The national craft beer scene has peaked from its once unstoppable momentum upward. With over 5,200 craft breweries in operation, we’re entering a new era. The big movers in the market such as Stone, Sierra Nevada and many others, are slowing their volume, or even regressing. There have been layoffs and volume reductions across the US. But craft beer will continue to have a huge impact on communities across the US. It’s a culture that rapidly wove itself into our everyday lives.
With Bellingham Beer Week just around the corner it’s time to look at where our city is, how we got here and where we’re headed. It’s arguable, but this hoppy prognosticator’s opinion is that Bellingham’s beer scene is nearing its peak as well, but this just means things get better. Regionally speaking, signs of a slowdown are at our doorstep. Metalcraft Fabrication closed its doors after 10 years of building tanks for the craft beer industry. Because our local breweries are smaller and less reliant on massive distribution infrastructure, they will likely find it easier to adjust to the changes in the market with greater ease.
Bellingham’s craft beer boom started a mere five years ago, when breweries started to open in rapid succession. In the past five years a majority – eight to be exact – of Bellingham’s breweries have opened: Kulshan, Aslan, Wander, Kulshan K2, Structures, Stones Throw, Gruff, Menace. All of Bellingham’s breweries account for somewhere around 30,000bbls of annual production, or about 8% of our state’s 2015 volume. Bellingham is a force in our region’s craft beer market.
I’ve said Bellingham might top out at 18 breweries and I’ve heard estimates as high as 25. If all current breweries in planning open, we’ll be at 15, with momentum slowing. I’d like to see smaller neighborhood breweries in Columbia and York neighborhoods as well.
Whereas big breweries bet big during the craft beer boom on infrastructure to meet estimated future demand, smaller community oriented breweries, that are less reliant on distribution expansion, don’t have the massive amounts of debt to recoup. Instead, they focus on in-house sales and limited local distribution, that have a much higher profit margin. This strategy reflects the breweries that have most recently opened in Bellingham – Wander, Stones Throw, Gruff, Menace, Structures. Even Melvin Brewing, with a estimated opening in June, will only be a 7bbl brewery. All reflect the changing trend that maybe smaller is better these days.
Kulshan, Aslan, Chuckanut and Boundary are doing extremely well. They have either expanded to new locations, or
started delivering us their fine beer in cans, which is a new trend for our city. We even have our city’s first lager can in a hundred years, or so. Boundary recently canned another 800 cases of its famed Cedar Dust, after an initial canning of 600 cases.
Kulshan has two breweries and a whole bunch of cans they’re distributing. Aslan just invested into massive 120 barrel tanks, acquired a new 8,000sqft barrel aging and office facility and launched their third canned beer. Chuckanut opened a second facility in Skagit County to fulfill the massive demand for their world class lagers in and around Seattle and beyond.
These larger breweries hope to recoup these investments via distribution and further driving craft beer lovers to their tap rooms. Their cans and draft are found up and down the I-5 corridor, from Vancouver, BC to Portland and beyond. And like many of our city’s breweries, growth allowed them to give back to their community, in the form of unending philanthropy and support of our city’s organizations and nonprofits.
Both Gruff and Stones Throw have burst onto the scene in the last 6 to 12 months, respectively. Gruff is kicking out new beers at an impressive pace. They are also using their small 2 barrel brewhouse to do some very interesting brews. Gruff found a location that will allow them to grow, as well as benefit from their central location and proximity to Bellingham’s waterfront expansion. Stones Throw offers Fairhaven and Bellingham, the “closest pint to adventure.” Their location in Fairhaven has stretched Bellingham’s craft beer boom even further and they have become a community fixture to Fairhaven and their neighbors.
Our newest brewery, Menace Brewing on Meridian St, was opened by the owners of The Local and The Annex just a few months ago. They had to shutdown brewing at their original Ferndale location for the year prior to moving into Bellingham. Everyone I talk to raves about their Chili Bravo, which is a delicious testament to spice. Ben, owner and head brewer, told me he has more plans for peppers and beer in the future. With a small production and neighborhood vibe, Menace will benefit the most from the opening of Melvin Brewing, which will have a full kitchen and will drive people from all over to its taproom. Drafting off a (relative) giant will have the same benefit as Gruff’s proximity to Boundary.
Structures opened in the rainy hazy days of Winter 2015. Fittingly, they shook our local market’s high IBU bitter ways with the New England haze craze – Dank, low IBU, juicy IPAs. They have brought the “fresh” moniker to our vernacular. We’re seeing hazy or juicy beers at breweries across Bellingham, which follows a national trend. James Alexander, Structures’ Owner, has brought a minimalist aesthetic to the taproom and beer-first strategy to our town. I suspect 2017 will be a big year for Structures Brewing since their NE “style” is the is the hottest trend in craft beer.
Wander Brewing offers an impressive breadth of well executed styles. They’ve brought us their Millie series of sours, Belgians and their famed steamed beer. The have 500ml bottles, ranging from blondes to porters. Their 16oz cans are rolling out of the brewery in high volume. Wander’s Barrel Project has been award winning on the national and international level. Their Wild Warehouse won again and again at all levels of competition. Head Brewer and owner Chad and Colleen Kuehl manage to execute on all cylinders. 2016 was Wander’s year of accolades when they won ten awards from international to state level. Both Wander and Structures are canning low numbers of 16oz cans with their telltale stickers and personalized artwork.
The Breweries to Come
Illuminati Brewing is in the final stages of permitting and will open in Bellingham’s industrial district off of James St..
After deciding not to follow through on their original plans on Northwest Ave, Subdued Brewing’s owners Chris and Dave have opened the possibility of putting together a smaller iteration in one of our neighborhoods. They are in the initial stages of information gathering and we hope we hear more soon.
We’ve heard of at least two breweries in the works, with one hoping to open somewhere in the waterfront district. We’ve been told that plans for the waterfront brewery are finalized, funding is secured and the plan is moving forward. Expect to hear more about them soon. Just yesterday, a lease was signed for Bellingham Cider Company that will go into the west end and basement of the Cascade Laundry Building on Prospect St. It will have a full kitchen and will be in one of the most prime locations in Bellingham.
Melvin Brewing is probably going to have the biggest impact on Bellingham and our city’s craft beer industry. I’ve talked to Jeremy Tofte at Melvin and they have big plans for distribution in the coming years, with hopes to push further into California. This is why they just bought eleven (11) 240bbl tanks for their Wyoming brew house. Melvin’s Bellingham branch will be much smaller with only a 7BBL system with an intent to service the neighborhood and city.
Bellingham has many internationally and nationally renowned breweries. But Melvin will be bringing something different to our town than just beer. It’s a big name brewery that has some in our craft beer community wondering what kind of impact they’ll have on our little bayside beertown. “How will they fit in?”, is a question I’ve heard asked from multiple people within our craft beer community.
Melvin’s opening is a perfect symbol of what’s happening to Bellingham on a whole. We’re a town who is trying to hold onto its unique identity, while welcoming the change that is inevitably coming. How do we do both?
This town’s momentum isn’t going to be stopped and we don’t have full control over its direction. Much of the change we see in the coming years will be an organic byproduct of our own momentum and its that momentum was bound to attract a “Melvin.” We should welcome this change, work with those that come here to create beautiful things and build the community we want.
Bellingham’s taphouses are a huge part of our city’s beer scene. Elizabeth Station has not only become a regional source for craft beer, but an organizing force in our community – bringing awesome beer events and collaborations. McKay’s Taphouse has an unending series of events, brewery nights and houses our city’s most extensive draft list at over 50 taps.
Overflow Taps in Lynden has coupled philanthropy with beer and the result has been success. So much success that they are opening a second location in Barkley Village. The Local and the Annex have a carefully curated selection of beers. The Local has also shifted to more of a dining experience that you can pair with their beer 25 taps.
Schweinhaus is one of our most unique taphouses. Part outdoor beer garden, part sports bar, all beer. Their central location will benefit them longterm and we’re all excited to drink beers in the sun there soon. The competition in the local craft beer market has put stress on our businesses as well.
The Copper Hog closed a month ago from a combination of owed back taxes and the draining of business from the breweries that were popping up around it. There are plans and hopes for an iteration of the Copper Hog to open in the coming months after some planning.
Differentiating as a taphouse in a sea of breweries will be key for future Bellingham’s taphouses. Our other beer bars such as Uisce, Archer Ale House and Maggie’s Pub all offer you something unique in both beer and culture. Taphouses will continue to be an integral part of Bellingham’s craft beer community and we expect to see more popup in the years to come.
What’s to come?
Brewery expansion and local market health is really a factor of macro market trends, real estate and a healthy local economy. I reached out to experts in our community and asked them each a series of questions, to get a feel for where the greater community sees Bellingham’s craft beer market is and where it is headed.
Annette Bagley, Bellingham Tourism
Has Bellingham’s tourism industry been positively impacted by craft beer tourism?
Craft beer tourism is a rapidly growing niche in the U.S. travel market. We are proud that Bellingham was ranked a Top 20 Beer Destination on the Beer Tourism Index by Travelocity and the Brewer’s Association in 2016.
Travelers interested in craft beer also tend to prefer a hyper local food experience, and beer pairs well with hiking, biking, and paddling, which are the cornerstone activities of the Bellingham experience. This makes craft beer tourism a perfect fit for the Bellingham destination.
As a prize redemption location for the Bellingham Tap Trail, we regularly see individuals at the Bellingham Visitor Centers who have traveled here primarily to enjoy the beer scene.
What changes do you expect to see in 10 years and how will it impact tourism?
The boom in Bellingham craft breweries over the past 5 years has been remarkable. We hope to see it continue to grow over the next 10 years. The more breweries we have, the more of a beer destination we become. We would also like to see more guided beer tours and educational experiences that appeal to visitors year-round. Today’s travelers are active, engaged and searching for the authenticity Bellingham offers.
Janet Lightner, Owner/Manager, Boundary Bay Brewery
TT: How healthy is Bellingham’s craft beer market?
Lightner: So healthy I am considering lobbying the Mayor for a name change to Brewingham! 😉
How does it the 2016/17 market differ from our market 3 years ago?
The good news is choices!! Pub operators and beer drinkers alike are looking for something new all the time! That was trending 3 years ago but now it is the norm. We were brewing approximately 18 different styles 3 years ago and we will brew more than twice that this year. The bad news is choices!! Craft Beer was built on a philosophy of collaboration and mutual respect. With all these “choices” comes a level of competition that we have not seen in Bellingham or the entire country. Sales tactics need to stay within the law and reflect the integrity of the Brewery being represented.
What changes do you expect to see in 10 years?
I see more women brewers. A lot! I see the West side of WA state gain momentum in barley and hops. Unique terroir differences. I see more neighborhood pubs. I hope to see a change in the way large format grocery stores commit to selling craft beer, allowing distributors to design the schematics and limiting changes cuts down on the choices for the consumer, and as we have observed they are all about choice!
What do you hope to see more of that you don’t see now?
A standard for the consumer to be able to recognize Craft from “crafty”.
Joe Hoppis, Hoppis Real Estate
What changes do you expect to see in 10 years?
The trajectory right now is pointing towards Bellingham being one of the brewery capitals of the west coast. I know, I know, that’s bold, but I did say “trajectory.”
Where in town do you hope to see breweries pop-up?
Obviously, to me, the new waterfront would be great, but I also like what K2 did by targeting an industrial site a little off the beaten path. Aslan, Boundary and Chuckanut own the core of downtown and I love, love, love what’s happening in the fountain district with Msquared (Melvin ‘n Menace). I’d love to see something roll in by Homeskillet, to add to Kulshan’s southwestern ‘hood.
Anything else you can tell us about brewery real estate?
I have another great start up brewery looking for space right now. Exciting stuff for Bellingham!
How healthy is Bellingham’s craft beer market?
Very. As healthy as a horse!
What changes do you expect to see in 10 years?
More breweries, more beer tourism, then final equilibrium. I still think greater Bellingham can handle 20 breweries, but those who choose to enter the game now will have more difficulty producing high volumes of beer. There is always room for another small neighborhood taproom serving beer brewed on-site.
What do you hope to see more of that you don’t see now?
Bellingham does a great job right now covering all the bases of beer. More mixed fermentation, I guess. Can’t get enough of that.