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How the Vermont Craft Beer Industry is Finding Success in a Crowded Market

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By Emma Marc-Aurele

The craft beer industry has contributed over $271 million to the Vermont economy while the industry has added a total $55 billion to the United States’ economy. The craft beer business is growing exponentially each year. According to the Brewers Association, 1.5 breweries open every day throughout the United States. In 2011, there were 2,033 breweries open in the US and that number more than doubled by 2015 when the Brewers Association recorded 4,269 as the running total.

That same trend has occurred in Vermont: in 2011 the state had 22 established breweries and by 2015 that number doubled to 44. With 9.4 breweries per capita, Vermont is ranked first for number of breweries based on population and is recognized as a leader in this booming industry.

In 2015, Vermont produced 261,654 barrels of craft beer, ranking 20thin the US, according to the Brewers Association.

“There are no signs of a let up in demand for high flavored craft products driven by millennials who favor craft products,” said Greg Dunkling, program director of the University of Vermont’s Business of Craft Beer Program.

A Pioneer of Craft Beer

Dunkling seems to think that Vermont’s top spot in the craft beer industry can be attributed to Greg Noonan, the founder of Vermont Pub and Brewery in Burlington and author of the famous “Brewing Lager Beer” guide. Noonan’s guide to brewing was written in 1984 and became the go-to-guide for small-scale home brewers and even some larger scale professionals.

A number of today’s brewmasters in some of the most famous breweries in Vermont (Lawson’s Finest Liquids, The Alchemist Brewery and Hill Farmstead Brewery) worked under the mentorship of this great beer pioneer. These successful breweries are consistently ranked at the top of the charts by beer consumers as well as in regional and national beer awards.

In 2015, announced Hill Farmstead Brewery as the number one brewery in the world. The Alchemist was also recognized by in 2015, when they earned third and fourth place spots on the list of top beers in the world. Focal Banger took the third place spot while Heady Topper landed right behind its fellow brew in fourth.

Long lines in local retailers stocked with patient consumers in search of their products are a testament to not just cold suds but exceptional beer. With the help from Greg Noonan, these three breweries have helped Vermont become a leading contributor to the growing and global craft beer industry.

The state of Vermont’s regulatory support has also contributed to the rise of Vermont’s craft beer industry. Before Noonan, Vermont’s law stated that establishments could not sell alcohol in the same place it was produced. With the realization for potential in their fellow brewing community members, the Legislature changed the law to help create a craft-beer community at its finest.

High quality beer and a simple business strategy seem to be the main goal when talking to brewers. In terms of what it takes to become a successful brewery in Vermont, the CEO of 14th Star Brewery, Andrea Gagner, further emphasizes Miller’s point to make high quality products, while also having the flexibility to adapt to the changing palates of these hop-driven consumers.

Gagner says that 14th Star Brewery aims to “grow slowly and organically” and become “good corporate citizens” which seems to be the trend of most breweries in the area. This business of high quality brewing encourages breweries to grow slowly and focus on the integrity of their product, which in turn allows community involvement and the use of local ingredients.

Bill Mares, a knowledgeable craftsman of craft beer and co-author of the book “Making Beer,” is another leader in the industry.

He and business partner Todd Hair, who has worked in well-known breweries like Magic Hat and Switchback, recently opened up The House of Fermentology on Pine Street in Burlington Vermont.

They are unique in that they are a “blendery” and are producing a line of sour beers. Although their product may be distinct from the others, it seems even they have this same idea of focusing on the quality of the drink.

The obvious problem with this “staying-small” craft business strategy is ensuring that these companies can brew good beer consistently in order to keep customers happy and coming back for more.

Mares said, “We have to brew really good beers all the time. We can’t afford one bad batch.”

For a company that does not rely on volume, the small amount of beer that these partners invest their time in need to be at the same level or better than their local brewing competitors. These breweries seem to be under this same pressure to be consistent in the high quality of their batches.

Thankfully for them, over the years there have been some advancements in brewing technology that make the process a bit easier. Mobile canners have been helpful to smaller brewers in getting the product to markets outside the local community.

They allow these small businesses to package their products so they can be placed in retail establishments statewide, and across the country. Without these canners, they have to depend on only draft distribution and are at the whim of restaurant and bar owners.

Founder of Otter Creek Brewing (and current Shumlin Administration official), Lawrence Miller, is quoted in the book “Making Beer.” He puts it, “The state adapted to what we needed without blowing open the door to create an unstable market. There was a good camaraderie among all brewers, professionals, and amateurs. The home brewers were the educated consumers who could then educate the public to be more appreciative of good beer. The brewers benefited from these open-mouthed people willing to come back and say what they thought. If you were a brewer and open-minded you could adjust. Some who could not adjust, are not around anymore.”

Now with this new technology, consumers can see and become familiar with the product in stores and are able to purchase it more conveniently.

Beer Business and Strategy

So with all these new brewing inventions and flavors, where is this trending industry headed?

UVM’s Dunkling said: “As beer styles become more experimental and breweries push the envelope expanding the traditional definition of a beer style, consumers transition from other alcoholic beverages into this sector. There’s simply too much flavor to ignore.”

Dunkling and his fellow staff members provide industry specific knowledge that people require to either gain employment in the industry or to undertake their dream of someday launching their own brewery. In 2014, overall beer sales were only up 0.5 percent, while craft beer sales increased by 17.6 percent.

Along with this increase in specific craft sales and Vermont’s leading standings in number of breweries per capita, Dunkling’s UVM program seems like the perfect way to take advantage of Vermont’s brewing success and help continue the growth of the industry.

UVM’s program includes both business strategies as well as some of the fundamentals of brewing craft beer. Overall, though, this growth in the craft beer industry seems to be larger than just beer. Many industry analysts relate the craft brewing sector to the broader locavore food movement and the desire of consumers for “local, high-end artisanal products,” Dunkling said. This want for beer brewed in a consumer’s backyard is more than beer and emphasizes local, local, local.

Paul Sayler, co-owner of Zero Gravity Brewing, is quoted in “Making Beer” saying, “At its most basic, beer is a cottage industry. And Vermont is a state where cottage industries spring up. It’s Yankee craft and ingenuity at work. Add to that Vermont’s strong culture of local foods and small scale.”

Some may wonder if this explosion of craft beer in Vermont is simply just a fad and eventually some may see the state as an oversaturation of craft breweries, but most think that the demand for a quality beverage will never go away.

Darby Kitchel, manager of Switchback Brewery feels that the massive amount of breweries stands out as a tool for inspiration to brew better beer.

Kitchel said, “It creates a sense of competitive spirit, which makes for good drive to make better beer and, in the end, run a better business.”

Emma Marc-Aurele is a freelance writer from Burlington. This story first appeared in the July issue of Vermont Business Magazine.