Number of LI craft brewers have tripled in recent years

Greg Martin and Dan Burke started out as friends and co-workers who turned their home brewing hobby into a successful business. All beers from the Long Ireland Beer Company are brewed in Riverhead and are distributed throughout the state. Videojournalist: Randee Daddona (April 26, 2013)

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It's a tough business making craft beer -- with steep regulatory hurdles, high start-up costs and sometimes strenuous manual labor -- yet more brewers than ever are tapping into a thirsty Long Island market.

Since 2008, the number of craft brewery companies on Long Island has tripled, from five to 15, according to the New York State Liquor Authority and local brewers. That number could rise to 19 by Dec. 31, because at least four more breweries are slated to open this year.

"Every time you turn around there's another brewery opening up," said Steve Pominski, owner of Barrage Brewing Co. in Farmingdale, which has brewing licenses but has not opened yet. "I think there's a lot more room for growth."

Long Island is an expensive place to start a business, but it offers assets as well. Local brewers say the water, which doesn't need to be treated before brewing, is of high quality. The proximity to New York City also helps -- as it's a big market for craft beer but has limited space to host breweries.

Demand for craft beer -- defined as being made by an independent brewery that produces less than 6 million barrels a year -- is growing on Long Island as well.

"In the last five years the consumer has changed a lot," said Barry McLaughlin, a craft beer specialist with East Yaphank-based beverage distributor Clare Rose. "They want flavor in their beer, they want to hear a story about the beer they're drinking."

Across the nation, craft beer sales made up $10.2 billion of the $99-billion beer market in 2012, up from $7 billion in craft sales in 2009, according to the Brewers Association, a trade group representing U.S. craft breweries.

The local-food movement -- which promotes consuming products made close to home for sustainability -- and the popularity of beer-and-food pairings has boosted the profile of craft beer, said Julia Herz, a program director at the Brewers Association.

Furthermore, the volatile economy has pinched pocketbooks, making the varied styles and flavors of craft beer an "affordable luxury" for many customers, said Greg Martin, co-owner of Long Ireland Beer Co. in Riverhead, which opened in 2011.

 

Boost to the economy

New York State also has encouraged the growth of craft brewing in recent years, offering tax breaks and waiving fees for branding and labeling beers for small breweries.

There's more for Long Island in the growth of this industry than just flavorful beers. As breweries proliferate, they create jobs, generate tax revenue and support other regional industries, such as agriculture and restaurants. For example, several Long Island breweries hold beer dinners with nearby restaurants, and many brewers donate their leftover mashed malted barley for local farmers to use as animal feed.

Martin buys some of his hops -- an essential ingredient that produces a bitter flavor in some beers -- from a farm on the East End.

"There's an opportunity not only to produce jobs and tax [revenue], but also to buy a lot of local ingredients that will have a net economic impact on the area," said David Katleski, president of the New York State Brewers Association.

Additionally, craft breweries have potential as tourist attractions. Later this year, the Long Island Convention & Visitors Bureau will promote the region's epicurean experience -- during which craft breweries will be featured prominently alongside the Island's already renowned vineyards and farms, said Kristen Matejka, the bureau's director of marketing.

 

Late start for LI industry

The flowering of Long Island's craft breweries came relatively late compared with those in pockets along the West Coast and the Midwest, which saw significant progress in the '90s.

There was a small surge of brewery openings in the '90s on Long Island, but most facilities quickly shuttered for lack of a sufficient customer fan base, said Alan Wax, the editor of beer and wine blog CorksCapsAndTaps.com.

Local brewers say a lack of brewing expertise here, and the high cost of real estate, also delayed growth.

When Mark Burford started Blue Point Brewing Co. in Patchogue with his business partner, Pete Cotter, in 1998, he relied on brewing expertise picked up when he lived in California for a decade. Today, Blue Point is the biggest craft brewer on Long Island and, according to the Brewers Association, the 36th largest in the United States. Burford now readily helps new brewers.

The New York State Liquor Authority has granted brewing licenses to 13 facilities on Long Island as of April. Local brewers say some licensees are not active yet and some facilities do contract brewing without the need of a license. So the total number of breweries is 15.

Of that count, 11 are microbreweries, which produce fewer than 15,000 barrels of beer a year; three are brew pubs, which are restaurants that brew and sell beer for consumption on the premises; and then there is Blue Point, a regional craft brewery.

Most of the brewers headquartered on Long Island brew beer here. Three local microbreweries contract to do their brewing off Long Island. Blue Point and Southampton Publick House do the same for some of their beer.

 

Wait can be long

The principal start-up costs for a craft brewery, which can reach $500,000, are equipment purchases and rent.

Brewers must have a physical location before they can apply for federal and state licenses to make beer. So they often pay rent on buildings that sit with empty fermenters and other unused equipment for months, or even years, before they receive federal and state approval to operate.

It can take up to three years of planning before beer starts to flow. In that time, brewers must manage a tight schedule of physical labor and paperwork. For instance, they must comply with local building and waste management codes, and set up brewing systems.

Pominski, at Barrage Brewing, signed a lease in April 2012 for his brewery and is still waiting to brew his first batch of beer. He received his federal and state licenses in December, but National Grid wasn't able to hook up a gas line to his Farmingdale operation until last month because of delays prompted by superstorm Sandy. Then Pominski found himself dealing with Suffolk County's sewer agency, which had questions on how he planned to dispose of his wastewater.

"I've been right there, I've been right on the other side of the door waiting for it to be unlocked," he said. "Hopefully that's going to end real soon and we'll open."

For some breweries, opening also means setting a precedent. Montauk Brewing Co., started by three childhood friends, opened a tasting room in its namesake hamlet last summer and brews its signature Driftwood Ale by contract in upstate Cooperstown. The trio is still assembling its own brewery and has just secured a location in Montauk, said Vaughan Cutillo, a co-owner. In the last two years the group has worked with the Town of East Hampton to write new laws for breweries, which the municipality did not have, and hired engineering and waste management consultants to help in the process.

"We've been gradually building the brewery piece by piece," Cutillo said. "It's really just us funding everything, the banks wouldn't even loan us money -- they wanted two years of operation and proof of business."

Even after opening, several Long Island brewers say it is a challenge to brew enough to cover costs and survive in a low-margin business.

 

Support appreciated

Despite the hardships, local brewers say the supportive brewing community and their passion for making inventive brews keep them going.

"I think with the craft beer industry, people are in it for the love of creating a beer," said Paul Dlugokencky, owner of Blind Bat Brewery LLC in Centerport. He operates the brewery out of his garage while he holds a job editing academic journals. Later this year he plans to make brewing a full-time pursuit.

Local demand also helps. Lauri Spitz, who raised $25,000 on social crowdfunding site Kickstarter.com with her husband to fund their Moustache Brewing Co. -- set to open later this year in Riverhead -- said there is already a waitlist of restaurants that want Moustache ales.

As for Burford -- who once chased after customers to just try his craft beer -- his Blue Point now accounts for about 1 percent of the beer sold on Long Island, according to the brewery's distributor, Clare Rose.

"It's been a great, wild ride," Burford said. "To watch people catch on now, it's kind of like a twinkle in your eye and a wink."

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