Local breweries turning heads

YAKIMA, Wash. -- Despite being in the Yakima Valley for nearly 15 years, Whitstran Brewing Co. has chosen to keep its operations in Prosser small.

It has a handful of commercial accounts that reach beer drinkers from Yakima to the Tri-Cities, but most of Whistran's beer is sold at its brewpub, which opened in 2007 at 1427 Wine Country Road. The space also houses the brewery.

Owner Larry Barbus said that while other breweries have seen success by selling more to restaurants and bars, for his brewery, running a brewpub provides a higher profit.

"Say I have a keg I sell wholesale at $150," he explained. "124 servings. At $4 a pint times 124, that's $500 bucks."

Local breweries such as Whitstran have taken different approaches in deciding how to best market themselves amid the growing interest in the craft brewing industry.

While overall beer sales nationwide were down 2.2 percent in 2009, the craft brewing industry saw sales increase 7.2 percent, according to the Brewers Association, a Boulder, Colo., nonprofit trade association for the nation's craft brewers.

A craft brewer, in general, makes less than 2 million barrels a year, offers beers made with traditional ingredients to enhance flavor and complexity, and has less than 25 percent of the business controlled by a noncraft-brewing entity.

Brewers attribute the growing popularity of their products to consumers' evolving sophistication and appreciation for specialty foods and drinks.

"The American palate has advanced in the last 20 years in terms of what we like to eat and drink," said Julia Herz, craft beer program director for the Brewers Association. "We like diversity and choice in the marketplace."

Even the big American beer companies, such as Budweiser and Miller, see the value of craft brewing and are offering brands with claims of craft-brewing-style production.

Last year, Whitstran brewed 138 barrels of beer. As of April this year, it had already brewed 69 barrels, on pace to top last year's production.

Barbus doesn't actively pursue new commercial accounts, but new ones have come along anyway.

"As (consumers) become more educated with the various styles (of beer), they will start searching out," he said.

At the brewpub, Barbus likes to ask new customers what kind of beer they like and then match them up with the brewery's products.

Some of them go for the classics, such as an IPA.

For those who declare a dislike for beer, Barbus pulls out the brewery's Friar's Decadence Imperial Stout, a chocolate-flavored stout. He usually serves it with a chocolate truffle.

"They don't realize beer could taste like that," he said.

Sunnyside's Snipes Mountain Brewery, which has been in operation since 1997, sells about two-thirds of its beer at the brewery's restaurant, with the rest sold through commercial accounts, mostly in the Yakima Valley.

The brewery has seen a 15 percent to 30 percent increase in sales in every month this year compared to 2009, said Chris Miller, Snipes' head brewer.

It produced about 800 barrels in 2009, and production is expected to increase by at least 10 percent this year.

Miller credits the brewery's growth to its work in marketing as well as traditional word-of-mouth. Interestingly, the buzz about Snipes tends to migrate from the west side to Sunnyside, rather than from local residents.

"You have people who live in towns around here and someone from Seattle or a relative will let them know we're here," Miller said.

Word-of-mouth has also been key for Horse Heaven Hills Brewery in Prosser, which will celebrate its first anniversary July 4.

The brewery expected to brew 150 to 175 barrels in its first year. It ended up brewing 225, about 50 percent more than planned, said Gary Vegar, who owns the brewery with his wife, Carol, and partners Dave and Brenda Keller.

Most of Horse Heaven Hills Brewery's business comes from people purchasing beer from the brewery's tap room. It lets visitors linger in the brewery and even provide take-out menus from nearby restaurants for those who want to order a meal to have with their beer.

The brewery also has several commercial accounts from people asking to serve the beer on tap. Ultimately, the owners and partners would like to expand the brewery to provide enough supply to serve beer drinkers throughout the state.

"I think there is a resurgence of microbreweries across the nation from home brewing to small start-ups like us," Vegar said. "I foresee it will be like back in the old days, pre-Prohibition, and that many small communities will have their own brewery."

Indeed, there were nearly 1,600 craft breweries in operation for all or part of 2009, the highest number seen by the industry since before Prohibition. About 330 more craft breweries are in the works for 2010.

"That means the marketplace is responding to what they provide," said Herz, of the Brewers Association.

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To respond to increased demand, Yakima Craft Brewing Co. recently increased its fermentation capacity from 21 to 35 barrels.

"Our issue for the last six to eight months has been making enough beer to satisfy demand," said president and brewmaster Jeff Winn. "We've been running out of everything every week."

When the brewery opened two years ago, it was a welcome arrival to beer fans in Yakima who were without a local brewery after the famed Yakima Brewing and Malting Co. and corresponding Grant's Brewery Pub shut down in 2005.

Yakima Craft Brewing believes continued growth will come from west of the Cascades. Currently, 25 percent to 33 percent of its business is outside the Yakima Valley.

"You can't expand organically in Yakima," Winn said. "You have to look for geographic expansion at some point."

The brewery has limited its marketing to the west side of the state, providing the occasional keg to select restaurants or a supply of bottles to beer shops. Some places get a supply of Yakima Craft Brewing's products through its distributors.

"We have to be careful because the demand is extreme," Winn said. "We don't want to create a lot of excitement over on the west side when we know that we can't fulfill that (market)."

Iron Horse Brewery in Ellensburg has made its way into bottling shops, bars and restaurants in several major metropolitan areas in Washington and Northern Idaho through the popularity of Quilter's Irish Death, the brewery's dark ale.

Owner Greg Parker is not only aiming for regional growth, but strategically focused success.

"We want to become a regional brewery," said Parker. "Not eight-state regional, but to go into Oregon, Washington and Idaho and do that well."

There are still plenty of untapped markets in the state, such as Vancouver, Olympia and Bellingham.

Iron Horse runs a public house at its brewery and has opened a second public beer house in the downtown area.

Like Yakima Craft Brewing, Iron Horse faces the challenge of having enough capacity to serve markets statewide.

Its fermentation capacity has increased from 60 barrels in 2007, when Parker took over the business, to double that today.

But the brewery can only brew 15 barrels at one time.

Parker would like to open a new brew-house with increased brewing capacity in the next few years, but doing so would require a major capital investment.

"Expansion is very difficult, it's very expensive," he said. "Unless you find a big angel investor, you can only grow as fast as you can finance it."

While some breweries set their sights on a regional market, others see potential for long-term success by keeping it local.

Miller, the head brewer of Snipes Mountain Brewing, believes there is an opportunity to educate people on the merits of buying craft beers made locally.

Barbus, from Whitstran Brewing Co., agrees.

"There are a lot of people who live in the Valley that (still) don't know we exist," he said.

He hopes that will change as people discover his brewpub.

"Every time someone comes in, we talk the beer," he said. "They have friends -- that's a good thing -- and they talk."

Central Washington's burgeoning wine industry is also likely to continue drawing people over from the west side and other parts of the country, Barbus said.

Many wineries already refer customers to his brewpub.

"When people search out new wine, there will be people searching out new beer," Barbus said.

* Mai Hoang can be reached at 509-577-7685 or mhoang@yakimaherald.com.