USA, PA: Yards Brewing Co. looking for bigger location in Philadelphia

Yards Brewing Co. sells enough beer - 42,000 barrels last year - that it is running out of space at the 40,000-square-foot plant it opened in Philadelphia in 2007, Philly.com reported on January 11.

The brewery - Yards' third since president Tom Kehoe opened the original tiny plant in Manayunk 22 years ago - is crowded with 22 shining 200-barrel fermenter tanks; cold storage; a loading dock; a research lab; a tasting room/restaurant, which opens at noon daily; and offices, all in the riverside neighborhood near the SugarHouse Casino.

Partners Kehoe and Trevor Prichett are looking for an 80,000- to 100,000-square-foot home, and want to remain in the city, close to its most loyal users, if it can find the right place.

"We hope to start building in six to 12 months," and move in by 2018, Kehoe said. The company settled in the current site in 2007 after he split from ex-partner Bill Barton, who went on to cofound Philadelphia Brewing Co. at Yards' former Kensington site.

Unlike the factories that continue to leave Philadelphia looking for cheaper space and costs, Yards says demand for its product is growing from its local customer base. "Look for the hipsters," Kehoe said, laughing. "We would love to be as close to Center City as we can, and we would love to be in a neighborhood, and it's important to a lot of our employees to be able to bike to work."

Even on a recent frozen January morning, several of the 70 plant employees had hung their commuter bikes on the pegs at the loading dock.

City officials and industrial brokers have been helping Yards review locations "that can help support their continued growth" without leaving town, John Grady, president of the Philadelphia Industrial Development Corp., the city/Chamber of Commerce partnership that controls key industrial sites, said.

PIDC can offer big-enough buildings way downtown at the Navy Yard. Grady said he's confident private brokers can find alternatives near Center City. But "there's not a lot" available, and there are limited sites for new construction, warns Sean Durkin, a broker at industrial real estate agency Roddy Inc.

Yards is betting on growth at a time when the U.S. beer industry is in ferment. After years of losing drinkers to local upstarts, industry giants like AB InBev have been buying up craft brewers or starting their own. Pottsville's venerable Yuengling and pioneer craft brewer Boston Beer have added plants and gone national.

Philadelphia is thirsty, but the market "is not an easy sell" for new brews, Kehoe says. Remember Red Bell and Independence? In the late 1990s, they were among the best-funded of the city-based craft brewers that revived the local beer tradition a decade after former city favorites Schmidt's and Ortlieb's shut. They sold in yuppie bars in Center City and the South Philly sports venues, at premium prices. But they failed to catch on with neighborhood distributors or corner taverns, and were among the hundreds of U.S. craft brewers that cut back and closed after 2000.

Away from downtown, Victory in Downingtown and Dogfish Head in Delaware have won cult followings with multiple brands. To make it in Philly, says Prichett, a city resident with degrees from Harvard and Wharton, it's not enough to offer seasonal flavors and creative ads. "You have to be part of the community," which includes giving away beer for Ronald McDonald House events or parish carnivals' "Baskets of Cheer." "Last year we donated three tractor-trailer loads of beer."

At least the business doesn't feel threatened by digital replacement. "Beer is heavy. The farther you ship it, the less margin to share with the wholesaler and the retailer," Prichett said. "Craft beer will be the real deal for the rest of our lifetimes."

13 January, 2016