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COLD BEER HERE: New regulations have helped spark an explosion of new breweries in the state

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Rick Reed, the founder and CEO of Cricket Hill Brewery, is finally seeing his vision fulfilled.
Rick Reed, the founder and CEO of Cricket Hill Brewery, is finally seeing his vision fulfilled. - (PHOTO BY AARON HOUSTON)

Rick Reed was trying to stay ahead of the curve when he opened Cricket Hill Brewery in Fairfield in 2002.

“I looked at what was happening in Pennsylvania, with little breweries such as Victory coming out with wonderful craft beers — and I said, 'You know what? New Jersey is a very viable market … let's be at the right place at the right time.' ”

He was right — but just off by a decade.

New Jersey finally appears to be getting around to being that perfect place to start a brewery. According to Reed, more than 15 breweries are scheduled to open in New Jersey this year, in lower-profile areas such as Plainfield, Edison, Sparta, Lafayette and Hackettstown, and in the areas you'd expect — Asbury Park, Hoboken and Jersey City.

But the state wasn't so ripe in the beginning.

“We had to fight to have the same rules as New Jersey wineries,” Reed said. “You could have on-premise consumption at wineries, but not breweries.”

The law made it impossible for breweries to earn money from beer sales after tours — both on the property and to be taken away — robbing breweries of both quick revenue and brand exposure.

Thanks to the 2012 revisions of New Jersey's Class A licensing statutes for alcohol, wine, distilled spirits and beer, that's no longer the case.

“New Jersey has made it easier for businesses to establish and generate revenue with the hope of participating in the growth of the industry in the Northeast regional area,” said Justin Csik, an attorney who specializes in licensing with Stark & Stark in Lawrenceville.

“(The revisions) give microbreweries alternative revenue streams because they're now able to sell directly to consumers,” Csik said. That led to “a renewed interest in establishing startup microbreweries in New Jersey.”

Prior to the law, New Jersey breweries struggled to compete on an equal playing field with nearby states.

“We were allowed to have tours; we were allowed to give four 4-ounce samples only; and we could only sell up to two six packs per person per day,” Reed said.

That meant for all the free beer Cricket Hill was providing on tours, it wasn't making up the difference in sales.

“Now I can start charging for people to drink my beer during our site tour,” Reed said. “We can also sell as much beer as someone wants to buy up to a keg.”

“It's a huge cash rush for us.”

As the creator of 15 different beers, Cricket Hill has grown 15 percent since the laws were amended and averages 150 visitors each weekend.

But while Reed thinks Cricket Hill's timing was just right, Augie Carton — owner of Carton Brewery in Atlantic Highlands — said his business would be entirely different if he had started it after the laws were amended.

Started in 2011 by three lifelong Middletown residents — Carton, a stockbroker; his cousin Chris, a lawyer; and his friend Jesse Fergonson, a one-time music producer turned full-time brewer — Carton Brewery pushes the boundaries of flavor by making experimental beers, such as their juniper cherry lime flavor fermented with wild bacteria.

“We consider this beer a success because five out of 10 people adore it for being funky, four people find it interesting but weird, and one is completely offended we'd even make this beer in the first place,” Carton said.

They must be doing something right.

With 300 to 500 people visiting the brewery every weekend and production at 2,000 barrels a year, Carton Brewery is two years ahead of its original game plan.

Carton, however, actually finds that restricting.

“There are a million more beers I want to (experiment with) that we just can't because we're now operating at full capacity,” he said. “Now that breweries can sell pints of beer on-site to support themselves, less beer can be made without the business suffering.”

Because of it, Carton says he might have committed to 50 small tanks — instead of the six big tanks he has now — to create more variety.

“If we had to do it over again, Carton Brewing wouldn't be a 15-barrel brewery — we'd be a five-barrel Main Street storefront.”

In essence, the very type of brewery business New Jersey may be seeing more of in the next couple of months.

Reed expects most of the breweries opening up this year to start out as so-called nanobreweries.

A growing national trend since 2011, nanobreweries are those that typically produce no more than three barrels of beer in one batch. (By definition, microbreweries are far bigger, even though they are limited to making 15,000 barrels a year.)

“Now, you can even be a home brewer and sell beer from your garage,” Reed said.

Nanobreweries have grown popular with home brewers who can typically keep their full-time jobs while testing their recipes in local markets to see if their beers warrant the opening of future microbreweries or brewpubs.

That includes Cape May Brewing Co., which was founded as a nanobrewery in the Cape May Airport in 2011. It now functions as a full-time production brewery, self-distributing about 15 different brews to more than 80 local restaurants and liquor stores.

There's also nanobreweries that have maintained their small existence despite their growing popularity, such as Flounder Brewing Co. in Hillsborough, known for its hit brew Hill Street Honey American Ale; or Pinelands Brewing Co. in Little Egg Harbor, with six beers and two flavors of homemade sodas.

Reed doesn't think that the rise of the nanobreweries should worry already-established microbreweries. He's got bigger opponents.

“It's us against them — Bud, Coors, Miller — their massive advertising campaigns and unlimited funds,” he said. “We're comrades — all we're doing is growing our army bigger and better.”

And despite all appearances, New Jersey needs all the help it can get to become competitive in the $246 billion craft beer industry.

With nearly 30,000 jobs and $2.3 billion in direct economic contribution depending on the state's beer industry, New Jersey would be smart to keep doing more to incentivize further brewery creation, Carton said.

“We're the densest state and we only have 28 breweries currently,” Carton said.

“Even though that's a big uptick from when we opened three years ago, if you want small businesses and regional pride, the laws need to go through another round of changes.”

Both Carton and Reed say these changes include working with the New Jersey Restaurant Association to allow breweries to also serve food on site, and allowing breweries to switch distributors without needing to find another buyer.

“The distributor can pick up our brand, do nothing for us, and we then need to find another distributor willing to pay them for our brand,” Reed said.

Such restrictions may cause New Jersey residents to open up breweries elsewhere where the laws are better for business.

According to 2012 data from the Boulder, Colo.-based Brewers Association, New Jersey ranked only 29th in the country with 26 craft breweries.

In comparison, New York ranked sixth with 165 and Pennsylvania ranked seventh with 108.

For now, as the trend continues to expand, there's one simple fix to help make New Jersey more popular among craft beer drinkers.

“I've lived in New Jersey for 35 years, and I think we have an inferiority complex. We're tired of seeing other beers from other states in our bars,” Reed said.

“If you're a New Jersey bar, you should have at least one New Jersey beer. Live Jersey, drink Jersey.”

E-mail to: megf@njbiz.com
On Twitter: @megfry3

BLAME IT ON BUD?

According to Rick Reed, New Jersey can thank Budweiser for its delayed entry into the craft beer industry.
As he tells it, Anheuser-Busch realized beer tastings were bad for business and encouraged lawmakers to keep craft breweries behind the times while wineries forged ahead.
It wasn’t until the company was purchased and reorganized in 2008 by the German company InBev that New Jersey breweries were able to fight back — and kick off the New Jersey beer revolution with the 2012 licensing revisions.

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Meg Fry

Meg Fry

Meg Fry covers manufacturing and retail. Meg joins NJBIZ with past production experience in the arts, film and television. She continues to write and market her own spec scripts and screenplays. You can contact her at megf@njbiz.com or @MegFry3 on Twitter.

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