CREJ - page 12

Page 12
— Retail Properties Quarterly — May 2016
operate in the nine-county region,
including breweries, distilleries and
wineries as well as coffee, tea, dairy,
water, ice and soft drink manufactur-
ers.The region ranks third out of the
50 largest metro areas in beverage pro-
duction employment concentration,
and ranks fourth for direct employ-
ment with about 8,640 employees,
according to the EDC report.
When examining alcohol-beverage
production specifically, the market is
seeing modest square-footage growth.
There are expectations that the num-
ber of breweries, distilleries and winer-
ies will continue to grow in Colorado,
and this trend will continue to drive
employment in 2016, said Lisa Strunk,
a senior economist with Development
Research Partners, who prepared the
EDC report.
The front-of-the-house retail oper-
ates as the introduction into whatever
the company is manufacturing. Not
only does it introduce the beverages to
new customers, but also it allows the
company to communicate its brand
and show off its production space.
Today the state has over 300 brewer-
ies, over 50 active distilleries and more
than 140 wineries.The nine-county
EDC region is home to 25 craft distill-
eries and more than 50 wineries alone.
Why Retail Space?
As these beverage markets become
more crowded, producers who rely
only on distribution are finding it hard-
er to get placement, said P.T.Wood, an
alchemist withWood’s High Mountain
Distillery.WhenWood’s High Mountain
Distillery received its distilled spirits
plant license in November 2012, it was
the 23rd company in the state to do
so.Today, there are almost 90 licensed
DSPs, he said.
“There’s a limited amount of shelf
space out in the world, so the tasting
room or farm-distillery destination-
type model gives you the ability to
make a pretty good living in this busi-
ness, even without a ton of outside
distribution sales,” saidWood.
AtWood’s distillery in Salida, the
4,000-sf building dedicates about 20
percent of the square footage to a
tasting room, which sells bottles and
cocktails made out of the distillery’s
gin, whiskey and liqueurs, and fea-
tures garage doors that open onto First
Street and windows looking into the
production area.
However small, that tasting room
brings in close to 60 percent of the
distillery’s revenue, he said. “Before
we went with a distributor, we really
didn’t have any sales or marketing,
and we were in 100 to 125 retail outlets
across the state.Virtually all of that
was driven from our tasting room.”
The same can be said for many of
Colorado’s small wineries. “A 2013 CSU
Economic Impact Study showed that
on average, [wineries] sell more than
60 percent of their product direct to
consumers through the sales room or
at events,” said Doug Caskey, executive
director with ColoradoWine Industry
Development Board. “A large winery
would sell a greater share of its prod-
uct at wholesale, but a smaller winery
without much distribution will sell an
even larger percentage of its product
out of its sales room.”
Some wineries find success in retail
locations when grouped together in
order to do joint marketing and collab-
orative events, he said.
Several Colorado breweries are taking
their expansions one step further and
creating “destination breweries.”These
locations pair the brewery experience
with tourist attractions, Strunk said.
New Belgium Brewery is credited as
one of the first to adopt this model, fol-
lowed quickly by Breckenridge Brewery,
Avery Brewing Co. and Great Divide
Brewing Co.
“Generally, destination breweries
offer a number of tourist attractions,
including the brewpub, restaurants,
special tours, gift shops, private event
spaces and beer gardens,” she said.
Market Driver
Brewery and distillery expansions and openings announced in 2015 in
Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson, Larimer
andWeld counties.
Destination Breweries
Breckenridge Brewery
opened a $36 million, 12-acre headquarters facility
in Littleton. The facility includes a brewhouse, barrel-aging room, tasting
room, restaurant and beer garden.
• Boulder-based
Avery Brewing Co.
opened a $28 million facility in Gunbarrel.
The 67,000-square-foot facility is expandable up to 95,000 sf for future proj-
ects and includes a taproom, a restaurant, gift shop and outdoor patio.
Great Divide Brewing Co.
opened a $38.2 million brewery in the River North
neighborhood. The first phase of expansion includes a 65,000-sf bottling,
canning and kegging warehouse, and a taproom. The second phase, slated
for 2017, will include a brewhouse, beer garden and a skywalk to accommo-
date large tours.
Expansions and Openings
Anheuser-Busch InBev
will invest $45 million to build a new canning line
and construct 25,000 sf of warehouse space.
• Fort Collins-based
New Belgium Brewing Co.
broke ground on a $7 million
expansion that will include office space, a tasting room, a beer garden and
an on-site health care facility for workers and their families.
Mobb Mountain Distillers
will open a 1,000-sf production facility and tasting
room in Fort Collins.
Upslope Brewing Co.
will open a new brewpub in Boulder in fall 2017 for
experimental brewing and barrel aging as well as add a restaurant.
• Boulder-based
FATE Brewing Co.
will expand its capacity by moving into
the former Avery Brewing Co. space.
Skeye Brewing’s
3,600-sf space in Longmont includes a brewhouse and a
taproom.
MillerCoors Blue Moon Brewing Co.
will anchor a 5-acre entertainment dis-
trict in RiNo that will include a tasting room and will feature a two-barrel
pilot system.
New Belgium Brewing
will open a 10-barrel, pilot brewery to make sour
beers in The Source Hotel in RiNo. The brewery will operate on the ground
floor and will age its beer in barrels on the eighth-floor lounge, where it will
operate a beer garden.
Laws Whiskey House
acquired 31,000 sf at 13th and Cherokee streets to
open a second Denver facility.
Tivoli Brewing Co.
and the
Tivoli Distribution Co.
reopened in Denver with a
$7 million campus operation that is the first full-production brewery in the
nation on a college campus and coincides with Metro State University of
Denver’s new brewing degree programs. The facility includes a brewery, tap-
room and restaurant.
TRVE Brewing
opened its new production facility, the 5,000-sf Acid Temple.
Crazy Mountain Brewing Co.
opened its second Colorado location at the for-
mer Breckenridge Brewery headquarters. The 42,000-sf turnkey includes a
brewhouse.
• Denver-based
Renegade Brewing Co.
opened a new production facility at
The Yard on First and Santa Fe streets.
Pat’s Backcountry Beverages
is expanding inWheat Ridge into a 17,300-sf
facility.
• Golden-based
Mountain Toad Brewing
plans to build Toad Mesa, a 21,000-sf
production and packaging facility in the Coors Technology Center. The facil-
ity will include a small tasting room and beer garden.
El Rancho Brewing Co.
and
Lariat Lodge Brewing
opened in Evergreen. El
Rancho Brewing will include a 10-barrel brewing system and adjoining 500-
seat restaurant. Lariat Lodge Brewing will include a five-barrel brewing sys-
tem and restaurant.
Source: Metro Denver Economic Development Corp.
Photo courtesy Avery Brewing Co.
Avery Brewing Co. opened a 67,000-square-foot facility in Gunbarrel.
Photo courtesy Infinite Monkey Theorem
The front-of-the-house retail introduces beverages to new customers, communicates
the brand and can show off the production space.
Photo courtesy Avery Brewing Co.
The catwalk at Avery Brewing Co. was designed so visitors could watch what is
happening on the production floor at any time during operation.
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