4 by 4 Brewing has plans to expand by December with an 11,000-square-foot brewing operation and taproom in the Fremont Hills area. Your production volume in 2021 was 1,600 barrels, and this new facility increases capacity by 550%. When do you anticipate getting to that volume?
It's definitely a multiyear process. We went ahead and just purchased and built out the brewery for what we want to become. By doing it in a package deal, it's just so much more affordable than piecing it over time. The idea is to hopefully scale that over a three- to five-year period. We're going to have a pretty quick idea of what both taprooms will be after about the first year. Then the difference of that would be looked to be made up in distribution as we start to grow our footprint. We feel that if we get into a statewide distribution platform, along with our two taprooms, that would be equivalent to around 9,000-10,000 barrels.
In 2020 you invested $30,000 in canning production and started producing hard seltzer. How did that pay off?
It was great. We were able to go to market with seven beer SKUs and three seltzer SKUs in 2021. We grew from about 25 stores that our products were located in up to about 53 stores. The investment up front was quickly taken advantage of by growing the footprint of cans and just giving us another layer of revenue that we didn’t necessarily have before COVID. We’re up about 15% from 2019. I haven’t finished up the books, but we’re going to be somewhere around ($1.2 million) in 2021.
The local craft beer scene also is expanding. Wire Road Brewery opened this month in Battlefield, and Banter Brewing recently opened in south Springfield. How would you describe the landscape?
It’s starting to get regionally on the map as a beer destination. There’s a lot of buzz simply for the fact that you can come and get 13 different breweries in one town. Everybody’s beer is just getting better and better. As owners, we all meet once a month with our Springfield Craft Beer Collective. We make a conscious effort to be differentiated and have a good mix of beers, have a good mixing of concepts. The neighborhood concept thing is what really drives it. We’ve all made a conscious effort to try and get more people into craft beer, whether that’s through seltzers or light beers. We’re seeing our market grow.
The Independent Brewers Association called this time one of the most challenging of the past two years, with supply chain and workforce issues. Craft breweries make up like 8% of the market share, but they employ half the industry. What impact are you seeing?
Our biggest struggle isn’t so much getting products; it’s getting them here. A lot of our products are sourced from the Pacific Northwest; whether it’s hops or organic fruits, yeast, we’re really struggling to get shipments. I can’t even tell you how much cost is up on shipping from what it was a year or two ago. Typically, we would order our organic fruit and get it within three days so we can time our batches. That may get held up for three, four, five weeks now in somewhere land. It totally kills our production. The grain costs are up a lot because there was a drought and they didn’t get the yields that they hoped for. On the workforce side, we’ve actually been very fortunate. We have pretty long tenure, very little turnover. People want to work in this environment. Everybody got hit hard with wage increases this year. We really had to bring our current staff up to a higher level. We’ve got 13 [employees], and with the new place, we’ll probably be around 30, 35. For full-time people, we’ve implemented health insurance that we worked through with the state chamber plans. We have flexible scheduling, one week paid vacation. We’re trying to be a little different and give them a reason to stay. In this industry, nobody gets real rich, but it’s a fun place to work and they’ve got flexibility and freedom. We average anywhere around $25 to $30 an hour, their total with our hourly pay plus their tips. In the back of house, the brew process, the seller process, you’re going to be anywhere from $12 to $20 an hour.
Are those increased costs being passed along to consumers?
We’re all having to pass some increase. We’re definitely nowhere near what we were making in 2018 and 2019. Profit margins are way down. We have taken some increases in the taprooms, but I do think we were at the market standard or below. We’ve gotten more in line with the rest of the taprooms in town. In the market, it’s really hard. As small craft breweries, we’re already on the high end of price. Your typical drinkers are just shopping, and they’re seeing the prices of not only Budweiser, Miller, Coors, but they’re also seeing the prices of large craft breweries that have the scale, so they can come in at a lot lower price. There’s not room for us to really increase the retail price because you’re already kind of priced out, in a sense.
Derek Shimeall can be reached at firstname.lastname@example.org.
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