Shrinking Shelves: The Impact of Breweries Moving to Virginia

Posted by  VBR Staff   in  Opinion     4 years ago     1003 Views     1 Comment  

DSC_0054I’ve probably mentioned it several times, but I am an Engineer by degree. And in the *ahem* 5 years it took at school, one of the things you are taught is the notion of parameters. Things can only be so high, by so wide, by so deep (my fellow nerds will refer to this as ‘Q’). It is a given space that can not be changed. Virginia is about to see their limits of Q pushed by some outside factors.

In an announcement that will come down later today, Stone Brewing Company will be coming to Richmond after a long courting process over the past year that saw them choose the Commonwealth’s capital over Columbus, OH and presumed runner-up Norfolk. On Monday, Green Flash is breaking ground on their new east coast facility in Virginia Beach, a stone’s throw from the Oceanfront. But that’s not all, in addition and pseudo under-the-radar, Victory Brewing is putting in a Brewpub in Leesburg, and while this is not a full facility, it brings us to the heart of our musings today.

As a businessman, this is great news for Virginia. These companies are supplementing local economies. It is reported that Stone Brewing alone will bring in 300 jobs in addition to the jobs created in the construction of the new facility. And with the volume of product these companies will be exporting, we should see a good tax revenue for years to come.

As a consumer of craft beer, this is also good news. There is little argument (although some begrudgingly) that Stone, Green Flash, and Victory make a good product. Stone IPA and Victory’s Golden Monkey have been some of my (and a number of others across the country) favorites for several years now. The reason they are expanding is that they make great beer, people enjoy it back on the left coast, and people should start to enjoy it elsewhere. Have you been noticing more and more Sweetwater Brewing Company beer around lately? In late 2013, the ‘420’ makers have been pushing north from their Georgia home expanding their brand awareness. They even have their own Twitter account for Virginia. Same thing.

But as a consumer of Virginia craft beer, this is not the best situation. In grocery stores, convenience marts, restaurants, and with beer distributors, there is a finite space available. For the most part, Macrobreweries (Bud, Miller, Coors) take up most of that space, although there has been a slight push by the ‘craft’ world recently. The rest of the space is divided up among a wide variety of the local product. So in comes these breweries that, like their Virginia counterpart, will have tours, hit your favorite restaurants’ taps, and you’ll want to pick up some in the store to take home. Those restaurants, those stores, those convenience marts, have but so much room and now you are adding brand recognition to that, so they will move product. And hey, “It’s made in Virginia!”. Those entities are going to look at the economics of these new beers and make a choice on what to sell, and that could mean some of the others that we know and love, get pushed out.

So is this doom and gloom for Virginia breweries? Not at all. One of the reasons these companies are coming to VA is that this is a rising craft beer state, with a great location on the East Coast, and with favorable business development models. These are the same reasons we have such a diverse and growing local brewery scene to begin with. Nevertheless, local breweries will be pushed to make better product to compete with these other companies. It’s not just local vs. macro anymore, it’s local vs. local, and now there some serious players in game. Done right, this benefits everyone who enjoys ‘craft’, and could lead to cardinal changes in the way we think about beer. But for now, gear up, this should be an interesting ride.