February 25, 2008
Strange brew | Most New England brewers focus on English-style ales, but Allagash Brewing Co. founder Rob Tod took a gamble on Belgian-style beers. Now, 14 years later, that bet is starting to pay off.
By Mike Miliard
Brewing beer was something that Allagash Brewing Co. founder and brewmaster Rob Tod says he "completely stumbled into." Initially, his intention was to study rocks for a living.
But not long after arriving in Vermont to attend grad school for geology, Tod got a part-time job washing kegs at Otter Creek Brewing in Middlebury. "For free beer, I took the job," he says. "And after two days I was in love with it." He soaked it all in, learning as much as he could about the art and science of brewing. He came to work on weekends without clocking in. He enrolled in a brewing school laboratory course. He says he "read for hours every night ˆ everything I could about brewing."
And, after a year or so, he felt sufficiently well-prepared to strike out on his own. In the summer of 1994, the Carlisle, Mass., native moved to Maine. "I wanted to live here. It's a great area," he says. "And there's a really good beer culture here. I thought people would be pretty open to a new beer style like this."
The "this" Tod is referring to is the Belgian ale, a complex, aromatic, intricate and often potent style of beer that encompasses a near limitless array of permutations. That he chose, in founding Allagash, to specialize exclusively on Belgian styles immediately set him apart from nearly every other Maine craft-brewer, whose beers all trend toward the well-rounded, somewhat staid profile of classic English ales.
Besides having deep affinity for the joyous complexities of the Belgian style, Tod says, he "just wanted to do something different. What's the point of doing something if it's already been done? We just want to do our own thing and be unique. And I've also always liked the challenge of being one of the only people doing it."
It hasn't always been easy. It's not hard to forget these days that the craft brew craze is still a relatively recent phenomenon. And when Allagash rolled out its first barrels in 1994, few people could tell a Dubbel from a Tripel. "It was tough the first 10 years," says Tod. "There were a lot of draught lines that we just had to fight for because people just weren't drinking that kind of beer. Now, a lot of people are seeking the beer out."
And how. Like a cork propelled skyward from one of its 750-milliliter bottles, Allagash's popularity has exploded in recent years. In 1994, the brewery churned out just 120 barrels. In 2007, that number was nearly 10,000. Allagash has grown its production volume by 40% each of the last three years, and the company has had to scramble to meet demand.
In the fall of 2006, the lot next to its old brewery on Industrial Way in Portland was just a thicket of trees. Barely six months later the company had erected a sprawling, state-of-the-art, 13,000-square-foot facility, where Tod's smallish staff of 13 now brew twice a day. Already, after only nine months in the new space, Tod is thinking of expanding again ˆ "way earlier than we thought we would," he says.
But even as Allagash is enjoying its biggest success to date, market forces are conspiring to put a damper on things. The prices of raw materials like barley and, especially, hops, have skyrocketed. Fuel costs are steadily rising, making distribution that much more costly. Even glass for bottles and corrugated cardboard for packaging have leapt in price. But Tod is convinced Allagash will weather the storm ˆ even if it means a downtick in profits. "One thing we've made the choice not to do is change anything about the beer," he says. "It's an expensive decision. But we don't want the beer to change."
Bubbling over
When Tod launched Allagash 14 years ago, he had no employees. So he made the decision to keep things simple. Initially, he brewed just one beer, Allagash's White Ale. And he sold it only in the Portland market.
His round-the-clock devotion to that one style paid off in spades: He learned to do it, and do it well. The White is a model of the citrusy, gently spicy Witbier style (so called because of its use of wheat in addition to barley malt). "Whenever I host a beer tasting, and they want me to focus on just United States craft brewers, I always pick Allagash White as my example of a Belgian Wit," says Gregg Glaser, editor-in-chief of Yankee Brew News. "I even like it better than the import Hoegaarden."
Still, Glaser says it was a risk for Tod to choose to pursue the Belgian-style ales rather than the tried-and-true English-style ales that most New England brewers sell. "For Rob to go out and do something different like this was a bold move," he says. "I give him a lot of credit for it."
But while today it may seem like a stroke of marketing genius to differentiate himself from the rest of the Maine brewing pack, Tod remembers things it differently. "A lot of people say, 'That was a smart business decision.' But it really wasn't at the time," he says. "There wasn't a lot of interest in the beer. We didn't have a lot of accounts. But we really did it because it was something we wanted to do, and we had a passion for it."
He stuck with it, brewing constantly. And when he wasn't brewing, he was on the road, up and down the eastern seaboard and beyond, hosting beer dinners and winning over wholesalers. These days, Allagash is sold in 22 states, including nearly all of the East Coast, Ohio, Illinois, Texas, Colorado, California and Oregon.
Tod says the company's revenue was a trickle during the first 10 years or so. But while he's reluctant to disclose exact figures, Tod says revenue has climbed north of $2 million. While more revenue has allowed Tod to plow more capital into the business, he says it's also allowed the company to do "new and different things that we might not have been able to do three or four years ago." That's meant better equipment, like a custom-made koelschip for his forthcoming line of spontaneously fermented beers (for more on this, see "Cold storage," this page), and has also helped "improve consistency batch to batch."
Allagash has benefited not just from the resurgence in popularity of Belgian-style and other so-called "extreme" beers, but also from a sort of symbiotic relationship with its craft brew neighbors in Portland and beyond. Asked to describe the Maine brewing community, Tod is effusive. "We have a great relationship with other breweries in the state. I think you can be very cooperative and competitive. If Geary's needs some bungs for kegs, or if they need some hops, or if we need a bag of malt from them, everyone is really helpful and open and willing to share. We work with Shipyard, Geary's, Casco Bay, Stone Coast, Sebago ˆ everybody gets along really well. It's pretty cool. You probably don't see this much cooperation in many industries."
Under pressure
It also helps, says Glaser, that Maine beers all "have good customer loyalty within the state of Maine."
Allagash will need all the customer loyalty it can muster as it weathers the rough seas that are already lashing the brewing industry. From sky-high hops prices to rising costs for bottles and packaging, Glaser says the industry is facing a "perfect storm." Says Tod: "A lot of people have asked me lately, 'Is that really that big a deal?' It's a huge deal."
Prices for certain types of hops have increase by as much as 1,000% over the past year or so. For years prior, there had been a slight surplus of hops, which drove prices down. As they fell, it became more appealing for farmers to grow other crops. (Especially as the government offered subsidies on crops that could be used for ethanol fuel.) Now crops are down by 10%-15%. That's from an already paltry 113,000 acres devoted to hops worldwide.
The weak dollar has been an issue. So has climate change. Floods in England. Hail storms in Germany. "All these things are happening at once and have sent hop prices through the roof," says Tod. "It's all gone up: Glass is up 50% in the last two years. Corrugated cardboard. Barley and wheat have gone way up [between 40%-80%]. It's kind of scary."
"This will cut into profits for everybody," says Peter V.K. Reid, editor of beer industry journal Modern Brewing Age. "Some larger players are able to mitigate the impact by locking in prices with suppliers, but everyone is hit by this, from the smallest microbrewer to Anheuser-Busch."
But for Allagash, all things considered, this might be happening at the best possible time. The company is in the process of installing a malt silo that will allow it to purchase brewing materials in bulk. "Instead of having to buy 50-pound bags, we can buy 44,000 bags at a time. That will help environmentally, will help with efficiency, and will help offset some of these price increases," says Tod.
To offset rising prices, Allagash has raised prices on its four-packs of beer by around 5% this year. Tod says that has helped, but that the company will still have to absorb much of those cost increases. "We should be raising our prices more," he says. "The pressure is coming from all angles now."
"There is little a brewery can do when the price of essential inputs goes up," says Victor Tremblay, an economics professor at Oregon State University, and an expert on the dollars and cents of brewing. "There are no substitutes for hops, malt, glass and fuel when making beer. This is a classic case where belt tightening, and possibly downsizing, will occur. It's a tough time for the industry."
Still, beer culture is shifting, and consumers are more open to trying new kinds of beer. "Things are moving in that direction right now," say Tod. "When I was younger, it was almost sort of déclassé to order beer in nice restaurants. But a lot of high-end restaurants now have five or six taps, or some cool Belgian imports. You're just starting to see the whole beer culture expanding even more."
Even as his industry faces more perils and pitfalls than it has in years, Tod is sure that the beers Allagash makes will continue to be popular ˆ and he plans to keep churning out new and exciting brews that no one's even dreamed of yet. "I think these styles of beer will continue to gain momentum," he says. "It's hard to go back. Once people they try these beers, it's almost impossible for them to go back."
But not long after arriving in Vermont to attend grad school for geology, Tod got a part-time job washing kegs at Otter Creek Brewing in Middlebury. "For free beer, I took the job," he says. "And after two days I was in love with it." He soaked it all in, learning as much as he could about the art and science of brewing. He came to work on weekends without clocking in. He enrolled in a brewing school laboratory course. He says he "read for hours every night ˆ everything I could about brewing."
And, after a year or so, he felt sufficiently well-prepared to strike out on his own. In the summer of 1994, the Carlisle, Mass., native moved to Maine. "I wanted to live here. It's a great area," he says. "And there's a really good beer culture here. I thought people would be pretty open to a new beer style like this."
The "this" Tod is referring to is the Belgian ale, a complex, aromatic, intricate and often potent style of beer that encompasses a near limitless array of permutations. That he chose, in founding Allagash, to specialize exclusively on Belgian styles immediately set him apart from nearly every other Maine craft-brewer, whose beers all trend toward the well-rounded, somewhat staid profile of classic English ales.
Besides having deep affinity for the joyous complexities of the Belgian style, Tod says, he "just wanted to do something different. What's the point of doing something if it's already been done? We just want to do our own thing and be unique. And I've also always liked the challenge of being one of the only people doing it."
It hasn't always been easy. It's not hard to forget these days that the craft brew craze is still a relatively recent phenomenon. And when Allagash rolled out its first barrels in 1994, few people could tell a Dubbel from a Tripel. "It was tough the first 10 years," says Tod. "There were a lot of draught lines that we just had to fight for because people just weren't drinking that kind of beer. Now, a lot of people are seeking the beer out."
And how. Like a cork propelled skyward from one of its 750-milliliter bottles, Allagash's popularity has exploded in recent years. In 1994, the brewery churned out just 120 barrels. In 2007, that number was nearly 10,000. Allagash has grown its production volume by 40% each of the last three years, and the company has had to scramble to meet demand.
In the fall of 2006, the lot next to its old brewery on Industrial Way in Portland was just a thicket of trees. Barely six months later the company had erected a sprawling, state-of-the-art, 13,000-square-foot facility, where Tod's smallish staff of 13 now brew twice a day. Already, after only nine months in the new space, Tod is thinking of expanding again ˆ "way earlier than we thought we would," he says.
But even as Allagash is enjoying its biggest success to date, market forces are conspiring to put a damper on things. The prices of raw materials like barley and, especially, hops, have skyrocketed. Fuel costs are steadily rising, making distribution that much more costly. Even glass for bottles and corrugated cardboard for packaging have leapt in price. But Tod is convinced Allagash will weather the storm ˆ even if it means a downtick in profits. "One thing we've made the choice not to do is change anything about the beer," he says. "It's an expensive decision. But we don't want the beer to change."
Bubbling over
When Tod launched Allagash 14 years ago, he had no employees. So he made the decision to keep things simple. Initially, he brewed just one beer, Allagash's White Ale. And he sold it only in the Portland market.
His round-the-clock devotion to that one style paid off in spades: He learned to do it, and do it well. The White is a model of the citrusy, gently spicy Witbier style (so called because of its use of wheat in addition to barley malt). "Whenever I host a beer tasting, and they want me to focus on just United States craft brewers, I always pick Allagash White as my example of a Belgian Wit," says Gregg Glaser, editor-in-chief of Yankee Brew News. "I even like it better than the import Hoegaarden."
Still, Glaser says it was a risk for Tod to choose to pursue the Belgian-style ales rather than the tried-and-true English-style ales that most New England brewers sell. "For Rob to go out and do something different like this was a bold move," he says. "I give him a lot of credit for it."
But while today it may seem like a stroke of marketing genius to differentiate himself from the rest of the Maine brewing pack, Tod remembers things it differently. "A lot of people say, 'That was a smart business decision.' But it really wasn't at the time," he says. "There wasn't a lot of interest in the beer. We didn't have a lot of accounts. But we really did it because it was something we wanted to do, and we had a passion for it."
He stuck with it, brewing constantly. And when he wasn't brewing, he was on the road, up and down the eastern seaboard and beyond, hosting beer dinners and winning over wholesalers. These days, Allagash is sold in 22 states, including nearly all of the East Coast, Ohio, Illinois, Texas, Colorado, California and Oregon.
Tod says the company's revenue was a trickle during the first 10 years or so. But while he's reluctant to disclose exact figures, Tod says revenue has climbed north of $2 million. While more revenue has allowed Tod to plow more capital into the business, he says it's also allowed the company to do "new and different things that we might not have been able to do three or four years ago." That's meant better equipment, like a custom-made koelschip for his forthcoming line of spontaneously fermented beers (for more on this, see "Cold storage," this page), and has also helped "improve consistency batch to batch."
Allagash has benefited not just from the resurgence in popularity of Belgian-style and other so-called "extreme" beers, but also from a sort of symbiotic relationship with its craft brew neighbors in Portland and beyond. Asked to describe the Maine brewing community, Tod is effusive. "We have a great relationship with other breweries in the state. I think you can be very cooperative and competitive. If Geary's needs some bungs for kegs, or if they need some hops, or if we need a bag of malt from them, everyone is really helpful and open and willing to share. We work with Shipyard, Geary's, Casco Bay, Stone Coast, Sebago ˆ everybody gets along really well. It's pretty cool. You probably don't see this much cooperation in many industries."
Under pressure
It also helps, says Glaser, that Maine beers all "have good customer loyalty within the state of Maine."
Allagash will need all the customer loyalty it can muster as it weathers the rough seas that are already lashing the brewing industry. From sky-high hops prices to rising costs for bottles and packaging, Glaser says the industry is facing a "perfect storm." Says Tod: "A lot of people have asked me lately, 'Is that really that big a deal?' It's a huge deal."
Prices for certain types of hops have increase by as much as 1,000% over the past year or so. For years prior, there had been a slight surplus of hops, which drove prices down. As they fell, it became more appealing for farmers to grow other crops. (Especially as the government offered subsidies on crops that could be used for ethanol fuel.) Now crops are down by 10%-15%. That's from an already paltry 113,000 acres devoted to hops worldwide.
The weak dollar has been an issue. So has climate change. Floods in England. Hail storms in Germany. "All these things are happening at once and have sent hop prices through the roof," says Tod. "It's all gone up: Glass is up 50% in the last two years. Corrugated cardboard. Barley and wheat have gone way up [between 40%-80%]. It's kind of scary."
"This will cut into profits for everybody," says Peter V.K. Reid, editor of beer industry journal Modern Brewing Age. "Some larger players are able to mitigate the impact by locking in prices with suppliers, but everyone is hit by this, from the smallest microbrewer to Anheuser-Busch."
But for Allagash, all things considered, this might be happening at the best possible time. The company is in the process of installing a malt silo that will allow it to purchase brewing materials in bulk. "Instead of having to buy 50-pound bags, we can buy 44,000 bags at a time. That will help environmentally, will help with efficiency, and will help offset some of these price increases," says Tod.
To offset rising prices, Allagash has raised prices on its four-packs of beer by around 5% this year. Tod says that has helped, but that the company will still have to absorb much of those cost increases. "We should be raising our prices more," he says. "The pressure is coming from all angles now."
"There is little a brewery can do when the price of essential inputs goes up," says Victor Tremblay, an economics professor at Oregon State University, and an expert on the dollars and cents of brewing. "There are no substitutes for hops, malt, glass and fuel when making beer. This is a classic case where belt tightening, and possibly downsizing, will occur. It's a tough time for the industry."
Still, beer culture is shifting, and consumers are more open to trying new kinds of beer. "Things are moving in that direction right now," say Tod. "When I was younger, it was almost sort of déclassé to order beer in nice restaurants. But a lot of high-end restaurants now have five or six taps, or some cool Belgian imports. You're just starting to see the whole beer culture expanding even more."
Even as his industry faces more perils and pitfalls than it has in years, Tod is sure that the beers Allagash makes will continue to be popular ˆ and he plans to keep churning out new and exciting brews that no one's even dreamed of yet. "I think these styles of beer will continue to gain momentum," he says. "It's hard to go back. Once people they try these beers, it's almost impossible for them to go back."
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