Karbach Brewing Company plans to build a bigger brewery

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Just today I read some exciting news about Karbach Brewing Company, which has quickly become one of my favorite breweries from Texas. These guys have an impressive line up of beers, and so far every beer I have had from them have been above average to exceptional, in my opinion. It looks like I am not the only one who thinks this about Karbach as the demand for their beer is growing at a rapid speed. Very proud that these guys are from Texas, and making their mark on the craft beer market. What I find fascinating at the moment is that they only distribute locally around the greater Houston area, and my home town of San Antonio! Plans to expand to other markets such as Austin, or Dallas were put on hold because of they feared there could be a shortage of beer in their local market due to the lack of capacity in their current facility.

Here is the article I read originally posted on houstonchronicle.com, written by Ronnie Crocker:

Fast-growing Karbach Brewing Co. intends next year to build a new brewery that will give it the capacity to make three times as much beer as it has made in 2013 and, eventually, several times that.

The $15 million project, to be announced Tuesday, will begin with a 1.2-acre tract adjacent to the current brewery at 2032 Karbach. The 19,000-square-foot, two-story facility will include a public tap room and kitchen that will be open daily and space upstairs that will be available for special events.

It also will include a brewhouse from German manufacturer Ziemann that is four times as large as the existing one, modern storage areas for grain and yeast and a laboratory for quality control testing.

Brewmaster Eric Warner said he expects to be brewing test batches in the new place next October or November and producing beer for sale in early 2015. He said stronger-than-expected growth has put Karbach on an “aggressive timeline” to get the facility ready to keep pace with demand.

“It’s just nuts,” Warner, a well-known figure in craft brewing before he arrived in Houston from Colorado 21/2 years ago, said of the red-hot market for craft beer here. “I’ve never seen anything like that.”

Karbach’s growth is rare even in the exploding craft segment, said Julia Herz, craft beer program director for the Brewers Association trade group. With expected production of 19,000 barrels for 2013, Karbach is in the midsize group that starts at 15,001 barrels and goes up to 6 million.

Of the nation’s 2,600 craft breweries and brewpubs, only 120 are in that category. Herz said it typically takes startup breweries much longer to reach that status.

“They’re already at the regional size, and they’re not even on our 2012 list,” she said.

She said research shows demand for craft beer still exceeds supply, meaning there is room for craft brewers to continue to grow, “as long as quality is a priority.”

Karbach earlier this year was identified by New Yorker magazine as the second-fastest growing craft brewery in the U.S. Warner said the original business plan called for Karbach to produce 9,000 barrels in its third year. In reality, he said, it is on pace to produce nearly 30,000 barrels in its third full year, between September and next August.

That growth has led to multiple internal expansions that have taken over existing space and even caused the owners to move their importing business to a location near the Houston Ship Channel. The brewery started with eight fermenting tanks and now has 50 squeezed together.

Warner said the brewery should reach full capacity by the fourth quarter of next year, making 10,000 barrels in that three-month period.

The new facility will give Karbach immediate capacity to produce 60,000 barrels annually, and Warner said it is being constructed with room to expand that to more than 200,000 barrels.

Saint Arnold, the city’s first craft brewery, is on pace to produce about 60,000 barrels this year. It has experienced double-digit annual growth since moving into a new and bigger brewery near downtown in 2010.

Karbach has budgeted $15 million for its expansion, to be spent in several phases. In addition to the new building, brewing equipment and tanks, the price tag includes land that Karbach has acquired and is in the process of purchasing along Karbach Street, between Dacoma and 20th streets. At least some of the fermentation tanks in the current brewery will continue in operation. Warner said no decision has been made on whether to keep the existing brewhouse or sell it.

Warner said Karbach considered going outside the city limits, where property is less expensive, but determined Houston is the better environment for a brewery. As land became available around the existing plant, the decision was easy, he said.

Preliminary renderings show a handsome brick fa├žade and steel building facing Dacoma with outdoor seating and an upstairs balcony, with views of the brewing and fermentation areas.

The front part of the downstairs will be largely for the public, who will be able to purchase beer for consumption on site thanks to recent changes in state law. Warner said the food menu won’t be extensive but will include items made with locally sourced ingredients.

Houston architectural firm Three Square Design Group was selected for the project. Previous Three Square clients include Buffalo Bayou Brewing and Fort Bend Brewing companies.

Earlier this year, Karbach began selling in San Antonio, through Silver Eagle Distributors, but delayed expansions into Austin and Dallas-Fort Worth because of capacity constraints and concerns over possible shortages in its home market, where Silver Eagle also has wholesale rights. “The beer drinkers have been so supportive, and Silver Eagle has done a terrific job,” Warner said.

The new plant will allow those distribution expansions to move forward.

http://www.karbachbrewing.com/

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