Craft beer in Colorado is (still) booming, but for how long?

September 18, 2014
PHOTO: Buy Local Beer
Hundreds of beers fill the coolers at Argonaut Wine & Liquor in Denver. Stores and breweries sold 115 million gallons of beer in Colorado last year, the most in at least three decades.
To Steve Kurowski, who helps runs the Colorado Brewers Guild, craft beer is the ultimate small business success story.
“It it awesome, and it’s just started,” says Kurowski who notes craft beer is only 7 percent of beer sales nationwide. “So craft beer will get bigger, we will have more market share. We have not hit our watermark for craft beer. Beer maybe, but not craft beer.”
Kurowski is an unabashed booster of the industry. It’s his job. But in a dozen interviews with industry leaders, liquor stores, and breweries for this story, there isn’t much pessimism.  
“To every neighborhood, it’s own brewery,” says Andy Brown, head brewer at Wynkoop Brewing Company in Denver. “That’s what we’re seeing now.”
He’s not that far off. There are about 230 breweries in Colorado, with up to 100 more in the pipeline, according to the Colorado Brewers Guild.
“I can’t keep up with them all,” says Brown. “I’d like to say we’re a small kind of community, but at a certain point I just can’t go to them all anymore. I try to; it’s a goal of mine.”
Many aren’t looking to compete with giants, like New Belgium. They’re small neighborhood establishments, content to serve their surrounding blocks.
A few miles south of downtown, Brian O’Connell sits in the busy tap room of his Renegade Brewing Company in the Santa Fe Arts District. He says there’s a question whether the rapid expansion of craft brewing can continue at this pace.
“I think as long as people are going to them and drinking at them, then yeah, why not?” says O’Connell.
Liquor stores and breweries sold nearly 115 million gallons of beer last year, according to state tax records. That’s about 22 gallons for each Coloradan.
O’Connell’s 3,000 square foot brewery quickly became too small. He’s building a new one that’s five times the size. When he first opened in 2011 banks wouldn’t lend to him, but things have changed. 
“I actually, as a very small company, was able to pick and choose my best offer to finance my new facility,” says O’Connell. “Which is pretty amazing for a three-year-old company.”
In a recent CU-Boulder survey of craft brewers easy financing was ranked as a top reason for growth, and every single respondent reported plans to expand.
Liquor stores running out of shelf space
Looking at the Argonaut Liquor store in Capitol Hill, it’s hard to imagine where all that new beer will go. 
Customer Corey Kispert stares blankly at a cooler of beer holding the mind-numbing selection. He says it’s, “a little overwhelming. How do I pick? And I’m always looking for something new.”
It can be overwhelming for Ron Vaughn too. He’s been running Argonaut since before craft beer was cool. Now, there are hundreds of beers currently packed into his coolers.
“It does present some challenges,” says Vaughn. “But they’re good challenges to have a craft market that’s as robust as this one.”  
But Vaughn expresses skepticism about the craft beer boom, and it’s not the common concern, about quality.
“I think they make good beer,” says Vaughn. “But I think it’s just the weight of everything. People are spending money and they’re expanding and that’s the natural business model, but at some point it gets a little top heavy. And I really, truly see a little attrition of some of them. They’re just not going to make it.”
There’s yet another risk that concerns guys like Vaughn in particular. It’s supermarkets threatening to change the law to give them the right to sell craft beer. That would break what the chain stores call, “the liquor store monopoly.”
As Steve Kurowski with the Colorado Brewer’s Guild sees it, small independent liquor stores are a key ingredient in craft beer’s success, because they’re willing to take chances on small, unique brands.
“We work very well together,” says Kurowski. “It’s independent business supporting independent business at it’s finest.”
It’s a formula Kurowski argues is clearly working, and should not be messed with.

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