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It’s the middle of the afternoon, and Dave Coleman and Mike McGarvey are in McGarvey’s basement in Columbia Heights, thinking about beer.
Not in the usual, “Gee, I really wish I could knock off work and go drink one,” way, either. Coleman, who took over the Big Hunt beer program four years ago, spends most of his days thinking about beer, anyway. He’s already turned what used to be the prototypical dive bar into one of D.C.’s top craft beer destinations. But what he and his friend-turned-business partner McGarvey are up to now involves a whole new level of sudsy thoughts and dreams: They’re set to open a full-scale production brewery, one of the first to call D.C. home in more than half a century.
Why would someone intimately familiar with the travails of the craft beer industry want to get into a business fraught with high overhead and low expectations of success? Last month, I got a glimpse into their motivations, when I visited Coleman and McGarvey as they brewed test batches. Coleman tells me he’s been at the center of D.C.’s beer world, tasting as much as he can as the city experiences an explosion of craft beers at local bars, restaurants, and stores.
McGarvey continues his partner’s thoughts: “We were tasting all these new beers and appreciating them and just thinking, ‘Why don’t we have this in D.C.? Why can’t we have our own brewery?’”
“We built our lives here,” Coleman adds. “We met our girls here. This city birthed the idea for the brewery. We are looking forward to giving D.C. something back.”
Soon, they’ll be giving D.C. the 3 Stars Brewing Company, one of four breweries set to start producing beer within the District in 2011. Each will be a craft brewery, which the Brewers Association, the industry’s trade group, defines as one that produces less than 2 million barrels, or 4 million kegs, a year. (Of course, given the market share of the commercial beer heavyweights, some drinkers define “craft beer” as almost anything not associated with Bud, Miller, or Coors.)
“We’re really looking to push the envelope. That’s what American craft beer is all about,” Coleman explains. On my afternoon visit, the two partners were brewing a regular Porter and four 10%-ABV Imperials, one an Imperial Breakfast Porter made with oatmeal and coffee that would be fermented with cold-brewed espresso.
McGarvey, the director for marketing and business intelligence for Sirius Satellite Radio, has been homebrewing since he received his first kit from his girlfriend three years ago.
He and Coleman have since upgraded to a complex, meticulously organized basement brew space. Coleman calls their setup “a homebrew system on steroids… and more steroids.”
No kidding. Coleman and McGarvey’s innovative system allows them to brew five different three-gallon batches of beer simultaneously—perfect for testing new recipes. The pair has already invested about $10,000 in the business.
Their homebrew system is just a start, of course. The partners are searching for a permanent space for their brewery. They had hoped to locate it in Columbia Heights, where McGarvey and Coleman own homes.
“We want to be embedded in the neighborhood,” says McGarvey, a native of upstate New York. “We want to be part of the reason that some of these neighborhoods do better.”
But zoning laws have made that difficult. Production breweries need a special type of commercial manufacturing zoning, which doesn’t overlap much with residential neighborhoods. “The majority of the right zoning is in Northeast, where all the production is on your way out of town,” Cleveland native Coleman says. “D.C. in recent history, like many other cities, hasn’t had that much manufacturing, so the amount of spaces that are zoned for it are very limited.”
The three stars in 3 Stars Brewing Company are borrowed from the D.C. flag, but they also represents three partners: Coleman, McGarvey, and a friend who introduced them but decided not to make the full commitment to the startup. As president, Coleman will be in charge of marketing and sales. As CEO, McGarvey will manage operations and strategic planning and oversee the brewing process. They’ll soon look for a third star—an experienced head brewer to reproduce their beers on professional equipment.
3 Stars will have two flagship brews: an IPA and a saison. The founders are considering a porter, stout, and wheat as seasonal releases. These will be on draft and in 12 oz. bottles in D.C. restaurants, bars, and shops, while other limited-release experimental beers, like the Imperial Breakfast Porter, will be on draft and in 750ml bottles.
The last production brewery in D.C. was the Olde Heurich Brewing Company, which folded in the mid-1950s, squeezed by the bigger breweries of its day. (The revived Olde Heurich Brewery, which went under in 2006, made its Foggy Bottom ales and lagers in upstate New York.) The new generation of D.C.-based breweries is, in a way, a reflection of the public discontent with mega-breweries and the lifeless beer they’ve produced for decades. By the end of next year, the District will be home not just to 3 Stars, but also DC Brau Brewing Company, Chocolate City Beer, and Black Squirrel Brewing Company.
DC Brau is headed up by a pair of D.C. natives, Brandon Skall, a former wine and alcohol sales representative, and Jeff Hancock, a professional brewer.
DC Brau was the first of the new breweries to get its name out in the public and is likely to be the first to have beer for sale. It already has more than 1,000 “likes” on Facebook—probably the result of the partners’ visibility on the D.C. craft beer scene, since few, if any, of those Facebookers have actually tasted the product yet.
In addition to launching an aggressive marketing campaign, the young entrepreneurs hired a legal team, gathered written letters of intent from future accounts, raised almost $600,000 in private equity, and are working with a brewery planning firm to build out and equip their 6,600-square-foot space in an industrial area of Woodridge. Starting as early as January, DC Brau’s flagship beers—Public Ale (a pale ale), Citizen Ale (a Belgian-style pale ale), and Corruption Ale (an IPA)—will be available in aluminum cans and on draft at nearly 40 local bars, restaurants, and retail shops that have already signed commitment letters.
Chocolate City Beer was dreamed up by Wonderland Ballroom manager Jay Irizarry and professional brewer Ben Matz, who decided to start a brewery after several successful backyard homebrewing projects.
The pair convinced friend Brian Flanagan, who works with communications company RCN, to join as a partner and primary financier, as well as start-up specialist Don Parker, who will head up business planning. The brewery named its first beer Big Chair IPA, after the 20-foot tall community landmark in Anacostia, part of its effort to show that D.C. is more than federal buildings. The IPA will be followed by an ESB, an Altbier, and eventually several seasonal and one-time brews.
The “nano-brewery” founders hope to secure just a dozen draft-only accounts at D.C. bars and restaurants, starting with Wonderland Ballroom and the Looking Glass Lounge. As soon as January or February, Chocolate City kegs could be rolling out of the brewery’s fixer-upper in Edgewood.
The small, two-story space has a unique history. A neighbor says it used to be a stone-cutting facility that supplied material for the basilica at Catholic University. The building’s most recent tenant, Chad Houseknecht, used the space to create hand-made weapons for a Military Channel show called Weapon Masters.
Black Squirrel Brewing Company is the brainchild of former journalist Tom Knott, who partnered with Gene Sohn and Amy Bowman to open the Black Squirrel Restaurant and Bar in Adams Morgan before pulling out to start the brewery. Both entities will share the name but remain legally and financially separate.
Knott, the primary financier, brought on minority partner and head brewer Hollie Stephenson in September 2009. Stephenson, a Georgia native with a background in government relations, had no formal brewing experience before Knott sent her to Brewlab in the United Kingdom for an intensive four-week course.
Stephenson is currently doing recipe development in a temporary 1,300-square-foot space in Brookland. She’ll use her foundation in English ales to produce four flagship beers for Black Squirrel: an IPA, a stout or porter, and two lighter styles accessible to ordinary bars and casual drinkers. She plans on releasing a bottle-conditioned line of Imperial ales as well. Stephenson and Knott will have Black Squirrel beer contract-brewed elsewhere while they find and build their own permanent 25-barrel production brewhouse. Their beer could hit the market as soon as next August or September.
Besides the four coming to D.C., two more production breweries will open in Northern Virginia next year: Beer from Port City Brewing Company in Alexandria and 28 North Custom Beer Works in Ashburn will eventually make its way into the District. Another, Baying Hound Aleworks, is already operating in Rockville. Altogether, these seven new outfits will nearly double the area’s number of local craft breweries, which currently include Heavy Seas Beer, Oliver Breweries, and Stillwater Artisanal Ales in Baltimore, Flying Dog in Frederick, and Hook and Ladder in Silver Spring. When you add in brewpubs like District Chop House, Franklin’s in Hyattsville, and Mad Fox in Falls Church, the metro area will have 20 local beer options.
Even though the demand for craft beer continues to grow annually, it’s not clear at what point the market might become over-saturated with these new breweries. Will anyone buy all the new beers, and will so many new outlets starting up at once make it harder for them to survive?
The brewery founders and other local beer professionals are convinced D.C. has room for all of them. “When you look at the numbers and look at how many breweries can support a market in other cities, it’s hard to think that we’re wrong here,” says McGarvey, the CEO at 3 Stars.
He has a point. Asheville, N.C., has seven breweries, but only a population of around 70,000 people, a tenth of the District’s. Portland, Ore., with a population more comparable to D.C.’s, has a total of 36 breweries and brewpubs, and that number grows almost monthly.
Just like their counterparts in Asheville and Portland, D.C.’s new breweries could thrive because they’re local. “Local brands, once they really integrate themselves, do really well,” says Ben Brown of Premium Distributors, a major area supplier of craft and mass-produced beer. Says Tim Liu, manager at restaurant and craft beer bar Scion in Dupont Circle: “People are looking for local beers. Especially since we’re close to a lot of the hotels, a lot of people come in and ask, ‘What’s local?’”
The flood of fresh new breweries brings with it a unique problem: The founders of each brewery thought they would be the first, and only, production facility in D.C. in more than 50 years. Instead, they all realize they have local competition for those limited taps and shelf space.
But for now at least, they’re cooperating with each other. During my visit to Chocolate City, Skall of DC Brau dropped by to see how progress was going. Skall and Hancock have had many conversations with the 3 Stars founders as well. “By watching Brandon and Jeff, it’s helped us avoid some of the challenges they have had to face,” says Coleman of 3 Stars.
“Say I run out of yeast,” says Matz, of Chocolate City. “I call Brandon, and I go over and pick up some yeast. If they say, ‘Hey, my boiler’s not working,’ we’ll go over there and help them fix it.”
The brewery founders plan to collaborate beyond neighborly favors. “We have the opportunity to really work together and build a culture of beer appreciation, which already exists here but is not easily accessible,” Matz says.
“Instead of just opening up as Black Squirrel Brewing Company, just one brewery, we’re going to have a real D.C. brewing community,” Stephenson says. “There will be more of us to help each other and make the local scene be heard.”
Dogfish Head Brewing Company founder Sam Calagione likes to say the craft brewing industry is 99 percent asshole-free, and there’s a reason why: They all have a common rival, and there’s enough room in the market for all of them. Most of the beer consumed in the world is mass-produced by companies like MillerCoors and AB-InBev (owners of Budwesier).
According to Jessica Muskey, vice president of marketing for Premium Distributors, the 2009 market share of craft beer in D.C. was 9 percent by volume. That number is twice the national average of 4.5 percent and has been growing yearly. But it’s still just a drop in the bucket.
“If we can just take half of a percent, or 1 percent, then everybody wins,” Matz explains. “So a distributor sells three less kegs of Miller Lite a week to Union Pub. Who cares? That’s not a huge deal for them. They’ll be OK with it.”
But will the big fish in D.C.’s craft beer industry be OK with new competition in that small but growing market?
“While we’re all craft breweries taking the time to use quality ingredients and really push the envelope, we’re doing that on different levels,” says J.T. Smith, the local sales representative for Flying Dog, of Frederick, a much bigger player than the new start-ups. Ben Brown of Premium Distributors goes further: “It will be fine. The brands won’t have enough beer to really make a dent in how much beer is being sold in the city.”
These new breweries will start out small, even by the standards of craft beer. Flying Dog produces 40,000 barrels a year and exports to 30 countries. By comparison, 3 Stars will start with 3,000 barrels and hopes to reach 12,000 barrels by year five.
DC Brau will start with the same level and plans to take five years to expand to 5,000 barrels. Black Squirrel hopes to send 1,200 barrels across D.C., Maryland and Virginia its first year. Chocolate City is looking at closer to 1,000 barrels its first year—and has no plans to ever sell beer outside the District.
What’s likely to determine their success, in the end, won’t be the ZIP code on their business invoices.
“If the beer’s good and it’s brewed in D.C. then I’m going to try to sell a lot of it,” says Greg Jasgur, bar manager at beer mecca Pizzeria Paradiso, who oversees a large line of craft brews. “I’m not going to put a beer on just because it’s local. I want all these breweries to do well and hope I like their beer, but I would like to think that people’s taste buds are going to be the ultimate litmus test.”