Beer Buzz

Northwestern Vermont's craft brewers put their heads together

by Pip Vaughan-Hughes

Photos: Jeff Clarke

Over the last decade, the craft-brewing phenomenon has changed the way Americans think about -- and drink -- beer. In few places has the explosion of small breweries had as much impact as in Vermont, which has a higher number of craft breweries per capita than any other state. If Vermont is in the forefront of the movement, it's also bucking the industry trend: 1998 saw growth in the sector slow down dramatically.

Alan NewmanMagic Hat Brewing Co.'s Alan Newman sports his own magic hat. Approximately 35 investors hold shares in the Burlington company.

As Alan Newman, president of Magic Hat Brewing Co. in Burlington, points out, "Vermont is a hotbed of craft brewing." According to Newman and Otter Creek Brewing Inc. head Lawrence Miller, who is also president of the Vermont Brewers Association, the statistics bear this out. About 12 percent of beer sold in Vermont is brewed in-state; Vermont breweries have "a better than 30 percent share of draft sales," estimates Miller. He also guesses that Vermont brewers command approximately 18 percent of the dollars spent by Vermonters on beer, a figure that places the Green Mountain State at the top of the nation.

The craft-brewing movement -- the move toward what Newman describes simply as "better beer" -- began in the mid-1970s when Fritz Maytag, heir to the Maytag electronics empire, discovered his favorite local brewery, Anchor Brewing of San Francisco, was going out of business. Maytag bought the company and became the first person to invest substantially in microbrewed beer. The industry took off in the Pacific Northwest and made the jump to the Atlantic seaboard in the mid '80s. Catamount Brewing Co. in Windsor became Vermont's first microbrewery when it opened in 1986, followed by The Vermont Pub & Brewery in Burlington in 1988, and Long Trail Brewing Co. in Bridgewater Corners and Otter Creek Brewing Inc. in Middlebury, both started in 1989. Magic Hat Brewing Co. of Burlington joined the fray in 1994 and Franklin County Brewery is three years old.

At the smallest end of the market, Vermont's brew-pubs are true hands-on operations. Three Needs on College Street, Burlington, is run by Dan Lipke and Glenn Walter, previously head brewer at the Vermont Pub and Brewery a few blocks down the street. Lipke says the business's mysterious name came to Walter in a dream: "He's kind of cryptic about what it means," he admits. The two have brewed 42 styles of lagers and ales. Not having to worry about packaging and distribution gives Lipke and Walter the freedom to brew what they like: German and California-style lagers, and wheat, alt (a richly flavored German style) and Belgian ales. "It's a tough market out there," says Walter. "The nice thing about being a pub is that we don't have to compete with the six-pack market. If you're going to open a brewery, your expertise needs to be in sales and marketing rather than distribution." In common with almost all craft-brewers, the two went into business inspired by a love of beer. "One of my best friends used to home-brew," says Lipke. "I brewed my first batch in 1990, and it blew me away."

Greg Noonan, who owns The Vermont Pub and Brewery of Burlington with his wife, Nancy, tells much the same story. He grew up in Massachusetts and went to college in New Hampshire. "I had a neighbor who was into home brew," he says, "and he got me into it." Noonan started his business in 1988. At the time, Noonan says, the only east coast brewpubs he knew of were in Boston; Northampton, Mass.; and somewhere in North Carolina. "We called it ‘The Vermont Pub and Brewery' because no one knew what a brewpub was back then," he says. "Microbrewing equipment wasn't really available, so we had to fabricate our own out of stuff used in dairies and for making maple syrup."

Suds stats

Of the 30 regional brewers in the United States, four can be found in tiny Vermont. The Green Mountain State is home to 16 so-called "craft breweries," which range in size from small brewpubs to the regional variety.

Brewpubs

Small operations brewing beer for on-premise consumption. Example: The Vermont Pub and Brewery of Burlington; 805 barrels in 1998.

Microbreweries

Larger concerns brewing up to 15,000 barrels a year. Example: The Franklin County Brewery Inc., St. Albans; 1,400 barrels in 1998.

Regional brewers

The largest of craft breweries. Examples: Otter Creek Brewing Inc., Middlebury; 20,750 barrels in 1998 and Magic Hat Brewing Co., Burlington; 18,500 barrels in 1998.
By comparison, Anheuser-Busch brews 93 million barrels a year, according to Michael Giorgio, director of marketing of Otter Creek Brewing Inc. When it comes to making craft beer, the emphasis is on quality, not quantity. By the time Bennett Dawson opened The Franklin County Brewery Inc. in St. Albans three years ago, attitudes had changed. "We entered the market when the boom seemed to be at its peak," says Dawson. His seven-barrel brewhouse produced 1,400 barrels last year, using a classic English method and using English and Canadian grains. The brewery has a bottling capacity of 50 cases an hour.

"We've hit the point as a brewery where we have to choose a path," says Dawson. The choice is between staying local and going regional. "We're the fifth largest brewery in Vermont," he says, "and there comes a time when you have to face up to the fact that you'll be concentrating less on brewing and more on marketing." This is inevitable, he thinks. "There's been a real change over the last six months in Vermont," Dawson explains. "The big breweries have perceived a softness in the market and are really going for it."

Greg & Nancy NoonanGreg and Nancy Noonan own The Vermont Pub and Brewery of Burlington, established 11 years ago. "Microbrewing equipment wasn't really available," Greg recalls, "so we had to fabricate our own out of stuff used in dairies and for making maple syrup."

Quality is vital in the industry. "I will always dump a batch that's not up to standard rather than pollute the beer's reputation," says Dawson. For the Franklin County Brewery, the time has come to seek markets farther afield, with the support of "a good bunch of shareholders," as Dawson puts it. "This time next year we should be in other parts of New England and New York state."

Northwestern Vermont's two regional breweries, Otter Creek and Magic Hat, have very different styles and images but share a history of rapid growth. Miller founded Otter Creek in 1989 as a one-man operation. Originally from the Northeast, he caught the first wave of the microbrewing phenomenon while studying psychology at Reed College in Oregon, and "ended up pursuing a career in brewing rather than a Ph.D.," he says. He started shipping draft beer in 1991 and bottling two years later. By 1995 the company had built and moved into the large, custom premises they occupy on Exchange Street in Middlebury. "We started shipping out of state in 1996," says Miller, whose operation produced 20,750 barrels last year.

While the Otter Creek ale label seems to promise a return to the traditional brewing values of a pre-corporate age -- the designs echo, among other things, pre-war British labels -- the packaging of Burlington's Magic Hat offers a beer experience that's up to the minute. When Magic Hat began brewing in 1994, says Newman, the industry in Vermont consisted of three microbreweries: Long Trail, Catamount and Otter Creek, all of which have gone regional. "Magic Hat went through the microbrewery phase -- from 2,000 to 6,000 barrels -- in one year," says Newman. "I'm very lucky in that I have a partner who is only interested in brewing," he continues. "That way I can put all my energy into running the business." Approximately 35 shareholders, including co-founder Bob Johnson, own the company.

Astriking aspect of Vermont's brewing industry is the sense of community that exists among brewers. "I think it's because the craft-brewing movement was started by a lot of ex-flower children," speculates Noonan. "There's a lot of willingness to share information with everyone else. And not just in-state: We get calls from the West Coast, too. That's a complete turnaround from the old days when brewing was a very secretive, guild-run business."

Craft brewers are united by a love of their craft, fitting for an industry that started as a reaction against mass production. It's also about quality, Miller points out. "At Otter Creek we've held training sessions in taste analysis. We share our lab protocols. We're directly supporting other brewing businesses, but indirectly supporting our own. Just the thought of a bad Vermont beer is worth militating against."

There's no doubt that location has helped Vermont brewers succeed. "There's a sense of community in Vermont that lends better support to start-up companies of all stripes than in many other places in the world," says Miller. "And not just in brewing. It's being able to turn to business people in all sectors around the state for information and advice. There's also the honesty of the Vermont consumer. All of us have felt the benefit and sometimes the sting of the Vermont audience."

"People in Vermont have a huge loyalty to Vermont products," agrees Noonan. "That's not the same in, say, New Hampshire, where loyalties are much more local."

Vermont functions as a kind of unofficial brand that gives products from the state a definite cachet. "The Vermont image is aspirational," says Miller, who crafts words as well as beer. "Our ability to develop out-of-state markets stems from people's positive experiences in Vermont -- skiing, fishing, hiking."

The state's brewers have felt the effects of a changing market, however. Newman doesn't think things are necessarily getting better. "They're getting different," he says. "Now there are two strata: regional brewers and microbrewers. This is a difficult period for microbrewers," he maintains. "When we started it was an easier time. The public was more forgiving; growth was frenetic. You could make mistakes and get away with it."

"Anheuser-Busch flexed their muscles two years ago," explains Noonan. "They went after the distributors, and Miller followed suit. That really slowed growth," he says. "People were seeing 15 to 100 percent growth -- the big breweries cut that to zero to 15 percent. But in the long run," he says, "it only created a lull. There's been a winnowing process: Operators that can't cut it have gone under."

Michael Giorgio, director of marketing of Otter Creek, explains there has been a swing away from American craft beer and toward imported beer. Newman agrees, but believes "the pendulum is swinging back towards craft beer." Building brand awareness is one strategy to accomplish this. Ensuring quality is another.

Lawrence MillerOtter Creek Brewing Inc. owner/brewmaster Lawrence Miller guesses Vermont beers represent approximately 18 percent of all money Vermonters spend on beer and ale. That figure makes the Green Mountain State number one for in-state consumer loyalty.

Craft beer is delicate and will almost always taste better if it doesn't have to travel far. "A lot of Vermont brewers have withdrawn from out-of-state markets to service their home market," Noonan points out. It's this willingness to put quality and the home audience first that Noonan believes will make Vermont an exception to the consolidation and winnowing process that brewers in other states are suffering.

"Every brewery needs someone to put their hands on the barrel and say, ‘Be great beer, not just OK product,'" says Dawson. It seems that, in Vermont at least, the love and care of craft- brewers is flowing in the right direction: into the beer.

Pip Vaughan-Hughes is a free-lance writer recently arrived in Vermont from London.