Great American Beer Festival

beer.jpgRocky Mountain gold: Great American Beer Festival hits Denver this week

When the inaugural Great American Beer Festival took place in Boulder in 1981, the hometown Boulder Brewing Co. was one of just 22 breweries — pouring a total of 40 varieties of beer — on hand…

The full story by Alicia Wallace at The Boulde Daily Camera:

This week, at the 26th annual manifestation of the festival in Denver, the brewery now known as Boulder Beer Co. is one of 408 participating breweries — including 11 from Boulder and Broomfield counties — and will serve up a handful of the 1,884 brews on tap.

More than 41,000 people are expected to attend the event, hosted by the Boulder-based Brewers Association and running Thursday through Saturday at the Colorado Convention Center.

The three-day festival also comes on the heels of a recently released report from the Beer Institute that showed Colorado outpaced every other state in the nation in beer production last year.

The “granddaddy of all U.S. beer fests” brings together brewers large and small from all across the country and attracts beer enthusiasts from around the world.

“Oh, it’s just astounding,” says Marty Jones, spokesman for the Oskar Blues Brewery in Lyons. “If you love beer, it’s the proverbial candy store.”

The event may well have outgrown its Boulder beginnings, but it has not lost any of its historical significance or current importance, given a growing craft-beer industry whose impact has been flavorful to small breweries locally and nationwide, says Dan Weitz, Boulder Beer’s marketing director.

“I think Boulder has something to be really proud of in that we are the home of Colorado craft brewing with Boulder Beer from 1979 and the Brewers Association both being based out of Boulder,” Weitz says. “It all started here. People forget that.”

An ‘elevated’ event

Attendance at the Great American Beer Festival has grown about 20 percent annually during the last two years, says Paul Gatza, director of the Brewers Association, a trade association for the craft-brewing industry.

And it shouldn’t grow that much again, he says, noting that his association put a cap on attendance on certain nights to keep the experience a little more intimate.

“With so much beer around … people are pretty well-behaved,” Gatza says. “People are there to taste the beer, they’re not going there to get drunk.”

Overall, the beergoers are split 50-50 in terms of men and women. During the Thursday evening session and the Saturday afternoon session, the crowd typically consists of enthusiasts, Gatza says. The energy definitely picks up on the Friday and Saturday night sessions, he says.

“It’s very elevated, you might say,” Gatza says. “It does get a little crazy late into the night with the 21-to-25(-year-old) demographic in abundance.”

For the brewers, the three days are a chance to catch up with old friends and colleagues across the nation, to try some new beers that typically are out of pocket, and to show off the best and the new varieties they have to offer.

Then there are the medals.

During the festival, 107 judges will sample 2,832 beers in 76 categories, which include “American-Style Cream Ale or Lager,” “Robust Porter,” “Oatmeal Stout” and “Gluten-Free Beer.” Five different three-hour judging sessions will take place during the festival and the top three beers in each category will receive gold, silver or bronzes medals.

When it comes to some of the locals, the breweries seem to approach the contest from different angles: Boulder’s Avery Brewing Co. entered eight of its beers — including its Kaiser Imperial Oktoberfest and Ellie’s Brown Ale; Oskar Blues is hoping its Dale’s Pale Ale and Old Chub will net the brewery its first gold-medal glory since it began canning its beers a few years back; and Longmont-based Left Hand Brewing Co. went back to its roots and entered only its Sawtooth Ale, its first beer.

“We think there’s a retro coming back,” says Chris Lennert, Left Hand’s vice president of operations.

King of beers

The timing almost seems too perfect.

Two weeks before hosting the Great American Beer Festival, Colorado was crowned king of the beer-producing states.

In 2006, Colorado produced nearly 23.4 million barrels of beer — about 724.5 million gallons — which allowed the state to edge out California for the top spot, according to recent data released by the Beer Institute. California produced about 22.8 million barrels last year.

The Colorado beer industry also directly and indirectly contributed $12.4 billion annually to the state’s economy, according to a recent study commissioned by the Beer Institute and the National Beer Wholesalers Association.

The biggest contributor to the first-place ranking sits just 20 miles from the heart of downtown Boulder.

Churning out more than 20 million barrels of beer annually, the Molson Coors Brewing Co. most likely upped the Golden facility’s production when it shut down its site in Memphis for cost-synergy reasons, says the Brewers Association’s Gatza. The largest beer-production facility in the world, plus the presence of an Anheuser-Busch brewery in Fort Collins, puts Colorado in that top tier, he says.

“So in that (Coors) transition, I think that’s what put Colorado over in 2006 and will probably keep Colorado (in first) for 2007 and 2008,” Gatza says.

Then there are the craft brewers.

The Brewers Association defines craft brewers as small, independent and traditional — meaning the brewery should have annual production below 2 million barrels; must have at least 75 percent ownership by craft brewers; and has either an all-malt flagship or at least 50 percent of its volume in malt beers or beers that use adjuncts to enhance, rather than lighten, flavor.

The $4.7 billion craft-brewing industry has seen its sales grow 31.5 percent during the past three years, according to the Brewers Association.

In 2006, the industry’s volume grew by 12 percent over the year before, and was the fastest-growing segment in supermarket scan data, experiencing stronger growth than all other alcoholic beverage categories, the trade association says.

Growth didn’t slow this year. During the first half of 2007, the volume and sales of craft beer grew by 11 percent and 14 percent, respectively, over the same period in 2006, according to the Brewers Association.

Skyrocketing growth

This is the 13-year-old Avery Brewing Co.’s seventh straight year of 30-plus percent year-over-year sales increases, says Adam Avery, the Boulder-based company’s president and brewmaster.

“I’d like to think that we make great beer,” Avery says. “More than that, just the industry as a whole is becoming a lot more mature. Thankfully the consumer base is changing what they’re asking for in a beer, they’re asking for more flavor … They’re finding that beer can be hugely flavorful and as complex” as wine and other spirits.

Take the response after its Ellie’s Brown Ale topped a recent New York Times’ list of the best-tasting brown ales. Ellie’s led the pack of 25 beers — 18 American — selected by the newspaper, which noted the beer “had such a beautiful malt aroma that sniffing it seemed like pleasure enough. But drinking it was awfully good, too.”

“It helped tremendously,” Avery says of the New York Times write-up. “We had tons of e-mail. Especially on the East Coast, we saw a big increase on the Ellie’s sales.”

Four years ago, Boulder-based Redstone Meadery brought the International Mead Festival to Boulder and also spearheaded the creation of International Mead Association. Those efforts, plus the growing sophistication of beer-drinkers palates, resulted in 2006 being a “stellar year” for Boulder-based Redstone Meadery, says owner David Myers.

The company, which reaches 23 states outside of Colorado, grew by 48 percent, a rate that Myers says will be hard to match.

“Our projection going into the years ahead is just to grow at a 10 percent rate,” he says. “Those kinds of years of 48 percent, you don’t put those up year after year.”

At Boulder Beer, Colorado’s oldest craft brewer has increased its volume by 100 percent during the past five years and experienced its best August, sales-wise, in 13 years, marketing director Dan Weitz says.

Boulder Beer produces about 26,000 barrels of beer on an annual basis and as its Hazed & Infused has grown to become a flagship brand, the company is looking at ways to expand at its brewery by adding another fermenter, Weitz says.

“It’s been a lot of work,” he says, “but it’s a lot of fun.”

Two years ago, Longmont’s Left Hand Brewing Co. put out 8,500 barrels. That climbed to 11,200 last year and the expectation is to produce between 14,500 and 15,000 barrels this year, says Chris Lennert, vice president of operations.

When it hits the 15,000-mark, Left Hand could make the jump from microbrewery — which is defined by annual barrel output of zero to 15,000 — to regional brewery, which sits in the 15,001-to-2-million-barrel range.

“We think we either are going to be the country’s largest microbrewery or the country’s smallest regional,” Lennert says. “And I would rather be the country’s smallest regional.”

To accommodate further growth, Left Hand is in the process of building a new brewhouse, which should be up and running by the first quarter of next year.

Expansion is a familiar story to the crew at Lyons’ Oskar Blues. Since it started hand-canning its beers in 2002, Oskar Blues’ beer production has grown 1,200 percent. In the first six months of 2007, production grew 88 percent, but the company hit capacity at its 2,400-square-foot facility, which sits behind its brewpub and restaurant off Main Street.

After being backed up with orders, Oskar Blues decided to purchase a building in Longmont that will serve as an additional production facility and tasting room.

Trouble brewing

But in the land of breweries, the flavor bouquet is not coming up all roses.

With raw ingredients — including malt and hops — expected to increase anywhere from 50 to 125 percent, the industry is bracing for some tough times.

“When the cost of your main ingredients skyrocket, you have to do something to handle those costs,” says Jones, Oskar Blues’ spokesman. “It will affect our ability to keep growing.”

Left Hand’s Lennert says the company already has alerted its customers in its newsletter. It’s possible that the cost of a case of beer could rise by $1 to $3, he says. The increases will strike the entire industry and could force smaller breweries out of business, he says.

The rising costs most likely will have Boulder-based Twisted Pine Brewing Co. sticking to its business plan of being a Colorado-only brewery, says Bob Baile, the company’s president. “That is a major reason for us to keep up the quality of our product,” he says.

Business will have to be a bit of a balancing act, between keeping the customers happy and weathering the financial pinch, says David Mentus, head brewer at Longmont’s Pumphouse Brewery and Restaurant.

The 12-year-old brewery might have to start charging a dollar more per pint, he says.

“It really kind of changes how we are going to look at how we make beer efficiency-wise and how we can still deliver the quality products to the consumer without making them feel the total brunt of the increase,” Mentus says.

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