After investing more than $5 million on brewery infrastructure over the last five years, Wachusett Brewing is turning more attention to the contract portion of its business. But in order for the company to fully capitalize on all of the opportunities coming its way, it says, it needs a little help from Massachusetts state regulators.
In an effort to extend both its own line of craft products into cans and to attract brewers looking to do the same, the Westminster-based craft brewery acquired and refurbished an old Coca-Cola canning line in early 2012. The following year, Wachusett added a multi-packer, giving it the ability to produce 12-packs.
The company’s facility improvements finally culminated with the installation of a fully-automated, 50-barrel brewhouse earlier this year. That system, which was fabricated in Maine, is capable of churning out 600 barrels per day and has improved the company’s ability to produce greater quantities of its own beer while taking on new contract partners, like Portsmouth, N.H.-based Smuttynose Brewing.
But in a conversation with Brewbound, Wachusett founder and president Ned LaFortune said that unless Mass. regulators pass House Bill 187, which would clear the way for additional tenant brewing privileges, the company’s future contract business could be limited.
What LaFortune is hoping for is a change in regulations that would allow out-of-state brewers to transport their finished beer across state lines and utilize Wachusett’s’ canning services. The brewery currently owns two food-grade tankers and is capable of hauling up to 300 barrels of beer at a time, but those vehicles can only transport beer brewed within the Commonwealth.
It’s a resource that would give an out-of-state brewery like Smuttynose, which just built its own new brewery, the ability to brew in New Hampshire and then utilize Wachusett’s canning line, a piece of equipment it doesn’t currently own. But the state needs to allow for amended tenant brewer privileges first, LaFortune said.
LaFortune’s offer to contract brew isn’t necessarily geared toward startups entrepreneurs. While he has plenty of space for both brewing and canning, his system isn’t as accommodating for startup brands that are still working to establish a foothold in the marketplace.
“It would be our preference to work with someone who can fill 100,000 cases annually,” he told Brewbound. “Before I take on a bunch of contracts, I would want to work with someone who can take thousands of cases for one SKU. It minimizes administrative costs and overhead.”
LaFortune says he can still can for those smaller brewers, and he hopes to be able to do so regardless of their state of origin. A change to the law would also allow Wachusett to explore opportunities with larger customers — the kinds who could fill large canning runs but don’t need the company’s brewing services.
Regardless of the customer size, the increased emphasis on contract brewing is somewhat of a strategic pivot for Wachusett.
“It is partially based on my decision to keep the Wachusett brands a local, New England brand,” he said. “I don’t want to try and take the brand further away, I just want to make sure that we are diversified.”
The Wachusett line — 80 percent of which is sold in Massachusetts — is still growing, but there’s a need for contract services in New England not currently being met, LaFortune said. As new competitors enter the fray, LaFortune believes additional contract volume will help shield the company from surrendered tap and retail shelf space.
“When Yuengling entered the market, it did have an affect on us,” he said. “Fortunately, for us, it didn’t have too much impact on the company because we had picked up a lot of contract volume. Any diminishing growth for Wachusett was made up by contract volume.”
Wachusett made 32,000 barrels of beer in 2014, making it the second-largest packaging brewery in Massachusetts. The company is forecasting sales of 45,000 barrels in 2015, a figure that could increase if contract business grows.
So will there ever come a time when Wachusett is producing more beer for other brewers, a la Connecticut’s Two Roads Brewing?
“If it goes down that road and it is working for us — and if we are working with people that we respect and cash is flowing — it could happen,” he said. “It will all depends how successful the brands are in cans.”
And perhaps, too, on House Bill 187.