Spilling over: WNC’s brewing boom brings rising fortunes to other sectors

As quickly as new breweries keep popping up in and around Asheville, the auxiliary businesses that support those beer producers are multiplying even faster. By providing an array of services, this critical infrastructure enables the breweries to focus on making interesting, high-quality beverages even as it helps fuel the local industry’s robust overall growth.

In the past 18 months, the Asheville Brewers Alliance has seen its membership more than triple, from 48 (32 breweries and 16 associates) to 180 (64 breweries and 116 associates). Increasingly, says Kendra Penland, the alliance’s executive director, local businesses are recognizing opportunities created by the industry’s commanding presence in the area — and capitalizing on them.

“Now we have tap-line cleaning companies, law firms, marketing firms, beverage equipment supply companies, those who sell hoses — they understand the value of being part of the ABA,” she explains.

Naturally, all that economic activity is creating lots of jobs. Between 2011 and 2016, brewery-related employment in the four-county Asheville metropolitan statistical area jumped 754 percent, according to a just-released study by the Asheville Area Chamber of Commerce and the Economic Development Coalition for Asheville-Buncombe County.

“That’s the highest of any manufacturing industry in Asheville’s MSA,” notes Heidi Reiber, the coalition’s research director. “It represents about 600 jobs, so it’s pretty intense growth for any industry, especially an MSA of our size.”

The rising tide of craft beer is lifting a wide variety of different industries. And that, in turn, helps solidify the breweries’ position, argues Clark Duncan, the coalition’s director of business development.

The industry’s broad reach, he points out, extends “far beyond great beer. While you can’t predict ebbs and flows in an industry, I think you get a little bit of stability when you’re able to bring those supply chain players into the region, because it gives our brewers an advantage.”

The farmer

In the winter of 2015, Mike Karnowski — then with Green Man Brewery — contacted Barnardsville farmer Michael Rayburn about buying pie pumpkins. The two started talking about what produce local breweries were interested in using, and Karnowski (who now has his own brewery, Zebulon Artisan Ales) gave Rayburn a list of brewers to talk to. Rayburn, who co-owns Rayburn Farm with his wife, Lauren, spent that January visiting industry figures, accompanied by his then 2-year-old son.

The farmer caught his first big break at Wicked Weed Brewing.

Co-owner Luke Dickinson “just happened to be there,” remembers Rayburn. “He was like, ‘Well, we use a lot of basil for our Coolcumber beer.’ They were just buying it from a wholesaler, so I said, ‘Yeah, I definitely can do that.’ It’s worked out, and they’ve become our largest supporter. They literally buy a ton of basil from us every year.”

Rayburn now counts 18 Asheville area breweries as clients, plus a few distilleries. Besides accounting for 70-80 percent of the farm’s current business, having breweries as steady customers gives Rayburn, a horticulturalist by training, a chance to experiment.

“I’m growing things now that I never imagined I’d ever grow as a farmer,” he says. One such item is the obscure Kenyan Blue Spice basil, traditionally favored for nonculinary uses. Rayburn now grows it exclusively for Twin Leaf Brewery and the soon-to-open Zillicoah Beer Co. in Woodfin. “It’s hard to put a definite on it,” he says, “but we may be one of the first people to grow it as an agricultural crop.”

Having been hugged by beer fans at multiple tappings, Rayburn says the Asheville community clearly takes pride in having a local farm provide ingredients for its favorite beers — which, in turn, builds deeper loyalty to those breweries. And the commitment to producing and using unusual ingredients, he maintains, helps build the local industry’s reputation for constant creativity. Last year, for example, five breweries used his pumpkins, which he wraps in foil and roasts on the farm over hot wood coals.

“Maybe that starts a trend: Asheville-style pumpkin beer,” says Rayburn. “More diversity is really key to the Asheville brewery scene. It’s got to be something truly unique going on here, other than just ‘Oh, we’re making it better,’ because everyone says that.”

The lawyer

Asheville attorney Derek Allen got pulled into alcoholic beverage law when Oskar Blues Brewery called asking for help with zoning issues while trying to establish its Brevard location.

Allen quickly recognized that his expertise in land-use law was applicable to breweries’ permitting process: In both cases, he explains, “You have black-and-white rules and lots of gray areas in between. Being able to be familiar with those on a daily basis just provides the value-add that I think folks are looking for.”

The attorney, who’s with Ward and Smith in Asheville, went on to work with Sierra Nevada Brewing Co. as well as what he calls the “true homegrown guys” like Hi-Wire Brewing. By early last year, notes Allen, he was gaining another North Carolina brewery client just about every week, and the firm’s alcoholic beverage law group has expanded dramatically. About a dozen lawyers spread across the state now represent more than 80 breweries plus distilleries, cideries, wineries, distribution interests and a range of vendors.

Their work involves a lot of trademark and intellectual property law. They also stay busy papering various kinds of deals, helping breweries navigate distribution agreements, move into a new state or territory, find new land, close on a loan, get a new location permitted and attract investors. But as the firm’s client list has grown, Allen says he’s tried to focus on maintaining real relationships with each one, an approach he sees as part of a larger, more intentional lifestyle that continues to gain local traction.

“I talk a lot about a craft lifestyle and craft culture, and beer just happens to be part of it,” he says. “Asheville’s popularity has been driven, in part, by the high tide of a new awareness of this craft culture.” Many people, he continues, “want quality, authentic aspects in their life: from the goods they buy to the food they eat to the drinks they drink to how they live their lives.” The shift also involves “being more conscious of our world — more walkability, more eco-friendly, leaving shallower footprints on the planet. The craft beer space is just part of that bigger piece.” So for Allen, his “continued work in that space has just been an extension of the things that were already important to me.”

The accountant

As a CPA and senior tax manager at Dixon Hughes Goodman, Dennis Theodossis’ primary focus was manufacturing. And when the firm decided to start a craft beverage niche about eight years ago, he applied those same principles to breweries, many of which hadn’t looked at themselves that way when it came to things like accounting and tax benefits. That understanding has since evolved within the brewing industry, notes Theodossis, who helps his clients get tax incentives and grasp the importance of tax accounting to their financial success.

He now works with close to 40 breweries, distilleries and wineries in Asheville alone. “We help empower them with tools to make business decisions that maybe otherwise they might not have had,” he explains. “A lot of brewers are really good at brewing, and they’re really good with people — but they’re not really good with the nuts and bolts of a day-to-day business. I think that’s a piece we’ve done a lot to help with: growing people’s skill sets and internal processes along the way.”

Theodossis also does a lot of real estate work, and those concepts, he says, are useful in analyzing brewery ownership structures, which are becoming more intricate and involved as new taprooms with multiple business partners sprout up.

“Our goal is to try and help them keep as much of the money in their pocket as they can, so they can get bigger and create more beer or whatever they want to do: pay their employees more, give more back to their community. Whatever their mission is, I think we play a good role in that.”

The contractor

Tim Singleton, a project manager for MB Haynes Corp.’s H&M Constructors – Industrial Division, first professionally crossed paths with the brewing industry just over a decade ago, when H&M moved Highland Brewing Co.’s equipment out of the Barley’s Taproom basement and into its current East Asheville facility. His sector mostly installs the boilers that provide steam and the chillers that cool down water during the brewing process.

Most of those breweries, says Singleton, “start out pretty small. Three or four of them together put in a small brewing system that they can manage on their own.” But when they “grow into and secure financing to make the next step — into brewing equipment that requires steam in order to brew — they really can’t do that part on their own.”

Singleton’s background is heavy industrial, and though he felt his skills were a good fit with Highland’s planned expansion, the brewery’s lack of experience at that scale forced him to get creative.

“At a paper mill or a power plant, I was used to having the engineering work provided to me,” he explains. But in this case, “I had to fill a gap there and actually perform that service. It took me a little while to get my feet under me and accept the responsibility for designing those pipe systems.”

That custom design aspect has since become a standard service that’s helped H&M stand apart from other local piping contractors. Positive word-of-mouth has yielded nearly two dozen brewery projects so far, most recently Archetype Brewing in West Asheville and Wedge Brewing Co.’s new Foundation facility, and Singleton estimates that 30 percent of H&M’s piping work is now brewery-related. To keep up with the demand, he’s made additional hires and now has three different crews working on this specialty. In the last five years, MB Haynes has grown from roughly 450 to 700 employees across 10 divisions, and the brewery business has played a significant part in that.

“Because of Tim’s good reputation and the work that H&M does in there, our service groups have also started getting business from the breweries, particularly our HVAC and refrigeration group,” notes Marketing Director Pam Bailey. “Their work’s really been increasing.”

The consultant

Meg Smith is one of a select few Asheville businesspeople who are already on their second stint as brewing industry ancillaries. She and her husband, Craig, formerly owned Land of the Sky Mobile Canning, which helped brewers package and distribute more quickly while maintaining high-quality standards. In January, they sold the business to the Manchester, N.H.-based Iron Heart Canning Co. Meanwhile, the couple were seeing many new breweries that were making good beer but had little experience with packaging and infrastructure. That inspired them to found Package Sense, a consulting firm that helps breweries develop a business culture beyond production.

“With the saturation of the market, we think growth is the biggest challenge and also the biggest necessity,” says Meg. “If you’re not growing right now, stagnation is a scary thing, given how many breweries are in planning and how many are here. We think that’s an area that breweries are really going to need help in, and we’d like to help them with that.”

Brewers’ passion for their craft, she continues, is “only part of the battle.” She also believes that as the industry becomes more competitive over the next few years, breweries that have a strong business backbone and a defined plan will survive — and those that don’t may not.

“My experience is with finance and economics, and due to the sheer volume of what’s happening, I do think that over the next 24-36 months, there’s going to be a significant shift in the industry — maybe a 10-15 percent shift,” she predicts.

“Breweries that aren’t packaging or don’t have quality control that’s competitive with other breweries in their same area — people just, quite frankly, aren’t going to drink beer that doesn’t have that type of care associated with it. They’re going to have five other choices within a mile that are taking those things seriously. In Asheville, certainly, but also in other markets within driving distance.”