E-Malt.com News article: US, CO: Avery Brewing Co. mulls expansion urged by ‘astronomical’ growth in recent years

Avery Brewing Co. has experienced "astronomical" growth in recent years as a result of broader trends in the burgeoning craft brewing industry and the wider-scale adoption of its hop-heavy brews, Dailycamera.com reports.

That growth, however, is quickly pushing Avery Brewing to the brink of capacity and bringing a heightened sense of urgency to co-founder Adam Avery's quest for a means of expansion: a grand vision that involves the purchase of at least 5 acres of land; building a brewery and a restaurant on site; and expanding as much as the market will dictate.

It's a vision that could uproot the brewer from its hometown, Boulder.

"Right now, we're maxed out; we've built out what we can do, basically," Avery said of the 18-year-old company's location at 5763 Arapahoe Ave. in east Boulder. "We're in the process of trying to find some land in Boulder. Unfortunately, there's not a lot of land for sale ... there's not a lot of properties for the kind of money that we can basically afford."

While Avery Brewing is close to securing a plot of land in Boulder, Avery said he's looked at properties outside the city limits that could give the brewer more land for less money. Avery did not disclose the locations he's eyed or is considering buying.
"There's a big decision coming up," he said. "I hope we can stay here."

Liz Hanson, the city of Boulder's economic vitality coordinator, said she has worked closely with Avery the past couple of years on his property search. Among the industrial sites in consideration is a city-owned parcel of land on the north side of Pearl Parkway just east of Foothills Parkway.

The city has listed the 2-acre Lot 1 of the City Yards Subdivision for sale on its website for $1.135 million. Avery Brewing has contacted the city about purchasing the neighboring Lots 2 and 3 -- a combined 6.6 acres that is owned by the city and has a purchase option by Pollard Motors, Hanson said. Lots 2 and 3 are not on the market.

Avery could not be reached late on May, 14 for a follow-up comment about the city-owned property, Dailycamera.com said.

"I think the key for me on this issue is that businesses like Avery Brewing, which have grown here, really make up the essence of our business community," Hanson said. "We understand the challenges that these businesses have in finding new locations when they grow. ... It's a real goal for the city to try to help these businesses stay when they're growing."

After producing more than 20,000 barrels - about 620,000 gallons - of beer last year and notching $7 million in revenue, Avery Brewing is on pace to churn out 33,000 barrels this year and surpass the $10 million mark. About $1 million of that is projected to come from Avery Brewing's tap room that's located just off the busy Arapahoe Avenue and tucked among several warehouses.

In the past 18 months, the brewery increased its work force to 45 people from 21 employees and plunked more than $1 million into capital improvements and equipment purchases - including a second canning line - to further fuel the expansion.

"It's a great time in our business, but it's also a really weird time in our business," Avery said.

Last month, Avery Brewing announced it was exiting eight states and seven partial state markets. The move ended contracts with 17 distributorships and cut off about $1 million in sales, Avery said.

The decision was difficult but necessary as demand was exceeding supply, he said, adding that it was necessary to focus the "finite amount of beer" in certain existing markets and grow from there. Other craft brewers - including the Longmont-based Left Hand Brewing Co. and Oskar Blues Brewery - have similarly pulled out of certain markets.

"It's a step backwards to do two steps forward and just do business in the right way," Avery said.

Given the growth trends and the widespread success of its India Pale Ale, Avery estimated that Avery Brewing's current brewery - a 25,000-square-foot operation spread around neighboring businesses - would be at capacity in a year's time. Retrofitting a larger facility is not really an option, he said, noting the growth curve is too high and the brewery would face a similar quandary in a couple of years.

Buying at least 5 acres, building a flagship brewery and restaurant, and having plenty of room to grow is the only option, he said.

"We've always said that we're gonna brew the beers we want to brew and we're gonna get as big as possible doing that," he said. "How big can we get? I have no idea.

"A lot bigger than we are."


17 May, 2011