Rolling out the barrels
Despite the presence of Miller and other longstanding commercial brewers, Wisconsin is becoming a craft-brewing powerhouse.
From the pages of In Business magazine.
Wisconsin is a beer state, no question about it.
“Where else can you find a Major League Baseball team named after beer?” asks Jim Steele, the professor who oversees the University of Wisconsin–Madison’s burgeoning Fermented Foods and Beverages Program, referring to the Milwaukee Brewers.
Figures jointly released in July by The Beer Institute in Washington, D.C., and the National Beer Wholesalers Association in Alexandria, Va., indicate that beer’s economic impact in Wisconsin is more than $8 billion; and the industry directly and indirectly supports almost 56,500 jobs in this state. (Nationally, the beer industry’s economic impact is $253 billion and 1.75 million jobs.)
Craft beers account for about $1.8 billion of beer’s economic impact in Wisconsin, according to the Boulder, Colo.-based Brewers Association. While the nonprofit trade group reports 97 craft breweries in the state in 2014, that number is now closer to 125, says Mark Garthwaite, executive director of the Wisconsin Brewers Guild.
“Our place in the national rankings is pretty high, but craft brewing, in a strange way, is a little bit of a liability,” Garthwaite says, explaining that for so long Wisconsin beer was defined by giants such as Pabst, Miller, and Schlitz. “Beer in other states — Iowa, Indiana, Arizona — is defined by craft beer. We have a challenge here that other states don’t have, and that is to recalibrate the way people think about beer in Wisconsin.”
So far, so good.
Some Wisconsin craft brewers have received national recognition — whetting the whistle of the state’s evolving beer tourism industry, innovating with a vast array of sustainability practices and developing new business models that include crowdsourcing. And with both UW–Madison and Madison College now offering brewing programs, future industry leaders are learning the art and science of beer early on.
Craft beer also is the focus of multiple pieces of pending legislation, including the federal Craft Beverage Modernization and Tax Reform Act, co-sponsored by Wisconsin’s U.S. Sen. Tammy Baldwin, and a state effort to amend Class A liquor licenses, which would allow grocery stores to sell tap beer in re-sealable jugs.
Meanwhile, HopCat, a brewpub chain with six locations nationwide, recently opened in downtown Madison and offers 130 craft beers on tap; Waunakee will welcome Octopi Brewing Co. in September as the village’s first craft brewer, and will be home to Lone Girl Brewing, as well; Hop Haus Brewing Co. in Verona and Rockhound Brewing Co. in Madison are also set to join the local beer scene; and producers of the forthcoming feature-length documentary Brewland spent several days filming in Wisconsin this past spring.
As Jim McGreevy, president and CEO of The Beer Institute, proclaims, “Beer is more than our nation’s favorite adult drink — it is a powerhouse in job creation, commercial activity, and tax revenue.”
5 crafty examples of sustainable brewing
Breweries require lots of water and heat, but many craft brewers in Wisconsin are taking actions to offset the energy their products generate.
Local breweries like Ale Asylum haven’t neglected to include sustainable features such as solar energy in their business operations.
At least six craft brewers are members of the Wisconsin Department of Natural Resources’ brewing sector’s Green Tier Program, which recognizes and rewards environmental performance “that voluntarily exceeds legal requirements related to health, safety, and the environment, resulting in continuous improvement in this state’s environment, economy, and quality of life.”
Brewing companies not part of the Green Tier Program have taken it upon themselves to be sustainably responsible. Whether that means buying local or organic ingredients, using compostable supplies, reducing excess packaging, or simply serving beer in recyclable plastic cups, the craft brewing industry — known so much for its local and regional heritage — often thinks globally.
Here are highlights from what five area craft brewers are doing as environmentally conscious entrepreneurs:
- Ale Asylum: The first brewery in Wisconsin to sign the Brewery Climate Declaration, which identifies climate change as a viable threat that must be tackled by policymakers; activated nearly 500 solar panels earlier this year to produce about 20% of its electricity.
- Capital Brewery: As a Green Tier Program member, Capital Brewery has updated its refrigeration system to use glycol (an air-based approach that conserves energy and water), installed a natural-gas boiler to produce steam more efficiently, and uses a built-in wastewater-recovery system to wash used kegs.
- The Great Dane Pub & Brewing Co.: Serves grain and hops for lunch to a local sheep farmer’s ewes.
- New Glarus Brewing Co.: Underground system runs wastewater through a treatment facility, after which it is returned to the village of New Glarus as drinking-quality water. Cows in Monticello also eat leftover barley from this Green Tier Program brewery, and cheese made from their milk is sold in the brewery’s gift shop.
- Wisconsin Brewing Co.: Built one of the industry’s most technologically advanced automated brew houses. Among the advantages it provides is the ability to repurpose materials generated by brewery operations and store them for future production.
4 reasons Wisconsin is ‘destination beer’
It’s considered common for an estimated 5,000 people to show up on a summer weekend at New Glarus Brewing Co. for tours and tastings — especially on a beer-release weekend. Not bad for a quaint, Swiss-heritage village of 2,200 people.
Despite the fact that it’s been open for less than two years, the Wisconsin Brewing Co. in Verona already has attracted more than 75,000 tourists. “Beer tourism is a real thing,” says Mark Garthwaite, executive director of the Wisconsin Brewers Guild in Madison. “There are a lot of people who travel to try beer.”
Along with our love for beer, here are four reasons why:
- Each brewery has its own story and charm, which brings variety to the experience. “Travelers are looking for authentic experiences, and craft breweries are part of that,” notes Lisa Marshall, communications director for the Wisconsin Department of Tourism, citing visitors’ increased desire for a vast range of culinary experiences. “Brewery tours help brand Wisconsin as a craft-brewing state.” Although the department doesn’t have a mechanism to measure the economic impact of beer tourism, Marshall says the phenomenon has evolved significantly during the past five years. She cites the Madison area as “a great jumping off point” from which “you could easily develop a whole beer tour.” In addition to stops at New Glarus Brewing and Wisconsin Brewing, such an excursion also could include Ale Asylum, Capital Brewery, Minhas Craft Brewing in Monroe, Tyranena in Lake Mills, and The Hop Garden in Belleville.
- Throughout Wisconsin, craft breweries and brewpubs provide tours or tastings (or both). Some, such as New Glarus Brewing and Sprecher Brewing Co. in Milwaukee, offer tourists a coupon for a free beer at one of several nearby drinking and dining establishments — keeping visitors around a little longer and encouraging them to support other local businesses. “It works out well for the community and for us,” says Deb Carey, founder and president of New Glarus Brewing.
- Beer festivals held throughout the state, seemingly every weekend, also have turned Wisconsin into a destination for beer lovers. One of those destination events is the Great Taste of the Midwest, an annual ticketed event held the second Saturday of August at Olin Park that — as its name implies — attracts breweries and visitors from all over the country’s midsection.
- Meanwhile, the National Brewery Museum in Potosi showcases a renowned collection of beer bottles, cans, glasses, trays, coasters, advertising materials, and other beer-related memorabilia, and The Hops Museum opened in Madison earlier this year as a community-curated space focused on telling stories of beer and hops.
MobCraft beer harnesses crowdsourcing craze
While still a marketing and entrepreneurship major at the University of Wisconsin–Whitewater, Giotto Troia learned about Threadless, a company that crowdsourced T-shirts featuring designs created by independent artists.
Having a barrel of fun: MobCraft’s leadership, from left to right, Andrew Gierczak, Henry Schwartz, and Giotto Troia, have given a creative forum to amateur homebrewers.
“That just fascinated me,” he says. “I thought, ‘What other industries could I adapt that concept to?’”
He found his answer in MobCraft — a Madison-based beer company that claims to be “the world’s first completely crowdsourced brewery.”
“We entered the industry knowing we were the first to make this our sole business model,” says Troia, who created MobCraft with brewmaster Andrew Gierczak and Henry Schwartz. “Bigger breweries are not lean enough to alter their business model to do what we’re doing.”
Every month, anywhere from a dozen to more than 25 beers submitted by mostly amateur home brewers are posted on www.mobcraftbeer.com. Voting begins on the first day of the month and ends on the 21st (or when the batch is sold out).
Everybody who votes is required to order at least one four pack of 22-ounce bomber bottles of that individual’s preferred brew. Credit cards aren’t charged if a voter’s preference doesn’t win.
The beers are made at House of Brews, an east-side Madison brewery, and christened with cool names such as Candy for Breakfast, Mistah Tea, and Orange You Glad You Weren’t Beat Up By a Banana.
As much as 80% of MobCraft’s beer is preordered, and MobCraft’s flagship beers and monthly winners are sold at more than 200 retail outlets and bars, primarily in Wisconsin.
With success comes imitators, but Troia doesn’t appear too worried.
“I have no doubt there are going to be other companies that will try to replicate our business model, and it’s flattering,” he says, adding that it took his team four years to go from home-brewing beer using friends’ recipes to producing and bottling beer based on strangers’ ideas. “Just popping up and having everything go right from the beginning is very difficult.”
MobCraft’s business model has produced beers like Batsh!t Crazy Coffee Ale and the seasonal Night & Day.
MobCraft has brewed radically different beers, everything from Wheat Men Can’t Jump IPA to Carrot Cake Ale to Troia’s favorite, Night & Day — a black vanilla IPA that he says will return as a winter seasonal beer.
One of MobCraft’s flagship beers, Batsh!t Crazy Coffee Ale — brewed with milk sugar and flavored with a blend of Guatemalan coffees — won second place out of 116 entries in the coffee beer category at the 2014 Great American Beer Festival.
Although Troia and his business partners would love to stay in Madison, he says MobCraft will relocate its headquarters to the renowned Walker’s Point neighborhood in Milwaukee early next year. The company has outgrown the space it shares with House of Brews and needed to find a new location fast, and the Milwaukee site became available before property in Madison. MobCraft may maintain a Madison presence with a small brewery and taproom, Troia says.
3 ways to construe brew
If you think the terms “craft brewery,” “microbrewery,” and “brewpub” can be used interchangeably, think again. Craft beers boast the majority of their total alcohol volume from fermented traditional or innovative brewing ingredients, such as cocoa, cashews, and carrots. But where they’re brewed and how they’re sold define where they fit in the brewing industry lexicon.
The Brewers Association, a nonprofit trade organization based in Boulder, Colo., has established the following definitions for popular craft brewing terms:
- Brewpub A restaurant-brewery that sells 25% or more if its beer on site. The beer is brewed primarily for sale in the restaurant and bar, and it often is dispensed from the brewery’s storage tanks. In south central Wisconsin, examples include Granite City Food & Brewery, Great Dane Pub and Brewing Co., Karben4 Brewing, and One Barrel Brewing (all in Madison), as well as The Grumpy Troll in Mount Horeb and the Hydro Street Brewing Co. in Columbus.
- Craft Brewery An independent, often regional brewery with annual production between 15,000 and 6 million barrels. For perspective, 6 million barrels is approximately 3% of annual beer sales in the United States. (Any brewery producing more than 6 million barrels per year is considered a large brewery and not a focus of this market report.) Regional examples include Ale Asylum in Madison and Middleton’s Capital Brewery Co.
- Microbrewery A brewery that produces fewer than 15,000 barrels per year, with 75% or more of its beer sold offsite. South central Wisconsin examples include New Glarus Brewing Co., House of Brews in Madison, Tyranena Brewing Co. in Lake Mills, and Wisconsin Brewing Co. in Verona.
Students taste craft brewing business
In 2014, more than 3,400 regional craft breweries, microbreweries, and brewpubs were operating in the United States — double the number in 2010. Carl Nolen, president and CEO of Wisconsin Brewing Co., predicts the country eventually could be home to as many as 20,000 breweries.
A collaboration between Wisconsin Brewing Co. and UW-Madison students has produced a red lager known as Inaugural Red.
“Where are all the employees going to come from?” he asks. “And what’s our responsibility in preparing them?”
Enter the brewer’s collaboration with the University of Wisconsin–Madison’s Fermented Foods and Beverages Program in the College of Agricultural and Life Sciences. In May 2014, WBC brewmaster Kirby Nelson had a chance on-campus encounter with students from a fermentation class, who shared with him the milk stout they created.
Liking the taste and realizing the students had nowhere to go with their brew, Nelson and Nolen joined forces to create the Campus Craft Brewery in Babcock Hall as part of a formal fermentation science program that combines lab studies with real-world brewing experience.
This past spring semester, using a stainless steel tank donated by MillerCoors several years ago that is capable of brewing 15 gallons at a time, six teams of students worked with Wisconsin Brewing. They worked to identify a beer style and its traits — in this case, a red lager — and create their own recipes and then submit the results to a panel of brewing professionals who determined which beer best matched the description they were asked to invoke: “It’s a beautiful summer day out on the Union Terrace. The sun and sailboats and people are out, the lake is sparkling, and this brew is the perfect companion.”
The result: Inaugural Red, already one of WBC’s signature and best-selling beers, sold year-round in packaging created by students in UW’s graphic design program and based on entrepreneurial strategies developed by business school students. “We jammed a 16-week process into about six,” Nolen says of the effort.
That’s why, beginning this fall, the program includes two semesters. Students will spend the fall semester focused on the business of beer, with the production of what likely will be a lager in the spring, according to Jim Steele, the food science professor who leads the Fermented Foods and Beverages Program.
All students must be over 21, and they come from a variety of educational studies, including chemical and biological engineering and horticulture.
Meanwhile, Madison College also introduced a craft brewing certificate program in January consisting of three classes that cover brewing and serving essentials, the fermentation process and biology of yeast, and a hands-on brewing experience.
Steele says brewing programs like these are the future craft beer: “We want to stimulate growth in this industry.”
5 reasons to get hopping on brewery tax reform
Craft breweries in Wisconsin and around the country might soon enjoy tax breaks and new business regulations that would promote job creation and economic growth. The Craft Beer Modernization and Tax Reform Act — a bipartisan piece of legislation cosponsored by Wisconsin U.S. Sen. Tammy Baldwin and 14 other senators — was introduced in June and would also benefit cider makers, vintners, and distillers.
U.S. Sen. Tammy Baldwin talks about the brewery business with Lakefront Brewery president and cofounder Russ Klisch. Baldwin is the cosponsor of tax reform legislation to help the nation’s brewing industry.
“Wisconsin’s brewers have been at the center of our culture and anchors of local communities since our state’s beginning,” says Baldwin, who has emerged as a champion of the state’s brewing business. “They create jobs, employ Wisconsinites in every corner of the state, and spur investment in communities throughout the state.”
Specifically, the bill would accomplish the following five things:
- Reduce excise taxes for brewers to provide more cash flow to reinvest in growing their businesses.
- Simplify beer formulation and label approvals by exempting common beer ingredients from the Alcohol and Tobacco Tax and Trade Bureau’s lengthy approval process.
- Increase collaboration between brewers by removing restrictions on tax-free transfers of beer and repealing unnecessary inventory restrictions.
- Exempt approximately 90% of producers from bi-weekly tax filings and bonding requirements.
- Exempt beverage producers from complex capitalization rules for aged products and level the playing field between U.S. businesses and their international competitors.
The Craft Beer Modernization and Tax Reform Act builds on longtime industry consensus and various proposals aimed at improving economic conditions for craft breweries, including the Small Brewer Reinvestment and Expanding Workforce (BREW) Act and the Fair Brewers Excise and Economic Relief (BEER) Act, both cosponsored by Baldwin, who visited multiple craft breweries around the state in August to promote the bill.
“I’m not trying to get out of my property taxes and employee taxes,” says Deb Carey, founder and president of New Glarus Brewing Co., who pays hundreds of thousands of dollars per month in excise taxes and has been lobbying for this type of legislation for years. She’s hopeful she won’t have to wait much longer. “It feels to me like we’re getting closer and closer to seeing some changes.”
Are growling grocers in our future?
Someday, you might be able to fill a 64-ounce jug of your favorite craft beer on tap at Woodman’s — at least if the Wisconsin Grocers Association has its way.
The trade organization hopes to introduce state legislation soon that would allow retailers to sell growlers. The reusable containers, which would be filled and sealed on site, currently are available at some bars and breweries, but not all of them.
“What we would offer in growlers is not something necessarily offered in taverns,” says Brandon Scholz, president and CEO of the Wisconsin Grocers Association, who envisions a strong partnership between grocery stores and craft breweries.
Currently, grocery stores with Class A liquor licenses are allowed to sell prepackaged beer, but in order to offer draft beer in a growler, store operators would need to apply for a Class B liquor license — the same designation as taverns and other establishments that serve alcohol.
The WGA is working with state Rep. Joan Ballweg, R-Markesan, to introduce a bill amending the Class A liquor-license law to include growlers.
Pete Madland, executive director of the Tavern League of Wisconsin, calls the potential legislation “another hit” to the bar industry, along with the statewide smoking ban enacted in 2010 and laws that increase penalties for individuals who over-consume alcohol. “Now they want to expand access to beer?” he says. “There are plenty of places for people to get craft beer on tap, and the grocery store shouldn’t be one of them.”
Madland claims that some craft brewers are opposed to selling growlers in grocery stores because of concerns over beer freshness and the cleanliness of hose lines used to dispense the beer.
According to the WGA, grocers in other states are successfully and safely selling growlers with no legal issues. For now, Madland says he’s not too worried about that change coming to Wisconsin. “I can’t say there’s a lot of concern, since there’s no legislation yet.”
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