New York City breweries are finding more than cheap real estate and bucolic views in Upstate New York’s wine country: They’re finding a strategic business opportunity to reach customers outside their existing market.
Other Half Brewing Company and Big aLICe Brewing Co. are only the first of the city’s breweries to capitalize on relatively low startup costs in an area that’s not far from Rochester (the state’s third-largest metropolitan area) and within a few hours’ drive of their NYC home bases. Additional beer businesses may soon make plans to follow.
Other Half has operated its Finger Lakes taproom in East Bloomfield, New York, since April 2018. Three weeks ago, Big aLICe announced it would also open a brewery in that region in spring 2021, taking over the shuttered GAEL Brewing Company location in Geneva, New York. New York State Brewers Association executive director Paul Leone says he’s fielded calls from three other NYC breweries asking him to keep an eye on potential real estate upstate.
These moves are evidence of a shift in the way breweries are approaching satellite taprooms. Instead of building multimillion-dollar destinations, breweries like Big aLICe and Other Half are taking a more nimble approach. Yes, their Finger Lakes locations allow them to capitalize on tourism through experiential taprooms, but they also plug into a consumer base that’s different from those within NYC’s urban, craft-beer-geek bubble. The real estate could be considered a steal—both businesses moved into spaces vacated by defunct breweries—especially when one applies city money to a region that boasts an average industrial building base rent that’s 37% below the national average. Lower real estate costs allow breweries to own rather than lease their buildings, as well as afford space for barrel-aging programs, small-scale farming, and outdoor seating.
Plus, for urban breweries used to cramming patrons into narrow taprooms—to say nothing of the risks posed by population density during COVID-19—the room to breathe feels especially timely and escapist. And they’ll be making their home in an area that’s already considered a drinks destination: The Finger Lakes region is home to more than 100 wineries, most of which have expansive patios and ample properties overlooking Keuka, Seneca, and Cayuga Lakes.
NYC’s beer market has only grown more crowded since 2018, when Other Half announced its East Bloomfield location. Now, COVID-era restrictions have hobbled taproom-focused city breweries. Upstate, Big aLICe and Other Half have found a low-cost way to enter a market full of new customers—not just for their taproom, but for potential sales in grocery stores and other retail, too.
“As popular as Other Half is, we’re also off the radar for the vast majority of people,” says Sam Richardson, the brewery’s co-founder. “We have a big, niche following but it’s people who are looking to buy craft beer outside of grocery stores.”
Upstate offers a lucrative opportunity to make those introductions. Around East Bloomfield, Other Half is already self-distributing cans to Rochester-headquartered supermarket chain Wegmans and small neighborhood taverns, introducing itself to locals who aren’t driving into NYC for beer.
In 2018, Other Half paid just $660,000 for the 4-acre property and a turnkey brewhouse inside a 8,000-square-foot building that formerly housed Nedloh Brewing Co.; it’s since purchased 6 adjoining acres. (The state also reportedly provided a $400,000 tax credit tied to job creation at the brewery.) Big aLICe reportedly spent $435,000 for the former GAEL Brewing property, which encompasses 2.5 acres.
When Big aLICe expanded from its first location, a 1,000-square-foot brewery in Long Island City, Queens, to a second taproom in Brooklyn, the lease on the second space was 68 pages long. Big aLICe co-founder Kyle Hurst estimates the business spent $10,000 on legal fees in the process of renting—not even owning—the Brooklyn property. Taking over the Geneva space, by contrast, was a cakewalk.
“It goes back to this small-town feel where the bankers and lawyers got together to say, ‘How can we make this happen?’” Hurst says.
The Finger Lakes locations put Other Half and Big aLICe in the midst of what Leone calls a “craft beverage wonderland,” which includes wineries, cideries, and distilleries. The region accounted for 4% of New York’s $71.8 billion tourism dollars in 2018, and netted more than twice as much tourism spending as the Catskills or Adirondacks regions.
“If you're on the wine trail or close to it, I don’t want to say it provides guaranteed business, but it’s in a sense ‘safe,’” says Jen Meyers, membership and events manager for the New York State Brewers Association and a former brewer at three Finger Lakes breweries.
The proximity of agriculture, especially orchards and vineyards, is also appealing to Big aLICe, a licensed New York State farm brewery. Other Half, meanwhile, is eyeing locally grown fruit and recently emptied wine barrels to contribute to its nascent mixed-culture beer program.
While pastoral in feel, Geneva is just 45 minutes’ drive from Rochester, which counts roughly 1 million people in its greater metropolitan area, the third-largest in the state.
“[Other Half] has seen that you can have success in a different market with real estate costs being a lot lower, but still having enough people to support it,” says Will Cleveland, a reporter and beer columnist for Rochester’s Democrat and Chronicle. “They draw people coming from Buffalo, Syracuse, even southern Ontario.”
Other Half’s Richardson says the goal in East Bloomfield isn’t to create a tourist spectacle but a smaller-scale, less risky satellite.
“The Disney Land or Taj Mahal brewery, people saw the potential folly in that,” he says. “We’ve seen how difficult it’s been even for New Belgium [Brewing Company] and Stone [Brewing] to do that. I think now everybody wants to be more part of the local community.”
In contrast to massive complexes like Surly Brewing Co.’s $30 million Minneapolis Beer Hall—now indefinitely closed—or Empire Farm Brewery’s 42,000-square-foot, $6 million second taproom in Cazenovia, New York—now permanently closed—Other Half and Big aLICe aren’t sinking millions in construction costs to gain new customers.
“It gives them an opportunity to expand their brand and reach a market they weren’t necessarily reaching, while still maintaining a high degree of control,” Meyers says.
That requires cultural adjustments, though, for breweries that originally established themselves in Brooklyn or Queens. Other Half charges roughly $8 for a 12oz pour of IPA or DIPA in Brooklyn, but Meyers says she paid $5 for a pint of Lager at the Finger Lakes location this summer. Other Half also offers 56oz pitchers for $25-$27 at that upstate taproom, and realized it had to modify its merchandise lineup and taproom playlists as well.
“I can make pink Other Half shirts and sell them in Brooklyn all day long. No one wants to wear a pink shirt in Rochester,” Richardson says.
It’s a challenge to the brewery’s established brand, which was born in Brooklyn and grew among a still relatively limited number of customers. In East Bloomfield, Other Half is introducing itself to a new, more mainstream customer base that doesn’t always share the cultural preferences of its original fans.
“What we knew and have continued to realize is just how niche of a brand we are,” Richardson says. “In Brooklyn, we have a very defined aesthetic, even the types of music we listen to in the taproom have been with us since the beginning when the customer base was really strong. But now it’s grown. … We have to make sure we’re taking care of people. They’re our customers. ”
Richardson says East Bloomfield requires a balancing act between replicating the established Other Half brand and meeting new expectations. Ultimately, though, Other Half believes the balancing act is worth navigating if it offers the chance to expand its customer base—and it’s unlikely to be the last NYC transplant that does.
Words by Kate Bernot