In the early 1980s, American craft beer pioneers dreamt of nothing more than producing a few beers that broke through the monotony of humdrum, mainstream lagers. A group of men and women who had traveled through Europe and had their eyes and mouths opened by local beers or who had adventured to brew their own beers. For these early entrepreneurs, the future was uncertain but filled with hopes of building a few hundred or even thousand barrel brewery.

Fast forward two decades and things have changed beyond anyone’s greatest expectations. Once top of the pops, America’s largest breweries are now reeling on their back heels. Once considered little more than a gimmick, craft beer has enjoyed startling success.

As the beer industry has aged, it has both matured and evolved. From its slow infancy to its turbulent teens, craft brewers are now experiencing the complications of adulthood. What started as a fun experiment for some has led to some pretty high stakes. From hobbyist basement systems costing a few hundred or thousand dollars to gleaming new brewhouses costing a few hundred thousand, the craft beer business is hardly just fun and games.

Times are changing quickly in the American beer marketplace and they’re not going to slow down anytime soon. In response to double-digit growth, breweries recently producing 10-15,000 barrels per year suddenly produce 75,000 barrels per year and have tank space capacity for many times more. To meet market expectations and changes, these brewers have traded sore backs for aching pocketbooks.

We are thankful that times are good right now and that despite a weak economy and financial hardships, craft brewers are not yet seeing a reversion to old buying habits.
But the nature of the industry itself is also changing in other ways. Many craft beer pioneers are now elder industry statesmen. Fritz Maytag bought Anchor Brewing 43 years ago; Ken Grossman started Sierra Nevada 28 years ago; Jim Koch toted his briefcase from bar to bar 24 years ago. Beyond these well-known figures, many founders of regional breweries have been in the business for 20 years or more now. And as with any other small business, many are owned by one person or a small group of aging entrepreneurs who’ve long been toiling in the brewhouse, glad-handing distributors, and hawking product every weekend at beer festivals. For these hard working individuals, vacations are few and downtime almost non-existent.

And as with any other hard driving profession, it eventually wears you down. With high debt levels and decades dedicated to building up their companies and employees, these brewery owners can’t just walk away. Not to the mention the disappointment felt by their loyal customers who they’ve worked so hard to gain. And so we must look to an uncertain future but one where we can be certain of corporate shakeups and where change will be a constant.

The Old Dominion Brewing Company of Ashburn, Virginia, for example, is representative of stories we will continue to hear. Founded by Jerry Bailey and other investors in 1989, the brewery was a pioneer in the Mid-Atlantic region. After nearly two decades of work, however, Bailey and others were ready to leave the business. They tried for years to sell to other craft brewery owners, but with no success. Then in 2007, they sold Old Dominion to a joint partnership of the Fordham Brewing Company and Anheuser-Busch. After making a run at it for a year, the group recently announced it will close the brewery’s pub and its future operations as a stand-alone brewery remain in question.

The Old Dominion case, while extreme, is a cautionary tale for the industry and consumers alike. Craft breweries are run by people not corporations and these folks can’t continue in this tough business forever. Shareholders eventually want their initial investments back, owners want to retire, and if they don’t have kids ready to take over the business, end game options remain limited. Consolidation, either with other craft breweries or with larger brewing concerns, will be the norm not the exception. And while we can all appreciate how far craft beer has come since its early days, it’s time to contemplate the business realities that lie ahead.

–Article appeared in Volume II, Issue IX of BeerAdvocate Magazine.

The news of Old Dominion’s impending closure has finally hit the Internet beer sites and I doubt many are surprised. For several months or more, the question of closing the brewery’s Ashburn location has only been one of when, not if. And the only sub-question was, “How long is the company’s lease?” Not quite two months ago I wrote of the closing of the brewery’s pub:

I think at this point the real question for Old Dominion fans is what will become of the brands and the brewery in the future. As Coastal runs another brewery in Dover, Delaware*–one that is large enough with expansion to cover all the company’s brands–the inefficiencies of running two small facilities will inevitably lead to a consolidation of production. As the company’s corporate parents are located in Annapolis, and the pub is now closed, it’s not difficult to see where things are headed. I don’t know how long Old Dominion’s lease on the property runs (a sufficiently long time I would venture from Coastal’s attempt to salvage the pub) but I wouldn’t expect Old Dominion’s Ashburn brewery to remain open any longer than Coastal can control.

So today it was announced that in a “consolidation” of brewing operations, co-owner Coastal Brewing Company will move all brewing operations to the company’s facility in Dover, Delaware, in 2009. At least for the moment, Coastal claims that its full line of beers, including brands under both the Old Dominion and Fordham names, will continue to be brewed, marketed, and distributed throughout the Mid-Atlantic region. This position isn’t likely to continue and the deal, which gave Coastal access to the distribution system of its new partner, Anheuser-Busch, is even more of a head scratcher now then when it went through last year. In the press release, Coastal specifically name-checks the Dominion Ale, Dominion Lager, and Oak Barrel Stout, so I’d expect to see these continue. And Coastal may continue a few seasonal products, perhaps the Octoberfest and the Millennium Barleywine, but I’d get ready to say goodbye to more than 3/4’s of the brewery’s products.

With the closing of the Ashburn facility, Old Dominion’s story really comes to an end. I’ve enjoyed many good times and beers in Ashburn and am sad to see the brewery go, although the passing was a slow and painful one. One thing is clear out of this situation: Virginia is in strong need for a regional brewery and it’s open season for brands from Pennsylvania, Maryland, and other nearby states.

So we’re headed to Philadelphia and its northwestern suburbs for a family event next week and weekend, which, of course, I plan to turn into a beer trip. I first became conscious of Philadephia’s craft beer scene when I sampled my first and favorite beer from the town: Independence Brewing Company’s Franklinfest. A malty, toasted Octoberfest style beer, I can still remember how it tasted and how much I enjoyed it. Sadly, Independence didn’t make it but my interest in the town remained.

I first visited Philadelphia for beer a decade or so ago on a circuitous beer tour from Chicago to Wilmington, North Carolina. After enjoying time in Pittsburgh, at Stoudt’s and central Pennsylvania, we made our way through Victory and into Philadelphia proper. Pre-Beerfly days, we only had a well-worn copy of the excellent Beer Lover’s Guide to the United States to guide us. And after an aborted attempt to visit the Northeast Taproom in Reading (Stan and Daria’s guide was excellent but in the days before cellphones, books couldn’t tell you when a place decided to close on Mondays), we spent a fun night in the city. After visiting the well-known places, including Monk’s, we took a book recommendation and headed to McGillin’s. At the city’s oldest bar, we ran into the owners of Flying Fish (who gave my brother handwritten directions to his version of the area’s best bars) and a little known guy trying to give away t-shirts and pint glasses to people who would try his brown ale. Despite his efforts, the guy didn’t get much attention that night, much to our surprise as beer lovers. For that guy was Sam Calagione, founder of the Dogfish Head Craft Brewery. We sat down and chatted with Sam for a little while and I still have a snifter the bar gave away for buying one of his beers.

Several years later, after returning from my first trip to Bamberg, Germany, I foolishly opined on some Internet beer group that I didn’t believe Philadelphia to be a great beer town. I was heavily criticized at the time and have spent recent years considering the city’s place in the pantheon of great beer cities of the world. In recent months, I’ve had the opportunity to visit the few great American beer cities I had managed not to hit, including Seattle and Portland, Oregon. While I plan to do a future BeerAdvocate column on the subject of great beer cities and whether designating such a pursuit actually matters, my upcoming trip has returned my focus to Philadelphia.

I have to admit to a certain amount of excitement on my part at getting a chance, after a few years away, to return to Philadelphia. But in reviewing the usual online sites, including the excellent Beermapping.com, I still wonder at the pronouncements of fellow beer writers Don Russell, Lew Bryson, Jack Curtin, and a number of other locals that Philadelphia is “America’s Best Beer Drinking City.” I’ve previously laid out here and in my book my criteria for a great beer city and Philly definitely meets several of those marks, with a handful of top-notch beer bars (Monk’s, Tria, Eulogy) that heavily focus on educating the public. And as I haven’t been there in a while, I’m looking forward to seeing how well craft beer has integrated into regular drinking establishments in the city. But when it comes to breweries and brewpubs, I think this is where I have some pause about claims of Philly’s greatness. For brewpubs, the city offers Nodding Head, Manayunk, and Triumph Brewing. I’ve been to Nodding Head several times and enjoy its quirky environment and solid beers, but have not had a chance to visit Manayunk and relative newcomer Triumph. But that is it for the city, three brewpubs, although I plan to stop by Tom Baker’s new enterprise in Germantown and expect that will add greatly to the city’s brewpub balance. In looking at local breweries, we see even less to support Philly’s claims of greatness. Dock Street is celebrating its one-year anniversary at its new location and has a history almost as twisted as the Concord Brewery’s story. Yard’s Brewing has also had a up and down history and its story continues to unfold. I know very little of the Philadelphia Brewing Company and look forward to trying its beers but doubt it would be touted as a ‘great’ place. In terms of locally produced beer, Philadelphia doesn’t appear to have much of a grasp on the greatest title.

With this said, I’m still excited about visiting and drinking in Philadelphia because it actually reminds me of the best drinking city this country has to offer: Chicago. My home town may not be able to lay claim to being the greatest beer drinking city, although I think it could put up a fight, the character and quantity of its drinking establishments, in my opinion, is unmatched anywhere in America. My visits to Philadelphia and its drinking establishments, as well as reviewing descriptions of other Philly beer bars, reminds me so much of Chicago. I’ve never been to several of the city’s best drinking establishments (at least as they are described online), including The Grey Lodge and the Standard Tap, but I am expecting to thoroughly enjoy them. But I wonder whether a handful of great bars can be enough to raise Philly to the top echelon of great beer drinking cities in America.

When local guys such as Don, Lew, and Jack tout Philly’s beer drinking prowess, I get the sense that their definition of ‘Philadelphia’ is probably a lot broader than mine. I expect that they include places like Victory (35 miles west), the Sly Fox and Iron Hill establishments (15-20 miles outside), Flying Fish (15 miles east in New Jersey), and other outlying establishments. With all that the northwestern suburbs of Philly have to offer, I’m not going to argue with designating Eastern Pennsylvania as a classic and great beer region. And I’ll be stationed in this area and will be visiting the Earth Bread + Brewery, Victory, and probably the General Lafayette Inn, as well as a few other places (with any luck, the Drafting Room in Exton). But as to the city itself, I have my doubts.

In any event, local beer lovers clearly have a lot to brag about in Philadelphia and its outlying areas. And we cannot overlook the achievement that is the Philly Beer Week project, one I plan to attend this year. I’m looking forward to the trip and to putting the Philly propaganda line to the test.