By Eric Peterson | Jun 07, 2016
The sun never sets on Colorado's craft beer industry.
The Tommyknocker Craft Beer Bar is open for business in Helsinki, Finland. You'll find Crazy Mountain Brewing's products in Sweden, Norway, and the U.K., not to mention Malaysia and South Korea. Denver Beer Co. is exporting to Japan. And Eddyline Brewing opened a brewpub in New Zealand.
It all adds up to an ever-growing global footprint for Colorado craft beer.
But it's still a nascent movement. "Right now, I don't think this is driving growth," says Steve Kurowski, marketing director for the Colorado Brewers Guild. "It's laying the foundation for future sales and attention in these countries."
Kurowski says that there's a perception problem. "A lot of Europeans and people all over the world think American beer is just Budweiser, Coors, and Miller," he explains.
The Colorado Brewers Guild and the Colorado Tourism Office have worked to dispel that notion with media events showcasing Colorado food and beer in France, Germany, Canada, and Iceland. "I've had follow-ups with media on every single one," says Kurowski. "It's guerrilla marketing at its finest with craft beer. That doesn't change whether you're halfway across the world or in our backyard."
While most of the growth story for Colorado craft beer's international exports is supported by anecdotal evidence, WISERTrade data showed a 38.3 percent uptick for Colorado's beverage exports in 2015, according to the Colorado Office of Economic Development and International Trade. Nationally, craft beer exports have grown from 14,000 barrels in 2003 to 383,000 barrels in 2014. That's an average annual growth rate north of 35 percent during a notably tough economic decade, handily outpacing craft beer's heady rate of growth in the same period.
Mark Snyder, export development program manager at the Brewers Association in Boulder, says Canada, Sweden, and the U.K. are the top three markets for American craft beer.
Snyder points out the fact that American craft brewers were largely inspired by European traditions. "They went to the brewing schools in Europe and came back here and started breweries," he says.
As of 2016, it's come full circle. "Fast-forward to 2014: German brewers and English brewers are coming here to go to school now or do internships. We are the leaders in the world."
From the Upper Arkansas to Down Under
Mic and Molley Heynekamp launched Eddyline Brewing in Buena Vista in 2009.
The couple vacationed in New Zealand the next year. "We loved it," says Mic. They returned in 2011 and 2012, and started mixing the idea of business and pleasure.
They took the plunge and relocated from Buena Vista to New Zealand to open a brewpub in Richmond, a mountain-biking hub, earlier this year.
"We felt there was a ton of opportunity," says Mic. "It was kind of lacking in brewpubs and craft beer. There were no big IPAs."
The Heynekamps wrote a business plan in 2013, garnered government approval in 2014, signed a lease in 2015, and opened the brewpub in February. Longtime business partner Brian England took over running the Buena Vista production brewery as the couple started with a pizzeria and seven-barrel brewing operation in New Zealand. Hops are shipped from the U.S. to maintain recipes, and Mic plans to reciprocate and start sending some New Zealand hops to Colorado soon, as the Eddyline brewpub is right is the center country's hop industry. "Both locations will really benefit from each other," he says.
Mic describes a "basecamp philosophy" for outdoorsy locals and tourists. "It's kind of a cool model," he says. "You're far away from home but you still have your IPA."
"It's been really easy," says Mic of the experience. "New Zealand has been an incredibly easy country to set up a business in. . . . That's how it should be." He says he's looking at opening a larger production facility in New Zealand by 2018.
"New Zealand's like Colorado was in the mid-'90s in terms of craft beer," he says. "There's a ton of potential."
And plenty of Colorado craft breweries are busily converting that potential into sales.
Ska Brewing Company co-founder Dave Thibodeau says the Durango-based brewery's exports grew 46 percent in 2015 and now account for about 6.5 percent of total wholesale sales. The primary market is Sweden, and Ska is also available in the U.K. and Norway.
It began when Stockholm-based Great Brands AB approached Ska about bringing Modus Hoperandi IPA to Sweden in 2010. The next year, Ska won a silver medal for Modus at the annual Stockholm Beer & Whisky Festival and Great Brands started selling it through the country's government-owned monopoly of liquor stores. "By 2012, we were in 400 stores," says Thibodeau. "On average, we send over one container every month."
Modus Hoperandi is now a year-round fixture at Swedish liquor stores, and Ska has also shipped a number of seasonal beers. "We were fortunate," says Thibodeau. "We're not in that many states, but we thought it might not be a bad idea in case exporting is the next big thing."
It might just be exactly that: Ska has garnered a following amongst the Swedes. After recently shipment of Decadent Imperial IPA, Thibodeau says, "We got pictures of people lined up. Within an hour, they were all sold out."
But it's not quite as simple as it sounds. Systembolaget -- Sweden's government-owned monopoly -- puts out a tender for a certain kind of beer and a certain kind of packaging, breweries apply for the slot, and a product is selected after blind taste tests.
A growing appetite for international
Most of Colorado's largest craft breweries have dipped their toes into a few foreign markets. Great Brands' portfolio in Sweden also includes beers from Great Divide Brewing, Oskar Blues Brewery, Left Hand Brewing Company, and Avery Brewing Company, and New Belgium Brewing Company reports "minimal" exports to Canada, Sweden, Japan, and South Korea.
Great Divide founder Brian Dunn says Sweden is a top 10 market for the Denver brewery that gravitates to big beers like Yeti Imperial Stout and Hibernation English Style Old Ale. "I liken it to the Northwest," says Dunn. "The weather's shitty and people stay inside and drink."
Oskar Blues saw exports to Sweden, Canada and the U.K. grow 8.8 percent in 2015 to 1,970 barrels, which Marketing Director Chad Melis says is ”comparable to a state like Kansas or Missouri." The Longmont brewery also recently announced expansion into Australia.
Dustin Lemoine, Avery's national sales director, says the brewery exports to Sweden and Japan, but there's a lot of interest from other countries. "I get one a day, or four a week -- requests from distributors around the globe," he says.
Typically, he doesn't respond to these requests. He's got his hands full with the U.S., let alone Sweden and Japan. But those two markets are notably passionate about craft beer.
Case in point: Avery shipped 84 cases of Tweak, its seasonal barrel-aged stout, to Sweden and it sold out in a day. "I was told it was the most expensive bottle they ever sold," says Lemoine.
And he says he was initially "reluctant" to work with Avery's Japanese distributor, AQ Bevolution, but changed his mind when the company's founder showed up to visit the Boulder brewery with a dozen sake brewers. "They were very excited about American craft beer," says Lemoine. The founder of Thrashzone nanobrewery in Yokohama later interned at Avery.
"Sweden and Japan were fairly easy, but there's a lot of concern about international law," says Lemoine. Without good legal counsel, "You could find yourself in hot water."
"The root question is quality," he adds. "How do you maintain quality around the planet?"
Of the 30 beers Avery produced in 2015, "There's five to 10 I wouldn't want to send around the world unless I knew the chain of custody," says Lemoine, noting that hoppy beers like Avery's Maharaja Imperial IPA require cold storage most of all. "Managing a distribution network domestically, that's tough enough," he says. "I don't know how to do it across an ocean or two."
It follows that Lemoine is focused on Colorado and the U.S. above all, but he says Mexico is on his short list if Avery expands into another market. "There's a lot of craft beer opportunity down there," he says. "We're definitely exploring it."
Denver Beer Co. started exporting its beers to Japan in 2015 in partnership with Nagano Trading Company. "As we opened our production facility, we realized we had a little extra capacity," says co-founder Charlie Berger. A business class at CU Denver "spent a whole year researching international markets for Denver Beer Co.," he adds, and the brewery worked with the Denver Office of Economic Development to further hone the strategy.
Then Berger and co-founder Patrick Crawford joined Denver Mayor Michael Hancock on a trade delegation to Japan in late 2015. "The trip was an amazing learning experience about the American craft beer industry abroad," says Berger.
And what did they learn? "We learned a lot about what the consumer is looking for," answers Berger, noting that Princess Yum Yum Raspberry Kolsch was a big hit in Tokyo. "They are really educated about what good beer tastes like."
Exports now account for "a percentage point or two" of sales, says Berger, but the strategy is to grow that number to about 10 percent. "We have a big appetite for international," he says. "We have been vetting some other international markets, but we haven't pulled the trigger on any others yet."
"Let's be honest," says Berger, echoing Lemoine. "Our primary market is our backyard. We love this city and our state."
A serious sales driver
Captol Invest, a Finnish importer, licensed the Tommyknocker Brewery brand and opened a craft beer bar bearing the Idaho Springs brewery's helmeted imp in Helsinki in 2015.
"It's going well," says Steve Indrehus, Tommyknocker's director of brewery operations. "They're expanding and we're in the process of getting into liquor stores. They're looking at putting a bigger version of Tommyknocker in and they're also looking at putting craft beer bars onto cruise ships."
"It's small," says Indrehus, forecasting growth once they have retail distribution. "We're doing a container every three months. Once we have the liquor stores, we hopefully will be doing a container a month."
"I think it's a serious sales driver," Indrehus adds. The goal is to ride the ever-growing craft-beer wave in Finland, but keep the brewery focused on Colorado for a "healthy balance," says Indrehus. "Our goal is to sell most of our beer locally and develop out-of-state markets."
Crazy Mountain Brewery is probably the Colorado brewery most aggressively developing its international business. With production forecast to jump from 17,000 barrels in 2015 to more than 40,000 in 2016, CEO and Brewmaster Kevin Selvy says about 25 percent of volume goes overseas. Scandinavia is the company's third-largest market after Colorado and Illinois, and Crazy Mountain is also currently available in Germany, Spain, Ireland, Malaysia, South Korea, and Guam. Next up: New Zealand, Argentina, Chile, and Brazil.
The brewery's first shipment went to Sweden in early 2013. "One pallet turned into four turned into 20 within a quarter," says Selvy. "Now we're sending over two 40-yard containers a month."
On top of its success in Scandinavia, Crazy Mountain recently launched an importing company in the U.K. with former employees of MillerCoors and is already shipping over one container a week. "It's a major market," says Selvy. "London's probably the most important beer market in the entire world."
The strategy plays off of the U.K.'s loose, non-exclusive distribution laws. "We sell the beers to ourselves in the U.K. and we self-distribute," he explains. "We can sell to whoever we want."
While it continues to rely on Winemarket Nordic AB in Scandinavia, Crazy Mountain can use its U.K. arm to supply distributors in Germany, Spain, and other countries in Europe. The result of selling to diverse accounts is a "blended margin," says Selvy. "It's a more profitable way to sell beer over there and we can control our brand's growth.
Margins can often be higher in Europe and other foreign markets than they are in the U.S. "Sometimes you have to give a little bit to get the market launched, but in general you work on better margins with beer you sell abroad," explains Selvy. "It's easier to sell beer in France than it is in Kansas. It's one of the oddities of the industry."
Most of Crazy Mountain's international shipments leave from Houston and land in Europe about six weeks later. "The logistics are challenging," says Selvy. "It adds a whole new layer of complexity to our network."
"We learned the hard way on a few things. We've learned how vital cold transport is, even though it's super expensive." That lesson came courtesy the strike at the Port of Oakland in 2015. A container lost power and 1,600 kegs were warm for several weeks. "The beer was totally destroyed," says Selvy.
But that wasn't the end of the story: It still ended up on draft at bars in Europe. "A lot of those accounts didn't want to carry our beer ever again," he says.
That's just one lesson of many. "Our thinking has evolved," says Selvy. "Our objective is to be a global brand in the craft beer industry." In countries where craft beer is emerging, he notes, "You could be the Sierra Nevada of that market."
But it's not all about business, he adds. "At the end of the day, it's fun. You work beer festivals around the world and get treated like a rock star."