Colorado’s beer market is as competitive as the battle for the Iron Throne.
The state is ranked second in the number of breweries at 396 and fourth in breweries per capita at 9.2. An additional 58 craft breweries opened up in 2018. In that climate, being a neighborhood brewer has its perks.
“We are insulated from a lot of that being in a small town,” said Bayfield’s Bottom Shelf Brewery co-founder Greg Allen. “That is one of the advantages – our market is built-in right here.”
The craft industry had already taken off in 2013 when the BSB team applied for its license. Allen said it took 10 months for approval because the government was so bogged down with applications (there was a federal government shutdown during that time).
Since then, BSB’s sales have more than doubled as they continue to grow. The brewpub’s quality food, crushable brews and welcoming atmosphere undoubtedly play a role in its success, but being the only game in town doesn’t hurt either.
Allen and partner Chris Young knew it would be difficult making inroads in Durango’s more-established industry. Carver Brewing Company and Durango Brewing Company, which has since relocated to La Junta, were some of the first breweries in the state, and Ska Brewery had already made a name for itself nationally.
“Chris and I chose Bayfield because we looked at all the competition around Durango – it’s fierce,” Allen said.
Bart Watson, chief economist for the Colorado Brewers Association, said most of the craft industry growth nationally mirrors the population of that state. Colorado stands out because it has a relatively low population compared to other top brewery states like California, but the craft market continues to grow.
Watson said there are multiple factors for why this may be, such as a conducive regulatory environment, favorable demographics, a strong craft culture, raw labor talent and beer roots planted by Coors.
“The flip-side of having so many brewers is it’s a really competitive marketplace,” Watson said. “There is a well-established base of beer lovers, but that only goes so far.”
The craft industry beer buzz is far from gone, though it’s starting to sober up. Growth has begun to stabilize and more closings are happening. Still, the overall industry is doing well.
“I am amazed at how shockingly low (closures) are,” Watson said.
Fifty percent of all new businesses close in the first six years of business, Watson said. Based on data he’s collected since 2013, only 10.7 percent of craft breweries close after six years. Watson points out that this won’t last forever, though more businesses closing don’t necessarily indicate disaster.
Two breweries, BREW Pub and Kitchen and Durango Brewing Co., left Durango in the last year. In March, co-owner of BREW Erik Maxson told The Herald that the business was struggling to recover after the 416 Fire. Sales were down 30 percent the last eight months of operation and they were not able to keep up with rent. It’s rumored that Durango Brewing Co., specifically the name, was purchased in 2015 by Gold Buckle Brewing for its marketing potential.
Watson said it’s hard to pinpoint why more breweries are closing. Competition isn’t solely to blame. Growing competition has certainly pushed new brewers to pursue alternative avenues. Most patrons have come across a strange brew made with ingredients like lemongrass or chocolate and Ancho chilies. And more brewers are experimenting with gluten-free or alcohol-free beers.
Watson said small towns don’t have the luxury to be so experimental since they need to attract a broader base. Luckily, that isn’t an issue for BSB.
“For us, we try to brew beers that are balanced and drinkable,” Allen said.” Something you can take on the river.”
BSB is currently operating at full capacity, the owners said. Their three-barrel system allows them to brew approximately 100 gallons per batch. They brewed approximately 500 barrels at 31 gallons per barrel last year. Other than a few kegs here and there, BSB doesn’t distribute. They do plan on canning in the next year.
Allen and Young occasionally discuss possible future options — finding a new location to brew off-site, recreating their business model in a similar town or expanding their current building. But for now, it’s just a discussion.
They worked 14-hour days, seven days a week for the first two years of the business. Going back into debt and working long hours isn’t appealing to them. Allen would rather be on the river.
Operating on a larger scale may not even be feasible. A decade ago, Steamworks Brewing Company operated a satellite business in the area called Bayfield Beer Factory. Steamworks co-founder Kris Oyler said one year they brewed more than 8,000 barrels. At the time, Bayfield didn’t have proper water-treatment facilities. He said the recession hit the same year they hit their stride.
The economic climate halted momentum and the business closed in 2009. Oyler chalks it up as a learning experience and said they ended up OK after selling the brewery and equipment. Oyler added that the restaurant part of the operation did okay, though they struggled with labor and price points over the years.
Allen said BSB struggles with finding consistent labor as well. They’ve had two kitchen positions posted for over three weeks and haven’t received an application yet.
“Bayfield is better suited for a smaller operation like Bottom Shelf,” Oyler said. “They’ve been a great addition to their community.”
Allen said when BSB opened, it was a perfect situation because there was no other place to get a burger and a beer. There still isn’t. Though, he said, another brewery in town would draw more people to Bayfield. And he said he wouldn’t mind a little competition.
prt@pinerivertimes.com
