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New Belgium talks craft brewing's explosion and building second locations

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New Belgium has seen firsthand just how much the craft brewing industry has exploded in growth over the past few years, and in no other state is that more true than Colorado.

We had the chance to speak with New Belgium Brewery owner and CEO Kim Jordan about the massive influx of craft breweries, not only in Fort Collins but throughout the rest of the state.

With all of the breweries that are opening during what seems to be every week, the bubble has to burst at some point, right?

"People in the industry talk about, will the bubble burst? My general feeling is that while we probably won’t have a bursting of the bubble, in that beer drinkers have become too excited about craft beer to say no to it for good. I don’t think we’re going to go back in that kind of a way.

I see there is still some room for growth, but I do think we will have rationalizing at some point.

"Some of that will be because people decide that the business is too much. On the retail shelf, there is only so much space, at some point there will probably some rationalizing, but it won’t be a big burst," Jordan said.

So how does a brewery stay competitive in an ever-expanding market? Some local breweries in Colorado have chosen to expand their brewery through the land they own, while others have elected to build second locations.

New Belgium is among those that have decided to add a second brewery to their operation and we asked Kim if the second location is the best way to expand and grow a brewery.

"I think that’s certainly one model, but breweries are certainly expensive to build and one of the things that’s very clear to us is it’s cheaper to add capacity at an existing location than it is to start all over at another location.

"The two limitations are at the front end and the back end of the production process. On the one hand, you have the size of your brew house and its ability to have a certain amount of throughput per day, and then on the other side, you have your packaging equipment.

"So how much can it produce per day and if you haven’t maxed those two parts, then it’s certainly cheaper to add capacity in fermentation and aging to maximize that, rather than go build another brewing. I also think that presence in another market is alluring though.

"The reason we chose to build a brewery on the east coast was so we had the ability to ship beer across shorter distances," Jordan said.

New Belgium is scheduled to open their second location sometime during 2015.



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