Maryland's craft beer business is growing rapidly — at a rate of 35 percent a year — as consumers increasingly seek out independent brewers' new-style yet traditionally made beers.
"There is just an amazing level of interest in craft beer, artisanal products in general, but craft beer specifically," said Jon Zerivitz, co-founder of Union Craft Brewing Co. "It's been growing all over the country."
Both new and existing companies are driving the expansion.
Oliver Breweries, the 21-year-old beer-making operation of the Pratt Street Ale House in downtown Baltimore, has outgrown its beer-making space and is opening a small production plant. Union Craft Brewing , the relatively new brewery in Woodberry, is expanding and just introduced another new beer. And the popular Heavy Seas Alehouse in Little Italy — part of Clipper City Brewing of Halethorpe — opened a second restaurant last month in Rosslyn, Va.
"The American craft beer segment of the industry is truly exploding," said J.T. Smith, executive director of the Brewers Association of Maryland. "It's something that should be celebrated as a value-added manufacturing sector in Maryland."
Throughout the state, 15 brewing companies are in some stage of planning to open, Smith said. New breweries have opened in Ocean City, Frederick and Silver Spring, Smith said.
The 35 percent annual growth rate for the state's industry, consistent for the past five years, takes into account new openings, companies moving from out of state to manufacture here, growth of employment, tax revenue, volume and sales, Smith said. The state's brewing industry, with 38 active brewing companies, generates economic impact of $95 million and accounts for 20,000 jobs, including breweries, wholesalers and distributors, the association says.
Oliver, now brewing at the Pratt Street Ale House bar and restaurant, is opening a separate brewery in an industrial section of Clifton Park in East Baltimore to supply growing demand for its beers.
The maker of the American-style India pale ale Draft Punk and English-style mild ale Dark Horse, among other varieties, made a push into bars and restaurants in Washington and Northern Virginia in 2011. Pratt Street opened a second restaurant in December 2012, in Columbia, and plans its third for this fall in Severna Park.
"The brand has been doing really well," said Justin Dvorkin, co-owner of Oliver and Pratt Street Ale House. Once the Columbia restaurant opened, "it made it difficult to supply ourselves. We had to pull back out of accounts in D.C. and Virginia."
Having a separate production plant in a 12,000-square-foot former ice storage plant will boost production from 2,000 barrels a year to 4,000 barrels and allow for expansion into canning and bottling, Dvorkin said. Oliver eventually plans to stop brewing at the Pratt Street location.
"It puts us into a production-facility stance, as opposed to just a brew pub with a little beer left over," Dvorkin said. "We can really supply all the demand."
Demand has grown, he said, as consumers have grown more educated about craft beer.
"People want to find exactly the kind of beer they like," he said. "They don't have to settle for something close."
Union Craft Brewing, the first purely production brewery to open in the city in the past 30 years, is expanding for the second time since opening less than two years ago.
The brewery installed three new fermentation tanks and expanded by 3,000 square feet to enable production to double from 3,000 barrels this year to about 6,000 by the end of next year, Zerivitz said. This month, it added a third canned beer, the German-style Blackwing Lager, to its Duckpin Pale Ale and Balt Alt, a German-style altbier — all of which are sold in stores across the state and in Washington. Union Craft plans to launch a fourth variety in cans soon and expand its tiny taproom.
"The additional capacity will enable us to meet the overwhelming demand for our existing beers, as well as give us the ability to experiment with new beer styles," said Adam Benesch, another Union Craft co-founder, in announcing the expansion.
Business has been so good for Evolution Craft Brewing in Salisbury that co-owners and brothers Tom Knorr and John Knorr are laying the groundwork to nearly triple production in the next couple of years.
The brothers, who run four restaurants in the Salisbury area and opened a brewery at one in 2011, are seeking an increase in the number of barrels that the state's brew pubs can sell to distributors. That limit now is 22,500 barrels a year.
In Maryland, Evolution is the largest brewery in its class, selling its Exile Red Ale, Primal Pale Ale, Lucky 7 Porter and Lot No. 3 India pale ale to wholesalers and retailers in the mid-Atlantic.
"In general, people are looking for a more flavorful product than what's been offered for a long, long time," Tom Knorr said.
The company, growing at an annual rate of 45 percent to 50 percent, now produces 7,600 barrels a year and expects that to grow to 12,000 this year.
"Our problem is we're really busy and growing fast, and in trying to plan out the next few years, it looks like we'll hit that level in 18 to 20 months," Tom Knorr said of the state limit. "At that point, we'd have to stop growing and maintain a level below that, or have to give up all our restaurants."
A bill to raise the cap to 60,000 barrels a year failed in this year's General Assembly session. It was opposed by the state's liquor lobby, which favors keeping producers, wholesalers and retailers separate.
Lawmakers did approve a pair of bills Friday that specifically target microbrewery growth in Montgomery County. One measure removes a restriction requiring microbreweries to also be fully licensed restaurants, while another allows breweries to distribute beer to license holders in the county. Del. Sam Arora of Rockville, the bills' lead sponsor, noted that microbrewing is one of the fastest-growing sectors of the economy in some parts of the country.
With growing demand has come more and more competition from new breweries and companies from other states entering the market.
In Howard County, Jailbreak Brewery will become the county's first commercial brewery when it opens next month in North Laurel. It's hoping to fill what it saw as a void in production breweries between Baltimore and Washington.
"It seemed to us there was a big hole in the market," said Justin Bonner, Jailbreak's owner. "There was nothing in this area as far as brewing goes, outside of brew pubs."
Meanwhile, Fort Collins Brewery, a family-owned, hand-crafted brewery that's been in Colorado since 2004, expanded into Maryland in February by partnering with seven different distributors. The business, now in 21 states, expanded to New York and Virginia last year.
It looked to Maryland because "it's an up-and-coming craft scene," said Kaylee Kulich, a spokeswoman. "It was a no brainer to expand there."
Zerivitz , the Union Craft co-founder, said his company got into the business at the right time.
"Baltimore is a little behind the trend," he said. "We're right on the cusp of the explosion of interest in craft beer in Baltimore. The people of the city have taken to us."
Baltimore Sun Media Group reporter Luke Lavoie contributed to this article.Copyright © 2015, CT Now