Breweries Booming In Anne Arundel County, Despite End Of 'Golden Era' Elsewhere

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“Ten years ago you could throw a dart at a dartboard, and it would hit a bullseye no matter what,” said Bart Watson, vice president of strategy and chief economist for the Brewers Association. “You can still hit a bullseye today. You just gotta aim a little bit more.”

Taproom Is ‘Community Hub’

For small-town vibes, look no further than Forward Brewing in Annapolis. The brewery is located in a former marine electronics shop that’s been in Co-Founder Cam Bowdren’s family since 1982. The Annapolis native opened Forward with his wife, Claire Fitch Bowdren, in May 2020. With beer production underway, Forward is a return to Eastport’s manufacturing and industrial roots.

Forward now has weekly cycling, running and trivia clubs for after-work hangouts. Fundraiser beers donate to the Chesapeake Bay Foundation, an environmental nonprofit, and Annapolis Pride, an LGBTQ+ advocacy organization. Forward also unveiled a six-person booze cruise this year for Annapolis harbor boat tours.

Exposed wooden beams and natural light foster a welcoming environment. With a full food menu and communal seating, Forward feels more like a neighborhood lounge than a noisy bar.

“Our space itself has kind of become a community hub,” Fitch Bowdren said.

Crooked Crab Brewing Company has sported a playful taproom since opening in Odenton in February 2018. Designs for punny beer names like Crabtain America and Furious George adorn the walls.

Brick oven pizzas satisfy salty cravings. The oven, modeled after a Great White, explains the Pizza Shark red ale on tap.

Customers catch a glimpse of the action, peering through soaring windows into the pizza kitchen and the brewhouse. With an open floor plan and bright lighting, the University of Maryland graduates turned brewers have crafted a staple affectionately dubbed “The Crab.”

“We’re a community gathering place at the end of the day,” Co-Founder Earl Holman said. “It’s not just beer geeks that are coming here and drinking.”

Crofton’s Chesepiooc Real Ale Brewery is local even down to its name, which means village “at a big river” in the native Algonquian language. Another Chesapeake reference lines the side wall with a mural of Captain John Smith’s first European map of the bay.

Patrons earn reward points with each purchase. Those can be exchanged for merchandise or more libations. Regulars who save their points can eventually brew their own beer with the help of Owner Jon Esposito.

There’s even free dog-safe “beer” and a bounty of treats for the good pooches who stroll in. Welcoming tactics like these have made Chesepiooc a popular gathering spot since it opened in February 2018.

“My entire goal is to be very hyperlocal,” Esposito said. “I think breweries that stay local have a place.”

Esposito was one of Anne Arundel County’s first brewers in more than a decade. Fordham Brewing Company operated at Rams Head Tavern in the City of Annapolis, which has different zoning laws, from 1995 to 2007. Chesepiooc and Crooked Crab were the first breweries to fill the void 11 years later. Forward followed soon after.

Anne Arundel County’s fourth and newest brewery, Pherm Brewing Company in Gambrills, didn’t reply to our interview requests. Chessie’s Wharf, a new Annapolis beer hall that RaR Brewing debuted this January, isn’t classified as a brewery because the alcohol is shipped in from the Eastern Shore.

Breweries Opening, Closing Quickly

Local ambiance helps Anne Arundel County’s taprooms stand out in an increasingly crowded field.

The U.S. has more breweries than ever with 9,900 nationwide and 143 in Maryland, where craft beer has an economic impact of $875 million annually. At least five breweries are planning launches in the Old Line State, bringing cold ones to Caroline, Harford, Montgomery, Talbot and Washington counties.

The number of U.S. breweries nearly doubled from 2015 to 2020. Since then, the brewery count has climbed a more stable 9%.

“Demand and supply has become a little bit more in balance,” Watson said. “That’s led to a maturing industry where openings and closings are a little bit more in balance, which is the case in most industries. You wouldn’t expect restaurants to only open and not close.”

Despite overall growth, hundreds of breweries still shutter every year.

Closures in 2023 included 168 taprooms, 145 brewpubs and 92 microbreweries.

“What we’ve moved to is a market where there are winners and losers,” Watson said. “This is what most markets look like, and what was really unique was five, 10 years ago when everyone opened and no one closed.”

Maryland isn’t immune either.

Gordon Biersch Brewery Restaurant closed its Annapolis brewpub in February 2023. Its parent company, SPB Hospitality, converted the space into an upscale American restaurant.

At least seven breweries have gone out of business statewide this year. Pariah in Baltimore, Hysteria in Columbia and Scorpion in Owings are among the latest to bid farewell.

“Breweries, in the grand scheme of things, are still relatively very successful as businesses,” Watson said. “They’re just not as successful as they were during this golden era where you could do anything.”

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So how can the little guy survive in such a competitive market?

Small Batches Over ‘Cutthroat’ Retail

Small breweries must ensure they pick the proper target audience.

Wholesale distribution is rarely a high priority for those resource-limited operations. It’s challenging to secure consistent liquor store shelf space. Even then, there are thousands of options in each store.

Most craft brewery profit instead stems from taprooms, where there’s no middleman and prices are controllable.

The Brewers Association called taprooms the “make or break” piece for most small breweries.

“That’s why the experience of coming into the brewery is so important as a differentiator,” Watson said. “You’re going to make a little bit of money on … distribution, but getting people to come back to the brewery time and again because they had a great experience is going to be key.”

Crooked Crab sends 70% of its beer out for wholesale distribution, but that only accounts for a sliver of overall revenue. About two-thirds of its profit comes from the taproom alone.

Mead, a fermented honey water, is also available at Crooked Crab. This beverage lacks the fanbase necessary for widespread liquor store sales, but it’s a distinctive in-house specialty.

“Wholesale is extremely competitive,” Holman said. “You really have to have good product because it’s survival of the fittest.”

Forward Brewing’s compact footprint isn’t conducive to large-scale distribution. It contracts a larger brewery to produce its cans for liquor stores.

About 700 barrels of Forward beer are brewed annually, and half are consumed in the taproom.

Forward sells some kegs, but those taps are strategically located at nearby watering holes. Annapolis favorites like Sailor Oyster Bar, Pearl and Preserve all have Forward beers on draft.

“The margins are so low on distribution for us that it’s essentially a marketing tool,” Fitch Bowdren said. “Breweries [with] a much larger share of their revenue [as] direct taproom sales are doing a lot better right now.”

Chesepiooc also has limited keg distribution, but it prides itself as “probably the smallest brewery in Maryland.” Fewer brewing tanks make it more nimble than national giants.

One day, Chesepiooc brews its rare cask ale, a carbonated British beer hardly found in the States. The next day, Esposito whips up nitrogen-infused brews. And the day after that, ciders or sours head to the tanks.

Chesepiooc has taps across Anne Arundel and Prince George’s counties, but Esposito plans to avoid wholesale liquor store competition.

“Shelf space is so difficult to get,” Esposito said. “It’s kind of cutthroat. I have no interest in that.”

But why is Anne Arundel County a solid choice for small-batch brewers?

Craft beer enthusiasts skew toward higher incomes. Many Anne Arundel County residents splurge on these artisanal brews.

The county’s median household income is $113,000, the Anne Arundel Economic Development Corporation said. The abundance of federal, state and local government jobs nearby lend to an affluent clientele.

The county’s diverse population is also densely concentrated around its breweries, supplying plenty of customers.

“Anne Arundel County has great demographics,” AAEDC Chief Operating Officer Wes MacQuilliam told Patch in a statement. “There’s a clear demand, and it’s great to see so many small businesses opening and growing as they meet it.”

Government Aid Sparks Expansion

Craft breweries exploded onto the scene nationwide in the early 2010s, but Maryland took a while to catch up. Strict beer laws complicated brewing in the Old Line State.

Until seven years ago, taproom sales were capped at 500 barrels annually. A barrel is 31 gallons.

This red tape limited profitability, making breweries unattractive ventures in Maryland.

“Brewing is one of the most regulated spaces in the country,” Watson said. “It needs to be regulated, but we also had a bunch of rules limiting market access for small breweries.”

Guinness’s Halethorpe brewery successfully lobbied Maryland to ease its beer production limits on two occasions. Taproom sales were upped to 2,000 barrels in 2017 and then 5,000 barrels in 2019.

“We actually sold last year over 1,000 barrels of beer in our taproom, so theoretically that would’ve been illegal,” Holman said, calling previous sale caps “prohibitive.” “The legislation is getting a lot better.”

Nine years ago, Anne Arundel loosened zoning regulations that previously prohibited breweries almost everywhere in the county. That kickstarted the local brewery craze, the economic development corporation said.

“When the County added breweries to the zoning code in 2015 it didn’t take long before my phone was ringing off the hook with people interested in opening breweries here,” MacQuilliam said.

The AAEDC supported this boom with low-interest loans and grants for budding breweries. The money comes from the Video Lottery Terminal fund, or the VOLT Fund, a tax on Maryland casinos that supports business development.

Crooked Crab, Pherm and Forward all benefited from the VOLT Fund.

“Crooked Crab and Pherm have both already expanded their operations since opening to keep up with demand. AAEDC was proud to assist the businesses, both of which had received VOLT Fund loans,” MacQuilliam said. “We were also proud to help Forward Brewing open in Eastport, also through a VOLT Fund loan and guidance.”

Any chunk of change helps breweries, which have high barriers to entry. The tiniest breweries cost hundreds of thousands to launch, while larger regional breweries often command over $10 million.

Forward tapped the VOLT fund for a $315,000 loan to handle some start-up costs in October 2019.

The Bowdrens initially sought a business loan from traditional banks, but those demanded steep down payments because of Forward’s restaurant classification. VOLT wasn’t as strict.

“Food service has different requirements for loans just because of the high rate of failure,” Bowdren said. “[AAEDC] was familiar with breweries and understood the model and just saw the potential for success. Since then, we’ve had a great relationship with VOLT.”

Pherm Brewing and Crooked Crab each scored a $50,000 loan and a $50,000 grant in June 2021.

Pherm used the cash to expand its production space and buy new equipment.

The Crab doubled its taproom footprint, boosted beer production by 33% and opened its pizza kitchen in 2022. Draft beer sales have risen over 20% since then, and the brewery hired extra help. Crooked Crab, which started with four employees, now has 26 staffers.

“We were expanding. We’re adding jobs,” Holman said, attributing some of the success to the VOLT fund. “We took advantage of that.”

What’s Next For Breweries

Maryland passed a law last year letting brewers ship beer directly to customers’ homes. There’s an annual limit that equates to a case or 24 cans monthly, but shipping marks another blossoming revenue stream for the industry.

Breweries hope lawmakers will soon relax limits on to-go sales. Crooked Crab said it’s capped at a case of carryout beer per customer, but that regulation was lifted during the pandemic. Holman wants to see permanent unlimited to-go orders.

“There are some times where somebody wants to come in and buy two cases of beer. It’d be nice to be able to actually sell that to them,” Holman said.

As for growth, Maryland could handle more breweries in the future.

The Old Line State ranks among the middle of the pack in most craft beer statistics, but it’s near the bottom of economic output.

Maryland has the 34th-most breweries per capita and the 32nd-most craft beer production per capita nationwide. The state’s craft beer industry, however, has the country’s third-lowest economic impact per capita at $192 per year.

That difference between beer consumption and economic output suggests there’s untapped potential in Anne Arundel County.

“There’s more than enough room for local places,” Esposito said. “Ten more? No. But one or two? Sure.”

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