Hartford Business Journal

32 HARTFORDBUSINESS.COM | MAY 13, 2024 FOCUS: Small Business Justin Gargano, founder and CEO of Thimble Island Brewing, stands next to a pallet of the brewery's flagship New England IPA, Sea Mist. He recently opened a new taproom in Old Saybrook. HBJ PHOTO | STEVE LASCHEVER Broader Appeal Thimble Island Brewery embraces customer- loyalty growth strategy with new taproom For example, he can sell a half keg to a restaurant for $185; however, if he sells it from his taproom, he can generate $1,200 in revenue by charging $5 to $9 per glass. Large breweries have profit margins around 12% to 14%, Gargano said. But for Thimble Island, he said profit margins are about 8% to 10% on the manufac- turing side — whereas he can make a 30% margin selling his products from a retail outlet. Several other breweries in the state have opened new taprooms to extend their reach beyond their hometown. Last year, Milford-based Dockside Brewery received zoning approval to open a taproom in Hamden. Beer'd Brewing Co., based in Stonington, opened a taproom in Groton during the pandemic. Brand loyalty Gargano said craft beer drinkers tend to be loyal to a brand they like — and that is located near their home. Thimble Island's highest density of customers is based within a small radius around its Branford brewery, even though the company's products are distributed across the state, he said. In this market, he said it wouldn't make sense to distribute outside of Connecticut. "We've dabbled in a few different markets, but we've pulled out of By Andrew Larson alarson@hartfordbusiness.com A t a time when the craft brewing industry is shrinking, Branford-based Thimble Island Brewery is expanding, but not in terms of manufacturing capacity — the goal is to attract more brand loyalty. Justin Gargano, CEO and founder of Thimble Island, has opened a new taproom at 75 Main St. in Old Saybrook — about 22 miles south on Interstate 95 from the brewery's main location at 16 Business Park Drive. He signed a lease with the property owner in September, and the new taproom opened May 3. The space has a 3,000-square- foot seating area and 35-foot wide bar, with Thimble Island's core beers readily on tap, along with Bishop's Orchard cider and several wines. It also features a kitchen and small brewing system, which he will use to produce experimental and limited batch beers. There is an outdoor patio with seating for about 35 people. He said he invested several hundred thousand dollars to reno- vate the brick building in downtown Old Saybrook, which previously housed his family's business, Gargano Pasta & Italian Market. Gargano started Thimble Island with a friend in 2010. Since then, it has become the sixth-largest craft brewery in Connecticut, according to Hartford Business Journal's Book of Lists, producing about 12,000 barrels a year and employing 35 people, which increases to 45 in the summer. He said the Old Saybrook location will employ another 10 people. Thimble Island's expansion comes as craft breweries continue to rebound from a pandemic lull — when bars, restaurants and taprooms were forced to close, and excess inventory accumulated. That followed nearly a decade of expo- nential industry growth. "The business has changed a bit, where there's a lot of great craft beer in Connecticut," Gargano said in a recent interview with the Hartford Business Journal. "And there's a lot of stuff that's on the shelves. So, we're trying to diversify ourselves to minimize risk." He said he sees opportunity in craft beer retail sales, where profit margins are higher and he can interact with customers directly. AT A GLANCE Thimble Island Brewing Co. Industry: Craft brewing Top Executive: Justin Gargano, Founder & CEO HQ: 16 Business Park Drive, Branford Website: thimbleislandbrewery.com Contact: 203-208-2827

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