No bust on horizon for Delaware's beer boom

At times, it feels like the craft beer boom is swallowing Delaware whole.

Microbreweries and brewpubs are surfacing in the state at a steady clip with the most recent, Grain Craft Bar + Kitchen in Newark, set to open this week and the popular Two Stones Pub already prepping its fourth new location in five years.

The state's tourism board has created its own Delaware Wine, Ale & Spirits Trail – a state-sponsored bar-hop across Delaware's three counties to lure thirsty craft beer fans and their dollars.

And bars that have ignored the craft beer wave for years are even getting in the act. The Starboard in Dewey Beach, which is known best for selling Orange Crushes and Bud Lights, added craft beers three years ago and they already account for nearly 20 percent of all beer sales.

So this beer bubble is bound to burst, right? Think again.

Industry watchers, brewery owners and restaurateurs agree: there are no signs of slowing. In fact, most say Delaware is still behind the curve.

Figures from the Brewers Association, a trade group that represents the craft brewing industry, points to room for growth in Delaware. While the state ranks 19th in the number of craft breweries per capita, it ranks sixth in terms of craft beer intake.

"Delawareans are getting their beer from somewhere – not necessarily Delaware breweries," says Wilmington-based beer expert and author John Medkeff Jr. "What that tells me is that there's a lot of potential for local breweries, along with the state's distributors and restaurants."

For Ron Price, owner and founder of Smyrna's Blue Earl Brewing Co., one of Delaware's newest breweries, he has seen no signs of slowing in the fast-growing industry.

"I understand there are some folks who think this bubble may burst and maybe sooner rather than later. I don't think that's necessarily the case here because we're seeing a change in culture," says Price, who opened Blue Earl in May. "I don't think craft beer drinkers are going to all of a sudden say, 'You know what? This is not for me.' This is a renaissance."

Craft brews gain in prestige, popularity

The shift away from brand loyalty in the beer world is a side-effect of the craft beer explosion with new beers being created and brought to market daily.

For those used to a keg of Bud Light or Yuengling at a summertime backyard barbecue, it's no longer a surprise finding a wide assortment of craft beers from multiple breweries being sampled and passed around.

"The consumer is becoming more educated and more interested in trying new things constantly. It's ever-evolving," says Ted Stewart, craft brand manager for New Castle-based Standard Distributing Co. "You have beer nerds or beer geeks who are like hipsters with music – they want the new stuff before everyone else."

When Sam Calagione founded Dogfish Head in 1995 as the state's first brewpub, there were 858 craft breweries in the U.S. Last year, the Brewers Association reported 3,464. That's a 303 percent increase in craft breweries over a 20-year period.

Last year, craft brewers produced 22.2 million barrels of beer – an 18 percent jump in volume over the year before, according to association figures.

"That's awesome as a beer drinker, but we'd be naive to assume that growth rate is sustainable," says Calagione, who believes the industry will continue to grow for years, but not at that accelerated rate. "The consumers will decide which breweries survive and thrive and I'm confident that most will."

Overall, microbreweries are still a drop in the beer barrel compared to worldwide beer giants Anheuser-Busch InBev and MillerCoors.

Craft breweries only account for 11 percent of the market share in the beer industry, marking the first time it ever broke double digits, according to 2014 figures from the trade association. The industry has set a goal of owning 20 percent of the market by 2020.

Calagione predicts that the first major signs of a craft beer slow-down in Delaware would come in the form of a brewery closing its doors. And these days, they only seem to be swinging open.

"Until you see a brewery go out of business, you'll see a healthy environment," he says. "And if Delaware breweries focus on quality, consistency and being well differentiated, I don't foresee a Delaware brewery closing any time soon."

Medkeff agrees, pointing toward history.

In the 1870s in the United States, there were over 3,000 breweries for about 40 million people. Today, there's about 3,500 breweries for seven times the number of people.

"That speaks well for the potential for growth," he says, especially considering that Delaware's largest city, Wilmington, does not have any production breweries.

Medkeff, whose new book "Brewing in Delaware" ($21.99, Arcadia Publishing) is due in stores Aug. 10, sees the return to locally based brewing as a trip back to the future.

After all, the brew game is coming full circle back to the days before Prohibition when hometown brews dominated early American life.

"Brewpubs existed from the earliest colonial days and were generally small operations run at hospitality houses that had saloons attached," he says. "They were spread along colonial roads with no railroads or refrigeration, making their business from travelers going from one town to the next."

Even though large-scale, non locally-sourced breweries have dominated in the nearly 100 years since Prohibition, brewpubs began to re-appear again in the mid-80s, concentrated mostly in California and the Northwest.

Craft beer now a must-stock item

Delaware has 15 craft breweries that are either already open or preparing to open soon, including Lewes' Crooked Hammock Brewery, opening later this summer, and the Dewey Beer Co., which opened in May. The majority of Delaware's craft breweries have opened in just the past five years or so.

The Dewey Beer. Co. is located across the street from one of the party town's biggest bars, The Starboard.

Only three years ago, The Starboard didn't carry any craft beers. That changed after co-owner Steve "Monty" Montgomery began getting requests for craft brews from his staff. They had caught the craft beer buzz even before The Starboard's customers, who rarely requested the small batch beers.

Twelve craft beer taps made their debut at The Starboard opening weekend 2012. Those taps and the other dozen or so craft beer bottles The Starboard now carries account for nearly a fifth of all beer sales, Montgomery days.

It's a number that might jump even higher now that Dewey's first brewery opened across Del. 1, already leading to more cross-pollination between craft beer drinkers and lovers of traditional domestics.

"The world is changing. Nothing against the domestics of the world, but people now are specifically going to places like The Picked Pig Pub or the Henlopen City Oyster House to find great beers," Montgomery says. "They almost treat it like wine: they're swilling it, sniffing it, tasting it. People are more into quality over quantity in this day and age.

"It's really overwhelming to keep track of all these great beers and not feel like a complete alcoholic because you have to go out every other day to try new beers."

Over at Standard Distributing, best known for supplying beers like Miller Lite, Coors Light and Yuengling to bars and liquor stores, Stewart's position as the craft beer manger was created just last year.

He's in charge of selling nearly 20 different craft brands that range from local brews like Greenville's Twin Lakes and Georgetown's 16 Mile to California's Lagunitas Brewing Company and New York's Brooklyn Brewery.

Over the past two or three years, Stewart estimates Standard has doubled or tripled its craft beer sales in the state, making it 10 to 15 percent of their current business.

"And even though you see craft beer everywhere, Delaware is still behind the game. If you go to Philly, it's even more prevalent. Delaware is on its way, but we still have a way to go," he says.

Crooked Hammock co-owner Rich Garrahan says his new brewery, which also includes a restaurant with live music and a beer garden, should be open in early September.

The brewery, which is part of the newly formed La Vida Hospitality Group that includes Rehoboth Beach restaurant Nage, is located just outside of Lewes on Kings Highway off Del.1 – making it the Lewes area's only brewery.

Five Crooked Hammock beers will be available to start, along with other locally brewed cold ones. Other local partner restaurants, including Nage and Big Chill Surf Cantina, are also expected to eventually carry the Crooked brews.

"Before Prohibition, there were local breweries all over the place. That trend is coming back and restaurants are realizing, 'Hey, we can brew our own beer, too. We don't have to serve the same thing as everybody else,' " Garrahan says. "For people who think there are too many brewpubs, just about every other restaurant in [the state] is serving the same beer. There's only a few of us serving something different. I don't think we're over-saturated. It's way under-saturated."

Opening a brewery 'extremely painstaking'

If you're a beer drinker or even a home brewer, Blue Earl's Ron Price warns that opening a brewery is a massive undertaking.

A home brewer himself dating back 20 years to when Dogfish first arrived on the scene, Price began his brewing career in his garage.

He now hosts beer-lovers and live music fans in his tap room at the 11,535-square-foot facility, which has been pumping out IPAs, saisons and stouts for two months now.

Even as the time nears when his beer will be available in local restaurants and in stores – the end of summer and fall, respectively –the excitement is tempered by the tough journey it took to get to this point.

Price warns that the process is not for the faint of heart. You have to juggle business plans, investors, bank loans and construction, along with an unholy trinity of city, state and federal officials who are all making sure the operation is following regulations.

"I think people should pursue their dreams, but opening a brewery is a daunting task. It's not for a weak-hearted or -minded. It's extremely painstaking," he says, nearly sighing at the memories. "It takes every bit of your blood, sweat and tears to do it."

If you're wondering just how mainstream craft beer is in Delaware, all you have to do is follow around Calagione, Delaware's own King of Beers.

The man who began his pioneering craft beer dynasty in Delaware is the nearest thing we have to a rock star.

Calagione isn't only recognized by fawning beer buffs at beer events or when visiting bars – he's recognized just about everywhere.

His visits to the Apple store at the Christiana Mall can especially morph from shopping trip to meet-and greet. It's that excitement for craft beer that has fueled not only the industry as a whole, but his own company. Dogfish, he says, is on pace for double-digit growth for the 17th year in a row.

"There's a lot of overlap in the demographics of computer nerds and beer geeks," Calagione says. "When I go into the Apple store, I can predict there will be beer lovers there who are going to want to high-five and selfie it out."

-- Ryan Cormier, The News Journal. Facebook: @ryancormier. Twitter: @ryancormier. Instagram: @ryancormier.

DELAWARE BREWERIES

New Castle County

Argilla Brewing Co. at Pietro's Pizza (Milltown)

Bellefonte Brewing Co. (Bellefonte)

Frozen Toes Brewing/Pizza by Elizabeths (Greenville)

Iron Hill Brewery & Restaurant (Newark, Wilmington)

Stewart's Brewing Co. (Bear)

Twin Lakes Brewing Company (Greenville)

Kent County

Blue Earl Brewing Company (Smyrna)

Fordham & Dominion Brewing Company (Dover)

Mispillion River Brewing (Milford)

Sussex County

16 Mile Brewing Company (Georgetown)

3rd Wave Brewing Co. (Delmar)

Crooked Hammock Brewery (Lewes)

Dogfish Head Craft Brewery (Milton)

Dewey Beer Co. (Dewey Beach)

FINS Ale House & Raw Bar (Rehoboth Beach)

DELAWARE CRAFT BEER PRODUCTION

2011 -- 7 breweries/153,958 barrels

2012 -- 9 breweries/180,794 barrels

2013 -- 10 breweries/211,280 barrels

2014 -- 11 breweries/239,625 barrels

Source: The Brewers Association