Adam Avery isn’t running away from risk.
“We jump the shark more often than we need to, but without jumping the shark, you don’t know what is possible,” says Avery, who started his namesake brewery in Boulder, Colorado, a quarter century ago with his father, Larry. “We need to do the things that we want to do and not be afraid.”
That lack of fear is evident as Avery literally barrels into 2017. The company has invested heavily in a 42,000 sq. ft. barrel-aging warehouse, with capacity for 30,000 oak barrels, about a block away from its two-year-old production brewery.
A majority of the facility will be dedicated to aging a new series of beers known as Botanicals and Barrels. Avery said he hopes to build the largest and most renowned barrel-aging program in the country.
“I think this is a big opportunity,” he said.
It’s all part of a drive for innovation and an effort to meet consumers’ constant craving for new beers, Avery said. That wasn’t the case when he started, but that’s the new reality of a hyper-competitive beer industry with 5,000-plus breweries battling not only for market share but also mindshare.
Avery likes to call the competitive edge for his brewery “the tip of the spear.” If his plan works, the tip will penetrate deep into the mainstream, where consumer thirst for barrel-aged beers will develop thanks to the company’s Botanicals and Barrels series. The six beers in that portfolio — Raspberry Sour, Vanilla Bean Stout, Tangerine Quad, Apricot Sour, Ginger Sour and Coconut Porter — will push the boundaries of style and flavor, while selling at an attractive price point, he said.
Last year, the company produced about 4,000 barrels of barrel-aged beer, a sizable jump from the 1,700 it made in 2015. In 2017, the company could pump out as much as 10,000 barrels of barrel-aged beer, Avery said, adding that the aging program itself has grown so much that a tanker truck was purchased to transfer beer between the company’s two facilities.
But in order to explore those experimental offerings, the company needed to make some hard decisions, discontinuing six popular beers — The Beast grand cru, Samael’s Ale English-style barleywine, Mephistopheles stout, The Kaiser Oktoberfest, The Czar Russian imperial stout, Salvation Belgian strong pale ale and Dugana IPA — which had been part of its Demons and Dictators series.
“The total of those beers was a couple million dollars in sales,” Avery said. “We’re sad to see those beers go, but they ran their course. It’s not that we get bored with making those beers, but there are so many things that we want to do, so many flavors to explore. Those beers got in the way. They take up tank time. They keep you from making new things.”
So is he crazy? Kevin Roberts, national executive vice president of sales and marketing for Breakthru Beverage Group, which distributes Avery’s beer in Colorado and Nevada, doesn’t think so. Roberts, who has visited the new facility, told Brewbound that the brewery’s “intense focus” on its barrel-aging program was striking.
“Everyone has dabbled with it, but the commitment that they’ve made to the concept struck me as truly differentiating themselves from everyone else,” Roberts said. “The fact that they weren’t just trying to geek out truly resonated with me.”
“It’s so much further advanced than I’ve seen anywhere else,” he added. “They’re poised to do that better than anyone now.”
Balancing Innovation
To support the barrel-aging program, Avery is also focusing on his brewery’s most popular brand, White Rascal witbier, which accounts for 30 percent of the brewery’s production. Last year, sales of White Rascal increased by 18 percent.
“You have to have the sales; that’s the strength of the shaft of the spear,” Avery said, moving his metaphor into mainstream sales. “That’s what White Rascal provides for us.”
In the past, White Rascal received little marketing help, Avery said, but this year the company’s flagship will get the “big spotlight” with a stronger marketing focus and sales push.
White Rascal isn’t the only beer with more runway. Avery will be able to increase production of The Maharaja imperial IPA due to an increase in the availability of simcoe hops. The company’s inability to get enough of those hops from growers and suppliers had limited the brewery’s ability to make the beer, he said. The Maharaja, along with The Reverend quadrupel and Hog Heaven imperial red IPA, have been added to the company’s year-round lineup in 4-packs of 12 oz. cans.
“I think we can produce three times the amount that we did in 2016,” Avery said.
Long-Term Plans
This flurry of activity is a long way from the scattershot collection of buildings where the brewery spent its first 21 years, when its production and taproom were clustered off Arapahoe Avenue in east Boulder in what was known as the “Avery Alley.” But there are stepped-up production plans in place designed, Avery says, to eventually hit 500,000 barrels of production.
He admits that’s a long way off from last year’s 62,000 barrels, and realizes that even maxing out the brewery’s current capacity of 150,000 barrels is also a ways away (the goal this year is 75,000). But Avery has heavily invested in the future with its 2-year-old production brewery, and it’s already starting to feel the benefits. Last year, production grew 26 percent, and revenues were up 40 percent.
Avery appears to be turning the corner after years of not having a facility with the capacity to match the company’s growth. The nadir was 2010, when Avery had to pull out of 18 markets to focus on where sales were growing. Near the end of the brewery’s tenure in the “Alley,” there were 15 more distributors that the brewery couldn’t supply.
“We’ve been rebuilding those bridges with our distributors for the last two years,” Avery told Brewbound. “We’re regaining their confidence.”
That starts with the addition of Nevada, which will put Avery’s beer in 33 states. However, Avery said he’s taking a more measured approach to expanding his company’s footprint.
“If we wanted to be in 50 states, we could be in 50 states,” he said, but instead, the company is focusing on bolstering its top markets — Colorado, Southern California and Texas, which account for more than 50 percent of the company’s volume.
To bolster sales in those states, the company has hired several salespeople in the last six months, Avery said. Still, the company’s home state of Colorado is a stronghold, accounting for 80 percent of Avery’s IPA sales.
And if too little production was a problem before, mastering the new, vast capacity of his new facilities is the new challenge.
“The jump from the Alley to here was a far bigger jump from my stove to the Alley,” Avery said.
Easing the transition is Bernardo Alatorre, a beer industry veteran who spent the last two decades working for Grupo Modelo and MillerCoors before joining Avery in April 2016.
“He’s the best draft pick we had last year,” Avery said. “He’s changing the way that we produce our beer. It comes down to Bernardo making everybody’s job easier by bringing in standard operating procedures that he’s lived his entire life that he can now bring here.”
Meanwhile, the brewery’s business is split evenly between on-premise and off-premise sales, Avery shared. Taproom sales also account for a large share of the business, an unsurprising observation about a brewery whose best retailer, Hazel’s Beverage World, still sits in the brewery’s hometown and, according to Avery, sells “a metric f–kton of beer for us.”
“It’s millions and millions of dollars,” Avery said of his taproom. “It’s our biggest marketing tool. You can see entire process from grain to glass, can and bottle. There’s nothing in the process you can’t see by walking on our tour. It’s invaluable to who we are.”