Still thirsty? Indy’s craft beer industry is growing up

Andrew Castner knew he was taking a risk when he left his job as head brewer at the Ram Restaurant & Brewery to cash in on Indy’s craft beer boom by opening his own business.

Castner’s been brewing up exotic beers for years — jalapeno IPAs and java-infused ales to name a few — and he’s betting his career there’s room for more brands in an increasingly saturated market.

He’s far from alone. Noting the success of the owners at Sun King and other home-grown breweries, a generation of beer makers are launching plans around the metro area to make their bones in the business, from Bargersville to Carmel, from Greenfield to McCordsville, and throughout Indianapolis.

At least 13 brewers are moving forward with plans to open in the metro area this year, a 50 percent bump that would make investors in any business segment take notice.

Castner says the boom is about changing times — or more to the point, tastes — and therefore, is sustainable. Today’s drinkers, he contends, aren’t satisfied with a simple lager; they want quality and choices in their selection of beers. The most popular selling craft beers, local brewers say, are India Pale Ales and seasonal selections.

“The generation that is coming up right now,” Castner said, “and really the one that came before it, are looking for choice in all kinds of different parts of their lives.

“Beer is a part of that.”

But amid the clamor to cash in on the thirst for fresh, local beer, business analysts and market enthusiasts have begun to wonder just how many different brews Hoosiers can stomach, changing times or not.

They say not every brewery in this new wave will thrive. Jake Koeneman writes about the craft beer industry for the Hoosier Beer Geek, and he thinks opening a successful brewery now will take more careful market planning than at any point during the past few years.

“Central Indiana to me can definitely bear more breweries, as long as they are differentiating either by recipe or by location,” Koeneman said. “Where I see the struggle for people is where they try to come in and have the same beers as Sun King, Triton, Flat 12 and Fountain Square and they try to go big distribution.”

Indianapolis: a booming beer town

Sun King Brewing launched Indy’s craft-beer boom nearly five years ago with thousands of barrels of beer and an intense marketing campaign.

Indy had never seen anything like it. The local market largely missed the nation’s first craft-beer boom, when the national market doubled in size from 500 craft breweries in 1994 to 1,000 in 1996. Back then, Indy only had a few neighborhood brew pubs, such as the Broad Ripple Brew Pub.

Everything changed in 2009. Sun King brewers Clay Robinson and Dave Colt had honed their beer-making skills at Ram Restaurant and Brewery, a national chain with local locations.

Sun King’s beers were a hit with consumers, but the company also focused on blitzing the market with a steady stream of colorful branding, clever slogans, promotions, sponsorships, special events and business partnerships.

“While good beer is important,” Robinson said, “I think good marketing goes hand in hand with it and has been a large part of our success.”

Now producing 15,000 barrels of beer annually, Sun King has become the largest brewer in the city and second-largest in the state. It has 47 full-time employees and 50 part-time workers in a large complex at College Avenue and Ohio Street, at a time when many breweries operate with only a handful of employees.

“We were a really whole new animal in this package, production brewery world,” Robinson said. “It’s a much more crowded marketplace now.

Flat 12 Bierwerks, Fountain Square Brewery and Triton Brewing here joined Sun King as the largest brewers in the city, distributing beer far and wide in addition to selling locally. In all, 23 breweries operate in the metro area and nearly 80 are operating in the state. By year’s end, nearly three dozen breweries could be operating in the metro area and more than 100 in the state.

Triton brewmaster Jon Lang said following in Sun King’s footsteps was easy. Sun King had just proven Indy beer drinkers had a thirst for good craft beer. Drinkers were open to trying new styles and brands.

But new breweries, Lang believes, could have more trouble finding the right niche, as they compete for shelf space, tap space and customers for bar stools.

“Sun King plowed the way and hopping behind them was simple,” Lang said. “Now, you’ve got all these other boats making waves to try to keep up.”

Rob Mathews, assistant director at the Ball State Entrepreneurship Center, said there still is some room for craft beer-making, despite the crowded market.

“It all starts with quality, no matter what their go-to market strategy is,” he said. “And they probably won’t all make it, truthfully.”

Bill Jimerson, owner of market watcher Indy Beer Talks, said Indy drinkers have been patient as startup brewers find and refine successful recipes for beer. But as more brands enter the market, he thinks new brewers will have a limited amount of time to prove they can make quality beer, consistently.

“You’ve got to show progress,” Jimerson said. “If you’re brewing for six months and there’s no improvement, people are going to see that.”

Troubled waters

Indiana has shown some signs of troubled waters in the suds biz.

The Alcatraz Brewing Co., which had been based in Orange County, Calif., failed to make a go at it as a national brewer. The Indy location closed in 2011.

A few local breweries have closed throughout the state, including Bee Creek Brewery in Brazil, Wilbur Brewing in Martinsville and Four Horsemen in South Bend. But other national craft brewers, Ram, Rock Bottom, and Granite City, still have metro-area locations.

In the months before closing, former Four Horsemen owner Ben Roule said he and his partners began to wonder how long it would take to see a return on their investment. He had hoped to be self-sufficient by the third year in operation, but after two years, that appeared to be a long shot.

They pulled the plug in November after “closely watching the market and the number of new brewery openings and tons of new brands coming to market,” Roule said.

“I hate to say it, but the over-saturation of the craft category began over a year ago in Indiana, and this is only going to continue to get worse,” Roule said. “There simply is not enough taps, shelf and cooler space to support every brewery looking to sell beer outside of there respective pubs/breweries.”

Room for growth

But the new brewers say the market has room for new beers.

Mike DeWeese, a former partner at Triton, is opening Tow Yard Brewing with new partners in Downtown Indianapolis in February. He wants to go big — a full production brewery with a brew pub.

“A lot of people ask me if the craft beer industry is getting saturated,” he said. “But compared to nationally, we are not even scratching the surface yet.”

Andy Meyer will open TwoDEEP Brewing in May on Capital Avenue along the Cultural Trail, and he plans to distribute kegs and cans. He has enough accounts for tap space to feel comfortable, but adding new accounts has been a struggle.

“The only concern we have is the continual battle for tap space out there,” he said, “but the upside is that restaurants that didn’t used to go for craft taps are changing their minds.”

Indiana is in its infancy compared to many craft-beer states. The 16th largest state by population with 6.5 million people, Indiana ranks only 22nd in the number of breweries per person.

Indiana lags leading craft-beer states out West, such as California, Oregon and Colorado, but it’s also fallen behind neighboring states. The craft beer industry had an economic impact of $609.2 million in 2012 in Indiana, according to a new study by The Brewers Association, but the economic impact of craft-brewing industries in Michigan, Illinois and Ohio all topped $1 billion.

Indiana brewers who believe there is room for growth point to cities such as Grand Rapids, Mich., which has about double the number of breweries as the Indy region in a metro area — with about half the population.

Scott Graham, executive director of the Michigan Brewers’ Guild, said market saturation is a popular topic in Michigan, too. But he said the breweries that have closed seem to be the ones unprepared to operate a business. To succeed, he said business plans need to be more extensive than “a homebrewer with a dream.”

Trying to stand out

Many of the brewers planning to open this year are targeting niches in the marketplace — either by location, by involving customers in the beer-making process or by mixing craft beer with another product.

Flix Brewhouse, based in Round Rock, Texas, will open a craft brewery in a first-run movie theater this fall at the former Hobby Lobby space at the Merchants’ Square Shopping Center in Carmel.

Jason Wuerfel will open Book & Brews a nanobrewery — known for making small batches of beer — in the back of a used-book store in February on the Far Northside. He’ll have live music and food, and, of course, places to sit and read.

Wabash Brewing, which will open in the second quarter on the Northwestside, will allow customers to design, purchase and take home small batches of beer. Cartel Brewing, which will open in June in Plainfield, plans to set aside one tank to allow the customers to design one house beer per month — chosen by consensus through a survey.

“Breweries are popping up around every corner,” said Cartel brewer Ruari Crabbe. “Just to separate ourselves, we’ll have a tank set aside for customers. They can design a beer from beginning to end.”

Breweries that also can market themselves as neighborhood destinations will be the safest bet for success, market watchers say.

Many of the dozen new brewers are targeting locations that seem underserved — town centers in Bargersville, McCordsville, Greenfield, and locations in Indianapolis, such as the Northwestside and near Downtown’s Cultural Trail.

Dan Noah is opening Wooden Bear Brewing in Downtown Greenfield — the only brewery in Hancock County. The closest brewery, Black Acre, is 30 miles away in Irvington on Indianapolis’ Eastside.

“If you could have started up a year or two ago,” Noah said, “it would have been the perfect time. It does seem like everyone is starting up now. But I think, for us, we’re the only one out in Hancock County, and that is an advantage for us.”

Castner, the former Ram brewer, thinks he’s found the right spot on the south side of town in Greenwood. He’ll open Mashcraft this summer, and he’s looking for ways to market it in his local community.

“We looked at the market, and we really liked the idea of being a neighborhood brewery,” Castner said, “when we looked at where the growth was going to happen.”

That’s what the new brewers are hoping to find — the right niche in an increasingly crowded market.

Call Star reporter Chris Sikich at (317) 444-6036. Follow him at Twitter.com/ChrisSikich.

Brewing boom

Twelve breweries plan to open in the metro area this year.

–Bent Rail Brewing, neighborhood and production brewery, 5301 Winthrop Ave.

–Book & Brews, nanobrewery in a used-book store, 9402 Uptown Drive, Suite 1400.

–Cartel Brewing, neighborhood and production brewery, 5778 U.S. 40, Plainfield.

–Flix Brewhouse, theater/craft brewery, Merchants’ Square, Carmel.

—Grand Junction Brewing, neighborhood brewery, will open in March, 110 S. Union St., Westfield.

–Mashcraft Brewing, neighborhood and production brewery, 1140 N. Ind. 135, Greenwood.

—Outliers Brewing, neighborhood and production brewery, 534 E. North St., Indianapolis, and a restaurant, 608 N. Park St.

—Scarlet Lane Brewing, neighborhood and production brewery, 7724 Depot St., McCordsville.

—Taxman Brewing, neighborhood and production brewery, S. Baldwin St., Bargersville.

–Tow Yard Brewing, brewpub and production brewery, 501 S. Madison St.

–TwoDEEP Brewing, neighborhood and production brewery, 715 N. Capitol Ave.

–Wabash Brewing, neighborhood brewery, still searching for a location on Indianapolis’ Northwestside.

–Wooden Bear Brewing, neighborhood brewery, 21 North St., Greenfield.