A rapidly expanding Northwest Arkansas brewery has planted its flag in central Arkansas.
Core Brewing and Distilling Co. recently opened one of its brew pubs in North Little Rock's Argenta District. The pubs, which offer a selection of the Springdale-based craft beer-maker's brews, have been the linchpin in its branding and growth strategy.
Central Arkansas already has several craft breweries, including Diamond Bear Brewing Co. and Lost Forty Brewing.
Since Core Brewing began its first major expansion in 2013, it has opened six stand-alone Core Public Houses, mostly in Northwest Arkansas, but with one in Fort Smith and the new one in North Little Rock. Core Brewing plans to open two more pubs soon, one in downtown Bentonville and another in downtown Springdale.
Core Brewing also expanded its capacity at its Springdale brewery and made distribution deals to get its beer in locations throughout the state, including in select Wal-Mart, Harps and Whole Foods locations, as well as in Nashville, Tenn., Atlanta and Oklahoma. The company, which has 22 full-time employees and more than 25 part-timers, also is gearing up for an expansion of its canning line.
Jesse Core, the brewery's founder, said the Core Public Houses highlight the company's message that the workforce is made up of good people who make good beer. He said the pubs allow Core to share its culture with its customers and get to know them personally, while introducing them to the breweries' product.
In an email from Germany, where Core was checking out a Krones canning line that the brewery recently purchased, he described what visitors to the Little Rock pub should expect.
"A laid-back local feel, like the rest of our pubs," Core wrote. "I think of our pubs as decompression zones, where patrons can relax and have a good local beer with friends."
Mellie Pullman, director of the Business of Craft Brewing Program at Portland State University, said the use of the brew pubs, along with steady expansion of capacity and distribution, is a smart way to gain market share in the craft brewing market that lacks dominant players or entrenched competition as in Arkansas.
"In an underserved market it's a good move without a lot of risk," Pullman said.
She added that the profit margins are much higher when selling beer by the glass in a pub controlled by the company, compared with selling kegs and cans to bars and retailers. She said Core's model is similar to that of many pubs in the United Kingdom.
At the end of March there were 21 small brewery permits held in Arkansas, along with 14 microbrewery restaurant permits, according to documents provided by Arkansas Alcoholic Beverage Control.
In 2014, Arkansas ranked 39th nationally in the number of craft breweries per 100,000 adults over 21, according to the Brewers Association.
There were 19 craft breweries in Arkansas in 2014, and brewers produced a total of 14,641 barrels of craft beer that year, ranking 48th in the country for total production, according to the trade group. A barrel of beer holds 31 gallons. The state rankings for 2015 are expected to be released this week.
Nationally for 2015, craft beer production was up 13 percent, to 24.5 million barrels, according to preliminary numbers provided by the association. In 2015, craft beer controlled a 12 percent market share in the nation, a 1 percent increase from the year earlier. The number of operating breweries in the nation was up 15 percent to 4,269, the most in the nation's history.
Core Brewing's new canning line purchased from the Germany-based Krones Group is expected to arrive in about 30 days at the Springdale brewery and will take about two months to set up. Once it's in operation, the fully automated line will take Core Brewery's canning capacity from 24 cans a minute to 250 cans per minute. Jesse Core said the line cost more than $750,000.
To fill all those cans, Core Brewing added four vessels that each process up to 160 barrels of beer, so the company now makes more than 225 barrels a week, or 900 a month. The company also is adding a 2,500-square-foot walk-in cooler. The price tag for the improvements was a bit more than $1 million.
Bart Watson, chief economist with the Brewers Association, said Arkansas' craft beer market, being somewhat new, has a lot of pent-up demand, and as a result there are tremendous opportunities for the state's breweries. He said Core Brewing's multipronged approach to its expansion seems to be succeeding and helping the brewery emerge as a market leader.
He said the Core Brewing's pubs are likely key in the company's success. He said they serve as multiple tasting rooms scattered around the state where the company can try new things and interact with its customer base.
"They are good places to innovate. We've seen it work in other places," Watson said. "They are a place to get immediate feedback from the customer and build brand loyalty in an intimate setting."
SundayMonday Business on 04/03/2016