Heady days for craft breweries

REHOBOTH BEACH, Del. - You can count on a thunderstorm to pump up business at a brewpub. Especially at the shore.

So it was no surprise in the founding manger of Dogfish Head Brewing here, beneath canoes suspended from the rafters, that regulars stayed put, ordering extra rounds, when the skies opened up last week.

On this particular day, they included a vacationing industrial engineer from Boeing, a gray-haired fellow who'd biked up from Ocean City, Md., and a guy in a Beeriotic Table T-shirt, each one a Dogfish disciple - each one in a small way responsible for an extraordinary craft-beer success story being played out in the ugly teeth of the recession: Dogfish Head was doing a bulletproof business.

Beer sales are up a phenomenal 40 percent over last year, 45 percent if you include its first foray into the Nevada market.

What is more remarkable is that those aren't unremarkable numbers for local craft brewers. At Downingtown's award-winning Victory Brewing, sales were up close to 30 percent; at smallish Sly Fox near Phoenixville, hovering close to last year's 38 percent gain.

The secret? Dogfish Head bartender Mike Pfeifer didn't hesitate: "It's a lot easier to get a $4 pint," he said, "than to get a Mercedes."

"It's just better," ventured Bob Farnam, the biker.

"The owner is a genius," offered Steve Haller, the engineer, conceding that the owner, Sam Calagione, did occasionally misstep, once memorably with a seaweed beer said to have the charm and nose of, well, pond scum.

In the robust, recession-defying craft-beer sector, Calagione is a rock star, handsome and brash. (He once built a rowboat and, as a publicity stunt, rowed the first six-pack from his new brewery in Milton, Del., over to Cape May.)

But it's not just a cult of personality; it's a trend across the top-performing crafts, breweries that ramped up production or entered new markets. Figures released today by the industry's Boulder, Colo.-based Brewers Association, showed a soberer craft picture in general -- nine percent average growth during the first six months of 2009, while overall, total U.S. beer sales dropped slightly.

Still, last year's spikes in volume of 20, 30 and 40 percent remain common among the top 50 craft brewers, and were holding steady: "It's easy to grow," a spokeswoman said, "if the demand is there."

The nimble independents price their beers just a bit more than top-end mass-market brows, and typically less than quality imports, catching niche consumers on the way up -- and down.

They see themselves, moreover, as somewhat nobler -- as champtions of beer's essential truth and virtue (hewing only to barley and wheat, not flavor-diluting rice and corn) - the anti-Bud (and -Miller and -Coors), which together control 78 percent of the $100 billion U.S. beer market.

But if Big Beer's flattening sales continue - and it doesn't wise up - says Nima Hadian, who manages Shangy's, the specialty-beer distributor in Emmaus, Pa., the Big Three could face a shrunken future: By 2015, he sees crafts grabbing a 15 percent market share.

For beer guru Tom Peters, the owner of Monk's Cafe on 16th Street in Philadelphia, the downfall of what he calls "that yellow fizzy stuff" can't come soon enough.

In the last six months, he noted, sales of Philadelphia Pale Ale, the flagship brew of Yards Brewing, have tripled.

To him, that's like sunshine on a cloudy day.

Craft brewing is about letting a thousand styles bloom.

And once a drinker bonds with one, there's no going back: "If you've had a halfway decent wine," says Larry Bennett, the self-styled "Minister of Propaganda" at Brewery Ommegang in Cooperstown, N.Y., "you don't go back to Boone's Farm."

The craft mafia, of course, wants you to quit wine altogether. Calagione cheerily debunks the high-end wine trade, a sector he sees mortally wounded by hocus-pocus and snobbery.

Wine people and food lovers can now easily find affordable, distinctive, hand-crafted beers with the higher-alcohol content and the food-enhancing qualities that have long made wine what's for dinner.

Plus, there are craft's natural - often pricier - spices and ingredients to consider.

The Dogfish Punkin' Ale being brewed last week uses real pumpkin puree (not glycol-based flavoring agents), organic brown sugar, and fresh-crushed cinnamon.

The "free-range unicorn hair" listed on a poster, Calagione explained, was a joke.

Across the brewscape, dirt is flying. Cement is pouring. At Dogfish's brewery in a defunct cannery near Lewes, Del., and at Victory's site in Downingtown, silvery storage silos are going up, looking to supply pent-up demand.

Craft-beer dinners are selling out. In Philadelphia, Beer Week has been an overnight sensation. A single note in Don Russell's "Joe Sixpack" beer blog generated orders for 1,000 cases of Terrapin, a legendary Georgia microbrew, before the wholesaler even got a chance to price it.

"Buzz" plays a big role, said the Brewers Association's Julia Herz: Dogfish's 90 Minute IPA got a pop by twice winning the group's home-brewing Zymurgy magazine's "commercial beer of the year." (Regarding buzz, craft beer tends toward higher alcohol levels, thus also offering, by some lights, more buzz for the buck.)

The reasons for the craft boom go on, some as mundane as the timely retreat in punishing hops prices, even as high energy costs still handicap competing imports.

Some are more intangible: the inching tide of locavorism, for instance, that has stoked a hunger for lost flavor and place - for heirloom tomatoes and juicy heritage-breed pork, estate-growth chocolate and aged, cloth-bound Vermont cheddar.

Craft fits neatly in, says Herz, offering quirky, "full-flavored, bigger, get-to-know-me beers," not just the Big Three's "refreshing, lighter-on-the-tongue" profile.

Some converts are rejecting Big Beer's crassness - its wet-T-shirt contests and beer-slob image. Craft brewers, in contrast, sponsor cycling (and recyling) rambles and brewer-farmer dinners.

Finally, Calagione argues, there's the mad-as-hell factor: People are fed up with the hubris and greed of corporate fat cats - "the Enrons, Madoffs, and Detroits" that helped dig the financial hole.

Instead of handing over their beer money to a "foreign-owned, faceless conglomerate," he says, they'd rather support local independents.

Vote with their wallets.

Philadelphia's profliferating craft-centric pubs are sharing in the glory, and helping spread it: Northern Liberties' local-brews-only Standard Tap and Fishtown's Johnny Brenda's, Memphis Taproom in Port Richmond, and the Grey Lodge Pub in the Northeast.

At the bustling Sidecar Bar & Grille, 22d and Christian, owner Adam Ritter said, "Our beer sales are off the charts."

Even distributors who kept craft inventories tight over the winter are warming, upping orders as they watch import powerhouses such as Corona and Heineken go into an unprecedented swoon.

They can see the handwriting.

At Victory Brewing in Downingtown last week, you could have a smoked brisket quesadilla in an airy 350-seat beer hall recently doubled in size.

At upstart Philadelphia Brewing, housed in one of the grand, old German beer breweries that still haunt Kensington, three new hands have been hired to keep the Kenzinger flowing. Co-owner Nancy Barton has noticed more women joining tours as the low-carb craze fades and local beer is linked to cookery.

At Fork restaurant in Old City, known for its wine list, a sellout crowd of 75 showed up Thursday for a $55-a-head beer dinner with Jason Perkins, the brew master from Allagash, the Belgian-style brewery in Portland, Maine.

At small-batch Sly Fox near Phoenixville (8,000 barrels annually to Dogfish's 100,000), a new brew pub is taking shape across Route 113 from the old one, lured by a lease too good to refuse from Maple Lawn Shopping Center. "We can't grow fast enough," said owner Pete Giannopoulos."That's our story in a nutshell."

At Yards, which opened a new facility on the Delaware last September, owner Tom Kehoe said the recession helped stabilize grain costs: The corn that was poaching barley land to cash in on the ethanol boom has receded, re-opening more barley acreage.

It has not been all smooth sailing. Last fall, worry was rampant that with costs up and the economy enhancing the prospects of cheaper beers, some high-end craft brewers might face oblivion.

The clouds passed. But there are still distribution choke points and state-excise-tax tussles to fret over. Hops are still high. Competition is growing. And at coastal Dogfish, there's always the threat that the high humidity could gum up the packaging line.

Just to keep things interesting, Oregon Public Radio reported last week that wine-makers aren't taking the beer inroads lying down.

They're mounting a campaign to win back the deserters.