Beer is big business in Vermont

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Beer is big business in Vermont

Fri, 09/02/2016 - 10:35am -- tim

Vermont Business Magazine Vermont's wholesale beer industry is worth over $300 million annually. Meanwhile on the brewery side, the Vermont craft beer industry alone contributes over $271 million to the Vermont economy. The Vermont Brewers Association on its Website now boasts 48 members, which supports over 1,500 jobs and brings in over a million tourists. While there is some overlap in all these numbers, it's clear that the growing beer industry has become an important revenue generator in Vermont and a vital employer. 

Vermont brewers tops in taste and output

Andrea Gagner, 14th Star, St Albans

by Emma Marc-Aurele Vermont Business Magazine

The craft beer Industry has contributed over $271 million to the Vermont economy while the industry has added a total $55 billion to the United States’ economy. The craft beer business is growing exponentially each year. According to the Brewers Association, 1.5 breweries open every day throughout the United States. In 2011, there were 2,033 breweries open in the US and that number more than doubled by 2015 when the Brewers Association recorded 4,269 as the running total.

That same trend has occurred in Vermont: in 2011 the state had 22 established breweries and by 2015 that number doubled to 44. With 9.4 breweries per capita, Vermont is ranked first for number of breweries based on population and is recognized as a leader in this booming industry.

In 2015, Vermont produced 261,654 barrels of craft beer, ranking 20th in the US, according to the Brewers Association.

“There are no signs of a let up in demand for high flavored craft products driven by millennials who favor craft products” said Greg Dunkling

The program director of the University of Vermont’s Business of Beer Program, Dunkling seems to think that Vermont’s top spot in the craft beer industry can be attributed to the founder of Vermont Pub and Brewery in Burlington and author of the famous “Brewing Lager Beer” guide.

Greg Noonan’s guide to brewing was written in 1984 and became the go-to-guide for small-scale home brewers and even some larger scale professionals.

A number of today’s brewmasters in some of the most famous breweries in Vermont (Lawson’s Finest Liquids, The Alchemist Brewery and Hill Farmstead

Shaun Hill, Hill Farmstead, Greensboro

Brewery) worked under the mentorship of this great beer pioneer. These successful breweries are consistently ranked at the top of the charts by beer consumers as well as in regional and national beer awards.

In 2015, RateBeer.com announced Hill Farmstead Brewery as the number one brewery in the world. The Alchemist was also recognized by RateBeer.com in 2015, when they earned third and fourth place spots on the list of top beers in the world. Focal Banger took the third place spot while Heady Topper landed right behind its fellow brew in fourth.

Long lines in local retailers stocked with patient consumers in search of their products are a testament to not just cold suds but exceptional beer. With the help from Greg Noonan, these three breweries have helped Vermont become a leading contributor to the growing and global craft beer industry.

The state of Vermont’s regulatory support has also contributed to the rise of Vermont’s craft beer industry. Before Noonan, Vermont’s law stated that establishments could not sell alcohol in the same place it was produced. With the realization for potential in their fellow brewing community members, the Legislature changed the law to help create a craft-beer community at its finest.

High quality beer and a simple business strategy seem to be the main goal when talking to brewers. In terms of what it takes to become a successful brewery in Vermont, the CEO of 14th Star Brewery, Andrea Gagner, further emphasizes Miller’s point to make high quality products, while also having the flexibility to adapt to the changing palates of these hop-driven consumers.

Gagner says that 14th Star Brewery aims to “grow slowly and organically” and become “good corporate citizens” which seems to be the trend of most breweries in the area. This business of high quality brewing encourages breweries to grow slowly and focus on the integrity of their product, which in turn allows community involvement and the use of local ingredients.

Bill Mares, a knowledgeable craftsman of craft beer and co-author of the book “Making Beer,” is another leader in the industry.

He and business partner Todd Hair, who has worked in well-known breweries like Magic Hat and Switchback, recently opened up The House of Fermentology on Pine Street in Burlington Vermont.

They are unique in that they are a “blendery” and are producing a line of sour beers. Although their product may be distinct from the others, it seems even they have this same idea of focusing on the quality of the drink.

The obvious problem with this “staying-small” craft business strategy is ensuring that these companies can brew good beer consistently in order to keep customers happy and coming back for more.

Mares said, “We have to brew really good beers all the time. We can’t afford one bad batch.”

For a company that does not rely on volume, the small amount of beer that these partners invest their time in need to be at the same level or better than their local brewing competitors. These breweries seem to be under this same pressure to be consistent in the high quality of their batches.

Thankfully for them, over the years there have been some advancements in brewing technology that make the process a bit easier. Mobile canners have been helpful to smaller brewers in getting the product to markets outside the local community.

They allow these small businesses to package their products so they can be placed in retail establishments statewide, and across the country. Without these canners, they have to depend on only draft distribution and are at the whim of restaurant and bar owners.

Founder of Otter Creek Brewing (and current Shumlin Administration official), Lawrence Miller, is quoted in the book “Making Beer.” He puts it, “The state adapted to what we needed without blowing open the door to create an unstable market. There was a good camaraderie among all brewers, professionals, and amateurs. The

Bill Cherry, Switchback, Burlington

home brewers were the educated consumers who could then educate the public to be more appreciative of good beer. The brewers benefited from these open-mouthed people willing to come back and say what they thought. If you were a brewer and open-minded you could adjust. Some who could not adjust, are not around anymore.”

Now with this new technology, consumers can see and become familiar with the product in stores and are able to purchase it more conveniently.

So with all these new brewing inventions and flavors, where is this trending industry headed?

Greg Dunkling said: “As beer styles become more experimental and breweries push the envelope expanding the traditional definition of a beer style, consumers transition from other alcoholic beverages into this sector. There’s simply too much flavor to ignore.”

Dunkling works as the program director of the UVM Business of Craft Beer program in which he and his fellow staff members provide industry specific knowledge that people require to either gain employment in the industry or to undertake their dream of someday launching their own brewery. In 2014, overall beer sales were only up 0.5 percent, while craft beer sales increased by 17.6 percent.

Along with this increase in specific craft sales and Vermont’s leading standings in number of breweries per capita, Dunkling’s UVM program seems like the perfect way to take advantage of Vermont’s brewing success and help continue the growth of the industry.

UVM’s program includes both business strategies as well as some of the fundamentals of brewing craft beer. Overall, though, this growth in the craft beer industry seems to be larger than just beer. Many industry analysts relate the craft brewing sector to the broader locavore food movement and the desire of consumers for “local, high-end artisanal products, Dunkling said. This want for beer brewed in a consumer’s backyard is more than beer and emphasizes local, local, local.

Paul Sayler, co-owner of Zero Gravity Brewing, is quoted in “Making Beer” saying, “At its most basic, beer is a cottage industry. And Vermont is a state where cottage industries spring up. It’s Yankee craft and ingenuity at work. Add to that Vermont’s strong culture of local foods and small scale.”

Some may wonder if this explosion of craft beer in Vermont is simply just a fad and eventually some may see the state as an oversaturation of craft breweries, but most think that the demand for a quality beverage will never go away.

Darby Kitchel, manager of Switchback Brewery feels that the massive amount of breweries stands out as a tool for inspiration to brew better beer.

Kitchel said, “It creates a sense of competitive spirit, which makes for good drive to make better beer and, in the end, run a better business.”

Emma Marc-Aurele is a freelance writer from Burlington. This story first appeared in the July issue of Vermont Business Magazine.

As Americans prepare to celebrate Labor Day, the National Beer Wholesalers Association (NBWA) and Vermont's independent beer distributors are recognizing beer distribution industry employees whose work positively impacts the national and state economies. 

"From truck drivers to graphic artists and sales representatives, America's beer distribution employees work day in and day out to make this the best beer market in the world," said NBWA President and CEO Craig Purser.

According to the economic impact report America's Beer Distributors: Fueling Jobs, Generating Economic Growth & Delivering Value to Local Communities, more than 3,000 beer distribution facilities directly employ 135,000 men and women in communities across the country. 

The report, produced by Dr Bill Latham and Dr. Ken Lewis of the Center for Applied Business & Economic Research at the University of Delaware, provides a comprehensive look at beer distribution companies' total impact on national and state economies. In addition to the impact of distributor operations, the report accounts for resources contributed by beer distributors in supporting community events and local economic development, contributing to charitable causes and promoting responsible alcohol use.

Key findings include:

  • Vermont beer distribution facilities directly employ 772 people, who earn $50.3 million in wages and salaries.
  • Vermont beer distributors add $300.8 million to the nation's gross domestic product.
  • Vermont beer distributor activities generate $396,000 in economic impacts to communities through support of charities, local events and economic development.
  • Vermont beer distributor activities contribute $65.6 million to the federal, state and local tax bases. This does not include an added $30 million in federal, state and local alcohol excise and consumption taxes on beer sold in Vermont.
  • The Vermont beer distribution industry contributes more than $57 million in transportation efficiencies for the beer industry each year.

Purser added, "Independent beer distributors do much more than deliver fresh beer. They provide significant economic benefits in their communities through local business-to-business commerce; investments in infrastructure and capital assets; and tax revenue. Beer distributors provide services that help brewers of all sizes grow; improve efficiency for trading partners, especially small brewers and retailers; and ensure consumers have a broad selection of products to enjoy."

To view the full report, visit www.nbwa.org/resources/economic-impact.

The National Beer Wholesalers Association (NBWA) represents the interests of America's more than 3,000 licensed, independent beer distributor operations across the country. To learn more, 

Burlington Beer Festival 2015

visit www.AmericasBeerDistributors.com.

SOURCE ALEXANDRIA, Va., Sept. 1, 2016 /PRNewswire-USNewswire/ -- National Beer Wholesalers Association