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V O L . X X I I I N O. V I I I A P R I L 1 7 , 2 0 1 7 18 C raft breweries are no longer just competing in the beer industry, but in the bigger alcohol and beverage industry. at's the view of Bart Watson, chief economist for the Boulder, Colo.- based Brewers Association, who spoke to 500 attendees at the second annual New England Craft Brew Summit in Portland in late March. "While beer [in general] is losing a lot of share from wine and spirits," Watson said, "the share of craft beer is increasing. It will have to compete with other alcohol and beverages going forward." e Brewers Association pegged U.S. craft brewery production growth at 6%, to 24.6 million barrels, in 2016 compared to 24.3 million barrels in 2015. Of the 5,301 U.S. breweries oper- ating in 2016, 826 new ones opened, up 16.6% over 2015, the association said. e Maine Brewers' Guild has about 82 members and contributed $228 mil- lion and 2,177 jobs to Maine's economy in 2016, including multiplier effects. A recent study by the guild and the University of Maine found that an aver- age of six craft breweries opened in the state each year over the past decade, with breweries spreading beyond Portland to rural Maine, including the recent open- ing of Drumming Grouse Brewery in Bridgton. Nationally, Watson says, more than two breweries are opening a day, with 5,300 active brewing operations. Every tank in a brewery creates two new jobs, Watson says. He adds that 60% of Maine breweries operate a tasting room or serve food, adding to their economic impact. Millennials still are driving craft beer demand, with a thirst for new fla- vors and experiential tasting, he says. But there is a slowdown in New England regionally, especially with beers 500 to 600 miles outside their market. "Distribution will be more chal- lenging going forward," Watson says. To self-distribute or not Brewers in Maine can self-distribute up to 50,000 gallons, or about 1,612 barrels, but with the extra overhead taken by an independent distributor once they reach that milestone, even distributor Tim Wissemann, president of Mariner Beverages in Portland, advises keeping distribution in house as long as possible rather than seeking a distributor before hitting the limit. "I'd say to everyone that you should self-distribute as long as you can," Wissemann says. It is expensive to ter- minate a distribution agreement once it is signed, and it's easier for the distribu- tor to cut ties with the brewery than the other way around, he says. When it's time to hire a distributor, ask how the beer is stored, their market- ing strategy and reporting procedures, advises Steve Johnson, founder of Moat Mountain Smoke House & Brewing Co. in North Conway, N.H. ose are some of the big concerns beer companies have when handing off control of beer distribution. Bissell Brothers Brewing Co. of Portland found a happy medium, with its former in-house distributor, Josh Schlesinger, starting an independent company, Sleek Machine Distro, to distribute Bissell's beers. e idea was that it is one way to control the way beer is delivered to the market. And, it can trim distribution commissions because Sleek Machine focuses on lean, or less costly, distribu- tion, according to Schlesinger. Other brewers, like Foundation Brewing Co., had big plans from the get-go and signed Mariner Beverages as a distributor from Day 1. "We knew our target was to get beyond what we could self-distribute," says Christie Mahaffey, co-founder of Foundation, which has a brewery and tasting room in Portland. e com- pany formed in 2012. "But if I started up the company today, I can see self-distribution [as an option] to have a direct relationship with customers," she adds. Funding new breweries or expansions With distribution providing less of a model for growth, neighborhood brew- eries are coming back now, says Patrick Wright, economic and community development coordinator for the city of Gardiner. And they may qualify for local and/or federal assistance. "So we need to work with the community on zoning," Wright says, pointing to Sebago Lake Distillery, set to open in May on Water Street. It has applied for a $90,000 Community TOP: Joel Alex, founder of Blue Ox Malthouse in Lisbon Falls, tries a new brew given to him by Brenda Melhus of Norway Brewing Co. at the New England Craft Brew Summit in Portland March 31. Blue Ox supplies malt to Norway Brewing, co-founded by Melhus' son Charlie and his wife Erika. MIDDLE: Empty glasses await eager beer tasters. BOTTOM: Long lines form to taste beer from Dirigo Brewing Co. of Biddeford. Craft beer's next act Growing breweries tackle a range of challenges b y l o r i v a l i g r a P H O T O S / L O R I VA L I G R A

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