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Craft Beer Pioneer Expects Enhanced Presence Of Big Brewers In Category

March 30, 2012

Founded nearly 25 years ago, the Brooklyn Brewery has emerged as one of the leaders among craft brewers, with sales volume of 140,000 barrels last year and sales revenue of $35 million. Operating out of a recently expanded brewery in the vibrant Williamsburg section of the borough, the brewer—which distributes its beer in the eastern half of the country as well as several markets overseas—is best known for Brooklyn Lager, believed to be among the top three draft beers in New York City. (Additional volume is produced under contract in upstate New York.) Shanken News Daily spoke recently with co-founder Steve Hindy about the company’s successes and challenges.

SND: Next year will mark Brooklyn Brewery’s 25th anniversary. Did you ever imagine when you started the business that it would be such a success?

Hindy: Of course, that was my dream 25 years ago. But seriously, the first 10 years were nip and tuck. It was scary. We were functionally bankrupt at many moments. It wasn’t until 1996, the year that we built the brewery, that I thought, “wow, this is really going to work.”

SND: How has the craft beer business changed in the last couple of decades?

Hindy: The biggest change is that all the distributors are eagerly courting craft brewers. Fifteen years ago they didn’t give you the time of day. Half of the beer distribution system—represented by Anheuser-Busch—didn’t want to have anything to do with craft brewers due to the 100% share of mind commitment. But when August Busch III left the scene, some of those distributors started taking on other beers.

SND: What are the biggest challenges facing craft brewers today?

Hindy: The issue of succession is a big concern for my generation of craft brewers. Some have answers to it, but I think others will sell out to bigger brewers. All of the big brewers who aren’t in this category are interested in entering it, and those that are already in it are aiming to expand their craft presence.

SND: How will further involvement by major breweries change the craft beer business?

Hindy: There will be a distinction between those breweries that are owned by the big guys and independent craft brewers. But the more that craft brewers sell out to the big brewers, the more the lines get blurred. Part of the attraction of craft beer is that it’s independently and locally owned. Craft brewers across the country are very involved with their communities in a way that the big brewers just can’t duplicate.

SND: You entered Minnesota last year. Are there plans to expand into any new markets this year?

Hindy: No, we plan to fill out a couple of states this year, but that’s all.

SND: What is your vision for the future of Brooklyn Brewery?

Hindy: Our export opportunities are incredibly exciting. But we also continue to sell more and more beer in our footprint in the eastern U.S. so I think we’ll just continue to grow sales and work hard to maintain the same culture of innovation and reputation as a good employer that we have always had.

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