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Sales hopping at 2 state breweries

Core Brewing, Diamond Bear planning expansions to meet demand

Posted: April 14, 2013 at 2:35 a.m.

Owner Jesse Core gives a tour of the operations to patrons at Core Brewing and Distilling on Wednesday, April 10, 2013, in Springdale. The brewery is expanding its current location for more equipment and a larger tasting room.

SPRINGDALE - Core Brewing and Distilling Co. is pushing forward with a new plan to double its beer output just three months after an earlier expansion.

In May, the brewery, located on North Lowell Road, will grow from 5,000 square feet to 10,000 square feet and add four employees to its staff of six.

The additional equipment will bring the brewery’s capacity to 22,000 barrels annually, brewery owner Jesse Core said. A barrel contains 31 gallons of beer.

Core, 39, the brewery’s founder and principal owner, said demand for his beer has pushed the brewery’s expansion plans ahead of schedule. Core beers are sold in 24 restaurants and bars in Northwest Arkansas, served in Arvest Ball Park and available in five locations in the Little Rock area. Plans call for out-of-state distribution to begin in June.

“It’s invigorating and scary,” Core said of the expansion during an interview at the brewery’s taproom. Patrons sat nearly elbow to elbow, playing cards or removing pieces from a tower of Jenga blocks, laughing, talking and sipping beer.

The growth plan also includes an expanded taproom and outdoor seating area.

Core Brewing isn’t the only brewery in the state that’s expanding as consumer demand for regionally brewed beers increases.

Little Rock-based Diamond Bear Brewing Co. is planning to purchase a new facility in July or August to keep up with demand, President Russ Melton said in a recent interview. The exact location has not been identified because the deal has yet to be finalized.

Diamond Bear leases space in the downtown area, which it will vacate once the new location is secured. Melton said the new location will include about 20,000 square feet - nearly three times its current space.

In 2012, the Little Rock brewery sold 46,025 cases, a 31 percent increase from 35,194 sold in 2011, and could have sold more with more capacity, he said.

Diamond Bear’s multiple beer offerings are sold in Arkansas and Mississippi. Melton said once it has the ability to make more product, Diamond Bear will concentrate on expanding its distribution throughout Arkansas.

Arkansas has 14 active native brewer permits, according to the Alcoholic Beverage Control Division of the Arkansas Department of Finance and Administration. The permits allow the holder to operate a small brewery that produces less than 30,000 barrels annually, or a microbrewery restaurant that can make 5,000 barrels of beer annually and requires an attached restaurant that seats at least 50 and sells at least one prepared meal a day.

According to data provided by The Beer Institute, a Washington, D.C.-based industry group, there were 2,751 active brewer permits in the United States in 2012, the largest number since the group began keeping records.

In Arkansas, there were 14 brewing establishments operating in 2012 - defined as importers, brewpubs, company-owned packaging and wholesaling operations - that employed a total of 100 people, according to the institute. Those jobs - which included a mixed bag of corporate positions, sales and brewpub jobs - earned $6.32 million, according to the group.

By producing less than 15,000 barrels of beer annually, with 75 percent or more of the beer sold off-site, Core Brewing and Diamond Bear are classified as microbreweries as defined by the Brewers Association, a nonprofit trade group supporting craft brewers. According to the association, in 2012 there were 1,118 microbreweries operating across the country, a 37 percent increase from813 in 2011.

Julia Hertz, a spokesman for the association, said Core Brewing’s expansion plans are ambitious. If Core Brewing begins producing close to capacity after the expansion, its classification could shift to a regional brewery - an operation that makes between 15,000 and 6 million barrels of beer annually. She said there are approximately 100 regional craft breweries operating in the country.

“They must be confident,” she said.

The association defines craft brewers as those that produce less than 6 million barrels of a year, are independently owned and have a majority of their sales in malt-based beer products. Craft brewers, which include regional and contract breweries, microbreweries and brewpubs, produced 13.24 million barrels of beer in the United States in 2012 - a 15 percent increase from 11.47 million barrels in 2011. Total U.S. beer production was up 1.1 percent in 2012 at 195.72 million barrels, according to preliminary figures by the Beer Institute.

Hertz said industry wide, more than half of the nation’s craft breweries are taking steps to meet demand. She said some are trying to maximize the space they have while others are moving into larger quarters. Some are opening a second location or contracting with other brewers to make their products.

She said the business is challenging - as well as highly regulated and taxed. She said ingredient availability and cost can vary dramatically from year to year, requiring craft brewery owners to plan properly or risk failure.

While the ability to produce more beer to meet demand is the current focus of the expansion at Core Brewing, the overall goal is consistent quality and flavor, said Core.

“Brewing is biochemistry at its finest,” he said.” Repeatability and precision are key.”

New beers are offered to the public at Core Brewery’s tasting room, which is open 3 p.m. to 7 p.m., seven days a week. If the reception is favorable, then the beer is offered to local bars and restaurants. If it meets with success there, the beer is sold in 22-ounce “bomber” bottles.

The latest addition is a canning line for the brewery’s flagship ESB, a pale ale that is made with malted English barley and fresh hops. A flagship beer is a brewery’s largest selling beer by volume, and Core said he’s been working to perfect his ESB for decades.

Core, born in Fort Smith and a seventh-generation Arkansan, has been brewing for more than 20 years and traveled around the country before returning to Arkansas. He worked for Tyson Foods Inc. in supply-chain management and served four years on the Springdale City Council.

He said during his time on the City Council, he contended the city needed to encourage businesses that would draw tourists.

Since beer aficionados like to travel, he said, often their first thought when visiting a city for the first time is to find a local brewery to taste its offerings. He said that makes breweries a strong complement to large scale tourist draws, such as the newly opened Crystal Bridges Museum of American Art in Bentonville and the Pinnacle Promenade in Rogers, the state’s largest mall.

“This is me putting my money where my mouth is,” Core said.

Business, Pages 69 on 04/14/2013

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