Toasting Virginia Craft Breweries

Virginia Craft Brewers 

Virginia isn’t just for lovers—it’s for lovers of craft beer. There are 142 craft brewers in the state. David Soyka samples four tastemakers to get their takes on the state of the industry, where it is headed, and tap into their experiences for what it takes to be a successful craft brewer.

One of the first craft brewers was Thomas Jefferson, though Virginia beer making actually dates back to as early as 1609. So it’s not surprising that the Travel Channel named Virginia as one its “Top Seven Beer Destinations.”

 

These are particularly heady days for craft brewers in the state of Virginia. Passage of Senate Bill 604 in 2012 allowed craft brewers to sell their beer for consumption on taproom premises; previously brewers could only sell product if they also ran a restaurant. SB 604 is widely viewed as the key ingredient that spurred existing breweries to expand as well as the start-up of many new breweries. Currently, the Virginia Craft Brewers Guild reports 142 active craft brewers, 40 of which opened only last year. According to a Fairfax County Times report, craft beer brings $623 million to the state and creates almost 8,000 jobs.

 

Indeed, family-and employee-owned Oregon-based Deschutes Brewery recently announced an $85m investment in Roanoke for its East Coast operations, which is expected to create 108 new jobs paying above the average wage in the region.

 

A press release from the office of Governor Terry McAuliffe quotes Virginia Secretary of Agriculture and Forestry Todd Haymore: “Deschutes Brewery’s selection of Roanoke for its East Coast operation helps solidify Virginia’s standing as a key player in the country’s growing craft beer industry, which saw sales increase by almost 19 percent in 2015. Adding Deschutes to our world-class, award-winning roster of homegrown craft breweries, wineries, distilleries, and cideries will bring increased national attention to Virginia as the top East Coast destination for craft beverage lovers. In addition to the local jobs and revenue Deschutes will generate, their investment also will bring increased agri-tourism activity and additional production and market opportunities for Virginia’s agricultural community.”

 

We tapped into four Virginia brewers to get their take on how Virginia is raising the bar in craft beer.

 

O’Connor Brewing

While a lot of college students drink beer, Kevin O’Connor was brewing beer in college. In fact, he made it part of his academic pursuits, writing his final thesis on the subject of how to start a brewery. Then he turned theory into practice six years ago, setting up his namesake craft brewery in Norfolk’s Ghent industrial district. As one of the first wave of craft brewers in the state, O’Connor has seen the industry landscape change over the years from creating openings to encourage new business start-ups to the point now where entry may be a little more difficult.

 

“Certainly, SB 604 allowing tasting rooms resulted in establishing a lot of new craft brewers who otherwise would have struggled,” he notes. “We were here before that—in fact we were the first craft brewer to open up in the south side of the Hampton area, so we were already a leg up on everyone else. Allowing tasting rooms did help us grow bigger. But while the brewers came after us, particularly the smaller ones, rely on tasting room sales, we’re kind of unusual in that’s only 10 percent of our business—90 percent of our sales is through our distribution network throughout Virginia.”

 

He is quick to point out that O’Connor’s remains very much a local brewer in both spirit and practice, statewide distribution notwithstanding. “Our brand identity is tied to being a regional craft brewer based in the Norfolk community,” he emphasizes. “A key factor for us is that we can offer a quality, consistent product that is locally made but available throughout the state. Consumers know that what they spend on one of our six packs provides something original and world-class that’s unique from everything else on the retail shelf—better yet, they get something made right here in Virginia even if they aren’t within driving distance of our brewery.”

Because it is well-established in the industry, O’Connor believes it will be easier to survive any likely changes that are brewing. “There are two schools of thought. One is that we’re just going to keep growing, with 6,000 or more brewers across the nation. The other view is that we’re sitting on the bubble that is close to bursting,” he says. “I tend to be closer to the second school of thought. I think you’re going to see some consolidation, with the bigger guys buying out the smaller ones. And it’s going to be harder for smaller brewers just starting up to break into the industry. But I don’t see either of those trends substantially affecting our business. There’s always going to be a market for local producers.”

 

An upcoming challenge O’Connor does see is shifting demographics. “When we first started, our customers were mostly in the 35 to 55 years age range. That’s starting to shift more to the younger 25 year old range. So we’re moving a little bit away from the beer drinker who has a certain level of brand loyalty to the millennial generation that is noted for seeking the unusual and what might be characterizes as a sort of ADD in always wanting to try something new. I think that’s what is driving the current trend towards weird ingredients, more bitterness and really hoppy flavors that are out of the ordinary.”

 

While O’Connor Brewing takes its own singular approach to trend setting— its Saison Series incorporates flavors and ingredients specific to local surfing spots around the world, with a portion of the proceeds donated to the Virginia Beach chapter of the Surfrider Foundation—again it hasn’t lost sight of its origins.

 

“We started out with the gold ales and pale ales that appeal to traditional beer drinkers,” O’Connor explains. “And while we’ve ventured beyond that, there are really three segments you’re trying to satisfy here. One is your everyday beer drinker who sticks pretty much to what they like. The second is those who dabble with one or more brands who will try a craft beer and still drink a Bud Lite. Then there are the geeks, the ones who are kind of like wine connoisseurs or ‘foodies.’ The last group is actually our smallest market.”

 

O’Connor also sees a growing interest among women in what is generally perceived as predominantly a product for male consumers. “I don’t think women are going so much for the 12 percent alcohol bourbon beer that’s popular with men, but we are seeing more women interested in craft beer. It’s all part of growing the community of people who enjoy something that is locally-made and is part of what we like to call a mighty yet humble craft.”

 

Dirt Farm Brewing

Janell Zurschmeide is not only a woman who likes craft beer (she confesses to being a “hophead”) but is perhaps a bit unusual in that she also makes craft beer. Along with her husband and other relations, Zurschmeide owns and operates a brewery on 100 acres in Loudon County, about a mile outside of the village of Bluemont, located on the family farm of 400 acres nestled in the Blue Ridge Mountains.

 

Dirt Farm itself is unusual in that it is not located in an industrial or commercial area and is a “destination brewery” akin to a winery—not coincidentally, there is also a winery on the farm site. “We got into craft beer as an extension of our experience in growing grapes and making wine for 10 years,” Zurschmeide says. “With a three acre hop yard and 10 acres of grain, we have all the natural ingredients we need on the farm to make what is literally home grown beer.”

 

After three years of operation, though, Dirt Farm is preparing to leave home. “The first few years we’ve focused on testing our recipes and getting feedback from our customers. We were brewing every single day, three times a day,” Zurschmedie notes. “We now have about 12 recipes and a 10 barrel brew house. That’s been phase one. By next year we’re looking to distribute beyond our immediate area.” Zurschmeide makes the point that while the craft brewing market may be reaching a point of oversaturation, Dirt Farm offers a unique selling proposition that resonates with consumers. “There’s growing interest and demand for locally grown fresh food, particularly here in Virginia. And we’re a third-generation family business, with a history of farming that dates back to the 1970s. Our pumpkin ale is made from the pumpkins we grow, when you drink our cherry beer you’re tasting cherries from our fields, all of our ingredients are locally cultivated.” Dirt Farm craft beer is a natural in more sense than one for anyone in the food movement. The name itself reinforces the brand identity as the product of “simple dirt farmers.” Certainly, the idea of “crafting” beer is rooted in the idea of quality ingredients and there’s no better way of controlling that quality than producing the ingredients yourself.

 

“We’re proud to be in Loudon County and we’re particularly grateful to our state’s Governor and Department of Agriculture— they’re very supportive of family-owned farms such as ours,” Zurschmeide notes, pointing out that, “No farms, no beer!” Given that the other thing Virginia is noted for in addition to farming is tourism, Dirt Farm hits the sweet spot for both. “We’re a good place for people to go, to learn about farming and experience what local grown is all about.”

 

“It is an exciting time to be in the craft brew industry here in Virginia,” she says, and is particularly happy that the family tradition will continue as part of it. “I have three nieces who just earned their college degrees which could have pretty much qualified them for any number of good jobs. But they all said, no, we’re coming back here to work on the farm.”

And as for getting more women interested in beer? “You know while it’s true that beer is usually associated with men, a lot of women do drink beer. I’m one of them. But I think more women are going to get interested in two ways. For one thing they are interested in the fresh and local food movement that craft beer is definitely part of. Secondly, craft beer is all about creating distinctive recipes and flavors and that’s going to interest more women. We just did a kale beer as an experiment that really went over well. Our fruit based beers are also likely to be more attractive to anyone who isn’t quite sure they like the taste of beer or haven’t liked the taste of other traditional beers.”

Strangeways Brewing

Another destination brewery, though of a decidedly different kind, is Strangeways Brewing. As a designated tourist attraction, the Richmond brewery has a sign posted by its Interstate 66 exit that attracts in-state as well as out-of-state travelers. “People stop here not knowing much about Strangeways or about craft beer in general, but they see the sign and decide to check us out,” says owner and founder Neil Burton. “That’s what’s fun about this business, to meet people and introduce them to something they’ve never experienced.” But what if they don’t like the taste of beer? Burton maintains there’s no such thing. “I ask people what they like and we work from there,” he says. Maybe they drink wine— well, we’ve got a red wine barrel aged beer. Or if they prefer liquor, we have bourbon, whiskey and eve tequila barrel beers. That’s how they find they actually do like beer.”

Then there are those who favor “Lite” beers from the big major beer makers. “Just the other day we had a truck out at a street fair and people were coming up to us saying they drank Lite beer and what did we have that was similar,” Burton says. “So I gave them our Albino Monkey, which is a Belgian ale similar in color to a Lite beer, but definitely a different taste. And you know ten out of ten of the people who said they only drank Lite liked the taste of our beer.”

 

Speaking of monkeys, what’s the idea of using a simian quizzically contemplating a frothy goblet of beer as the brand logo with the tagline, “Think Strange. Drink Strange.”? For that matter, why call the brewery “Strangeways”?

 

Burton is a fan of the 1980s English alternative rock band The Smiths and their last album, “Strangeways Here We Come.” “I thought the name was a good representation of the unusual beers we planned on making, as well as that I was making a strange career switch from running the family retail clothing business to opening a brewery,” Burton explains.

 

As for the logo, Burton says, “I thought of it while I was driving. It was only a bit later that I realized it was reminiscent of Rodin’s famous statute, The Thinker—we had a replica on top of the basement fireplace in my childhood home—and Rheingold’s “Affe mit Schadel,” the statue of a money pondering a human skull. I was thrilled to get British comic book cover artist Glenn Fabry to do it. For a comic book fan, it was a childhood dream come true.”

 

Beer making wasn’t one of Burton’s childhood dreams, though. “I’m a native Virginian.” he says, “It wasn’t until I travelled abroad for college in Austria and Germany that I first tasted really good beer, Schneider’s Aventinus, and I learned that beer can be something other than bland and ordinary. Then when I returned to Virginia, the craft brewing culture was just starting to take off. That’s when I realized I could combine my experience in retailing with selling great tasting beer.”

 

Burton’s first foray into brewing actually resulted in changing Virginia law. “I was a little nervous about starting a new business and investing in equipment, so I wanted to begin slow and use someone else’s excess facilities for brewing, what’s called an alternating proprietorship. Unfortunately, the law didn’t allow it.” Burton says. “So we set out to change the law and eventually House Bill 359 was passed to allow it. I like to say we fought the law and we won. By that time, however, the craft brewing business had really taken off, and no one had extra capacity to spare. So I ended up starting the brewery here in Richmond, and was fortunate enough to connect with long-time brewer Mike Hiller to help. But I’m glad I was able to broaden the possibilities for others to get into the craft beer market. And during all that time I was really able to perfect my business plan and refine what I really wanted to accomplish with the business.”

 

Today, Strangeways Brewing operates a one-of-kind 8400 square-foot production in Richmond, with a 20 barrel system that has produced 300 different beers. It has several tasting room spaces open to the public daily. “We did that because we’re a tourist destination, so we get a lot of out-of-town traffic particularly on weekends but, really anytime during the week.”

 

Given Burton’s background in retail clothing, it’s not surprising there’s a lot of branded gear and accessories in the merchandise shop. “It’s part of the experience, and it reflects my interest in clothes,” Burton says. “Just like I’ve got a lot shoes and different shirts, it’s the same with my beer—there’s a lot of variety and something for every occasion.”

 

After only three years in operation, Strangeways was named the “Best Brewery Tap Room in Virginia” in 2104/2015 by RateBeer and has been featured in a variety of trade and general interest publications. It has also introduced a number of industry “firsts,” which includes the introduction of the “crowler.” This is the 32-ounce can version of a growler, a refillable beer bottle.

 

“A can keeps beer fresher for longer because it isn’t exposed to light the way it is in a bottle and there’s a tighter seal,” Burton notes. “When I first started filling crowlers I found out I was in violation of an ABC (Alcoholic Beverage Commission) rule, so I had to invent a way to seal the can to be in compliance.”

 

Another first involves a somewhat looser fit. “Once a month we have an old-time burlesque show. I know we were the first brewery in Virginia to do that; if we’re not the first in the country, then we’re one of the first,” Burton says.

 

He points out that, “Richmond is a great place to visit, it’s a small city and there’s a lot going on. We’ve always had great restaurants and today they’ve gotten even better. Craft brewing is just a natural complement to that.”

 

That said, next up for Strangeways is to distribute beyond the Richmond market. “Even though we’re a local, regional brewery, we’ve already got statewide brand recognition,” Burton says. “I’d like to be able to get our beer into the hands of people who’ve heard of us but can’t buy a six-pack unless they’re in the area.”

 

Burton is optimistic about continued growth for Strangeways Brewery as well as any craft brewer entering the market, even though that market may seem to be peaking. “You’ve got to due diligence. You’ve got to have a solid business plan, do your research and offer some kind of unique experience to your customers. And you need to be passionate about what you’re doing and work with people who share that passion with you. Most importantly, you’ve got to have a story to tell, something that is going to interest people in you,” he emphasizes.

 

Without those qualities, it’s more than likely any business, not just a craft brewer, is going to fall flat. Burton’s head for business shows there’s nothing strange about his success.

Beltway Brewery

Like many craft beer makers, Stan Sellier started out as a home brewer. But, like Burton, when he looked to transition to making a business out of it, he couldn’t find a brewery that was either willing or had the capabilities to produce his recipes.

 

“That’s when the light bulb went off,” Sellier says. “I decided that my business was going to be that brewery dedicated to producing high qualify craft beer for start-ups and growing breweries that cannot build or expand their own brewing capabilities, as well as restaurants looking to offer their own small scale private label house brands.”

With help from the Loudon Small Business Development Center, Sellier founded Beltway Brewing in 2011. The timing couldn’t have been better. While his initial target market was established breweries looking to try out new recipes or that needed a little extra capacity, passage of SB604 encouraged the foamy wave of nano-breweries that could also take advantage of a brewing facility for hire.

 

Beltway’s facility in Sterling features a custom designed 30 barrel four vessel steam system. There’s also a smaller pilot system for brewing small batches used in recipe development. Minimum production runs are packaged in 60 kegs, or about 390 cases of 12 ounce bottles or cans.

 

Sellier hasn’t entirely lost the retail urge, even while it’s not the focus of his business. “We have a tasting room open on Fridays and Saturdays, and we do sell a Beltway brand,” he notes. “That’s typically to test out new recipes or because we made some excess that we can offer in the tap room. It’s nothing you’re ever going to see on a store shelf. That makes us a little different from most other tasting rooms. What also makes us unique is that we offer tastings of beer we make that’s shipped all over the country. In many cases, our Tasting Room is the only local place where you’re going to be able to find these beers.”

 

Sellier likens Beltway Brewing to Muscle Shoals, the Alabama recording studio famous for producing such major artists as Wilson Pickett, Lynyrd Skynrd and the Rolling Stones. “Just like Muscle Shoals, we provide a top-ofthe- line facility with the latest equipment to produce what the artist wants. We don’t tell you how to do it, though we’re certainly available for consultation if you want it. Our job is to provide you with the means to produce your ideas.”

 

Asked if it’s ever the case that the ideas might be a little too frothy, Seiller chuckles. “We have an expression here of ‘NBT’—the Next Best Thing. A lot of our customers come in here with their version of NBT. But unless they ask, it’s not our job to evaluate it, it’s our job to produce it the way they want it made.”

 

So what is the next big thing in craft brewing? “We’re seeing a lot of sour IPAs, lately,” Sellier points out. “I’d say what you might call the northeastern style of IPA still reigns supreme as what most of our customers like us to make.”

 

Sellier notes that most Beltway customers are out-of-state, looking to break into the D.C. and northern Virginia markets. And while he’d like to source more raw materials from within the state, “Ingredients are set by our customers and that’s largely out of our hands,” he says. “The new hops processing facility in Leesburg, Lucketts Mill Hopworks, could be a possibility but, again, that would be something for our customers to decide.”

 

Dependent as Beltway is on other businesses, is Sellier at all worried about any bursting bubbles in craft brewing? “There may be a shakeout coming, but in final analysis there’s always going to be a demand for quality beer. And that’s what Beltway Brewery offers. The highest quality equipment and the highest quality staff to brew a high quality product. We offer the flexibility for others to do that where it might otherwise not be practical for them. It’s an infinitely complex process and we are the people who know how to do it.”

 

That’s a little inside the Beltway knowledge many others are looking to get.

 

Last Call

We’ve just scratched the surface in the breadth and depth of craft breweries in Virginia. All expectations are that the keg is more than half-full for future growth and innovation. As Brett Vassey notes for the Virginia Craft Brewers Guild in assessing the state of the industry for 2016, “Every year companies are getting more creative with their packaging, their beer. The quality keeps improving. The craft beer culture in Virginia has never been stronger.”

“I think you’re going to see some consolidation, with the bigger guys buying out the smaller ones. And it’s going to be harder for smaller brewers just starting up to break into the industry. But I don’t see either of those trends substantially affecting our business. There’s always going to be a market for local producers.” – Kevin O’Connor, O’Connor Brewing

“There’s growing interest and demand for locally grown fresh food, particularly here in Virginia. We’re proud to be in Loudon County and we’re particularly grateful to our state’s Governor and Department of Agriculture— they’re very supportive of family-owned farms such as ours... No farms, no beer!” – Janell Zurschmeide, Dirt Farm Brewing

“You’ve got to have a solid business plan, do your research and offer some kind of unique experience to your customers. And you need to be passionate about what you’re doing and work with people who share that passion with you. Most importantly, you’ve got to have a story to tell, something that is going to interest people in you.” – Neil Burton, Strangeways Brewery

“There may be a shakeout coming, but in final analysis there’s always going to be a demand for quality beer. And that’s what Beltway Brewery offers. The highest quality equipment and the highest quality staff to brew a high quality product.” – Sten Sellier, Beltway Brewery

© 2016 Industry VirginiaTM