E-Malt.com News article: UK & USA: BrewDog reports progress in launching of its Ohio brewery

Giant, fantastical sea creatures are rendered in brilliant pastels on the walls of BrewDog’s brewery and U.S. headquarters in Canal Winchester, Ohio, the Columbus Dispatch reported on November 27.

So far, the science-fiction ocean scenery — the beasts cover a wall in the brewery, and most of an exterior concrete panel — are among the few projects related to the U.S. expansion that the Scotland-based craft brewer has completed.

Delays, both here and abroad, have scuttled the original plan that called for beer to begin flowing in August — this past August — and the firm’s plans to open its first U.S. brewpub, slated for the Franklinton neighborhood, have slipped into 2018.

Yet BrewDog remains confident that the tide of events has turned in its favor.

Most of its fermentation tanks, piping and brewhouse arrived this month from Germany. With equipment now on site, BrewDog anticipates it will start testing its system in February, and beer should roll out of its $30 million U.S. headquarters in April.

“I can’t wait,” said brewmaster Tim Hawn, whom BrewDog hired away from Dogfish Head. “I haven’t brewed since February. It’s all coming together now.”

Its taproom and the restaurant at the brewery also are months behind schedule, but they now are expected to open in February.

“We’ll begin polishing the floors (this) week,” said Keith Bennett, project manager for BrewDog.

The 10,000-square-foot space, booths and bar marked off with blue tape, is enclosed on one side by enormous windows looking into what will be the brewery and on the other side, by eight garage doors that open onto a large patio.

Taking advantage of the recent momentum on the project, co-founder James Watt made his way to Columbus to spend two weeks figuring out how to overcome the hurdles that remain in order for BrewDog to launch in the States.

“It feels good,” Watt said of the 100,000-square-foot project. “It will feel better when we hook up some tanks and are making beer.”

Watt admitted that the delays, late equipment and the Brexit vote — which caused the collapse of the British pound against the U.S. dollar — caused a bit of concern this year.

“I wasn’t sure we’d be able to do it,” he said. “It’s a hell of a gamble. It’s a $30 million project that we decided to do off a 24-hour visit.”

Even though the Canal Winchester brewery is back on track, BrewDog’s success in the U.S. is no sure thing. The American beer market must be contended with.

With more breweries than ever before, 4,200 and counting, according to the Brewer’s Association, BrewDog faces a vast field of competition for its bottles and cans on retail shelves.

It is getting harder for national brands, which BrewDog aspires to be, to obtain shelf space. Stores haven’t created much more space for beer and what space there is has been allocated to local labels. The same goes for many bars.

“The (retail) channels are crowded,” said Bart Watson, chief economist at the Brewer’s Association, a trade group for craft beer makers. “It is harder to get shelf space and tap handles.”

There also has been a slowdown in craft beer’s growth.

So far this year, craft sales have risen 8 percent, a big number in a stagnant overall beer market, but well off the double-digit gains of recent years.

The slowdown hit big players first.

The Boston Beer Co., maker of Samuel Adams, has reported slower-than-expected sales growth. Stone Brewing Co., one of BrewDog’s mentors, announced layoffs last month as its growth tapered this year.

BrewDog is planning to launch next year with about 100,000 barrels of production, which would make it the second-largest Ohio-based craft brewery. Great Lakes Brewing Co. is the biggest.

“(BrewDog) is going to face a very competitive environment,” Watson said. “They have built a great brand (in the United Kingdom), but we’ll see if that translates here with U.S. consumers.

“I imagine they will find success in Ohio, but as they move further away, there are a lot of great brands in the U.S.”

Though he is familiar with market trends and the challenges of building a business far from its home in Scotland, Watt is unmoved by these concerns.

“We never get too nervous about big, macro-level things,” Watt said after a tasting event at the Canal Winchester brewery attended by two dozen retailers and beer buyers. “We try to control what we can control.”

One thing BrewDog also plans to bring to the U.S. is a string of brewpubs and bars similar to the ones it has opened across Europe. That could provide the company a way into many markets that a regional or even national brewer might struggle to penetrate.

“I think it will help them,” Watson said. “Consumers like that experience. Taprooms have been great brand builders. You get to serve your beers in the environment they are meant to be served in, and you have control over everything. It is a smart move.”

Standing in the mostly empty headquarters building, a mural of a colossal, angry red squid squeezing a wood barrel behind him, Watt explained how his time working on fishing boats after tossing aside a legal career tempered his perspective.

He spent up to a month at a time on the boat, trawling for herring and mackerel in the North Atlantic.

“I worked on 24-hour shifts, on deck in storms, 250 miles north of Scotland.”

Gesturing at the half-built brewery, Watt observed: “This is fun.”


30 November, 2016