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What's on Tap: The Beer Bubble

The industry of craft brewing is taking off in Vermont and in Northern New York.
The industry of craft brewing is taking off in Vermont and in Northern New York. According to the Brewers Association, in 2013 craft breweries opened at the rate of more than one per day.  With new breweries popping up in quick fashion, I wanted to know, ‘How much beer is too much?’ 

If you haven't heard of 14th Star Brewing Company, you will soon. Owner, Steve Gagner, walks around the construction site of what will soon be his new brewery. 

“We're expanding from a 3 and a half barrel brew house to a 30 barrel brew house, to produce over 900 gallons at a time,” says Gagner.

His current building is 1,200 square feet. The new one comes in at 16,000 square feet.  It also used to house the St. Albans bowling center. 14th Star has been in business for 22 months. Since that time, it has grown by 4,000 percent. 

Gagner is confident that the expansion is worth it, “We’re planning for the future and for success."

He admits, at times, it’s nerve wrecking, “We’re both excited and terrified all in the same breath.”

With such a big expansion on his hands, Gagner says thinking big is something he wishes he did from the start,”One thing we didn't do was plan for success and so here we're installing enough capacity so we can meet that success.”

Lost Nation Brewing in Morrisville did the opposite; they started big.

”We know the growth in the craft beer market, so we wanted to prepare rather than get caught having to expand," says Co-owner, Jamie Griffith.

The brewery opened in June of 2013, a six thousand square foot building on the outskirts of town. Isolated now, but soon Route 100 will bring traffic right to Lost Nation’s front door. 

Citizen Cider is also on the move. It just left its old stomping grounds of three thousand square feet in Essex, to a new spot in Burlington.  

“We'll be at around 18 thousand square feet," says Co-owner, Kris Nelson. 
  
While every brewery has its own plan to succeed, will they? 

“If I could predict, when the industry will burst, I could make a lot of money," jokes Dr. Marc Law, Professor of Economics at the University of Vermont. 

He explains supply and demand in the craft brew business, “Once they realize there is no more room in the market, people will stop entering and some will exit. That's how every industry operates.” 

In the past two decades, the Vermont beer industry has grown in a big way. The Vermont Brewers Association (VBA) began in 1995 with just eight breweries. Flash forward to 2014, there are 35 in the state. Three are still waiting for entry into the VBA and another six or seven are just starting up. Some might say, ‘That’s too much, too soon.’ However, Dr. Law explains that product plays a big role in a businesses’ success. 

Dr. Law, “Not all beer tastes, the same”
Brittney Hibbs, “So if you have a great product?”
Dr. Law, “It can be sold, absolutely"

Which is exactly what Steve Gagner at 14th Star says to those who doubt him, “I say let them doubt, we're brewing quality beer, clean solid beer, that is sessionable, that is enjoyable and if they're doubting us. I’d say try one of our beers.”

14th star attracts a lot of consumers because of its story.  It is a veteran-run brewery, where Gagner himself drew up the business plan while awaiting combat in Afghanistan.

"We had no power, no running water; it was hot in the day, cold at night. To fill that time is when I kept the mental exercise and wrote a business plan for the brewery,” said Gagner. 

While that may be a unique draw for this St. Albans Brewery, each brewer who plans to stay competitive already knows what makes their beer different from the next.

Including Jamie, from Lost Nation, “We are making different style of German beer you probably haven't seen before."

So is there enough room for the market to sustain? Or will the beer bubble eventually burst? Dr. Law explains his answer, “The industry will stop expanding when it’s saturated and that’s for supply and demand to determine.”

With a growing thirst for Vermont beer, that doesn't appear to be happening anytime soon.

Here are some interesting facts about the Vermont Craft Beer industry as well as around the nation.

According to the State of Vermont Liquor Control Department, there are 46 malt beverage licenses.

The state of Vermont remains the top state for breweries per capita. Click on a state to see it ranks nationally on how many craft breweries it has and craft breweries per capita. States highlighted in lighter yellow rank higher than those highlighted in dark colors.

Data from the National Brewers Association. Data derived from the 2010 Census Bureau. 

Since Vermont has 532,900 adults living in the state, we have a brewery for every 11 thousand five hundred adults.

If you want to try some of Vermont's beers, The Vermont Brewers Festival is coming up in July. Tickets will go on sale on May 15th.
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