🔒Despite pandemic, CT’s brewery industry continues growth with hyper-local business strategies

Strolling through the empty, carpeted 80,000-square-foot interior of what used to be an office building on Windsor’s Day Hill Road, Daryle Dunlap led an impromptu tour of the future Dudleytown Brewing Company.

A long bar will stretch across the taproom on the ground floor, while the basement will serve as a canning and cold storage area.

Some 6,000 square feet of outdoor space to be converted into a patio overlooks adjacent baseball fields, allowing parents to drink a beer while watching their kids’ games, as other guests enjoy live entertainment the brewery will host during the spring and summer.

“We’re really just trying to make this a community-centric place,” Dunlap said. “It’s going to be a really fun place for people to come and enjoy themselves. There’s no real big plan for us to go into large production.”

A few years ago the sharp proliferation of breweries in Connecticut raised questions about the industry’s sustainability. Just 13 craft breweries were operating within the state in 2013, but five years later there were more than 80. Now that number is just over 120.

Even after a year in which the COVID-19 pandemic forced beer makers to shift business strategies, new breweries are opening and existing ones are expanding.

Coming out of the pandemic, the statewide brewery industry appears to be coming into its own, largely operating on hyper-local business strategies, rather than attempting to become the next nationwide craft brewer like Sam Adams or Sierra Nevada, said Phil Pappas, executive director of the Connecticut Brewers Guild.

And legislation recently passed into state law expanding breweries’ ability to generate revenue through home delivery, curbside pickup and open air beer gardens will likely only cement the industry as an important part of Connecticut’s economic landscape, he said.

According to a recent report produced by the National Beer Wholesalers Association and Beer Institute, Connecticut’s beer industry has helped create 17,892 jobs, $1 billion in wages and an overall $2.3 billion economic impact.

“I think we grew so fast that it was like, ‘how sustainable is this?’ ” Papas said. “I think we’ve proven ourselves — what else can you throw at us?”

Pandemic pivot

The pandemic did impact many breweries. As Connecticut, along with states across the U.S., enacted restrictions limiting capacity and prohibiting establishments from serving alcohol without food, local brewers dependent on taproom sales pivoted to other revenue generators. Some pumped up off-premises sales, while others began serving food or invited food trucks to their establishments. Others closed.

The industry also took advantage of federal relief programs like the Paycheck Protection Program to get through the crisis.

Prior to the pandemic, Hartford’s Hog River Brewing Co. generated about 80% of its revenue from taproom customers, said Joy Braddock, the brewery’s co-owner. When COVID restrictions upended that business model, the company shifted focus to canning and distribution, which now makes up 60% of revenues, Braddock said.

Moving beyond largely a taproom business model has been a revenue generator but also helped boost brand awareness, setting Hog River up for greater future growth opportunities, said Braddock, whose brewery is located in the Parkville section of Hartford.

But taprooms are the heart of the industry, and Braddock said she thinks they’ll only grow in popularity in the coming months and years.

When brewery taprooms exploded onto the scene a few years ago there were real concerns about oversaturation, but Hog River and other beer makers have found success — and have maintained customer interest — by operating as community gathering spaces.

“Our taproom is not only where people come and hang out, … we’ve hosted weddings here, we host birthday parties every other week,” Braddock said.

Local focus

Curt Cameron, owner of Hartford’s Thomas Hooker Brewing Co., also adjusted operations during the pandemic by increasing distribution through a third-party distributor.

Revenues from Hooker Brewing’s taproom and restaurant at the former Colt Firearms building on Huyshope Avenue, dropped by about 50% during the pandemic, but the company withstood that through off-premises sales. Hooker Brewing actually sold more beer during the pandemic year than in 2019, Cameron said. The company also released a line of CBD-infused seltzers.

Hooker Brewing only distributes beer in Connecticut, and limited areas of western Pennsylvania and southern Massachusetts. That’s a departure from what the company was doing in the early years after Cameron bought the brewery in 2006, and distributed to other states including Florida, Georgia, Maine, New Jersey, New York and Rhode Island.

“We’re doing more business now that we’re focusing [on Connecticut],” Cameron said. “We’ve really focused on a much smaller footprint, but really making relationships in that footprint.”

With COVID-19 fading into the rearview, the company is also redoubling its business for on-premises customers. Cameron is building out a 6,000-square-foot space at the Colt campus, which will serve as Thomas Hooker Live, a venue that will host comedy and music acts.

As someone who once saw a wide distribution footprint as the way to go, Cameron said the hyper-local focus many of Connecticut’s breweries are employing appears to be a strong point in the statewide industry.

When Shebeen Brewing Company in Wolcott opened its doors in 2013, only a dozen other craft breweries existed in Connecticut, lead brewer Luis Vega said. Part of the reason for that, he posited, is that liquor laws at the time made it difficult or impossible for breweries to operate taprooms.

“A lot of places were more geared toward being manufacturers,” Vega said. “And then ... a lot of the laws were updated.”

In 2012 the General Assembly passed a law allowing breweries to operate taprooms without serving food. In 2019 the legislature changed a law that said brewers could only sell their own alcoholic products, allowing them to sell craft liquor, wine, cider and mead made by other in-state companies.

Those changes have allowed breweries to offer customers an increasing level of service, which has boosted taproom business, Vega said.

However, Connecticut’s craft brew scene isn’t entirely taproom-focused.

Bad Sons Brewery in Derby operates a taproom, but owner Mark daSilva said about 80% of his business comes from distributing canned beer in Connecticut and parts of Massachusetts. Focusing on a local market appears to be the most successful model right now, said daSilva, who has been in the brewery industry for about 25 years, and opened several brewpubs in the 1990s.

“It’s going back to the way breweries originally were 100 years ago, … every town had their own brewery,” daSilva said.

The statewide industry still has room for growth, daSilva said, but he thinks eventually the number of breweries in the state will reach maximum capacity. He predicted that another 20 or 30 breweries could open before the market becomes overly crowded.

Dunlap, the co-owner of the forthcoming Dudleytown in Windsor, said he plans to start off producing about 2,000 barrels of beer per year (for context, Sam Adams makes about 6 million barrels annually, according to CNBC). If opportunities to distribute Dudleytown beer widely emerge in the future, Dunlap will consider them if they make sense for the company, he said. But for now, the company will be firmly rooted in Windsor.

“Our goal is to be able to sell as much beer as we can over the table in our taproom,” Dunlap said.