CINCINNATI — Andy Allgeyer reached a pinnacle in 2021 when FigLeaf Brewing Co.’s Black Solstice beer won a gold medal in the U.S. Open Brewing Championship.
“It feels great because I’ve been at this an extremely long time,” said Allgeyer, who co-founded the Middletown brewery in 2016. “Going from a garage to learning the commercial system and then finally submitting something that won, it feels great. You’ve kind of arrived and you feel much more comfortable in what you’re doing.”
It wasn’t a straight line to the top for Allgeyer, who sold FigLeaf to March First Brands after hitting a rough patch in 2019. Then, he collaborated with Bryan Fischer, director of brewing operations at March First, to refine his original recipe his barrel-aged stout.
“I think we backed off on some of the roasted notes to it and less of the coffee notes,” Allgeyer said, while adding “sweeter grains to give it a more well-rounded balance.”
Such adaptability would be useful in any profession.
But it’s a necessity in Cincinnati’s rapidly evolving brewery industry, where a rising number of rivals and changing consumer tastes are forcing breweries to find new ways to grow. Gone are the days when beer makers can copy Rhinegeist, with its multi-state distribution deals that made it the nation’s 23rd largest craft brewer before its 10th anniversary this month.
With the number of brewery locations approaching 10,000 nationwide and 100 in Greater Cincinnati, brewers are turning into niche miners. And no one is doing it better than March First, with a combination of strategies that include acquiring rivals, expanding to five locations and launching a new line of seltzers that sold 4 million cans in 18 months.
“The way that March First brands have expanded over the last two and a half years, I felt really proud to be a part of that,” Allgeyer said. “I think the industry is sustainable if people adapt.”
Is Cincinnati overserved?
The WCPO 9 I-Team has been exploring the health of Cincinnati’s brewing industry because of its growing importance as a neighborhood development tool and tourism offering. We're asking the question, does Cincinnati have too many breweries?
A recent spate of taproom announcements have introduced new brewery locations as entertainment attractions for Blue Ash’s Summit Park, Norwood’s Factory 52 apartment community and a stadium district next to the home of the Florence Y’alls baseball team.
They’re all looking for the buzz that Braxton brought to Covington, MadTree brought to Oakley and Little Miami Brewing brought to Milford.
“When (Little Miami Brewing) went in, it just kind of exploded,” Milford Mayor Lisa Evans said. “I mean, you can’t get a storefront downtown. Everything is rented. Just the foot traffic it brings, with people coming to the brewery and then walking downtown and finding all the restaurants and the places that we have.”
But that only works if the brewery succeeds. And that is no longer a given.
Greater Cincinnati breweries increased total sales volume by 3.7% to 227,929 barrels in 2022, according to the I-Team’s analysis of data from the Brewers Association, a Colorado-based trade group. That’s better than the 0% national growth rate for craft brewers. But it’s well below Cincinnati’s 15% growth rate in 2021, when all but four local breweries increased sales coming out of the pandemic year of 2020. Last year, sales gains were posted by only 21 of the 44 breweries for which the Brewers Association had three years of data.
Much of last year’s growth came from two of Cincinnati’s largest breweries: Rhinegeist increased sales volume by 7,274 barrels in 2022 and March First grew by 3,683 barrels. Everybody else combined for a net decline of 2,854 barrels.
“Is the industry healthy? I think so. Is it healthy financially? It is for some,” said Andrew Desenberg, a local podcaster and beer blogger who is better known as The Gnarley Gnome. “I think there’s a lot of room for small neighborhood breweries, places that people kind of make their watering hole. There’s still room for the whole thing to keep evolving and become something that that does grow.”
Still thirsty?
Local brewers agree the market has shifted.
“Too crowded is a strong statement but 10,000 breweries in America is a number that when we opened, we never really thought was reasonable or possible,” said Jake Rouse, co-founder and CEO of Braxton Brewing Company. “Do I think there’s room for everybody? Certainly. But I think you’ve got to be significantly more thoughtful about how you go to market now than you did eight years ago.”
Braxton’s total sales volume declined 7.5% in 2022, after a disappointing performance by its hard seltzer brand, Vive. But it’s still pursuing new growth by spinning off its best-selling beer into a new company. Garage Beer Co. is seeking distribution deals in up to 20 states and announced a Columbus location in April. Braxton is also pursuing a fifth location in Greater Cincinnati. It’s expected to join Dewey’s pizza and Graeter’s ice cream in a retail center under development in Union, Ky.
That’s one of 20 new brewery locations under development in a 40-mile radius of downtown, according to beer blogger David McKinney.
“Cincinnati’s a thirsty city,” said Trevor Self, marketing manager at MadTree Brewing. “We've built out locations, added private events into our offerings, gone beyond our award-winning beer to produce the #1 canned cocktail in the city - and we aren't done building yet.”
MadTree’s sales volume declined by 2,310 barrels in 2022, more than any other brewer in the I-Team’s analysis. But it recently announced its fourth location in a former airplane hangar at Summit Park in Blue Ash.
“Our vision is to build a sustainable purpose driven company that our kids are proud of,” Self said. “We have committed to growing the company by 3x and having $5M of impact in our community along the way.”
Northside’s Urban Artifact brewery has no plans for a second location. It will focus instead on distribution for the beer style it invented: The Midwestern Fruit Tart, now available in 17 states.
“We fill a niche that most distributors have,” said Bret Kollman Baker, head brewer. “The market is reaching maturation … people are going to find success through market innovation, sales strategy and doggedness.”
Taprooms, restaurants and entertainment options like pickleball and duck pin bowling are the latest innovations that breweries are using to attract new customers. The Gnarley Gnome sees these new developments as a way to boost profits.
“Look at the price,” Desenberg said. “You can go grab a six pack of beer for $9.99 off a shelf at Kroger. You go sit in a taproom and you’re paying $7 for a pint. They’re making more money off of it.”
But they’re also a way to deepen customer loyalty.
“Somebody can be sitting at your bar and they try a beer,” Desenberg said. “Now there’s somebody sitting across from you, and it’s like, ‘Let me tell you about this.’ There’s a story now. It becomes a conversation. It becomes more of an experience.”
The March First model
March First will take that approach to a new level next month when it opens its fifth location in the former Rock Bottom Brewery space on Fountain Square. The site will incorporate five different sections that showcase the company’s wide array of products in beer, spirits and hard seltzer.
“It’s actually easier to grow sales by opening up new taprooms,” said Josh Engel, marketing manager for March First Brands. “It’s actually a lot better to control the story and consumption of your products and educate people about them when you’re in your own space.”
The Fountain Square location will feature a taproom and casual-dining restaurant in its biggest space, which opens onto the square with sliding glass doors for outdoor seating. That space will feature craft beer from March First and its two acquired breweries, FigLeaf and Woodburn Brewing.
Next to the taproom is small conference room for business meetings and private events. It will be decorated to showcase the company’s fast-growing lineup of hard seltzer products, called Astra.
“From October to October we did 3 million cans of Astra and then from October to March we did another million,” Engel said.
Behind those spaces, facing Sixth Street, will be a small liquor store and upscale restaurant called Leveau. Both will feature products from Cincinnati Distilling, a March First subsidiary that opened last fall in Milford’s former Millcroft Inn.
“One of our chefs is from Louisiana and he is going to curate an entire authentic Cajun menu,” Engel said. “We’ll have people who are putting a lot of thought into the cocktail program that will pair very well with the food program.”
In addition to new locations, March First is pursuing acquisitions to grow the company in Cincinnati and elsewhere.
“We’ve looked at acquisitions in Dayton, Columbus, Cleveland. And even out of state. Florida. Colorado. We’ve looked far and wide. And we’re pretty much open to anything,” Engel said.
Founded on March 1, 2016 by Mark Stuhlreyer, who sold his IT company in 2015, March First bills itself as “Cincinnati’s only brewery, cidery and distillery.” It’s the 7th fastest growing privately held company in Cincinnati, with a three-year growth rate of 302% and 2022 revenue of $8.7 million, according to the Cincinnati Business Courier.
Still healthy?
The Gnarley Gnome thinks March First could someday catch Rhinegeist as Cincinnati’s largest craft brewery. He’s less sure about the industry’s growth as a whole.
“You’re definitely going to see places close,” Desenberg said. “That happens and will continue to happen. But, even right now, there’s a handful of places that are in planning and far enough along that they’re going to open.”
And that could be the key to the industry’s growth potential, said Janet Harrah, an economist who runs the Center for Economic Analysis and Development at Northern Kentucky University.
“You don’t try to enter a market when you hear that a lot of people are failing,” Harrah said. “So, my observation is, it’s still quite a healthy industry.”
And that’s good news for the region, Harrah said, because of Cincinnati’s cultural heritage as a brewing town and the region’s ongoing quest to attract talent and tourism.
“Every community needs to have a good quality of life,” Harrah said. “And one of the things we know, particularly with young workers, they are looking for the place they want to live often before they look for the place they want to work. So, you want to have a vibrant restaurant/bar industry. You want to have tourism attractions. So as far as that is concerned, it’s an important industry.”
