More equals less: Colorado breweries are pulling out of some states as they grow in others

Categories: Beer Man

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Great Divide Brewing
Great Divide made beer drinkers in six states cry last week when the Denver brewery acknowledged that it had pulled its beers from the shelves there.

In addition to Michigan, Rhode Island, Connecticut, Kentucky, New Mexico and Alaska, the brewer is leaving Washington, D.C. and has significantly reduced its distribution in parts of Minnesota, Illinois, Pennsylvania, New York, and Virginia.

"We appreciate the kind words and understanding we have seen from our customers in these areas and appreciate everyone who drinks our beer," Great Divide, which recently expanded into Southern California, said in an early April statement. "We do not relish the decision to shift out out-of-state distribution and we hope to be back in states in the future. However, at this time, we simply do not have the capacity to meet all demand."

The news got an extra bit of attention nationwide because it came on the heels on a similar announcement by Dogfish Head, the trend-setting Delaware brewery that starred in the (recently cancelled) Discovery Channel show, "Brew Masters," last year. Dogfish Head said goodbye to Wisconsin, Indiana, Tennessee, and Rhode Island.

But Great Divide isn't alone in Colorado. Oskar Blues, Left Hand and Avery have all been pulling their beer from certain states over the past few months. And not because they are having trouble selling their beer, but because they are selling so much of it.

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Oskar Blues Brewing
It seems counter-intuitive for a company to pull back if it is growing, but the reasons are clear, says C.V. Howe, the spokesman for Boulder's Avery Brewing.

"We are in a position where we can now afford to get out," he says. In the past, Avery tried to break into every market it could in order to sell its beer. Now the demand is so high that it has been forced to focus on fewer markets just to keep up.

"We had markets where we could grow by 200 perecnt if we could supply enough beer, but right now, our beers are gathering dust on the shelves in some of them and that is taking away from the markets where the beer is turning over fast," Howe explains.

Avery is now in parts of thirty states, after having left Connecticut, Rhode Island and the San Francisco Bay Area of California. And there could be more shrinkage on the way.

It's good for the brewery, Howe says, but "It's a shame for beer drinkers because there are always people in every market who are real die-hard fans. There's not much you can say to them other than, 'I wish there were 1,000 more people like you.'"

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Left Hand Brewing
Last summer, Oskar Blues -- which is growing so fast, you can see stretch marks on its cans -- essentially ran out of beer, telling out-of-state distributors that it simply couldn't match the demand; the company also pulled out of states like Idaho and Nevada, entirely. Since then, Oskar Blues had dramatically increased capacity, but it is focusing on the states where it does the most business rather than returning to the ones it left.

Oskar Blues spokesman Chad Melis understands that the decision made some people angry, but, he says "it's a good problem to have" as a brewery. He also says the brewery hopes to return to some of those states one day.

At Left Hand Brewing, also in Longmont, demand is so high that the brewery grew by 30 percent last year and is on pace to grow by 60 percent in 2011.

As a result, Left Hand has left Alaska, Iowa, Eastern Tennessee, and the Florida and Alabama panhandles. It is now in 28 states.

Left Hand marketing director Chris Lennert echos his colleagues in saying that the goal is to increase marketshare in its biggest areas. "Honestly, I'd like to be double our size in the next five to ten years but in fewer states," he says.

Follow Westword's Beer Man on Twitter at @ColoBeerMan.
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9 comments
Marc Bayes
Marc Bayes

East coast has always suffered from lack of craft beer. Dogfish and Avery both pulled form Wisconsin, wtf are they drinking there?

DenverScener
DenverScener

Them CO Beers need to step it up! Everyone knows Beer Rules. That's why there is great "craft" breweries in every area of the country. Thank the Lord we live out West with the abundant "craft" beer culture.

Steve Body
Steve Body

As a beer and wine reviewer for the Seattle Post-Intelligencer, I sample every beer I can find from everywhere - about 2000 beers year - (I don't drink 'em all. I do still need my liver.) and I can state categorically that the Colorado breweries can hold their own in quality with anything made in California, back East, Oregon, and even here in Washington. I was recently interviewed for a newspaper in North Carolina and was asked about my "Best of the Northwest" list; in particular about how those beers would stack up if compared to the rest of the nation. My answer was quick and succinct: "If the Northwest included Colorado, the list would look a LOT different".

I think and have always thought that breweries like Great Divide, Avery, Oskar Blues, and even New Belgium were biting off a little more than was advisable in establishing such broad distribution. The thing that's made the Colorado brew culture so dynamic is their steadfast adherence to experimentation, their brutal quality standards, and the fact that very few - except for maybe Avery - stuffed all their eggs into one stylistic basket. The simple and unshakable axiom of the marketplace is that the highest quality standards are best maintained by people making their wares in small enough quantities that they can pay attention to all of them. Here in Washington is the textbook example for the beverage trade: Chateau Ste. Michelle, Columbia, and Hogue wineries started out as fine wine operations and quickly outran their headlights. Now, all three figure absolutely nowhere into any list of the best wines from the Northwest. All three became the victim of the quest for more and more dollars, faster and larger production, and the attorneys and bean-counters which invariably infect any operation that grows that fast and that recklessly. Our brewing community has seen this example and been far more careful. Very few Washington breweries bottle for national distribution. Basically, it's only two: Pyramid and Red Hook...and both of these, as a result, are nothing more than an afterthought in any list of better Northwest breweries.

I'm a born 'n' raised Southerner, so I don't say this in any sort of judgmental or unkind way but the simple, indisputable fact is that the demand for craft beers in the Southern states mentioned is mostly in urban areas and is fairly small even in those. The South is still - and probably will be for decades to come, despite the presence of many great new craft brewers - mainly the province of that Anheuser Busch-created mindset that derides "frou-frou" beers and equates swilling BudMillerCoorsPabst with manhood. If I had been asked, I would have encouraged Colorado brewers NOT to expand into those areas to begin with. In the strongest possible terms, I applaud their decisions to rein in distribution, both in those Southern states and in areas like San Francisco, where the competition simply is too fierce for any out-of-state brewer to to succeed quickly and significantly. I receive weekly P.R. updates from O'Dell, even though they're not distributed here. I recently asked their marketing person if they had plans to grow into Washington and was told it wasn't in their plans at all. Our son moved to Denver two years, so I (selfishly) can get MY Odell's Isolation, St. Lupulin, 9 Shillings, et al, and found that I valued their decision to know what was Too Much Too Soon.

In pure quality terms, this is great news, to me. In NO way should this be taken as a negative statement on the value of Colorado brewers; quite the reverse, in fact. It's refreshing to see and entire culture placing quality ahead of gross economics. THAT is how truly GREAT breweries are made.

DenverScener
DenverScener

Nicely written, now take that shit back to Seattle where you belong.

Rrferg
Rrferg

Born and raised and currently living in Birmingham Alabama but I have worked all over the USA. I agree with Steve in regards to "mainly the province of that Anheuser Busch-created mindset that derides "frou-frou" beers and equates swilling BudMillerCoorsPabst with manhood" but I disagree with his comment "I would have encouraged Colorado brewers NOT to expand into those areas to begin with" I am a big IPA fan and was able to buy Avery IPA at the local now get... this Piggly Wiggly. I was also able to buy a local brewed beer called Good People Beer Brown Ale brewed legally since 2008 in Birmingham Al. We in the South do wear shoes and like the finer things of life. LOLGood Beer Good People

Jon S
Jon S

I'm glad we live in the best beer state in the US so we don't have to worry about awesome brews leaving the shelves. What's up with Rhode Island, though? Seems like everyone is pulling distribution there. Too small a market, or do they only drink bad beer?

Wordemup
Wordemup

Colorado is a fine beer state... The "best"? That I am un sure of. Sure there are some amazing breweries here but the overall beer culture is a little incestual.I've never lived in a state that was so boastful of being craft centric while at the same time so anti to pouring other out of state beers. It seems to be a real trend out here to open a bar or restaurant that only carries Colorado beers."we only carry Colorado beers" are you kidding? You realize your not a craft beer bar if you only carry Colorado beers right?The local breweries here are seeing those growing pains because other areas of the country actually enjoy drinking something on top of what is brewed in tbeir back yard. Sure... Take pride in your local breweries... But if your only drinking local beer than your missing out on some amazing brews.

bob b
bob b

Wordemup: I know Breckenridge Brewery's Ale House is focused on Colorado beers, but I didn't know it was a "trend". Are bars like Falling Rock, Freshcraft and the Cheeky Monk not up with the "trend"? Or can we have a healthy mix of bars that have different beer focus? I think the fact that we can have a big "Colorado Beer Bar" plus a variety of other beer joints, makes Denver a pretty dang good beer city.

Knard
Knard

As a taster of craft beer far and wide I must agree with Jon. The consistency and balance of Colorado brews, as a whole, outshine the collective from out-of-state. Wordemup I think you meant "you're" when you wrote "your". This made your comment hard to read.

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