Hartford Business Journal

HARTFORDBUSINESS.COM | MAY 13, 2024 33 FOCUS | SMALL BUSINESS CT Commercial Money Market Account Balance APY* $10 - $499,999.99 5.00% $500,000 - $999,999.99 5.00% $1,000,000 + 5.00% Looking to maximize your cash balances? Our CT Commercial Money Market account can put your idle cash to work for your business. This premium account pays a highly competitive rate, and gives you the flexibility of unlimited deposits, as well as access to your cash if you need it. To open your account, visit any of our Connecticut locations —Bloomfield, Enfield, Granby, or West Hartford. Member FDIC westfieldbank.com *Annual Percentage Yield (APY) is effective as of 4/1/2024, may change after the account is opened, and is subject to change at any time. Fees may reduce earnings on the account. Customers must have a business checking account in order to qualify for the CT Commercial Money Market account. them," Gargano said. "It doesn't make sense. It's in your own back- yard where you do well. The craft beer industry is going to shrink. And when that occurs, there'll be more market availability for other products in other states." A plethora of craft breweries in Connecticut provide consumers plenty of choices, so breweries have to compete for their attention. "Every town now has a brewery," said Rachel Diamond, executive director of the CT Brewers Guild, which advocates on behalf of the state's craft beer industry. "Just as regions have sports teams they support, people are loyal to their local breweries." The new taproom will give Thimble Island more brand recognition on the shoreline, which Gargano hopes will lead to more loyal customers who choose to buy their products on a regular basis. Industry struggles The craft beer industry is still struggling. According to the national Brewers Association, the number of breweries in Connecticut rose from 16 in 2011 to a peak of 130 in 2022. In 2023, five breweries in the state closed. Part of the reason is that craft beer is relatively expensive compared to its mass-produced counterparts. Thimble Island's products, including its popular Ghost Island double IPA, are priced in the "commodity craft beer range," below the top-tier craft beers, but higher than the national brands. A six-pack of Ghost Island bottles sells for about $12.99 at package stores. Top-tier craft beers may sell for $20, or more, for a four-pack of 16-ounce cans. "If you build your business model on high-margin products, you're selling a four-pack for $21," Gargano said. "That is not realistic to what beer is supposed to be." Even at a lower price point, Gargano said inflation has caused some consumers to switch to less expensive non-craft beer. Also, a cultural change has led to a decline in interest in craft beer overall, Diamond said. Several years ago, craft breweries were packed with patrons in their early 20s. But young people are increasingly opting for alcohol-free alternatives, or "alcohol-adjacent" offerings like hard seltzers and teas, she said. Also, there's competition from the cannabis industry, Gargano said, which is leading some would-be drinkers to quench their thirst for an intoxicating substance with mari- juana products instead. He's optimistic the new taproom will help build on Thimble Island's success. Technological edge Gargano, who has a background in software development, said part of what gives Thimble Island a competitive advantage is an in-house customer relationship management system, which he coded himself, that helps keep track of sales and inventory data. "It does predictive planning on what products need to be made and when, and allows us to then put a lens back to what we did the year before, to see if we should be sticking with some- thing that worked, or if it didn't work, and we need to make a change," he said. The Branford and Old Saybrook locations are connected to the same system using newly installed Comcast Business fiber internet. "As a tech geek, I still like to write code and try to keep up with things," Gargano said. "I like data. And I like analytics. I'm excited to see what I can do with AI, with all the data we have." THE TAPROOM DEBATE Craft brewery taprooms have been a hot political issue in the state legislature over the years. • A 2019 proposal that would have required breweries to choose between on-site or off-site sales — meaning they couldn't have taprooms if they sold their beer in package stores and restaurants — quickly died in the face of intense opposition from craft brewers. • That same year, lawmakers passed major industry reforms that significantly increased the amount of beer breweries can sell to customers for off-premise consumption, but also added a new excise tax on taproom sales. • In 2020, the state's craft beer industry unsuccessfully lobbied to reduce or eliminate food require- ments at places that serve alcohol. • A year later, Connecticut legis- lators voted to allow self-pour technology at places legally permitted to sell beer for on-site consumption. Year No. of breweries 0 20 40 60 80 100 120 140 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 No. of breweries vs. Year Craft breweries operating in CT Source: Brewers Association 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 NUMBER OF BREWERIES 140 120 100 80 60 40 20 0

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