Sunday, January 24, 2010
Food, "Dish", Atlanta

The beer boom

Georgia brewers ride locals-only trend to sales growth

By Colby Dunn

Lonnie Terrell looks like a beer drinker. His spiky hair and black T-shirt, with its spiky white writing, look like they belong on a motorcycle. He’s a former Marine and a career fireman, and it’s not a stretch to envision him kicking back with a Bud Light in front of a football game.

This Friday evening, however, Terrell, who lives in California but has returned to the Athens area to celebrate an old friend’s restaurant opening, is clutching a craft brew. He says he prefers a local microbrew to a megabrand beer.

“If we’re going to go drink, we’re not really looking to get hammered drunk,” he says. “We’re doing it for the taste, not just because it’s $14 for a 30-pack.”

Terrell and consumers like him are catapulting the so-called craft brewing industry up the sales charts. According to the American Brewers’ Association (ABA), sales of craft brews jumped 5 percent by volume in the first half of 2009, and 9 percent in terms of consumer spending—impressive figures in the midst of a tanking economy. The association expects numbers from the second half of 2009, which are still being tallied, to be just as good, if not better.

Atlanta boasts the second-largest Southeastern craft brewer in Sweetwater Brewing Co., as well as the oldest in the state in the Atlanta Brewing Co. And over in Athens sits one of the rising stars of the craft brewing industry, Terrapin Brewing Co., which, after only seven years in business, is distributing to six states and pulling in awards like the Great American Beer Festival’s Pale Ale Gold Medal.

To qualify as a craft brew, says Paul Gatza, director of the ABA, production must be under 2 million barrels a year, 75 percent of the ownership must not be in the major beer companies’ hands, and the beer must be staunchly barley malt, the more traditional, heavier beer-making ingredient.

“The whole industry is growing right now,” says Julia Weckback, marketing manager for Terrapin. “You know, it did so in the early ’90s, and then it fell off a little bit. But now people are into craft beer, they’re into drinking quality. People want to have things that are made with quality, that are made local.”

The craft beer symbolizes a lifestyle, and it’s capturing younger consumers who are notoriously difficult to woo. Gatza says that one of the largest segments of the new craft brew movement is the 21-to-35 age range.

During a Terrapin brewery tour—really more of a backyard party than an informational tour—Erin Mattimoe, a twentysomething in a red jacket and bright red lipstick, puts her finger on why craft beers are so appealing to drinkers her age.
“It’s kind of a fashion to go with something that’s made locally,” she says, as her friends nod in agreement.

Sweetwater, best known for its award-winning flagship brew, Sweetwater 420 Extra Pale, touts the slogan “Don't float the mainstream!” That pursuit of individuality is a defining characteristic of the industry.

Gatza says craft brewers are generally culled from outside the big beer business—they didn’t get experience with Anheuser-Busch or Pabst. They’re homegrown.

“They tend to be entrepreneurs and perhaps a little eccentric,” says Gatza. “Generally, they do not come from large breweries, but instead would come from a beer background.”

Some are home brewers or just beer lovers, or are tired of mainstream business.

That was certainly the case for Terrapin, which was started by two friends who entered their pale ale recipe in national competitions before they even had a company.

Sweetwater, now a Southern craft brew titan, was started by two men and a dog (who tagged along). They begged and borrowed their way into business in the late ’90s. Consumers like their connection to the beer and to the company.

Back at the Terrapin tasting, in a warehouse strung with boardwalk lights, scattered with disc golf baskets and an odd assortment of lawn furniture, Tim Kinard explains why he refuses to drink anything but microbrews.

“You can’t go to a Bud plant and sit there and drink their beer,” he says, taking another sip of his oatmeal stout. Kinard is sporting a vintage button-up vest and the kind of mustache that’s been turned up into little curls at the ends. When Bud Light is mentioned, he dismisses it as “mass-produced swill.”

“The thing about Terrapin is it’s a local beer, so you’re kind of supporting the local economy,” he says.

Weckback says this is another hallmark of the craft beer connoisseur.

“Something that’s totally different with the craft beer drinker from your average American lager drinker is that they certainly have brand loyalty for sure, but not in the same way,” she said. “It’s sort of where wine was 10 years ago. It’s all about variety and different kinds of things.”

Sweetwater expected to produce 65,000 barrels of beer by the end of 2009, a staggering 42 percent more than the 45,500 it produced in 2007. Terrapin posted a 13 percent sales increase in the last year alone, and doesn’t see its client base shrinking anytime soon.

The local movement is getting stronger, craft beer experts say. And in fact, the fallout from the recession may have been just what this once-niche industry needed to jump-start its growth.

“I think to some degree, people are fed up with what they’ve seen in the big-business economy out there, and I don’t see that trend really turning around, so that makes me optimistic,” says Gatza. “All the consumer trends are pointing to a bright future for craft breweries.” SP