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BEER PHOTO 1

Andrea Mayeux, MEDILL

Newly brewed cans of Gossamer Golden Ale roll down Half Acre Beer Co.'s canning line. The company expects to producee upwards of 15,000 barrels this year.


Craft beer craze has Half Acre Beer Co. thinking outside the brewery

by Andrea Mayeux
Jun 11, 2013


BEER PHOTO 4

Andrea Mayeux, MEDILL

Half Acre Beer Co.'s store opened in 2009, the tap room in 2012. Pondering the rapid change in the business, Half Acre President Gabriel Magliaro, said, "it's so different now for us as an individual brewing company and the industry as a whole."

BEER PHOTO 2

Andrea Mayeux, MEDILL

Cans and barrels of Half Acre beer wait to be shipped. The company is pondering how to expand.

BEER PHOTO 3

Andrea Mayeux, MEDILL

Gabriel Magliaro, president of Half Acre Beer Co., likes to be  reminded of home in the brewhouse. The brewery's graphic expert designed the picture of Magliaro's daughter, Lucia, that decorates the tank behind him.

BEER GRAPH

Alcohol and Tobacco Tax and Trade Bureau/Andrea Mayeux, MEDILL 

Beer manufacturing is down slightly in early 2013 compared with the strong output in the same months of 2012.


Andrea Mayeux, MEDILL

Last month's Chicago Craft Beer Week provided evidence that the local brewing business is a lucrative one.


Chicago, and the nation for that matter, is in love with craft beer. For local brewers such as Half Acre Beer Co., in Lincoln Park, business is good.

In 2007, three employees at Half Acre produced 800 barrels of beer. That's expected to balloon to 15,000 barrels this year, with a staff of 32 perfecting ales, pilsners and porters, and marketing, packaging and pouring them. Now Half Acre is exploring the idea of an expansion.

“It’s inevitable,” said Gabriel Magliaro, president of Half Acre. “It’s just a question of what it looks like and the shape of it.”

In the beginning, Half Acre developed recipes and a contract brewer handled the production. Now, the brewery has a three-vessel brewhouse, a canning line, a taproom where customers can sip Half Acre creations, and a store at its North Lincoln Avenue location.

During his visit to Half Acre, Sam Vrendenburgh, a 24-year-old beer enthusiast was delighted that one of the owners sat down and spent time with his group. “It’s much more personal than these huge brewers who make up the majority of the market,” he said.

Magliaro estimated 25 percent of beer brewed at Half Acre stays for the tap room and the rest goes out to stores and restaurants, in upwards of 1,000 different locations.

They even sell a small amount of beer in Philadelphia, where Magliaro and colleague Matt Gallagher are from. “We don’t even sell beer in all of Chicagoland,” Magliaro said. “So it’s a little ridiculous that we sell in Philadelphia, but we wanted to do it for ourselves. So we did.”

When Half Acre got running, craft breweries were “fairly foreign,” especially in Chicago, Magliaro noted. Now, with craft breweries popping up everywhere, it’s become a dominant force in the world of beer, he said.

“I speak about it like it was the '30s or something,” Magliaro said, “but it wasn’t that long ago. But so much has changed.”

The beer business, in general, is a booming one. In 2012 U.S. beer was nearly a $99 billion business, according to Brewers Association data. And 2,403 breweries operated for some or all of the year. That is the highest number since 1880.

Of the 2,416 breweries operating in March 2013, 2,360 of them fall into the craft variety. Craft-brew sales jumped 17 percent last year, according to the association.

By definition, a craft brewery is small, producing only 6 million barrels of beer or less a year, according to the Brewers Association. These brewers also are independent; a non-craft company can control no more than 25 percent of their business.

When Magliaro decided to start a craft brewery, he scoured the Internet for used equipment, ultimately spending "a few hundred thousand dollars."

“It’s easier now, legislatively, to do it,” Magliaro said, of craft brewing, “but it’s a proven model now. . . . I think that’s the difference.”

Last month the Illinois legislature sent a bill to Gov. Pat Quinn’s desk that would double the amount of craft beer allowed, 30,000 barrels or 930,000 gallons manufactured, without producers losing the ability to self-distribute. Brewers were going for a “dramatically higher number, Magliaro noted. “I’d say that number doesn’t really reflect the growth in the industry but it helps us a bunch.”

Fewer restrictions could help the state add more homegrown brews. On a breweries-per-capita basis, Illinois stands 34th in the nation, Vermont having the most, Mississippi the fewest.

“I think it’s a combination of everything,” said Brandon Wright, a 30-year-old with a growing beer-based business of his own. Regulation and investment costs hold back prospective brewers, he added.

Wright and his wife Amanda jumped into the industry only 18 months ago. They're not brewers, but at their Chicago Beer Werks in Plainfield, Ill., at-home brewers can buy equipment, grains and hops. Wright said they outgrew their space in a year and moved into a new facility, triple the size of the old one.

“We grew really quickly,” Wright said. “What we did a little differently is that we catered to be hands-on with our customers. We work out recipes with our customers. We almost have a service aspect and that really helped with the growth.”

Chicago Brew Werks will soon become a "nanobrewery." Wright said he wants to brew just one-and-a-half to two barrels to allow customers to experience the difference between varieties of grains and hops.

While the Brewers Association does not define a nanobrewery, the U.S. Treasury's Alcohol and Tobacco Tax and Trade Bureau calls them “very small brewery operations.” The bureau issues a reminder on its website that “any beer produced for sale by home brewers is not exempt from Federal excise tax payment.”
 
To open a brewery, a federal Brewer’s Notice must be completed with the bureau. In Illinois, a license is needed to produce up to 465,000 gallons, which could double if the governor signs off on the recent legislation.

Wright also plans to showcase other homemade brews at Chicago Beer Werks.

Wright described Chicago’s industry as tight-knit; he said competitors oftentimes help each other out. “Very seldom do you meet a person who is trying to start a craft brewery that just wants to compete against you. It’s kind of a Chicago thing that’s happening.”

That’s something that draws Sam Vrendenburgh to the local scene. Besides more flavor, Vrendenburgh said, he appreciates what craft breweries do for the community.

Magliaro realizes one of the biggest challenges in an exploding industry is to keep the customer engaged, by staying innovative--a Brewers Association hallmark of the craft industry.

“The fact that we had a brewery, that was pretty interesting, but it’s not anymore,” Magliaro said. “It’s pretty commonplace. We’re challenged with the idea of what about the bigger picture is interesting.”

Magliaro believes innovation is good not only for customers, but his employees and fellow brewers.

It’s “a really importation question,” said Magliaro, "one that as business owners and brewers and people that love doing what we do, will really have to consider that and come up with good answers, or I would say our business is threatened as a result.”