With 45 breweries in planning around North Carolina, dozens of others growing exponentially each year, tens of thousands of square feet of vacant warehouse space in a community ripe for development, and three men eager and ready to build a first-of-its-kind craft beer campus, it might seem like serendipity is surrounding the Rocky Mount Brewmill.
The news leaked out in May that the Capitol Broadcasting-owned 140-year-old textile mill (pictured left) in rural Rocky Mount will be transformed into an incubator for startup craft breweries, a contract production facility for growing breweries, a destination for lovers of craft beer, a school for those who wish to study the industry and a residential community for people who work on the campus.
It will bring life back to a economically-troubled old town and celebrate an industry already bringing national recognition to North Carolina. In a Wall Street Journal story earlier this month, our state ( and its now 110 breweries) was recognized in the top 10 for craft brewing.
In the weeks since details of the Brewmill were released, dozens of brewers have toured the facility. Many attended a June 20th kickoff event hosted by Brewmill co-founders Vann Joines and Slates Snider and master brewer Sebastian (Seabass) Wolfrum. They’re all eagerly awaiting the start of construction late in 2014, once financing is secure, and a grand opening next summer.
The ExitEvent team was immediately intrigued when we learned of the project from Capitol (our parent company) several months ago. It inspired the multimedia package you’ll see and read below.
But it’s also convinced us that entrepreneurship coverage has to extend to North Carolina’s growing craft beer and distilling industries. So consider this the kickoff to a new series on beer, brewing and distilling, and the entrepreneurs behind it all. And feel free to suggest your favorite beer or spirits entrepreneurial story in the comments below.
But before you do, read below for the full back story of the project, its promise to aspiring beer entrepreneurs and why now might just be the time for an ambitious plan like this one.
Why Rocky Mount and why these men?
It might seem odd that a real estate developer (Joines) and retail broker (Snider) working in New Orleans might pick an old mill an hour outside Raleigh for their first project in the state.
The pair met in graduate school at Tulane University – Snider completed an MBA and Joines, a master’s in sustainable real estate development. When both ended up in the real estate industry, they began to discuss doing a project together. And over time, they narrowed their plan to finding an old mill in their home state of North Carolina for redevelopment into residences, retail and offices.
And with the help of Margo Knight Metzger, executive director of the North Carolina Craft Brewers Guild, they studied the industry.
They found that craft beer, though making up only 8 percent of U.S. beer sales, was the fastest-growing segment of the industry. Average annual growth is about 18 percent a year, Metzger told me in an interview last week.
In North Carolina, the number of breweries quadrupled from 2005 to 2014. And some of those are growing revenue more than 100 percent a year and running out of time in the day and space in their facilities to brew more beer. Many are strapped financially.
“They don’t necessarily have the cash to be able to buy new tanks, which is what it takes to brew more beer and hire more people,” Metzger says. A state excise tax – the 8th highest in the country, she says – also strains their budgets.
For the startup breweries, financing is hard to find. Up to $1 million is required to open a brewery, and banks won’t talk to them until they’ve got a year of sales under belt, Metzger says.
Yet, an industry is clearly forming around beer in the state. And that’s evidenced by the number of breweries in some stage of planning and the ancillary services popping up around them.
Sean Lilly Wilson, owner of Durham’s Fullsteam Brewery, compares it to the tobacco industry of decades ago, when option houses, automotive repair shops and other vendors opened to do business with the plants.
“We’re going beyond just breweries opening to what I call a ‘Southern beer economy,'” he says. “There’s a web starting to form that provides infrastructure and sustainability to the craft beer industry.”
The Brewmill, in multiple phases
All of that research led to today’s plan, which will be rolled out in phases. The first, located in the old cotton shipping and receiving warehouse, will include the incubator, with up to 10 glass-enclosed spaces in the facility with the required tanks and equipment for brewers to brew on site for up to a year. The men expect to reduce the cost of opening a new brewery by two thirds or more. And, like a traditional incubator, they’ll have the help of Wolfrum and other experts in building up and marketing their businesses.
Beside those spaces will be a contract production facility, where existing brewers can brew, ferment, keg, can or bottle, and ship beer, sharing the cost of utilities and equipment. It’ll likely be used by brewers that have outgrown their primary facilities but aren’t ready to purchase more equipment or add space.
To equip brewers with the right talent, the Brewmill will partner with Nash Community College to begin a fully-accredited brewing distillation and fermentation sciences program in the building. Aspiring brewers can take classes to learn the trade – from sourcing ingredients to purchasing equipment to marketing and packaging the beer – and others can learn the manufacturing-related tasks like stainless steel welding, plumbing and wiring.
A draw for the community of Rocky Mount and visitors from around the state will be a large tasting room for drinking the beers brewed on site, and a retail store for buying them.
And across the street from the incubator and contract facility, in the main textile mill, is room for large and growing breweries to lease space and produce beer. The men say that’s phase two. They have to establish Rocky Mount as a hub of craft brewing first.
Soon after work begins on phase one, plans are to renovate the 35 or so homes owned by Capitol around the campus for rent to workers there. There’s room for up to 100 other homes to be built over time.
“If we’re selling folks on moving their brewery to Rocky Mount – the distribution is great, logistics are great. We’re creating an entry point into the market that doesn’t exist right now, then what we need to do is sell folks on the idea of developing a community of brewers,” Joines says.
It’s not a done deal. In fact, it’s really risky.
As exciting a project as the Brewmill sounds, it’s also contingent on many factors.
The men are still waiting on tax credit awards from the National Park Service, an entity that must approve any changes to the historic property. Already, the developers have received some historic tax credits. And they’ve lined up funding from Capitol Broadcasting and bank partners.
The National Park Service should report back in October, Joines says.
The Brewmill also requires brewers to be at a specific phase of development, either early enough in to benefit from the provided equipment and shared space, or far enough along to warrant expanding production.
And the Brewmill has to fit their business plans, Wilson points out. Fullsteam, for example, might distribute to 400 accounts across the Carolinas, but 75 percent of its business still happens onsite in downtown Durham.
“That’s been the fuel to enable us to grow in the scalable- but lower-profit margin distribution business, he says. “The savvy brewer is going to be asking those questions. If infrastructure is taken care of and there is no or limited opportunity for on-premise upside, then they have to have incredible packaging and quality, differentiated product to make it work.”
The developers will have to be sure they really are creating a one-stop-shop for the brewing community.
But despite some skepticism, Wilson says he’s in discussions with the Brewmill founders about a role Fullsteam can play in the facility. Fullsteam is too big for the incubator and too small to be an anchor tenant, but it is growing fast. And Wilson, a former president of the Craft Brewers Guild, wants to be involved in anything that supports and grows the industry he loves.
“What is wonderful about this project is its totally unique and indigenous to North Carolina. It came from entrepreneurs and visionaries that saw an underutilized property and distribution channels,” he says. “There is risk and a lot of moving parts in it all. And the unstated risk is Rocky Mount. But so was downtown Durham when they got started.”