A little more than year after combining forces under the private equity-backed Artisanal Brewing Ventures (ABV) umbrella, Victory Brewing Company and Southern Tier Brewing Company are about to take their partnership to the next level.
This March, the two plan to open a dedicated Artisanal Brewing facility in North Carolina, which both brewers will share and utilize to create region-specific beers of both Victory and Southern Tier brands and experiment with their respective retail operations.
Located in Charlotte, the 28,000 square foot brewery with capacity to produce a modest 10,000 barrels annually is slated to host a production brewhouse, fermentation cellar, packaging lines, a quality assurance lab, a tasting room, indoor and outdoor space, and a total capacity of up to 700 guests. Additionally, the companies say they plan to hire “in excess” of 100 people as a result of the expansion.
“It’s an exciting time here at ABV,” says CEO John Coleman in a statement. “With our commitment to the east coast, Charlotte was a natural choice for this expansion.”
Artisanal Brewing, the 13th largest craft brewery by volume combining both companies’ output, already operates its corporate headquarters in the city, but that’s not the only thing they say made Charlotte a “natural” fit. For starters, they say they have seen a “major influx of relocation” to the city from their four core markets in Pennsylvania, New York, New Jersey, and Ohio.
In turn, they hope their established brand equity in the region will bring longtime drinkers through the doors. To that end, it seems clear that the capacity of this new facility represents a small percentage of the combined company’s overall output, meaning this move is likely more about regional relevance than supplying a new source of fresh beer up and down the coast.
“The lion’s share of our business is done in those four states, then obviously the states that surround them, then some states in the northeast—that’s kind of our stronghold,” Southern Tier founder and COO Phin DeMink tells GBH. “As we start to expand, it’s a lot more logical to move south than it is to move west. We do good in the Midwest, but definitely in the southeast I think we have stronger roots.”
Victory founder Bill Covaleski outlined this potential go-deep-at-home strategy on Episode 82 of the GBH podcast back in June 2016.
“We’re going to learn which of our brands they really admire far from home, and learn what they gravitate toward as we innovate,” he tells GBH of the new facility.
As such, while other sizable craft brewers have been expanding further afield to establish roots in underserved territories, viewing growth through a national lens, Victory and Southern Tier are effectively doubling down where they’re already strong. This isn’t an accident, of course. Despite how competitive the marketplace has become, both companies agree there is still ample room to grow, even where they’re already craft staples. Or, as DeMink puts it: “Regionally, we have so much wood to chop.”
To find it, though, they say staying close to home is key.
“Freshness does well because people can understand it and wrap their heads around it. So how do we do that? We bring it to the people. We can’t rely on putting it on the shelf,” Covaleski says. “It’s making opportunity rather than sitting back and expecting your wholesalers to do all the work for you.”
As for those wholesalers, both breweries are aligned with different partners in the state. In Charlotte, Southern Tier is sold by Adams Beverages and Victory is sold by Tyron Distributors. Despite bringing production under one roof in the city, though, they say there are no plans to attempt synchronizing their wholesale networks, adding they’ve both corresponded with their respective partners about the expansion. The increased value of their distribution rights would likely increase dramatically with this move, making it an expensive switch for a relatively small production lift of 10,000 BBLs in the state, an amount they can likely move a substantial portion of through their onsite taprooms anyhow.
Back inside the new brewery itself, the two will work together but employ brewers whose primary focus is brand-specific so they can dedicate their attention more singularly and subsequently better focus on quality while being able to properly inform distributor and retail partners.
They also had to design the space to accommodate the different brewing styles employed by both companies. “There was definitely a lot of conversation about that,” Covaleski says.
For instance, Victory primarily brews with whole hops while Southern Tier brews with a mix of whole hops and pellets. “We had to design the system to be able to handle whole hops in the various vessels they’re important in,” DeMink adds.
With that in mind, the pair of companies have even brought some “legacy equipment”—a brewhouse and fermentation cellar from Victory, filtration equipment and yeast handling system from Southern Tier for instance—to their new digs.
The beer lineup itself, though, is still in the works. But in the meantime, Victory and Southern Tier believe they’re setting themselves up, even before a pint is poured, to go where the industry is headed.
“This is the type of thing that would’ve seemed bizarre even 10 years ago,” Covaleski says. “But I think it’s really in step with where craft beer is: taking your message directly to audiences.”