December 8, 2016

In a craft beer boom, breweries in Kentucky lift their industry and others

Commonwealth saw eight new breweries open in 2016, more planned for next year

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Near first light on an overcast December morning, chilly patrons awaiting a special brew formed a line from the packed parking lot at Country Boy Brewing in Lexington into its brimming taproom.

On paper plates they gathered biscuits and gravy, baked eggs, hash browns and cups of hot coffee before wedging themselves around crowded wooden-barrel tables or spilling onto the back porch.

A brewery bursting by 8 a.m. might seem abnormal but Country Boy makes it an annual extravaganza. Visit the bar, staffed by four fast-moving tenders, for a pint of the festivity’s central character, a rich charcoal-colored stout, brewed with Nate’s Coffee, the product of another local rising-star business.

“We’ve been doing this every year. People really turn out for it,” said Daniel Harrison, grinning through his thick red-brown beard, a signature feature of the Country Boys.

Harrison, who goes by the handle DH, co-founded the brewery nearly five years ago. The a.m. release of Nate’s Coffee Stout stands as an example of how the Commonwealth’s bustling craft brewing industry makes an economic impact as broad as its styles of beer.

Collaborations between brewers and other industries abound. Kentucky farmers increasingly provide ingredients for locally produced ales, sours, hefewizens and ciders. As it grows, the state’s brewing industry creates demand for service-related businesses including legal and accounting, general contracting, shipping, distribution and marketing.

The Kentucky Guild of Brewers now counts 35 members, from well-established brands to startups approaching their first birthdays to breweries in planning. Derek Selznick, hired this summer as the guild’s first paid executive director, set a tall goal for the industry.

“We’re focused on growing Kentucky’s craft brewing industry to the size, reputation and impact of what you see in states like Colorado, Vermont and Texas. We’re already at an advantage in dovetailing with Kentucky’s world-renowned bourbon industry from the perspectives of tourism, marketing and collaborations,” Selznick said. “With longstanding producers and new ventures across the Commonwealth, Kentucky offers a phenomenal variety of breweries, beers and experiences. Our industry already makes a significant contribution to the state’s economy and we will keep growing in the years ahead.”

Prior to Selznick, the guild operated as an all-volunteer organization. Like its move into a new phase, Selznick sees Kentucky’s craft beer industry as entering growth mode.

In 2016, the Commonwealth welcomed eight new breweries. Over the same time, the industry’s direct employment grew 25 percent to 570, Selznick said.

“We project we’re going to produce well over 100,000 barrels this year, up from 87,000 just a few years ago in 2014,” he said.

For 2017, brewers plan to open new facilities in Louisville, Somerset, Lexington and Northern Kentucky. Selznick sees the state as able to sustain that growth.

“Craft breweries really don’t compete head-to-head. Craft beer drinkers typically don’t have a single beer they always buy, as with Budweiser or Coors drinkers,” he said. “Rather, they appreciate the variety of styles. They mix six packs at the store. They trade beers with friends and fellow enthusiasts from other cities and states. And when they travel, they want to experience the local breweries.” 

When it comes to Kentucky brewery locations, each offers a different, yet often family-friendly experience for customers at its taproom, patio or property. 

Behind the scenes, the Commonwealth’s breweries operate in a hand-up-hand-down fashion, Selznick said.

Startup and smaller breweries may receive welcome advice in laying out a brewing operation. Or they might purchase used equipment from their larger brethren. In turn, as each recipient grows, they dispense guidance and hard-won insight to colleagues new to the trade.

“It’s grassroots. They recognize helping each other makes a more vibrant scene. They want to see each other succeed because the pool of interest keeps expanding. It’s a totally different approach than you’d see with the major corporations,” Selznick said.

In that way, Kentucky’s craft beer industry helps itself grow.

Then, there’s symbiosis with other sectors. Country Boy’s collaboration with Nate’s Coffee, for example, runs deeper than an annual specialty release.

Nathan Polly, owner and master roaster of the eponymously named roastery, rents a section of the Country Boy warehouse on Chair Avenue.

“We’re in 1,500 square feet of space that gives me ramp access, a loading dock, storage and room for a larger roaster,” Polly said. “I started the business roasting 4 ounces at a time. Now we’ve got three employees and we’re roasting 3,000 pounds a month.”

Thanks to that growth, Polly is now considering brick-and-mortar locations that would sell brewed coffee.

On the opposite side of town, another symbiosis emerged earlier this year. Mirror Twin Brewing opened on Lexington’s National Avenue, co-located with Rolling Oven Pizza. The arrangement gave Rolling Oven, which began as a food truck, the opportunity to open a stationary location and provide taproom patrons with fresh-as-it-gets pizza. 

West Sixth Brewing, founded in 2012 holds mainstay status in the state’s craft beer lineup, employing more than 40 people. At its historic, former industrial bakery location, customers can easily enjoy selections from Chef Ouita Michel’s Smithtown Seafood, which shares a doorway with the West Sixth taproom. 

As further evidence of craft beer’s economic waves, Selznick points to the services of a retired firefighter who built a specialty business cleaning the supply lines that run from a bar’s beer kegs to its taps.

“He’s got more demand than he can handle,” Selznick said. “When you look at all the businesses the craft beer industry supports – bottle and can makers, cardboard boxes, cleaning supplies, grain processing, farms, trucking – they make a significant impact.”

Working together this fall, the guild and the Kentucky Department of Agriculture inspired multiple collaborations across the state. They assembled five teams, each consisting of two breweries and a Kentucky Proud ingredient, and challenged each to create a specialty brew.

Louisville’s Against the Grain Brewery paired with Lexington’s Ethereal Brewing to create Peach Sour Saison, a specialty beer using peaches from Mulberry Orchards in Shelbyville.

During the beer’s release event in October, Ethereal Co-founder Andrew Bishop explained several of the young brewery’s beers include fruit.

“And some people are into it right away. Usually the craft beer fans,” he said. “But then I’ve had people who don’t want fruit in their beer at all.

“As a matter of fact,” Bishop said, after sipping from his glass, “I’d use even more peaches the next time around.”

As a backdrop to much of the activity, the Kentucky Cabinet for Economic Development offers multiple programs to help grow businesses, from startups to thousand-employee manufacturers.

Polly said his coffee company should qualify next year for the Kentucky Small Business Tax Credit program. The program incents business with up to $25,000 in tax credits annually after they’ve hired new full-time employees and invested in qualifying equipment.

West Sixth has taken advantage of the program the past three years.

And Country Boy, which plans to open a larger production facility and taproom in Georgetown in spring 2017, received preliminary approval for incentives through the Cabinet’s Kentucky Business Investment program.

For more information on the Kentucky Guild of Brewers, visit www.kygbrewers.org. To learn more about the Cabinet’s business-development programs, visit www.thinkkentucky.com.

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