2beerguys beer blog

Update on Starr Hill Brewery

I published this initial story in December: “Starr Hill to expand across U.S. with help of Anheuser-Busch”

Here is a follow up …

Sean
2Beerguys.com

Drink Craft Beer, You’ve Earned It!!

Starr shines bright as brewery expansion continues
By The Daily Progress Staff

Six months after striking a distribution deal with Anheuser-Busch, Crozet-based Starr Hill Brewery says its beer can be bought across Virginia, and plans for more Southeast distribution are in the works.

Company founder and brewmaster Mark Thompson said he sees opportunity to build even more national business by focusing on “music” destinations such as Austin, Texas, and Nashville, Tenn.

Starr Hill moved its brewing operations to the former ConAgra Frozen Foods plant in Crozet in 2005, a decision Thompson continues to rave about. Since then, the brewery has opened for public tastings, music and tours, and could have more events soon.

Thompson provided the details and more in an e-mail Q&A with The Daily Progress recently. An edited version follows:

Q. How is the partnership with Anheuser-Busch going?

A. The partnership with A-B has been going extremely well. To have a world class brewer as a business partner helps Starr Hill in every aspect of our business. In addition, A-B’s distribution network is one of the best in the world. The craft brewed beers, such as Starr Hill, have been driving the growth within the total beer industry for the last several years. The beer industry as a whole has been up by 1 or 2 percent while the craft segment has been growing by double digits. For the first time ever, the growth within the craft segment is the driving factor for the beer category as a whole.

This is significant for several reasons. First, the partnership with A-B is truly that, a partnership. A-B wants Starr Hill as much as Starr Hill wants A-B. Starr Hill provides the craft-brewed products that are driving the growth within the beer category and A-B provides the expertise of distribution that allows our brewery to fulfill its mission of sharing the gift of great beer with the world.

The second part of the partnership that helps grow our business centers is the procurement of raw materials. Bottom line is that Starr Hill now has a big brother looking out for our success in these times of global inflation.

Q. Where is Starr Hill being sold?

A. Starr Hill is currently available throughout the entire state of Virginia and the Outer Banks of North Carolina. We are going to roll out into the rest of the state of North Carolina during the next several months. In addition, we are beginning to set up Washington, D.C., to receive [Starr Hill] within the next couple of months. Our plan calls for us to introduce Starr Hill to Maryland by the end of the year.

Our 2009 plans are still not set in stone, but will probably include Tennessee, West Virginia and South Carolina.

In addition, we are exploring the idea of test marketing Starr Hill in several different “music” sites such as Austin, Texas, Cleveland, and Nashville, Tenn. Our niche has always been centered around music. Music and Starr Hill beer is what our brewery is all about.

Q. How has the company been performing? The cost of everything is going up.

A. Sales of Starr Hill are up by over 70 percent, and we will easily hit our objective of doubling our business this year. There are very few things in this world that cross all religions, races, colors and creeds like beer. Every culture on this planet has a fermented cereal grain beverage that they gather around to celebrate their culture’s rites of passage. Starr Hill is here to fulfill the mission of the celebration of life.

Starr Hill’s partnership with A-B provides our brewery a big brother who is looking out for us when it comes time to buying the raw materials for the brewery. It is no secret that there is a worldwide shortage of grains and, even more important, hops, on the world market. Gone are the days that craft brewers could simply buy raw materials from the surplus on the world market. The prices of barley and hops have doubled within the last couple of years. This partnership allows Starr Hill to better compete in a competitive market.

Year to date, the craft beer segment continues to experience strong double-digit growth nationally. This sales growth suggests that the consumer is willing to pay a higher price for our product. Starr Hill is no exception to this national trend. Our sales year-to-date are double what they were last year.

Q. Any new beers or products in the pipeline?

A. Starr Hill has introduced two new packages in the last couple of months with two more to follow shortly. Our first new product is the introduction of our seasonal beers in six-packs. Up until this year Starr Hill’s four seasonal beers have been draft only and required the consumer to sample them at a restaurant or at the brewery.

June 15 of this year we released The Love, an unfiltered wheat beer, in six-packs. Starr Hill has been producing The Love in draft for the last five years, so there is a lot of awareness about this seasonal beer. The Love will be available until the release of our next seasonal beer or until the 1,500 cases are sold. The next seasonal beer is Festie, an Oktoberfest lager beer.

The second new product that we released is called Box Set. Box Set is a sampler 12-pack that includes three bottles of Jomo Lager, Amber Ale, The Love and Pale Ale. This is our summer sampler pack and will be available through August or until the 2,500 cases are sold out.

We will do a winter sampler 12-pack that will come out around Thanksgiving. The winter sampler will have Jomo Lager, Amber Ale, Dark Starr Stout and The Gift (our winter seasonal).

The final new product from Starr Hill is 12-packs of our two most popular beers, Jomo Lager and Amber Ale.

Q. Any plans for a new restaurant?

A. Starr Hill currently operates a tasting room that is open to the public every Saturday from noon to 5 p.m. with tours of the plant at 1 and 3 p.m. The tastings are free and individuals can purchase cases and kegs for take out. We have experienced success with the Saturday tastings for several reasons. First, there is a large tourist trade that comes to Virginia to tour the wineries, and having a brewery on the itinerary makes a lot of sense. Second, Blue Mountain Brewery in Nelson County and the soon to open Devils Backbone Brewery near Wintergreen will give our region a real beer trail for the first time ever.

With the success of our Saturday tastings, the existing wineries, the new breweries, we have seriously considered doing more retail than we currently do. We know that there is a lot of interest in the retail side of our business and that having people out to the brewery to touch and feel the brand provides real value to our mission. We struggle with the fact that we are first and foremost a manufacturer and that retail is a side business.

Another idea that we have been kicking around is to do more special events at the brewery. We are in the process of looking into doing selected special events at the brewery that center around music and beer. At the end of the day when someone thinks of Starr Hill, we want them to think of beer and music. The thought would be to do an event like an Oktoberfest with a regional band.

Q. Still happy about moving to Crozet?

A. I am oftentimes quoted as saying, “They do not build buildings like ConAgra anymore.” I truly believe that Starr Hill is blessed to be in Crozet for numerous reasons. I could not have ever built a building like ConAgra to house the Starr Hill Brewery in.

The similarities to a frozen food factory and brewery are huge for our business. The brewery has more water infrastructure than any other building that I have ever seen. I have been told that the Beaver Creek reservoir (where we get all of our water) was built primarily to service the ConAgra building. It takes five to six gallons of water to make a gallon of beer, so one of our biggest concerns to future growth is having enough water.

In addition to the water coming into the building, the infrastructure for the water going out is just as robust. The sewer system for ConAgra is vast. The building has its own water treatment facility, which is no longer in operation but it gives you an idea of how much water in and water out this building had at one time.

Continuing with why ConAgra is the perfect home for Starr Hill are several other factors. One is that there are two existing steam boilers on site. All of our beer is cooked with steam and the existing infrastructure for steam is immense. Another asset that ConAgra provides is the amount of freezer space. Being an old frozen foods factory, there are thousands of square feet of freezer space that is ideally suited to storing beer. If I were to build a new cooler, it would have three to four inches of insulation, where the old freezers at ConAgra have 12 inches.

Some of the smaller factors are that there are existing drains in the floors, tiled ceilings and docks already in place.

Q. What’s next for Starr Hill?

A. Starr Hill is in the process of bringing in an additional 4,000 barrels of fermentation capacity through the acquisition of more fomenters. In addition, we are in the final phases of creating our new fermentation cellar. We have been working on the new space for the last four months. We have converted the old engine room into our new fermentation cellar.

Our three- to five-year plan still has Starr Hill being available throughout the East and our 10-year plan calls for the brand to be available nationwide. We are very grateful to the support that we have received from Charlottesville and Crozet. We will always consider this our home.