Expansion of Boulder’s Upslope Brewing Company

Boulder seems to be a hotspot for breweries, and the expansion of new breweries is by no means slowing down. Upslope, a local Boulder brewery, serves as a great example of how breweries in Boulder are continuing to grow. This local brewery had just opened their first brewhouse in north Boulder during the winter of 2008. In a short period, Colorado’s high demand for Upslope’s canned craft beers required for their production to expand. This just goes to show that dedication and a great tasting beer can propel breweries to success in Boulder, Colorado.

Only two years after Upslope’s opening, they decided that they needed to expand their brewhouse. Upslope brewery expanded into the warehouse space nearby their existing brewhouse in order to double their space to 4,400 square feet. With this expansion, this local brewery was able to increase production to 5,600 barrels of beer from its 7-barrel brewhouse at the end of last year. Yet again, they recently hit capacity for production and Matt Cutter, an Upslope co-founder, said, “A year ago last August, we’re sitting at Lee Hill and realized that the existing space was not going to be adequate for our future plans”.

In order to solve Upslope’s fortunate dilemma, they decided to open a second brewery, which just opened last week. This new brewery is a 17,000 square-foot facility with a 30-barrel brewhouse in east Boulder. Upslope’s east Boulder brewery is currently capable of producing 12,000 barrels, which is roughly 165,000 cases of beer a year. This expansion depicts the hard work they put in, and serves as an example of the local effects from the craft beer industry’s boom.

Not only are new breweries being established, but already established brewers are also expanding their operations or opening new breweries. “Some are definitely taking advantage of the opportunity to grow right now,” said Steve Kurowski, marketing manager for the Colorado Brewers Guild. According to the Brewers Association, a Boulder-based trade association that represents small and independent breweries, craft beer brewery sales increased from $8.7 billion in 2011, to $10.2 billion in 2012. Upslope brewing company is definitely a business that is taking advantage of the opportunity to grow right now, and sets a standard for up and coming breweries.

For further information on Upslope Brewing Company go here.

For further information on Upslope’s expansion go here.

Make sure to follow us on twitter here!

Colorado and Beverages

The Colorado Business Review (CBR) is a quarterly publication of the Business Research Division at the Leeds School of Business.  Past issues of the CBR have looked at things as broad as the general Colorado economy to much more specific topics like water and irrigation.  In particular, the October 2012 issue examined the beverage industry in Colorado, and so this post will look at some of content of that issue.

In Boulder, we know associate Ball Corporation with Ball Aerospace, its division which designs and builds satellites, and the jars seen at local businesses like Cosmos pizza.  In an article written by  Jim Peterson, a Vice President at Ball Corporation, we learn about the other 90% of Ball’s revenue: manufacturing cans.  The cans they produce are used by beverage companies all over the world, but many of them are here in Colorado.  One of their largest customers is Coors, located in Golden, CO (also the site of a Ball facility).  Not all of Ball’s customers are large corporations, though; some of Ball’s other customers are smaller, local firms like New Belgium Brewing and Oskar Blues.

Another article, written by Doug Caskey of the Colorado Wine Industry Development Board, talks about the thriving wine industry present on the western slope.  Centered around Grand Junction in Mesa County, the industry is aided by the abundance of sunlight and the arid environment.  Although small, the industry is growing rapidly: a study from 2006 estimated its impact at $21 million, while a later study in 2009 suggested that impact had grown to $60 million.

Erin Humphries, a Senior Product Manager at Celestial Seasonings, writes about the changes taking place at Celestial Seasonings.  The firm, headquartered in Boulder, sells its products around the world.  While usually associated with tea, the article is quick to point out that Celestial Seasonings is diversifying into other beverage types, including wellness and energy drinks.  The firm is also putting a new spin on its classic Sleepytime tea line: “Sleepytime Snooz shots”.

To find other issues of the CBR and other publications from the Leeds School of Business, go here.

Make sure to follow us on twitter here!

Craft Brewers in Colorado

Colorado is known for many things, including its sports teams, fantastic outdoor recreation, and others.  One of the lesser known facts is that craft brewers play a large role in the state economy.  In 2012, the Business Research Division at the University of Colorado Leeds School of Business conducted an economic impact study of craft brewers in the state of Colorado.  The daily camera has a summary of the study here.

Craft brewers in Colorado can be thought of as all the brewers besides Coors.  Coors is the elephant in the room, a giant in the industry (7th largest in the world).  Its facility in Golden is the largest single brewery in the world.  But despite the size of Coors, it is the smaller craft brewers that draw the attention of enthusiasts and economists alike.

According to the Business Research Division study, the first in Colorado dates back to 1859.  In 1975, the industry had been in a steady decline, and there was only one brewery in the state.  Thanks to legislation in the state which supports the industry, the number of establishments reached an all time high of 136 in 2011.

A slight majority of those establishments are brewpubs, or businesses which both produce beer and operate a restaurant.  The labor intensive nature of the craft brewing business (especially in conjunction with a restaurant) means that craft breweries employ a lot of Coloradans.  The industry employed an estimated 4,170 works in 2011, paying $102 million in wages.  Converted into an annual salary, that averages less than $25,000 per employee, which is well below the state average income.  Part of the reason for this is the part time nature of most restaurant/bar-tending jobs.

And the craft brewers in the state are locally oriented.  Less than a quarter of breweries export outside the state, with the rest catering to Colorado residents.  Some breweries are so in tune with the classic Colorado outdoor lifestyle that they offer ski passes to employees as a form of compensation.

In all, the industry had an economic impact of $450 million in 2011 and supported the employment of $5,800 residents.  Excise taxes were estimated at just over $1 million, and state/local taxes related to the businesses’ operations $40 million.

Coors might be the largest brewer in the state, but the smaller craft brewers shouldn’t be overlooked.

Boulder Breweries

Colorado proves to be one of the most productive states for smaller start-up brewery businesses due to their flexible laws. Colorado state laws allow brewers who produce less than 300,000 barrels a year to sell their product directly to liquor stores, and another law that prevents large retailers from having more than one store with a liquor license ensures that the small retailers aren’t put out of business. Laws such as these allow for local small business growth in Boulder.  Microbreweries in Boulder are plentiful and growing in numbers. Currently Boulder houses more than 40 microbreweries.

One of the more popular breweries includes The Left Hand Brewing Company located in Longmont. They are currently thriving and have been popular since 1994.  My personal favorite beer from The Left Hand includes the Nitro milk stout that has a rich, dark, and smooth taste. Another brewing company worth mentioning is The FATE Brewing Company, which is Boulder’s first craft brew-bistro. This brewery offers higher-end food alongside more than 30 rotating house brews.

Boulder’s Walnut Brewery, located right off of Pearl Street, is another popular brewpub. John Giuffo provides a critique on their Indian Peaks IPA, in which he says, “It was crisp, a little dry, hopped up but not obnoxious about it, and surprisingly smooth”. Another beer that John reviewed included their Buffalo Gold, a sweeter, lighter beer that was opaque, with honey, caramel, and lemons. Finally, their Emersum Oyster Stout was the last to be reviewed. This unique beer is a stout mixed with mashed up oysters that possesses a dark-espresso taste. These breweries are key examples of how Boulder proves to breed successful breweries.

For further readings on John Giuffo’s review go here.

To learn more about The Left Hand Brewing Company go here.

To learn more about The FATE Brewing Company go here.

To learn more about Boulder’s Walnut Brewery go here.

Make sure to follow us on twitter here!

The Case for Less Taxation and Regulation of the Colorado Brewing and Distilling Industries

The brewing and distilling industries in Colorado employ thousands of people with millions of dollars in wages, yet their economic impact on the state is underappreciated.  Specifically, high taxes and overly stringent regulation restrain growth in these industries.  The repeal of these taxes and regulations would support the creation of thousands of more jobs, and would do far more good to the Colorado economy than the current taxation and regulatory scheme.

The brewing and distilling industries are an important part of the State economy.  According to an article by John Carlson, the Executive Director of the Colorado Brewers Guild, in the Colorado Business Review, craft brewers are an important part of the state economy.  Carlson says that craft brewers (essentially all brewers other than Coors) employ 5,800 Coloradans.  A study by researchers at the University of Colorado estimates that craft brewers directly employ 4,170 people, and the total output of the industry amounts to $445.9 million.  Distilling, too, is an important (though smaller) industry.  The Redstone Meadery in Boulder is one of only a few producers of mead in the entire country.  Nationally, distilled spirits account for $117 billion in economic activity, according to Rob Masters, Head Distiller of Spring44 Distillery and President of the Board of Colorado Distillers.

The regulation and taxation of these industries is ostensibly for the purposes of consumer protection.  While the drinking age is a particularly controversial regulation concerning these industries, it is not the focus of this post.  Rather, this post is concerned with the regulation surrounding the mechanics of the industry.  Examples include the regulations surrounding distribution of alcohol in the state (which while looser than in other states, still inhibits growth), and the process of issuing liquor licenses.  Although casual research of the subject might suggest that Colorado imposes far fewer regulations and taxes than other states (true), the regulations and taxes it imposes create an unnecessary burden.

Despite the good intentions of these regulations, they serve only to disrupt the functioning of the markets, and ultimately harm the economy.  Masters says the tax on distilled spirits (as high as 54%!) suppresses growth.  Although it has already been noted that Colorado regulatory regime is less burdensome than other states’, the state can do better.  Uncertainty about future regulation is a large concern for the small craft brewers and distillers in the state.  Where a large brewer like Coors has the scale and clout to continue a profitable business in the face of regulation, smaller businesses might be forced to close us shop.  These past success of these businesses is a source of pride to the state, and their continued success relies on less regulation and taxation.

For more information, look for the Colorado Business Review, a publication of the Business Research Division at the Leeds School of Business.

Be sure to follow us on Twitter HERE.

Broomfield-based Silk dealing with backlash of soybean switch

Whole Foods is taking a look at its standards as lesser known products begin to fill the shelves.  Among the companies experiencing a loss in shelf space is Broomfield- based Silk soymilk. Silk makes up about 70% of soy milk sales and has annual revenue of around $500 million, yet Whole Foods is choosing to distance themselves from the brand.

In 2009 Silk switched from using organic to conventional soy beans in their products resulting in a back-lash from Whole Food consumers who claimed the grocery store only provided organic foods. The Organic Consumers Association called for a boycott of the soymilk after it did not clearly change the packaging to signify the switch from organic to conventional. It was later published that Silk had switched its soybean source from inside North America to a cheaper location in China. A spokesperson said that if Silk were to stay with the organic beans it would have resulted in a price increase for the company.

In attempt to rebuild confidence in the brand Silk added a traceability function to their website in 2010. This allows consumers to trace the origin of the soybeans used in Silk’s products down to the county level.  Silk is also working with the nonprofit, The Non-GMO Project to officially verify Silk products. Silk hopes that the Non-GMO labeling will help improve the credibility of the brand. Megan Westgate, the executive directors of the Non-GMO project said the following about working with Silk, “”With more than 20 million consumers nationwide and an exceptionally high volume of soybeans, all from North America, Silk is a tremendous ally. The verification of their beverage portfolio is an enormous boost to our non-profit mission of providing the public with an informed choice and preserving a non-GMO ingredient supply for the future.”

Despite the company’s efforts to rebuild confidence in the Silk brand, interest groups such as The Cornucopia Institute are still boycotting the brand. Even Whole Foods switched suppliers from Dean Foods (the producer of Silk) to Earth Balance. Earth Balance is based in Longmont, Colorado and only introduces a soymilk line this past July. What makes this company more appealing to Whole Foods is their dedication to being organic.

Whole Foods will have no trouble slowly phasing Silk products out of their stores. In addition to Earth Balance there are many other up and coming organic brands such as 8th Continent, Eden Foods and Organic Valley. These smaller brands are jumping at the chance to take over Silk’s consumer base.

 Organic Farmers Claim Soybean Victory

Broomfield Based Silk feeling a chill over its shelf space at Whole Foods

Silk Soymilk Trying to Rebuild Image with Organic Purchasers