After a slew of slow news days regarding the local brewing scene, the intrepid Stephanie Guzman of Albuquerque Business First posted a story today about Rio Bravo Brewing applying for a $5 million county industrial revenue bond. A surprising move? Maybe to some, not to others. Rio Bravo has been talking big since before they opened, planning to dive into packaging in distributing in a way that most breweries in New Mexico have so far avoided.
While the ethics of applying for public money as a private business are debated, the early public reaction seems to be focused on whether or not Rio Bravo should even do this. The line of reasoning is that if established packaging breweries like La Cumbre, Marble, Santa Fe, Sierra Blanca, and Tractor are not doing this, why should a new brewery that is still trying to establish itself? All of it bleeds into the bigger picture about brewing in New Mexico. Has it reached a crossroads of sorts? Is there a bubble forming? And what is the right path from here?
Well, to stoke the fires of public discourse and debate, here is a look at where the industry is now and the many directions it could be heading in the years to come.
Go big … or go medium … or go small
A salient point in numerous recent discussions between the Crew and our readers (these were in person, not online) was the question of how New Mexico can further establish itself as a craft beer destination. In the opinion of many people, that is best done through more packaging and greater distribution.
No one expects any of our breweries to grow to the size of a New Belgium or a Sierra Nevada or a Stone, but at least many feel they should aim to reach the size of San Diego’s Ballast Point or Colorado’s Upslope or Odell. Reaching more markets outside of New Mexico has not been a major priority for the breweries that do package and distribute. Only Santa Fe has truly extended their reach beyond bordering states. Marble has limited distribution outside of New Mexico, but only in bordering states like Arizona and Southwest Colorado. There is seemingly a market for good beer in neighboring states, though one would certainly argue it would make more sense to aim for West Texas or Arizona than to enter the intensely competitive Colorado market.
Ultimately, though, it does raise the question of whether or not packaging and selling beers in bottles or cans is truly the way to bring more positive attention and more customers and tourists. Some might argue that quality still trumps quantity, and that as some breweries have expanded locally and nationally, the quality has suffered.
As things stand right now, of all the new breweries coming to New Mexico, only Rio Bravo has even gone so far as to say they have packaging/distribution plans. Virtually every other planned brewery, or brewery that has opened in the last two years, has aimed much smaller. A few have kegged their beers and distributed them to bars and restaurants. By and large, though, packaging has not been on the table.
It is that debate of ambition versus caution, of going for it all quickly versus trying to grow naturally, that the brewing scene here must now confront. There is a growing notion among the public that too many breweries are playing it too safe; they are unwilling to grow beyond their current production levels. Of course, then there is the issue of just how fast a place should try to grow. As of right now, Marble and Santa Fe are engaged in major expansions. La Cumbre has just finished a major expansion. We are seeing more limited bottling runs from Bosque, and there is talk of future bottling/canning endeavors, and expansion, for Canteen and Second Street.
Breweries will point to the high excise taxes that they face once they pass a certain point of production as a detriment to growth. In some cases they must debate whether or not they can risk going from full sustainability to going into debt, even for a temporary period, in order to expand. Every brewery likely has a different take on expanding versus staying the course, growing fast versus growing slow. The Crew will be asking these sorts of questions when we start our annual Look Back/Look Ahead Series in December.
Breweries versus bars
I was recently privy to a discussion between a group of bar managers who had gathered for a late-night drink at a local bar that caters to craft beer. It was a fascinating “fly on the wall” kind of moment, hearing them discuss what for them are the positive and negative aspects of the impact of the local brewing scene on their respective businesses.
To a man, and woman, they all agreed that right now, the breweries are far more popular destinations than most bars during traditional happy hour times (roughly 4 to 7 p.m.). The only bars that are seemingly exempt are those with traditionally strong food menus (though they did not mention any by name, I could infer that Two Fools was one of these). Otherwise the breweries are taking business away from the bars. The problem, in their eyes, then lies with the fact the breweries are still trying to sell their beer via those bars.
It certainly is another debatable point. Should bars try to promote local beers ahead of national brands (be they craft or macro), even though the breweries from which those beers are originating are taking away business from those bars? The bar managers said they often have a hard time selling local beers to customers, many of whom would rather just get it “fresh” from the brewery itself. These bar managers all hailed from locally owned establishments, which tend to attract far more locals than chain restaurants with bars (Applebees, Outback, TGI Friday’s, etc.), who tend to get more tourists and newcomers to the state who seek out what amounts to the food they are comfortable with as opposed to the local and unknown (we can all leave out the local vs. national food quality debate, we are sticking to beer here). So again, should the local bars with craft taps focus on NM beers, or out-of-state craft? What is the balance?
Another point they brought up was the new proliferation of taprooms. At this point, more and more taprooms are opening, especially with the new state law that grants breweries permission to have up to three taprooms beyond the central brewery. Bosque has taprooms in Las Cruces and Nob Hill, with a third possible taproom now being rumored for Bernalillo, though ownership would not officially comment on that site. Blue Heron has a taproom now in Espanola. Taos Mesa has a secondary location at Taos Ski Valley. Little Toad Creek does most of their business now in their Silver City taproom. Marble’s Westside location is booming, and they are still in the planning stages for a Northeast Heights taproom. Tractor’s Nob Hill taproom has been around for quite a long time now. Santa Fe just opened their Albuquerque taproom, a second satellite location. Duel, Kaktus, and Red Door have plans to open taprooms in 2016. La Cumbre and Nexus have been discussing taprooms for quite some time, though we still have no concrete details of either signing a lease anywhere.
These taprooms can be a financial windfall to the breweries that own them. The tradeoff is that for every new taproom that opens, particularly in parts of the ABQ area that are “under-served” by craft beer, it takes away from the bars in those areas that have long offered that brewery’s beers on tap. Or at least that is the view of the bar managers, and likely the owners as well.
So it all boils down to this question: What role should bars and restaurants play in helping to grow the craft beer scene? Do they really have any responsibility to help, especially if they feel the breweries are eating into their profits? What kind of relationship should exist here?
Take some time to think about the issues presented here. Then let us know your thoughts, by Facebook, Twitter (@nmdarksidebc), email (email@example.com), the comments section here, or by finding us in person. Once we have everyone’s comments and thoughts, we will do our best to organize a forum, of sorts, among as many brewers and brewery owners as we can in the near future. We deserve to hear their thoughts on the future of the industry and they deserve to hear yours.
Sound off, New Mexico!