Written by Jennifer Fitzgerald | Photos by Anthony Harden
It’s been another strong year for the alcohol industry in Western North Carolina—and more growth is expected. Let’s examine why.
The anonymous quote “History flows forward on rivers of beer” certainly applies to the beer scene in Western North Carolina as Capital at Play takes its annual look at the industry. The region is home to 84 breweries, with two more on the way. These breweries continue to impact Asheville and the surrounding counties as they provide jobs and draw tourists throughout the year.
One significant change for the alcohol industry occurred on June 30, when North Carolina Governor Roy Cooper signed the state’s “Brunch Bill” into effect. It allows alcohol sales on Sundays to begin at 10AM rather than noon. Local government boards must approve this change.
A few highlights from the past year include Madison County’s first brewery—Mad Co Brewing—opening on Main Street in Marshall, and the announcement in May that Asheville’s Wicked Weed Brewing was being purchased by Anheuser-Busch InBev.
Why the continued growth in the area?
“First and foremost, folks want to be in Western North Carolina,” says Billy Pyatt, co-owner of Catawba Brewing Company and president of the Asheville Brewers Alliance. “Consumers move here for the outdoor and craft-economy life style. Businesses—breweries in particular—pick Western North Carolina because of the craft beer culture, abundant natural resources, and because their employees willingly locate here. Our Western North Carolina counties actively recruit and incent industrial investment. And the North Carolina regulatory environment is pretty friendly.”
If you turned your calendar back five years, you would find a totally different beer industry in the region. Who could have predicted the level of growth that we have experienced?
“Over the past five years we’ve seen the ‘old guard’ Western North Carolina breweries, like Highland, Asheville Brewing Company, Green Man, Wedge, and Catawba, develop their own unique business models and expand,” continues Pyatt. “New Western North Carolina brewers have sprung to life to energize the area even further. National breweries, like Sierra Nevada, Oskar Blues, and New Belgium, focused their East Coast production resources here. And brewing raw material companies, like White Labs, located here to be closer to their customers. Western North Carolina beer has become a true, nationally known beer ‘scene.’ Sure, we locals still center a lot of our social lives around the breweries, but the influx of beer tourists has really been an amazing addition.”
Pyatt stresses that a lot of the local beer scene has stayed the same over the years and that “brewers, from Sierra Nevada all the way to the newest startup, are a part of a solid, collaborative, and supportive community. All of us believe in giving back to the community. Charitable causes—from a down-on-their-luck friend, to United Way, Eblen, and similar—are getting wonderful support from brewers, large and small. And that makes a lot of us old guard very happy.”
As the number of breweries continues to grow, you might wonder if we have reached the saturation point. While we were in the process of gathering this report, it was announced that Sylva’s Heinzelmannchen Brewery was permanently closing, after 13 years in business. So the question inevitably becomes, how many is too many?
“There are over 5,300 breweries in the United States right now, and that number alone could give concern,” says Pyatt. “But digging a little deeper, one finds that there is a very wide spread in brewery business models. Most start-ups are pretty modest and exist to serve a narrow geographic range with primarily retail (bar) sales. You can draw some parallels between those and other service-industry focused businesses, like restaurants. The well-managed, unique, high-quality, customer experience focused entities will survive and thrive. And there always seems to be room for another concept in Western North Carolina. Of course, there are closings and business failures along the way as well. Not everyone makes it, but a lot do.
“Now some breweries aspire to be regional or even national in scope. That requires a very different set of skills and investments. Production cost and quality management becomes key, as are distribution and end-user marketing strategies and, of course, financial planning and management. Go visit Ingles and look at the craft beer cooler. You’ll see significant congestion from local, regional, and national breweries, vying for a piece of valuable display real estate. If there is one thing that can hold back the regional and national aspirants, it’s retail space. And I believe this side of our business is going to just keep getting tougher.”
The strong growth and performance of local breweries comes as no surprise, but how about the growth of distilleries? This year’s list includes seven distilleries, with another coming soon. Cody Bradford, owner of Howling Moon Distillery in Asheville, says there has been a lot of interest in distilling for several reasons.
“One is several TV shows have generated interest,” says Bradford. “Then some of the distilleries have been successful that started up in the last five to ten years, so a lot of people think there is a gold mine and want to get in on it. Unfortunately, it’s not as profitable as people think because of the extremely high excise taxes. There is also a bigger investment upfront for equipment because we brew a beer first and need all the equipment to do that like a brewery, but then we have to have distillation equipment.
“Unlike breweries, we can’t distribute our products as easily because of restrictions, and microbreweries get a big federal excise tax break that microdistilleries don’t get. Several North Carolina distilleries have already gone out of business and several others can’t be far behind them.”
Bradford notes that distribution remains a challenge for distilleries.
“They (North Carolina legislature) almost passed a bill to allow us to do taste testing in ABC stores, and that would have helped, but it was shot down. They almost passed a bill to allow us to sell online out of state. Five states and the District of Columbia allow direct shipment of liquor to consumers. That would have been huge. Finding a distributor for a microdistillery is a challenge. The market is flooded and distributors are being careful. They do allow us to sell up to five bottles per person per year, but that mainly is a one-time sell to tourist. It helps and it may allow some people to keep the doors open, but it’s not a major boost to business.”
Wineries & Cideries
The winery and cidery landscape remained the same this year—a robust number of locations spread throughout the region. Jeff Frisbee, the owner of Addison Farms Winery in Leicester, says there were several motivating factors for him and his wife to start a winery, including a strong desire to do something to preserve the family farm (he is the fourth generation to farm the land), a strong desire to be home, and their love of wine coupled with the belief that they were sitting on an ideal vineyard location.
“There are a multitude of reasons for growth in the wine industry, but I think there are two reasons that are the key drivers,” says Frisbee. “First, North Carolina is a state of agriculture. We have a rich tradition of growing produce, raising livestock, and, of course, growing tobacco. Grapes are as close as most family farms can get to the same per-acre revenue that tobacco once provided. Potential revenue is not the same level, but grapes can allow the farm to survive.
“Second, the United States is the largest wine consuming nation in the world, and while not nearly at the per capita levels of our European cousins, our per capita consumption continues to grow. Between 2010-2015, wine consumption in the U.S. grew by 113 million gallons, or a little over 14 percent. That growing demand, coupled with North Carolina being an under-recognized world-class wine growing region, makes it a natural fit that we would see growth in this industry.”
The full article continues below. Click to open in fullscreen…