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From Its Remote Outpost, Alaskan Brewing Co. Plays A Leading Role In Craft Movement

December 30, 2014

There are no roads leading to Juneau, Alaska. There’s little flat land, and the region can’t grow grain or hops. Most resources must be shipped in and out by barge. Nevertheless, the city of 30,000 people is home to Alaskan Brewing Co.—the largest brewery in the state and the 17th largest craft brewery in the country, according to the Brewers Association. Founded in 1986 by husband and wife team Geoff and Marcy Larson, Alaskan Brewing Co. has thrived despite—and sometimes because of—its distant location.

In 1986, Alaskan Brewing Co. was the only brewer in the state—but it wasn’t the first, as more than 40 breweries operated in Alaska during the Gold Rush days before Prohibition. Indeed, Alaskan Brewing Co.’s flagship Alaskan Amber ($7.99 to $9.99 a six-pack) is modeled after a 1907 Gold Rush-era recipe that originated in Juneau. The company’s most lauded beer, Alaskan Smoked Porter (around $10 a 22-ounce bottle), recreates a style rooted in 19th-century Juneau. The brew has won more awards at the Great American Beer Festival than any other beer.

Alaskan Brewing Co. has grown every year since it was founded, and its beers are now available in 17 states. “We’re at about 160,000 barrels this year,” Geoff Larson says, adding that the company produced 147,000 barrels in 2013. Its biggest market has always been Alaska, which comprises 40%-50% of volume, and Washington State is second. California, Texas and Minnesota are also top markets, and the company recently entered Michigan—its first state in the Eastern time zone.

Alaskan Amber is the company’s top expression, at around 50% of volume. The brewery’s White Ale, a Belgian-style Witbier, is tied with Freeride American Pale Ale for second place, followed by Icy Bay IPA. The seasonal portfolio, another top performer, comprises a Summer Ale, a Winter Ale and varying spring and fall seasonals—Big Mountain Pale Ale and Pumpkin Porter in 2014.

Hopothermia, a double IPA added to the core portfolio in 2013, has also been a success, which the company sees as evidence of the increasing sophistication of craft beer drinkers. “Ten years ago, a double IPA wouldn’t have been considered a core product,” Geoff Larson says. “Now it’s something a lot of breweries are doing.”

While this year’s production approaches the brewery’s current maximum capacity, the Larsons aren’t concerned. “As we grow, we always address our bottlenecks,” Geoff Larson says. This year, the company worked with the city to clear a road, allowing the brewery to combine some of its facilities and offer more storage space, better warehousing ability and more efficient production. “This is a game changer for us, (putting) our capacity in the 300,000 to 500,000 barrel range, ultimately,” says Geoff Larson. The project added around 19,000 square feet of warehousing and storage space and around $7.5 million in plant equipment. Clearly the Larsons expect continued growth in the future.

A full feature on Alaskan Brewing Co. will appear in the January-February issue of Market Watch.

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