Lexington craft brewers increasing number of barrels and sales

jpatton1@herald-leader.comJuly 13, 2014 

At Alltech's Shrewsbury Hall in Lexington, an elite cadre of tasters gathered on a hot afternoon to put their palates to work selecting the winner of the company's annual Kentucky Ale brew-off.

They sampled India pale ales, deep chocolatey stouts and spicy ryes, judging each to an industry standard.

What's the prize?

Becoming an Alltech special release: the brewery produces and distributes the winner each fall.

And the chance to compete at an even bigger competition: the Great American Beer Festival in Denver, against more than 100 other beers made from teams of professional and amateur brewers from all over the country.

Alltech's master brewer Ken Lee and his crew will work with the winner to produce the entry for the "pro-am" division and possibly make some local brewer's dream come true.

That's basically how Country Boy Brewing, one of Lexington's craft beer makers, got its start.

In 2010, co-owner Jeff Beagle and his partners won Alltech's contest with their "Cole Porter," which went on to Denver.

"It did not win, but there were 120 entries," Beagle said.

But just going gave them the confirmation they were looking for: their beer was good. Really good.

So in 2012, they opened their own brewery in Lexington. Then West Sixth Brewery opened, and then Blue Stallion. And suddenly, in less than a year, there were four craft breweries in town.

That was just the first wave. Now all have expanded, and all are answering a lot of questions from eager would-be competitors.

But they don't really see it as competition, they say. It's more like an ever-growing chance to reach a broader audience.

While overall the beer market is shrinking, craft beer is gaining market share. Nationally, the craft beer market in 2013 was about $14.3 billion, up 20 percent from the previous year, and now 7.8 percent of all beer sales, according to the Brewers Association.

Kentucky mirrors the national picture, Lee said.

"We see increased interest and enthusiasm with craft beer, moving away from some of the mainstream brewing and into local and regional beers, things that have a story behind them," Lee said. "And the homebrewers tend to be the grassroots, frontline level of that. These are the guys who are really into this. So having this pro-am competition is a way of staying connected with the people who drink beer and are really enthusiastic about it."

Ralph Quillin of Paris was one of those home enthusiasts, brewing beer as a hobby since 2008. But now he's jumped into full-scale commercial production, putting a 60-gallon brewery in one of the 1880s-era historic buildings he's rehabbing in downtown Paris.

Rooster Brewing opened in April, sold its first Paris-produced beer a week later, and now brews every Wednesday for sales on Thursday, Friday and Saturday, Quillin said.

"We did this on the cheap. I already owned the building, and didn't spend a lot on the brewery, or on the rehab," Quillin said. "So if we sell a few beers we can cover our expenses. A few more, can make money and actually expand."

Expand? Already?

In August, Quillin said, he anticipates they will be looking at buying larger equipment so they can produce more beer, enough to sell at other locations.

"We haven't done any distribution yet, haven't done any bottling yet," Quillin said. But that will be next: he anticipates selling "bombers" or big bottles, kegs and quarts.

"That's the Country Boy, West Sixth, Blue Stallion model," he said. "Six months in, you've got to have new stuff and expand."

Actually, West Sixth has expanded four times since opening in 2012, said co-owner Ben Self.

"When we started, we could brew 45 barrels of beer a week. Now we're up to about 350 barrels a week," he said. "We're making a lot of beer. ... We did our biggest expansion — the whole new brewhouse — earlier this spring. We thought that would hold us off for a little while. Since then, three weeks ago we added more tanks and we plan to do another expansion later this year."

West Sixth isn't alone. Blue Stallion added a cooler in January that tripled its capacity and allowed it to begin distributing at least 14 kegs a week. Country Boy will be adding four more tanks and a cooler later this summer and plans to begin distributing their beers in West Virginia.

In the beginning, Country Boy had a four-barrel system, that it would run twice a day, and about 32 barrels of fermentation space, Beagle said.

"Now, we have a 12-barrel brew system, run 4 times a day, and we have approximately 500 barrels of fermentation capacity," he said.

Last year, Country Boy had about $1 million in sales; if they get a canning line going this year they could almost double that, Beagle said.

Are they surprised at their success?

"We're surprised, and not surprised," Beagle said. There was a time, not that long ago, when brewpubs came and went.

"There will still be some shakeout and you don't know who's going to be shaken out," he said.

Just in January, Lore Brewing in Danville, a popular craft beer maker, went out of business.

So what makes for a successful craft brewer?

"A lot of it's the passion, the quality of the beer, the relationships you build with your distributors and your accounts," Beagle said. "Making mediocre beer is just not going to happen. If it's mediocre beer you're going to go out of business.

Today, craft beer consumers' expectations are high.

"Once people try craft beer for the first time, they just don't go back," said West Sixth's Self.

"I think you're going to see lots more breweries open. It's going to make us into more of a craft beer destination."

Right now Kentucky is well behind many other states in economic impact of craft brewers, with only $271 million, compared to California's $4.7 billion, or Oregon's $1.3 billion, or even Tennessee's $446 million.

So Self is sure there is plenty of room to grow.

"I don't have any idea right now about how big we will get," Self said. "We're all about introducing new people to the products. Obviously, it's expanding quite fast. But there's a huge opportunity for people drinking macro beer to move to craft beer. ... A very small percentage of people in Lexington are drinking craft beer. If we can grow the number by 10 percent, that's enough for everyone to double in size. We don't view the other craft breweries as competition. At all."

Janet Patton: (859) 231-3264. Twitter: janetpattonhl.

Lexington Herald-Leader is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service