In recent years, Colorado’s brewery tally has grown to 8.4 per capita, placing it third in the U.S. behind Vermont and Montana. In 2010, there were 70 members of the Colorado Brewer’s Guild and about 150 breweries total. Today, the guild reports 200 members and more than 325 breweries. About 50 per year have opened in each of the last five years, and The Centennial State is on pace to do similar numbers in 2017.
Denver itself has seen intense growth during that time as well, going from around 10 breweries eight or nine years ago to pushing 70 today. The ability to sustain that type of market saturation is impressive (although it may not be that way forever) and a big nod for that sustained growth goes to a local business that might surprise more than a few craft diehards.
Steve Kurowski, operations director for the Colorado Brewer’s Guild, says Coors Brewing Company is a big reason why the city of Denver has exploded in terms of breweries opening their doors in recent years.
“We didn’t have to get rid of a lot of the archaic prohibition laws,” Kurowski explains. “Coors was really responsible for keeping our laws friendly before craft beer. They made a point to say, ‘We’re a brewery. We need these laws.’ So when these microbreweries opened, it was a similar set of rules they had to deal with. They set the precedent in a lot of ways.”
Having favorable legislation in Colorado has put the industry in protection mode as opposed to being forced to be proactive about loosening prohibition-era regulations. The relative ease in which one is able to open a brewery has produced different problems in Denver, though. For one, the rapid maturation of a relatively small market that has allowed little room for growth in sales and in physical space. It’s an especially prudent problem as location could just be a factor in whether or not a brewery succeeds.
Meanwhile, the once-sleepy Mile High City is growing, having overtaken New York City, Portland, and D.C. for number of cranes in the sky over this summer. Most construction is residential growth, a side effect likely due to “green rush,” or the influx of new residents post-legalization of recreational marijuana. This influx has begun to push small businesses out of the downtown area due to rising rent costs or the desire to build more residential property.
River North Brewery opened its doors in downtown Denver on 24th and Blake in 2012 with a 5,000-square-foot brewhouse and taproom space that offered little room to make anything other than their original lineup of Belgian-inspired beers. When the building was sold and set to be demolished, owners Matt and Jessica Hess to open a 10,000-square-foot production space a few miles North of the downtown area in order to expand their offerings and output. In June, they announced plans to reopen a small taproom for experimental beers on 34th and Blake, which they hope to open at the end of 2017.
“It comes down to what you have to pay for rent or to own,” says Patrick Annesty, vice president of River North. “That area has gotten really expensive, so a production facility wasn’t really feasible, even space-wise. Especially as you see the downtown area being developed. It makes more sense to have a remote production space so you pay less per square foot while keeping a separate retail space.”
Despite more space and freedom to expand their lineup of beers in the production facility, the sheer volume of breweries pumping out beer in the city—from the old guard like Great Divide all the way up to more recent, innovative producers like TRVE—of Denver has made for fierce competition and an environment where flat is the new up.
“If you can maintain what you have, you should be happy,” Kurowski says. “It’s hard out there on the shelf. You sell yourself at retail, you don’t sell yourself at wholesale, so you’re more profitable. If you can be innovative and be a destination, you’re going to be fine. The breweries with the huge growth plans, good luck and godspeed.”
Just Northwest of city center, in the up-and-coming Highlands neighborhood, sits Call to Arms Brewing. Open for two years, they’re expecting to hit just around 1,000 barrels for 2017 with 92% of their sales coming from own-premise retail. In fact, they have an aversion to wholesale all together. Owners Jesse Brookstein, Jon Cross, and Chris Bell, who, between them, have a combined 30 years in the industry, have relied on becoming the neighborhood spot to sustain growth. Despite their location in a “trendy” hood, that growth has been slower than expected.
“We thought we’d be doing well over 1,000 barrels in our second year,” says brewer Chris Bell. “I’d be lying if I said that everything was perfect because we’re in a hot neighborhood. We thought this neighborhood would grow fast enough to keep our growth at a faster pace, and I don’t think that’s true. Ultimately, we’ve discovered that no matter how fast things are growing around you, it takes time.”
Call to Arms isn’t built for distribution, with limited space for packaging and an inability to hit low price points expected from nearby sports bars. They’ve instead focused heavily on reaching different audiences and getting people to come from outside the neighborhood by holding events on location—themed parades, live music, etc.—to become a destination in the area.
“Spend the money on the taproom, make it cool, and make it a comfortable place to drink, instead of dumping money into packaging and faster growth,” Bell says of Call to Arms’ business model. “Let’s make sure we have a proven concept and grow from that. We could sign with a distributor, but then you’re strapped to growth. We have a zillion regulars. That’s our base. Our sales should be ‘X’ on any given day just based on our regulars.”
Station 26 Brewing Co. opened in late 2013 with the sole purpose of focusing on their neighborhood with little-to-no distribution. Founder Justin Baccary decided on the Park Hill neighborhood located Northeast of downtown Denver after plotting all of the breweries that existed at the time and finding the gap in density. While Call to Arms has some competition in the Highlands area of town with Hogshead Brewery and Hops & Pie Taproom, Station 26 is on a bit of an island, which has helped the beer maker find faster growth.
“Our location has been great for us,” Baccary explains. “We’ve really been embraced by the local neighborhood because they didn’t have any [nearby] options.”
After biking up and down the streets of Park Hill, Baccary saw an empty building without signage and eventually tracked the owner down via public records. Upon approaching him regarding the space, the owner had revealed he was about to sign the lease for a CrossFit gym with someone who had four existing gyms and millions in the bank. Baccary charmed the guy in a different direction.
“I bullshitted my way into it,” Baccary says with a smile.
Nearly four years later, Station 26 has seen demand take off, producing nearly 3,500 barrels in 2016. About 1,000 of those were from retail, while the other 2,500 was distributed. “We started putting beer in cans about two years ago and that’s really taken off,” Baccary says. “The original plan was to sell a few kegs around town as a marketing effort, but the demand for our beer leads us to brew and sell more wholesale.”
Cans accounted for nearly 70% of Station 26’s wholesale equation, which eliminates the need to compete for tap handles and low price points. “It’s super tough [to get tap handles in Denver],” Baccary says. “There’s constant rotation. We’ll sell a keg and they’ll be like, ‘Hey, that was great, that beer sold faster than any keg ever!’ and I’m like, ‘Cool! Want another one or two this week?’ and they’ll say, ’No, we’ll talk next month.’ That’s why our numbers skew towards cans. If we get shelf placement at a liquor store and the beer sells, it’ll stay there.”
While Station 26 has seemingly found a way to sell wholesale without being committed to growth, they don’t have lofty plans to commit to a large scale production route. “We self-distribute 60 miles or less from this building,” Baccary explains. “We just do what fits. We’ve expanded our fermentation to some outside tanks, we have a barrel cellar. We just try to make as much beer as we can in this building.”
Both Call to Arms and Station 26 have prioritized being the spot in their neighborhoods, and they’ve built loyal bases of regulars as a result. But what happens as you get closer to Denver’s city center is a completely different landscape. With the majority of the city’s breweries all located within close proximity, simply opening your doors and pouring beer won’t cut it.
“You have to tell people what you have these days,” the Brewer’s Guild’s Kurowski says. “Word spreads through social media, but you have to validate all the time. These breweries need to find a way to out cool each other to keep people interested. People are getting smarter, their palates are becoming more refined. Quality is going to go up for everyone, but the breweries that aren’t brewing super high-quality beer are going to suffer.”
Our Mutual Friend opened in the River North neighborhood—Denver’s densest in terms of breweries—in 2012. At the time, there were only 12 other breweries in the city, which allowed OMF to go through the growing pains typical of a young brewery without having to worry about the fierce competition opening doors in literally every direction.
“You can’t get away with a lack of knowledge in this city anymore,” says OMF co-founder Brandon Proff. “There is no more learning as you go. We’re definitely lucky to have opened when we did. There are too many options available in this city. I don’t think it would have worked for us if we had waited.”
Much like Call to Arms and Station 26, OMF plans to do most of its sales through the taproom, but is also interested in experimenting with packaged beer. They’ve recently started bottling some of their wild fermented beers, including Saison Trystero, which won silver at the Great American Beer Festival in the Brett beer category. “We want to get as big as possible as we can here,” says head brewer Jan Chodkowski. “That probably means some amount of packaging. But no world domination for us.”
OMF has also invested in trying to provide a unique space in which to drink. With a bright and colorful facade mural, old world library interior, local artists adorning the wall, and ample natural light, its taproom is extremely comfortable and inviting. Plus, there’s an outdoor patio.
“This place was originally a printing facility that the owner’s grandfather started,” Proff explains. “It’s been a couple other things, a Mexican restaurant, a gelato place. It’s crazy to me. I’m sure they were thinking, ‘This neighborhood sucks,’ but when we came in here, it was ready to go with a bar, bathrooms, and a garage door. We needed this place specifically for that garage door to build our patio.”
OMF isn’t the only brewery that put a lot of thought into its taproom and patio decor. Ratio Beerworks, located just a few doors down the street, knew they were entering a competitive market in Denver and put careful thought into how they wanted to both a) design their taproom and b) build out their patio. Brewing is inherently industrial, which a lot of breweries use as a jumping off point in their taproom decor, with a classic rustic feel with reclaimed wood and steel. Ratio wanted to take another avenue.
“We went to Austin to get inspiration for our taproom and patio,” says co-founder and brewmaster Jason zumBrunnen. “We were thinking, ‘Let’s add some color and warmth.’ We thought that was missing from a lot of the breweries and taprooms we’ve seen.”
Ratio was the fourth brewery in the area when it opened in 2015. By the end of that year, 12-15 more breweries had opened within a half mile radius. Meanwhile, within Denver city limits, 50 breweries opened from 2010 to 2015. Blame it on the weed, sort of.
“I started Ratio’s business plan in 2010, so it took five years,” zumBrunnen says. “There was this buzz that recreational [marijuana] was coming, and all of a sudden, buildings were disappearing. People started moving here in droves. We were close to leasing a spot, but we’d hit a hurdle. Then all of the buildings were gone. It took us a year to find this spot.”
Ask a brewer for advice on opening a brewery, and the universal joke many will respond with is, “Don’t.” While that answer is only half-serious, it also serves as warning. As the U.S. sprints past the 6,000-brewery mark, potential beer makers need to understand the current market and what that might mean for their success more than ever.
Spangalang Brewery’s story is eerily similar to Ratio. They started their business plan in 2010 and opened in 2015 when Denver’s new-beer scene was already at a fever pitch. While competition between the fledgling breweries was friendly, there sheer volume had co-founder Taylor Rees second-guessing himself.
“I don’t know if we would have done this had we known there would be 60-70 new breweries opening and in the works at the same time we were about to open,” he says. “There are parts of town that have 10 breweries in a five-block radius. That’s good, because people come to this area to visit all of the breweries, but there will come a point where it’s just too much in one area.”
Some of the delays in opening for Spangalang were due to the historic district in which the brewery lives. With a rich jazz history, Denver was a stop for musicians, between the 1920s and the 1950s, coming and going from Chicago to the West Coast. They would play shows downtown, but due to segregation of the area, would head to the Five Points neighborhood to continue playing music with friends and the party the night away.
Opening a brewery in Five Points provided a new set of issues, specifically in working with a board to preserve the aesthetics of the architecture. “Legally, you can’t do anything to the outside of buildings [in the Wellton Corridor],” Rees explains. “Businesses are moving in, but we can’t change anything. We have to keep the storefront the same.”
Which brings us back to patios. For a small brewery that’s on pace to produce just 450 barrels in 2017 with 95% of those barrels coming from retail, the patio is a big deal. “It took us nine months from start to finish,” Rees says of the process. “While we didn’t want to go through the historical board, we had to get approval that was also delayed for months and months. Architects don’t care and don’t understand that it costs a lot of money to sit on a property and wait for approval. As soon as we wanted to put a patio in our private parking lot, it was a nightmare.”
But it was apparently worth the headache and setbacks. “We opened our patio in April, and our business increased measurably,” Rees says. “We get really busy on certain days when the weather hits 60-70 degrees between December and February. People want to go anywhere there’s a patio. Warm weather, we’re slow. Bad weather, we’d be slammed.”
Hip factor and patios are two parts of the puzzle when it comes to surviving a quickly maturing market like Denver, but at least one brewery in particular has defied the temptation to be The Next Big Thing. Bierstadt Lagerhaus opened at the very end of 2015, and was one of the most recommended brewery stops among everyone I spoke to during my visit. Brandon Proff and Jan Chodkowski from OMF admitted they visit at least twice a week, offering that “that’s where everybody in the industry goes.”
Co-founder and head brewer Ashleigh Carter sees it the same way. “We’re an industry place,” she says. “Everybody [in Denver] makes crazy stuff, but honestly, at the end of the day, people just want to drink Pale Lager and get drunk with their friends.”
It’s not just industry folk that have found appreciation for Bierstadt, either. Despite not aiming to make “crazy stuff,” they’re one of the most popular spots in the city, simply for making traditional German styles extremely well. “Is it cutting-edge to make a habanero IPA or a kaffir lime Saison?” asks co-founder Bill Eye. “Or is it cutting-edge to make a perfectly crisp and clean Helles? It’s think it’s literally the riskiest, cutting-edge thing you can do in brewing right now. There are 15 breweries in this neighborhood, but we don’t really fear anyone moving in down here because no one else is just making Lager.”
Prior to Bierstadt, Denver’s beerscape was seeing change from more traditional styles to a more diverse scene. The majority of the abovementioned breweries originated as Belgian-focused spots that eventually branched out once the IPA craze took over, more recently pivoting to Wild Ales and related funkier fare. The majority of the breweries I visited had just begrudgingly started to adopt hazy, New England style IPAs. But perhaps that’s another story for another time.
As ridiculous as it seems, making a clean beer devoid of adjuncts is one of the surest ways to compete as competition heats up. “You don’t have to be someone’s only stop, you just have to be one of the stops,” Carter says. “All you have to do is get the people getting drunk at the County Cowboy to stop in on their way to the other breweries in the area that have something different to offer.”
Carter and Eye often get requests for their IPA and have to entertain the pause and look of confusion when they tell those patrons that, well, they don’t offer IPA. But at the end of the day, neither of them feel any pressure to change up what they’re doing.
“We’ve done a collaboration where we did a hoppier Lager,” Carter says. “We’ll make a Hefeweizen at someone else’s joint, but we don’t feel the need to make anything else. Other people make IPAs or Saisons better than I do. It would be a disservice for me to try and make those styles.”
Eye admits that not chasing trends can be a bit stressful since, as a result, you’ll never be considered the next hot thing. But at the same time, the steady nature of traditional Lagers can be less stressful. With craft beer drinkers making up roughly 12% of all beer drinkers in 2016, most people are still drinking pale yellow beer. Chasing trends or not, there’s one true fact to surviving in Denver and that’s simply to be exceptional at what you do.
As the Brewer’s Guild’s Kurowski puts it, “You’ve got to be a great brewer, man. Marginal beer in Denver? Those breweries aren’t going to enjoy the success they’ve seen up until now.”