USA, NY: Brooklyn Brewery to stay put in Williamsburg

After a protracted search for a new home, Brooklyn Brewery appears to be staying put in Williamsburg, Brewbound reported on January 23.

Brooklyn Brewery founder and chairman Steve Hindy made the announcement on January 19 in a post on the company’s website titled “Home Sweet Williamsburg.”

“We look forward to maintaining a substantial brewing operation and expanding our office space, and possibly developing a restaurant and beer hall in Williamsburg, our home for the last 26 years,” Hindy wrote.

Spurred by New York City Mayor Bill de Blasio’s support for maintaining manufacturing businesses in the city, Hindry wrote that two of the brewery’s three landlords have expressed interest in reupping Brooklyn Brewery’s leases, which is currently slated to expire in 2025. (The third lease — for a warehouse across the street from the brewery — likely won’t be renewed and the space will be redeveloped into housing or a commercial space.)

Brooklyn Brewery president Robin Ottaway told Brewbound that a combination of rising rents in the popular neighborhood and landlords’ desire for commercial businesses led the brewery’s management team to explore its options, including moving to a Brooklyn Navy Yard project that’s becoming a food production hub.

“We assumed we were going to have to leave in 2025,” Ottaway said. “Manufacturing rents need to be lower than retail rents. You cannot manufacture at retail rents. That’s what these industrial business zones are meant for to keep manufacturing in the city and create those kinds of jobs.”

Once the de Blasio administration signaled that it would limit commercial development in industrial business zones and supported manufacturing businesses within the city, conversations with the brewery’s landlords restarted.

“We really didn’t want to leave and now it looks like we don’t have to,” Ottaway said.

Discussions with the brewery’s landlords are still in the early stages, Ottaway told Brewbound, but the Navy Yard project is now off, something he said was a “win-win” for all parties involved.

“We didn’t want to keep them hanging,” he said of the Navy Yard developers. “They’re going to have plenty of people interested. This is a win-win. They’ll find other people to move into the neighborhood.”

“I want to see manufacturers thriving not only in our assets like the Navy Yard, but across the city,” Alicia Glen, deputy mayor for housing and economic development, told The New York Times. “From where I sit, keeping the brewery at its home in Williamsburg would be a coup, and it means the Navy Yard can use its scarce space to grow the next multimillion-dollar Brooklyn brand.”

Meanwhile, Brooklyn Brewery is still hoping to build a larger production facility. The company had been considering a location on Staten Island, before negotiations hit a snag. Ottaway said there are no new details on that project.

“It’s hard to put timelines on those sort of things,” he said. “Those things are beyond our control.”

In 2016, domestic sales of Brooklyn Brewery’s beer went flat, Ottaway said, noting that declines were mostly concentrated to seasonal offerings. The core business was up during the same time period, however, and Ottaway said he’s “cautiously optimistic” for a stronger performance in 2017.

Nevertheless, sales of the brewery’s flagship Brooklyn Lager, which accounts for about 45 percent of the company’s total business, remained strong in 2016.

“I’m happy to have a flagship that’s still growing,” Ottaway said.

Though Brooklyn struggled to grow in the U.S., international sales — which now account for about 50 percent of the brewery’s business — grew by 20 percent, according to The New York Times.

In October, Brooklyn Brewery struck a deal with Japan’s Kirin Brewery that would include the sale of a minority stake — about 24.5 percent — and the establishment of a new joint venture in Japan, including the brewing of Brooklyn Lager, which is slated to be brewed in Japan for the first time in March.

24 January, 2017