THE GIST
It wasn't even two years ago the team at COOP Ale Works was considering future success of their business and that of their peers in Oklahoma, but in that short timeframe, fortunes have turned quickly. The 2016 passage of SB 424, allowing for breweries in the Sooner State to begin selling full-strength beer from their taproom (it was previously 12 ounces worth of free samples), opened up a new frontier.
This week, the 9-year old brewery announced a $20 million expansion to acquire and redevelop Oklahoma City’s historic 23rd Street Armory building. It represents a new kind of growth potential for Oklahoma as a whole after updating Prohibition-era laws. After own-premise sales of full-strength beer were made legal, COOP reported a 300% increase in their overall on-site sales within three months.
“Public sentiment is on the side of these kinds of changes,” Sean Mossman, director of sales and marketing for COOP, told GBH at the time. “These revenue streams make it easier for everyone to keep their doors open and that’s good for craft beer culture.”
According to estimates from the Brewers Association, COOP grew production from about 11,500 barrels in 2016 to 12,750 last year, the most by a Brewers Association-defined craft brewer in the state. The brewery expects to make about 18,000 barrels this year and more than double that amount within five years. With increased revenue streams and outlets to sell their product, COOP now has the chance to be a leader across its home market as laws come into place later this year that will offer new shelf space at nearly 4,400 grocery stores and other outlets.
"The reality is between the taproom law change and modernization of laws, those two things were probably the most significant contributing factors to our desire our need to go out and look for a new space," Mossman tells GBH. "But in doing that, we also need to be thinking about the fact that we have this ability to create an experience for the consumer that is going to carry outside the brand."
WHY IT MATTERS
The “by the numbers” of COOP's project are straight forward: a building of about 87,000-square feet to include a 60-barrel brewhouse, including around 30,000-square feet for storage, offices and expanding capacity for barrel-aged and sour beer production. But it's the thematic purpose behind this that matters most.
Like other companies before it, COOP is turning their new project into a destination brewery—a space that is far more than just a place to sit and drink. There will be a restaurant, 22-room "boutique" hotel, event spaces and five acres around the property to provide for parking, retail, green space and "downtown living.”
Speaking to Brewbound after the announcement, Mossman noted that the project is about "master-planning a four-block area" and to “create an iconic presence” in Oklahoma City.
This is similar to the way other breweries and city officials have talked about projects like this, including Surly, Three Floyds and Aviator. Just last month, as part of its deal with Heineken, London's Beavertown noted a big reason for needing investment was to work toward its own destination location, to be called "Beaverworld." If the last few years have been set up for breweries in the U.S. and around the world to recognize the power of selling beer directly to consumers, it’s becoming increasingly clear the next stage of this evolution means finding all sorts of ways to make those visits unique—and longer.
"We want to mean to Oklahoma what Anchor means to San Francisco and Boulevard means to Kansas City," says Mossman, noting that aside from hometown pride, there's also a shifting marketplace that doesn't guarantee perpetual growth. "We have our eyes wide open and see what's happening. That's why we have the move to diversify with the restaurant operation, the hotel operation and the event operation. It's just good, smart business in the current marketplace."
All this takes on important steps to maximize the impact of SB 424, the law that allowed for own-premise sales to start in the first place. As Mossman pointed out two years ago to GBH, it became a way to keep doors open. Maybe blow them open, too, if only evidenced by COOP’s expansion. But the excitement doesn’t end there.
"Oklahoma had been the most inefficient market for craft beer for so long,” Mossman says, adding that moving forward, “the opportunities are going to be pretty exponential.”
After voter approval of State Question 792, a variety of changes are coming for Oklahoma beer shoppers starting Oct. 1. Grocery and convenience stores will be able to sell full-strength beer and liquor stores will be able to sell refrigerated beer. COOP is eyeing their expansion at the same time many other breweries may finally see a light—and hear cash registers clinging—thanks to expanded laws that allow beer purchases like the majority of the country.
"We’ve already seen a boom in breweries starting up and expanding their businesses and opening up tap rooms, which I think is exciting for our consumers, but also when we have people visit the state I think that they kind of see us in a different way, that we’re moving forward with our modernization," Oklahoma Beer Alliance President Lisette Barnes told the Enid News & Eagle last year.
Anheuser-Busch InBev is planning on expanding its presence in the state, where it previously sold a low-ABV versions of its beers, including flagship Bud Light.
“The one thing that is important for us is that we are excited for the change that is coming to Oklahoma,” Matt LoPorto, partner and senior director of sales and marketing for Anheuser-Busch in Oklahoma, told NewsOK.com in May. “We have an exciting portfolio and we are excited to sell our full portfolio.”
Taproom-to-retail success has already shown up for COOP, with hope for even more in the future. Mossman pointed out two brands—Fly Me Away New England-style IPA and Saturday Siren, a dry-hopped Pilsner—that have gone to market because they were tested with own-premise customers. Saturday Siren went from taproom-exclusive to seasonal release to year-round within a year.
This is going to be important as the state sees increased competition, if only because of expanded access from producer to retailer. Finding ways to offer new products and experiences will be a natural part of the state's evolution toward modern beer laws and tastes.
"Other brands will come in and put downward pressure on is and other breweries will open and put pressure on us," Mossman says. "We have to respond with a showpiece that people of Oklahoma can be proud of and say, "when you're here, go there.""
—Bryan Roth