After just four months of operation, Atlanta’s New Realm Brewing officially announced on Friday night its lease of the former Green Flash Brewing Co. Virginia Beach facility, just days after confirming it had purchased the 58,000-square-foot space’s equipment. The initial purchase, which New Realm CEO and co-founder Carey Falcone tells GBH was for “pennies on the dollar,” was part of a sudden and unexpected growth strategy that led to leasing the space from The Miller Group, a Virginia-based real estate development company.
Since opening to great fanfare in January, Falcone says the business has struggled to keep up with demand for its distributed products and has a good chance of hitting Georgia’s own-premise to-go sales cap of 3,000 barrels in its first year. New Realm is, on average, selling around 50 barrels a week out of its taproom between packaged and draft offerings, and has at times stopped selling growlers and crowlers of beer to ensure its taplines stay full. And all this before the spring and summer, which are traditionally the busiest sales times for beer in the U.S.
When announced in 2014, the Green Flash facility was to be built for $20 million and provide a maximum capacity of about 100,000 BBLs per year. It’s unclear at the moment how much beer will be made there for New Realm, as the brewery’s production team, led by COO, brewmaster, and co-founder Mitch Steele, is in the process of determining staffing needs for the new space. In a press release, New Realm noted that their new brewery is currently capable of brewing 40,000 BBLs annually. All this is on top of a recent order for eight 60-barrel tanks for the brewery’s current Atlanta space in order to try to keep up with demand.
“We were space-constrained and capacity-constrained, and when this opportunity came up, it really forced us to look at our strategy and timing very differently,” Falcone tells GBH. “Even with the tanks coming in, if we were to fill every order coming to us, that’s just going to put us in a place where we’re going to have to address it again in a short period of time.”
New Realm’s Virginia space will now be part of a new chain of operations to ensure the company can keep up. As soon as permitting is allowed and staff is hired, the brewery will shift large-scale production of some packaged brands to Virginia, freeing up capacity in Atlanta. Falcone named Hoplandia IPA, Hoptropolis IPA, and Euphonia Pilsner as three potential beers for which some production could be initially shifted away from Atlanta, with particular focus on Euphonia, due to its 28-day lagering time frame. In Atlanta, that beer is currently causing backups on scheduling because it sits for twice as long as the others, taking up tank space as it conditions.
Beer will be packaged and transported back to Georgia for distribution. Plans call for a taproom in Virginia Beach, with potential for distribution as well. Falcone emphasized that, despite the large increase in capacity, New Realm will not distribute in any states it doesn’t have a physical presence.
Above all else, Faclone notes his excitement for what the new capacity will allow for Steele, who will have more flexibility in research and development and creation of new beers once space is freed up in Atlanta from producing beer in Virginia. Originally, New Realm had planned to make about 20,000 BBLs a year, but all this has changed that.
What the equipment purchase and facility lease also does is further delay plans for a New Realm operation in Charlotte, North Carolina, where the company bought land for $5 million as part of a longer-term strategy.
“We’re not even thinking about that right now,” Falcone says. When or if the space is used, its purpose will be to house a barrel-aging facility, he added, asking, “Why think about a sour program when our clean beers are getting maxed out really quickly?”
Working in New Realm’s favor, even if nothing comes to fruition in the near term in Charlotte, is the increasing value of real estate. Across North Carolina, prices have steadily climbed, and the South Boulevard area around central Charlotte where New Realm purchased its land is among the highest neighborhoods for appreciation in the city.
The updated plans for Charlotte highlight a theme of New Realm’s move in Virginia—it was simply too good of a deal to pass up. And while some may suggest the irony of one brewery rapidly expanding by taking over the equipment and space of another that failed because of rapid expansion, Falcone doesn’t consider it in those terms.
Instead, he’s says his executive team, which also includes CCO and co-founder Bob Powers along with Falcone and Steele, sees the rapid and dedicated response to its Atlanta taproom and recognizes the need for more options and space.
On Saturdays, Falcone says the brewery gets upward of 5,000 visitors and that the business has had to make staffing adjustments to accommodate. At one point, customers were waiting an hour to order at the bar, so New Realm opened window service to take down wait times to 10 minutes at most. With a crowded rooftop seating area, two or three servers have now been increased to eight staff, with more at the ready just in case.
It's a local example of the larger situation: New Realm simply needs more beer, and given the deal the company got on new equipment, future plans fell into place in the present. "It was such a good deal there was no way we could have walked away from it," Falcone says.
"Our strategy is not to ship beer to multiple states or multiple countries," he adds. "We are about a tight geography and being very involved in communities in which we're brewing."