USA, PA: Western Pennsylvania's craft beer market grows with the flow
John Titus and Tim Molinari are taking the plunge into the competitive world of craft beer brewing, after toiling for months to open their New Crescent Brewing Co. taproom in a converted storefront in downtown Irwin, the Trib Live reported on January 27.
Although craft brewers dot Route 30 in North Huntingdon and others are planned for Greensburg and Jeannette, the business partners aren’t worried that their brewery will get lost among the crowd when it officially opens Saturday, February 2, after recent “soft openings.”
“I think the demand for craft beer is not satisfied,” said Titus, of North Huntingdon. He’s joined Molinari, of Robinson, in market taste-testing at the region’s brewpubs.
Despite the growing competition for craft beer drinkers, area tavern operators and brewers — veterans and newcomers alike — agree the market for specialized beer is not saturated.
“The craft beer market has taken over a good part of the beer sales from the big guys — Bud, Coors and Miller. The craft beer trend is not going to stop,” said Nathan Long, a bartender at The Headkeeper, a Greensburg tavern that stocks more than 650 varieties of craft beer — locally produced and national and international brands.
The craft beer market is strong enough that Pennsylvania had 282 craft breweries in 2017, the sixth most in the nation, according to the Brewers Association. The independent brewers trade group based in Boulder, Colo., ranks Pennsylvania No. 1 in terms of craft beer production — 3.72 million barrels last year.
“Western Pennsylvania is loaded with small brewers,” said Rich Wagner of Hatboro, Montgomery County, a brewery historian and former Philadelphia brewery worker. “There is enough room for an infinite number of them.”
Allegheny County has 42 licensed breweries and Westmoreland has 16, up from 19 and 10, respectively, in 2016, according to the Pennsylvania Liquor Control Board.
“We’re seeing a ramp-up in the Pittsburgh area, proving there is an adequate market, from Erie to West Virginia and east to State College,” said David Kahley, president and chief executive of The Progress Fund, a Greensburg-based lender that has financed five brewpubs and is in discussion with five other prospective brewers.
“People can’t get enough of it. (Taprooms) can sell the beer on the premises, and that’s what’s driving this,” Wagner said, adding that a whole generation of beer drinkers has grown up patronizing brewpubs and taprooms.
As defined by the Brewers Association, craft beer has a flavor derived from traditional or innovative brewing ingredients and fermentation. A craft beer brewer cannot produce more than 6 million barrels of beer annually.
Those risking their money — and, in some cases, putting their house on the line as collateral for a business loan, Kahley said — hope to cash in on what the Brewers Association said was a nearly $6 billion economic impact craft beer had in Pennsylvania in 2016.
Both Titus and Molinari are bankers in Pittsburgh at their day jobs, and craft beer drinkers and brewers in their spare time. They were willing to invest what Titus said was “several hundred thousand dollars” to renovate a Main Street storefront into a brewpub, pay for the licensing and buy the equipment.
The five-barrel brewery in the back of the building leaves no space for a kitchen, so they intend to rely on local restaurants to supply any food they sell.
Another taproom in the wings is Invisible Man Brewery, which Stephanie Victor, 32, one of the owners, said is expected to open in the spring on South Pennsylvania Avenue in downtown Greensburg. The application for a brewery license is pending LCB approval.
Victor, part of the ownership group of Hugo’s Taproom on West Pittsburgh Street, is confident a brewpub will work in Greensburg, which lost its lone brewery when the Red Star Brewery & Grille closed in 2010.
The city’s “many unique bars … play off each other,” and there will be a niche for a craft beer maker, particularly among college students, Victor said.
Victor envisions having a Prohibition-era speakeasy in the basement, where the brewing will occur, and a brewpub that will hold about 70 patrons upstairs. Brewmaster and co-owner Ted Mellors has been brewing beer for about 20 years, and the pair have been mulling brewpub plans for about two years, Victor said.
In Springdale, Joshua Lipke found a niche in the craft beer market by making a British-style cask ale at his aptly named Leaning Cask Brewing Co.
“We tried to do something different,” said Lipke, a former banker and home brewer from West Deer.
The key to making cask ale is to reduce the artificial carbonation through fermentation. While not eliminating artificial carbonation like the Brits, Lipke produces an ale with a soft natural flavor and some artificial carbonation.
He and his wife, Stefanie, starting planning for the business in 2015 and opened in June 2017.
A decade after Penn Brewery opened on Pittsburgh’s North Side, Sean Casey in 1996 converted the former St. John The Baptist Church in Lawrenceville into Church Brew Works — much to the chagrin of those who had a hard time conceiving of brewing vats where communion wine was once served at the altar.
More than 20 years in the business has given Casey a unique view of the growth of the craft beer industry in Western Pennsylvania.
“Craft beer has also gone from unique to mainstream in the last three decades,” Casey said. “There used to be a lot of excitement for a craft beer festival, and the founders of the early craft brewers attended the rare beer festival and established friendships that exist to this day. Today, there are now craft-centric beer events every single weekend in virtually every community and city, and it’s quite ubiquitous.”
Casey said owners should be wary of complacency and need to evolve and embrace new beer and food trends, new packaging trends, new hops, new libation trends and new technology.
“The Church Brew Works was the first brewery to commercially brew with quinoa … and this fall we were the first American brewery to introduce a 2-liter steel can with pour spout,” in addition to 5-liter cans, he said. “As the breweries keep proliferating, there’s more pressure on the new breweries, and they are adding more variety. There’s a lot more variety in (craft) beer style, in the beer atmosphere and hyper-localization.”
Craft beer drinkers — who typically range in age from late 20s to early 40s — support the products from the smaller producers, Long said.
“You have to be hyper-local” to do well in the craft beer business, said James Bosco, who sells bottled craft beer at Major Stokes, his Greensburg eatery.
Long sees validity in that view. As big national brewers such as Anheuser-Busch gobble up regional craft breweries instead of directly competing with them, “once the big guys buy them, (customers) stop buying them,” Long said.
For some in the business, there is a cautionary tale in the 2018 bankruptcy of Rivertowne Brewing Co., which had a brewery and taproom in Murrysville, a microbrewery in Monroeville and taverns in Verona, North Huntingdon and on Pittsburgh’s North Shore. Helltown Brewing in Mt. Pleasant and Brewery Acquisition Co. of Wexford bought the brewery.
The liquor licenses and assets in the Verona and North Huntingdon taverns were sold in federal bankruptcy court on January 24.
Despite the bankruptcy of his business, Rivertowne founder Christian Fyke remains optimistic about the future of craft beer in the region.
“I still see that there is room for growth,” Fyke said after the recent auction of his liquor licenses. “Let it be casual and meet the customers where they are.”
The smaller taprooms that are popping up in communities can do well, Fyke said. It is the mid-size breweries, those producing between 5,000 barrels and 15,000 barrels a year, that are vulnerable because of the higher operating costs, he said.
Shawn Gentry, founder of Helltown Brewing, went into partnership with Arnold Burchianti in buying the 20,000-barrel-a-year former Rivertowne brewery and believes in the growth of craft beer. Buying the Murrysville brewery will give the partners a canning option and opportunities to expand into regional markets, said Gentry, who is awaiting LCB approval of a license to sell the beer that’s been brewed at the Murrysville site.
A bankruptcy court filing revealed that Rivertowne saw the number of craft breweries nationwide more than double between 2013 and 2017, with a 16 percent increase from 2016 to 2017. There were 6,266 craft breweries nationwide in 2017, according to the Brewers Association. At the end of 2012, that figure stood at 2,420.
That growth meant a drop in market share for Rivertowne. The business was overextended when it saw a corresponding decrease in revenue, unable to cover the debt it had accumulated.
While the craft beer business is enjoying boom times, Bosco predicts it will peak.
“There will be a shakeout,” said Bosco, a hospitality and tourism professor at Seton Hill University of Greensburg. “The ones who are selling their own beer in a unique atmosphere can survive. The ones that depend upon selling the stock from their shelves will not.”
Kahley sees Rivertowne’s failure as pertinent to that particular business and “not related to the demand for craft beer.”
He sees the craft beer business growing.
“We are going to see better product, and that’s going to encourage more people to get involved,” Kahley said.
29 January, 2019
