Niche brewer getting bigger

By EVAN LAWRENCE

Contributing writer

HOOSICK, N.Y.
With the annual rate of craft beer sales growing by double digits nationally and a big thirst locally for its award-winning ales and lagers, Brown’s Brewing Co. of Troy is setting up a new brewery.

The new facility, in a former factory just off Route 22 in North Hoosick, will allow the brewing company to increase its output nearly eightfold. Currently Brown’s Brewing can produce a maximum of 2,800 barrels a year at its brewpub in Troy; it will be able to brew 20,000 barrels a year in its first phase in North Hoosick. (A brewer’s barrel is 31 gallons.)

The new facility also will have space for future expansion that could allow production of up to 60,000 barrels of beer annually.

Gregg Stacy, the Brown’s Brewing director of marketing and sales, said the motivation for the expansion is simple: “We can’t keep up with the demand.”

The Brown’s brewery and restaurant on River Street in Troy already is the biggest brewpub in New York state, according to the Brewers Association, a trade organization for craft brewers. Last year, the brewpub produced 2,650 barrels of more than 25 brews, a volume increase of 13 percent from 2010.

Garry Brown, who owns the brewery with his wife, Kelly, said the expansion has been a long time coming.

“I’ve been dreaming about this project since 1998,” Brown said as he worked on a fermentation tank at the new brewery last month.

The new location, nearly 30 miles northeast of the Brown’s brewpub in downtown Troy, is relatively near the West Hoosick farm where the Browns live.

The brewery’s two brick buildings and a soaring, 4-sided brick chimney are visible from the Route 22 bridge over the Walloomsac River. The oldest section of the lower structure dates from the 1850s and originally turned out wallpaper, Stacy said.

A dam just above the complex once provided hydropower. The factory complex housed Flomatic Valves for many years and most recently was occupied by Trojan Steel.

Brown bought the factory and 48 acres in 2009 from Trojan Steel, in which he has an interest. Trojan Steel, which supplies structural steel for construction projects, continues to operate on an adjacent parcel. Although the two businesses are separate, there’s a good deal of sharing back and forth, Stacy said.

Room to try new things

In the Brown’s Brewing complex, the lower building, rising sheer from the Walloomsac’s west bank, will become the brewery. It’s been cleaned, repaired, and remodeled to hold the brewing and bottling equipment that’s now being installed. Brown’s brewers and craftsmen put together the five open fermentation tanks, while the company bought used bottling and labeling machines from other breweries.

Typically when breweries expand, they take out loans, erect new buildings, and buy new equipment, Stacy said. The resulting debt forces them to expand their business quickly. That’s not the scenario faced by Brown’s.

“We got old buildings and old equipment, and we’re doing it ourselves,” Stacy said, explaining that that will allow Brown’s to develop its market at its own pace.

The new brewery will have a laboratory -- something the Troy site lacks. The building has been set up with windows into the work areas so that visitors can see the brewing process.

A room right next to the river, overlooking the dam, will be a tasting room. The second brick building, uphill from the first, will provide storage and a warehouse.

Brown wants to take advantage of the site’s potential for water power and has a generator in the engineering stage, Stacy said. Spent grain may go into a digester to generate more power from methane. The brewery will have its own water treatment plant.

The property includes land across the river from the brewery. The Browns plan to grow some hops and barley there, in part for the edification of visitors. Although there’s not enough arable land for a big crop, whatever they grow will supplement the hops Garry and Kelly Brown already grow on 3 acres at their home in West Hoosick.

Stacy said they want to have the brewery up and running by March. The facility will employ 10 to 12 people at first: three brewers plus bottlers and packagers. Another six or seven support staff will work in the adjacent office. When it’s at full capacity, the brewery will have 20 to 25 employees, he said.

Unlike some small breweries, Brown’s doesn’t buy beer from even smaller brewers, nor does it sell its beer to larger craft brewers, such as Sam Adams, Stacy said. All of its production will go to Brown’s own customers.

Wider retail opportunities

The market for craft beers has increased despite the recession, growing by 13 percent nationally last year while the overall U.S. beer industry sank by 1.3 percent, according to the Brewers Association.

“People don’t go out as much during a recession,” Stacy said. “But craft beer is an affordable luxury.”

Industry research shows that much of the growth in the market comes from people who already drink wine and spirits adding craft beers to their menus. Although brewers like to think that people who drink mass-produced beer will eventually come to their senses and switch to the good stuff, that doesn’t seem to happen to any large degree, Stacy said.

Almost all of Brown’s beer is sold through the Troy restaurant, Stacy said. A very small amount goes to retailers in the Capital region.

“There’s a lot of demand in Albany that we’re not serving yet,” he said.

Brown’s plans to increase distribution first in eastern New York, southern Vermont and western Massachusetts, then slowly expand to what Stacy called “the four B’s -- Boston, Burlington, Buffalo and Brooklyn.”

The business has no interest in going beyond those markets, as doing so would force the company into more industrial-scale methods, he added.

The growth of craft breweries has lately had some active support from state lawmakers in Albany.

“We had five bills passed in our favor this year,” Stacy said.

One bill, passed by the Legislature in July, replaced an excise tax exemption for small brewers, which had been defeated by a legal challenge. In its place, the brewers were given a refundable tax credit. The result financially is “exactly what we had before,” Stacy said.

Stacy also praised a Wine, Beer, and Spirits Summit hosted by Gov. Andrew Cuomo on Oct. 24. The summit brought together farmers, brewers, distillers, winemakers, retailers and state officials to suggest ways the state can support its homegrown alcoholic beverage industry.

“Producers said, ‘This is what the state can do to help us,’” Stacy said. “The governor said, ‘This is what we’ll give you.’”

The governor promised to help promote New York alcoholic beverages in state and beyond.

Although the U.S. beer market remains dominated by a few huge manufacturers, the surge in craft breweries is creating a landscape reminiscent of the brewing industry in the early years of the 20th century, when almost every city had one or more small breweries making highly individual, handcrafted beers.

“We make beer the way it was done before Prohibition,” Stacy said.

After World War II, mass-produced uniformity in many aspects of life drove handcrafted goods into the shadows.

“Society has come full circle,” Stacy said. “Distributors are realizing this is not a trend. It’s real, and they’re getting behind it.”