401 Second Street - Site Improvements & Buildout

We are very pleased to announce that 401 Second Street, the future home of The Virginia Beer Company, is an active construction zone! In mid-August, we received final word from the Virginia Department of Transportation, the City of Williamsburg, and York County that we had been granted the necessary permits in order to move forward with our site work and buildout at the property. Late last month we met with our general contractor to review the final pricing plan for the buildout and sitework. We signed our final construction contract on August 24th and before the month was out, the survey crews were on site at 401!

We have reviewed the formal scope of our buildout in detail with our project manager, and have scheduled in-person updates with him and his team to be held at the building every other week. In addition there is a project foreman who is on site every day. Chris, Jonathan and I meet with the foreman every morning to discuss the previous day’s results and the current day’s goals. In addition we use our time on the premises to meet with sub-contractors (e.g., electrical, plumbing) to discuss measurements, equipment, and to review architectural plans. The VBC team is committed to ensuring there is at least one point person on site every day with the contractors to ensure questions are answered in real time so no needless delays are caused between the brewing side and the construction side.

We are now working with two master schedules. The first, focused on our site work, runs from September through mid-November. Three weeks in we have already seen all the pavement around the property stripped. As of today the crews were beginning to level the future parking & beer garden surfaces. All exterior retaining walls and rip rap have been removed and the teams are beginning to place foundations for the future fencing and walls going up around the site’s perimeter. In October we will turn our attention to outside plumbing extensions including a separator installation (to collect solids from the brewing process before they enter the sewage system) and storm drainage tie-ins. We will also look ahead to exterior lighting plans.

The additional schedule is focused on the site’s overall timeline, with a focus on our interior demo and buildout. This plan runs from September through mid-December. Similar to our site work, the interior of 401 Second Street has already been transformed from what was once held in the facility. The interior has been completely gutted – all masonry walls within our main facility have been demolished, as have the walls in what will be the office/lab/restroom/utility space in the one-story side of the building. Old amenities and piping have been removed from the rafters on the ceiling, and most of the old equipment and decorations previously held in the building have been cleared out by the building’s owner. Flooring has been cut for interior plumbing improvements, including our future taproom fixtures, brewing equipment, coolers, and renovated restrooms. In October the team will turn its focus to staging the new interior walls that need to be erected, filling in trenches, treating the floors, and electrical work that will pick up ahead of large equipment arrivals. 

We are thrilled to be moving ahead with our plans after an unexpectedly lengthy permitting process. On the heels of our Red Rye IPA collaboration with Alewerks Brewing Co., we are riding a high wave of momentum! We have some great videos of the work going on at our Facebook page, which we invite you to view here. Our Facebook page and Instagram account also feature many additional photos and videos of the progress. We will feature regular updates throughout the buildout, including a time lapse from start to finish as well as before & after photos.

We will continue to post periodic updates on our additional buildout plans and progress. And real time updates will be available across all of our social media platforms. We are working to finalize our opening timeline and will be sure to share that as soon as the time frame is settled. Thank you to everyone for your continued support and enthusiasm for our project!

Happy Independence Day!

This has been a very patriotic week. Our good neighbors to the north celebrated Canada Day on July 1st. The US played in one heck of an elimination game in the World Cup. And today is July 4th, Independence Day. I love the 4th of July. It’s a time to reflect on the United States, its history and its freedoms. It’s a time to think of those who have served the country, as well as those who simply are and have been good, honest Americans. It’s a summer tradition that brings with it a well-deserved day off, a celebratory atmosphere, fireworks, cookouts, and of course, copious amounts of good beer. 

There are so many great ways to celebrate this holiday. And it's a perfect time to look at the craft beer industry as an analogy for the many freedoms we in the US have been granted since the Declaration of Independence was issued in 1776. The current booming state of craft beer is not what it has always been. As noted by the Brewers Association, there are close to 3,000 operating breweries in the US, the highest number since the late 1800’s. We’re talking about almost 150 years between those peaks! The craft beer industry is seeing a resurgence that means more choices for all of us. If you want a cold lager for your July 4th bbq, you can find one and it doesn’t have to be from one of the big boys. Maybe you want a session IPA, something hoppy but not overpowering? I’ve seen a few of those around. Perhaps a glass of something smooth as on nitro? Those options are starting to pop up all over. There are so many options that there is most certainly a style for everyone. People often ask us what kind of beer Virginia Beer Co. will specialize in. Our most frequent answer is that we are going to specialize in variety. I don’t want to make too much of that vague response, but I believe it’s the most patriotic answer we can give! We have the freedom to brew anything and everything, and we plan to. 

Mind you we have our year-round offerings well thought out, but with the taproom we are designing and the brewing systems we've purchased, we're going to have a lot of tap space for a lot of varieties. That brings up another great point about the current state of the brewing industry. Slowly but surely, legislation is moving in favor of small and craft brewers all over the country. Freedom, baby! Homebrewing is finally being formally legalized in pretty much every state. State laws are changing to allow more flexibility for breweries to get their product to the consumer. A great example is SB 604, which (to put it in beer drinkers’ terms) allows for production breweries in Virginia, like we will be, to serve draft beer on premise directly to the consumer, which we plan to. Historically with non-craft lobbying and pushback to the growing craft beer segment, getting this type of legislation passed was not always a sure thing. But across the country and throughout the States, the winds have shifted and we are realizing the positive impact that new businesses like ours can have on the surrounding areas. New jobs, new revenue streams, new sustainability options, and new craft products for all. Maybe it’s a stretch but these are the types of freedoms our forefathers would have loved. Clearly I’m the resident expert on these things, I live in Williamsburg (ie, Virginia’s colonial capital!). 

Freedom is what the 4th of July is all about. And right now we are seeing more and more freedom in the craft beer industry. Whether it’s more options for the homebrewer; more flexibility for craft brewers to operate in a manner that’s good for the business and good for the consumer (eg, fresh beer!); or having the ability to offer beers of all shapes and sizes, it’s a great time to be in beer. And more importantly, it’s a great time to enjoy one! So whatever you do this Independence Day, be safe, be happy, and by all means be proud to be part of today’s celebration! God bless America and cheers to craft beer! 

Naming The Brewery

Once we settled on Williamsburg as our location, our next order of business was to come up with a name for our brewery. On the surface that might sound like a fun, easy task, but I can assure you that it was anything but. We started the discussion in earnest sometime in March of 2012; below you will see emails Robby and I exchanged in April of that year (click to enlarge). 

At that time we were both throwing out any idea that popped into our heads. Many of the names we were considering are obviously historical references - they are not in short supply here in Williamsburg! We continued discussing potential names into the early summer without coming to a consensus. Friends and family repeatedly sent us suggestions and voiced their opinions, but despite our best efforts we never managed to settle on a name. In July of 2012 we both decided that Liberty Tree Brewing Company had potential and began soliciting feedback. Below is a scan of my wife's list of potential brewery names from around that time (note the Liberty Tree logo doodles).

The response to Liberty Tree Brewing Company was somewhat mixed, and after conducting more research we discovered that two newly-opened breweries in Virginia (one in Richmond, one in Norfolk) were already using a tree as their main logo. Back to the drawing board!

Robby and I spent a lot of time thinking about existing craft breweries and how we perceived their brewery and their products based solely on the name they had selected. We decided that having the name immediately convey a sense of place was really important to both of us. Most people associate the term terroir with wine, but the idea certainly applies to beer as well. We also thought about how we ordered beer during our travels around the country. We always wanted to try local flavors but the origin of the beer was often unclear. While we liked the imagery associated with names like Liberty Tree Brewing Company and Gallant Ghost Brewing Company, neither one necessarily screams Virginia!

The Virginia Beer Company isn't listed in any of the emails or lists that were exchanged between March and August of 2012. It seems like such an obvious choice now, but at the time we had spent five months reviewing potential names without ever considering it. No one's quite sure who mentioned the name first, but once it infiltrated our minds there was no other choice. A quick search of the federal trademark registry and the Virginia State Corporation Commission registry confirmed (rather surprisingly!) that the name was available for use. We immediately solicited feedback from family and friends, receiving nothing but positive reviews. A few hours of paperwork and $100 later, The Virginia Beer Company was officially born as a limited liability company in the Commonwealth of Virginia!

Brewery Law Considerations

As referenced in the original post about our location search, the 21st Amendment repealed Prohibition in 1933 and left the regulation of alcohol to the individual states. The laws that are in place as a result of this decision were an important consideration for us when we began researching potential locations. The most important legal issues to take into account when considering opening a brewery are related to sales and distribution. Amazingly enough, neo-Prohibitionist sentiment is still alive and well today; most alcohol laws are anachronistic and change has been moving at a snail's pace. 

In 2011, New Belgium Brewing Company (Fort Collins, CO), Oskar Blues Brewing Company (Lyons, CO) and Sierra Nevada Brewing Company (Chico, CA) all announced plans for new East Coast facilities...

The Growth of Craft Beer

If you consume craft beer in any way, shape, or form, you've probably noticed that the industry as a whole has exploded over the past decade. In 2005 there were 1,394 craft breweries that, combined, accounted for only 3.1% of total U.S. beer sales by volume and 5.4% of sales by dollar value. By 2010 those figures had increased incrementally, with 1,600 craft breweries accounting for 4.4% of sales by volume and 7.6% of sales by dollar value. The "golden age" of craft beer really began in 2010...

Williamsburg's Craft Beer Consumers

Site of our future brewery. Not really.
Site of our future brewery. Not really.

In yesterday's post I gave an overview of how we ended up in Williamsburg, Virginia. Today I want to spend some time discussing the demographic profile of a typical craft beer consumer and how that profile matches up with the consumers in our local market. According to Nielsen research, the typical craft beer consumer lives in a cosmopolitan center, affluent suburbs, or a comfortable country setting. That consumer will likely fall between the ages of 21 and 67, where 90% of craft beer is consumed. The age groups that consume the most craft beer are Generation X (18.7% of population, 23.9% of craft beer volume), Millenials (26.1% of population, 32.9% of craft beer volume), and Baby Boomers (37% of population, 36.4% of craft beer volume).

Disregarding age and location, the consumer will likely be highly educated and earn an above-average salary; research has shown that craft beer consumption has a distinctly elevated income skew, with almost 78% of the total volume being consumed by households with incomes over $50,000. In terms of gender, men are responsible for 71.9% of overall craft beer consumption (which mirrors overall U.S. beer consumption by gender). We realize that there are many craft beer consumers that don't fall within some or all of the demographic profile created by the research noted here, and we will certainly be gearing our marketing efforts and outreach to serve those consumers as well. For example, female craft beer drinkers are among the fastest-growing consumer segments within the industry.

The City of Williamsburg and the surrounding counties (James City County and York County) have a growing, affluent population of almost 150,000 people. Of the 70,000 people located within a 5-mile radius of our desired location (more information on that topic soon, we hope!), 60% are between the ages of 21 and 67. That population is projected to grow to almost 76,000 by 2017, with a corresponding increase in average household income from $86,567 to $89,988. Over 62% of the roughly 27,000 households within the 5-mile radius have a household income over $50,000, 48% of the citizens possess at least a Bachelors degree, and 70% of the employed population have jobs classified by the census as “white collar.” Looking a bit wider, the greater Hampton Roads region is the second largest metropolitan area between Washington, D.C., and Atlanta, GA, with a total population of almost 1.7 million people. The median age is 35.4 and the average household income is $68,474; both are in the target demographic for craft beer.

As has likely become clear, the Williamsburg area has a population that matches up nicely with the demographic profile of a typical craft beer consumer. In future posts I will touch on our research related to market conditions as well as the legal considerations we took into account before selecting our location!

*Special thanks to Danny Brager for providing the Nielsen research used in this post, which was presented in a seminar titled, "The Who, What, Where, When, Why and How of the Craft Beer Consumer," during the 2013 Craft Brewers Conference in Washington, DC.

Why Williamsburg, Virginia?

Our initial musings related to opening a craft brewery never revolved around an actual place. Everything we discussed was in general terms - specifics didn't seem necessary as the likelihood of the venture ever becoming reality felt very small. In early 2012 my wife and I were contemplating our next move; her veterinary internship was going to end in July and I had been dreaming of a career change since my first day in finance. I can't quite remember the conversation that ended with a craft brewery looking like a true option, but I do remember that conversation spurring a new question: where would we open?

There were two main considerations. First, where would we feel comfortable living? There was no easy answer...