According to the Brewers Association, the trade group for independent craft breweries, there are more than 7,400 breweries currently operating in the United States. That’s nearly double the number of breweries that were in business in 2014 and almost 1,000 more than 2017. With an estimated 3,000 breweries now in the planning stages to open over the next several years, brewery operators are looking for ways to remain relevant in what many experts are calling a “maturing” market.
“There are so many breweries out there now, going into new markets is not as easy as it used to be,” says Chris Brown, co-owner and production manager of Holy City Brewing in Charleston, South Carolina. “Some markets aren’t even talking to new breweries because they’ve already got 30 or more in their area.”
Like many independent craft breweries, Holy City Brewing began with a group of friends who had some free time on their hands and shared a love of good beer. Joel Carl and Sean Nemitz, owners of the Charleston Rickshaw Company, spent the summer months pedaling tourists around Charleston’s historic district on pedicabs. But during the slow winters, they twiddled their thumbs and experimented with home brew recipes.
Meanwhile, Brown, who had worked as an assistant brewer at Gordon Biersch in midtown Atlanta after graduating from the College of Charleston, was looking to move back to the Lowcountry and possibly start his own small brewery. A mutual friend introduced Brown to Carl and Nemitz, and soon the three were brewing beer in the pedicab shop on a setup made out of bike parts and scrap metal. The beer was good, but Brown knew taking things to the next level would involve more space and much better equipment. Another friend of Carl and Nemitz’s, Mac Minaudo, had a warehouse building in North Charleston that was available, and after investing in some small equipment and better refrigeration, the group began brewing in their new location with plans to open a full brewery and brewpub.
“We started fine-tuning some beers and looking into funding,” Brown recounts. “We approached LDC [a local lending group that only lends to small businesses in Charleston] with a business plan and ended up getting their max funding, which I believe was about $100,000 at the time.” The money was used to purchase a 15-barrel brewhouse, but more funds were needed. “We scrounged around for the rest of it,” Brown says. “We sold 20 percent of the company to family and friends and used credit cards to try to scrape things together.” In the summer of 2011, Holy City Brewing opened with four tanks and a small bar.
The early days presented some unique challenges. At the time, South Carolina alcohol laws were not favorable to brewpubs, and operators were limited to offering no more than four, four-ounce samples. But as the laws relaxed, allowing brewpubs to sell full pints, Holy City’s in-house sales and its distribution steadily increased. With a goal of being Charleston’s “local brewery,” Holy City focused on distributing throughout the Lowcountry before looking at other markets. “We wanted to grow our home base and then organically branch out,” Brown says. “We grew in South Carolina quickly the first three years, and we wanted to make sure that market had what it needed before we went anywhere else. We really didn’t leave South Carolina until about six years into the business, and then at that point we only went to Charlotte and Augusta.”
Two years ago, the group decided that another move was necessary. Annual production had increased to 6,000 barrels, and Holy City was reaching maximum capacity at its small facility. “We had some contacts in the mayor’s office,” Brown says. “And the mayor actually came to the brewery and pitched us a building that used to be the public works building for North Charleston.”
Later this fall, Holy City will open its new brewery and taproom in the remodeled building. With the potential of doubling its capacity, Brown and his colleagues plan to venture into new markets, even though those regions are becoming increasingly saturated. There’s also the issue of new beverage trends, such as hard seltzers and light, fruit-forward beers, products that are a far cry from Holy City’s popular Pluff Mud Porter, the beer that according to Brown “keeps the lights on for us.”
“With the market the way it is, things are tricky,” Brown admits. “We’ve got the capacity; now, we’ve got to not only grow but continually adapt to a market that seems to be changing on a weekly basis.” But for Brown and the other owners of Holy City Brewing, the secret to success is focusing on the product rather than getting caught up in industry trends. “My thing has always been to brew beers true to style,” he says. “Show that you can brew good beer before you start doing anything too crazy.”