass. Brew Bros, a beer blog tracking new breweries and craft beer news, 88 new breweries have opened in the state since the start of 2015: 21 each in 2015 and 2016, and 41 last year.

Data suggests between 50 to 60 Massachusetts breweries are planning to open in the next year or two, said Framingham man Rob Vandenabeele, co-founder of Mass. Brew Bros.

The state has had six straight years of double-digit brewery openings, and Vandenabeele initially predicted 2018 could approach or even break the record of 41 new breweries set last year. Yet, only seven have opened so far, well behind the pace to top 2017.

"I would have predicted 15 to 20 already," he said. "It's been really really slow this year, and I can't put my finger on why."

Within the last year, 10 to 12 breweries-in-planning gave up their plans to produce and sell their beer, he added.

"Some people don't have a realistic understanding of how challenging it is to start a brewing business," Vandenabeele said.

Earlier this year, the BA Chief Economist Bart Watson said the 5-percent growth in national craft beer production in 2017 was probably not as strong as breweries expected while building out their companies.

The category is still growing, but individual breweries might be scaling back their plans with dozens of new brewers making beer, Watson said.

The amount of craft beer produced nationwide dropped from an average growth rate of 900 barrels per brewery in 2014 to 200 per brewery last year, Watson said.

This drastic drop in barrels produced per brewery is a sign of both declining market share among the industry's largest craft brewers and a rise in smaller breweries.

Small production brewery

Seven Saws brewery in Holden opened in May with just a one-barrel system and plans to keep it conservative. Co-founder Tom Anderson and his partners are waiting to see how the opening goes before they increase production capacity.

When the brewery opened, dozens of Holden residents walked to the Main Street brewery.

"That's where the focus is," Anderson said. "We will always remain Holden-centric, and we want Holden to be proud of us."

Seven Saws Brewing opened last month on Main Street in Holden, where the brewery offers flight samples.

The space became available in February, and the brewery opened three months later – a lightning-fast pace for a new brewery.

Plans to expand production capabilities have not yet been solidified, but Anderson imagines expanding to as high as a 20-barrel system eventually.

Plans to become the next big beer destination like Charlton's Tree House Brewing Co. or Boston's Trillium Brewing Co. have been tempered, but Anderson will take any kind of organic growth.

"Is that feasible anymore? I don't know," he said. "Maybe, if you make a really amazing beer, anything is possible."

For now, the brewery remains far behind the largest players in the craft beer industry, many of which are reporting declining sales.

Boston Beer Co., the maker of Sam Adams, reported a 14-percent dip in production last year despite brewing 2 million barrels. Boston's Harpoon Brewery reported a 6-percent dip to 185,500 barrels.

Nationwide, the largest 50 domestic craft brewers lost 2 percent of their production from 2016, and 22 of them reported declining production.

Training new brewers

Compounding the unprecedented growth of craft beer is another set of issues: a new brewer may be able to make a delicious beer, but may be clueless when it comes to running a business.

On the flipside, if the beer isn't a good, quality drink, the craft beer scene could lose some drinkers.

To solve both of those issues, the Massachusetts Brewers Guild held its first ever Technical Brewing & Business Conference in May at Framingham's Jack's Abby Craft Lagers, where new and prospective brewers learned the do's and don'ts of running a brewery.

In addition to business plans and marketing strategies, brewers were schooled on quality.

Neil Witte, quality ambassador to the BA, said access to the craft beer market is at an all-time high.

"I never thought I'd see anything close to this," Witte said.

He urged young brewers to invest in a quality program to ensure a beer actually tastes good – the most important thing to get right in the beer business.

"It's not just marketing," Witte said. "If someone grabs your beer and drinks it, you want to make sure they're drinking the best possible."

Changing to an intimate focus

Unlike other large craft brewers, the largest Central Massachusetts brewery – Westminster-based Wachusett Brewing Co., the 49th largest craft brewer in the country – kept growing its production last year, up 26 percent to 64,300 barrels.

Now, it's aiming for 80,000 in 2018, said President Christian McMahan. Its success is due to its commitment to its core beer – Wachusett Blueberry – and an ability to adapt to the changing industry.

The brewery is old by craft beer standards: It was founded in 1994. However, its license didn't allow for onsite serving of beer until the law changed last year, McMahan said.

The brewery opened its brewyard and taproom in December after success operating a summertime brew yard. The industry shift to a more intimate relationship with beer necessitated that project, McMahan said.

"It wasn't a 'Should we do it?' It was a 'We had to do it.' That's how beer has evolved in New England," he said.

The brewery's largest sales are now in Westminster and other surrounding towns. That transition from major regional craft brewer to a neighborhood brewery with a taproom and place to sit down with a frosty brew is helping to convert light beer drinkers.

"More people come here to experience the brand, and now they're supporting us back in other retail outlets," McMahan said.


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