The Business of Staying Small Pt. 2: How Limiting Production Has Led to Success for Two Craft Breweries

By Justin Dolezal, Foodable Contributor

There's been a lot of discussion as of late about the expansion of craft breweries, particularly those acquired by large macro-beer companies such as AB InBev, the owner of Budweiser, and Heineken International. These mergers and acquisitions are often framed as the next step in a small brewery's evolution and expansion, and in recent years beloved craft breweries such as Chicago's Goose Island, Northern California's Lagunitas, and Seattle's Elysian have all taken advantage of the resources and cache that major brewing operations can provide. In purely capitalistic terms, the moves make sense: a company like AB InBev, flush with cash, distribution access, and marketing resources can help a small brewery grow incredibly quickly.

Still, these acquisitions seem to fly in the face of the ethos of craft beer. Craft beer initially rose to prominence as an exciting, flavorful David rising up against what was a market dominated by bland, flavorless Goliaths, who cared more about advertising and profit margins than producing great products. The fact that companies like AB InBev have begun to snap up craft breweries just as craft beer has begun to cut significantly into macro-beer's market share smacks of opportunism, and has led to a sense of betrayal among craft beer fans who had previously supported breweries who have since sold out to larger corporations.

Thankfully, there remains a class of breweries who have stayed defiantly small, choosing to shun the chance at mass product distribution and the capitol that comes with it in favor of the control that comes with independence. Producing world-class beer takes great attention to detail, time, and patience, luxuries that can be difficult to come by when boards of trustees and multi-million dollar investors are involved. Staying small also allows breweries to drive demand for their products through a consumer base that is incredibly enthusiastic about rare, highly lauded products. The following is a list of craft breweries that have built a huge consumer demand, while remaining defiantly small.

Hill Farmstead Brewery

Shaun Hill opened Hill Farmstead brewery in 2010, and has since built the small Greensboro, Vermont brewery into a veritable craft beer Mecca. The brewery specializes in a variety of styles, all of which are informed by the Belgian “farmhouse” tradition. Hill Farmstead produces beers of exceptional quality, including many dry, funky Belgian style ales, as well as a lineup of IPAs characterized by bright, intense aromatic profiles and soft, refined bodies. Beers such as these have made Hill Farmstead incredibly sought after, with consumers routinely driving deep into rural Vermont and waiting hours in line to grab bottles or growlers to go.

Brewer and owner Shaun Hill has gotten the kind of attention you'd expect with such high demand, fielding several offers for expansion, but outside of slight additions to his brewery's campus, he's less than interested. “From day one I’ve been saying that we are part of a neo-American ideal, which is the opposite of infinite, boundless growth,” Hill said in a 2013 interview with Vanity Fair. “We host events, which is often the time I’ll get a chance to talk to people the most, and I think the only time that there are glaring differences is when someone is a little hostile about not being able to get our beer as often as they want to. 'Why don’t you just move into an industrial park? Why don’t you grow? You guys could sell so much beer.' They come from the point of view that business has a responsibility to meet their desires as opposed to business having a responsibility to create a positive-feedback loop that meets its own desires.”

The desire to remain small may alienate some customers, but it certainly hasn't stopped them from coming back, or from making their adoration known: in 2014, the user-aggregated website ratebeer.com named Hill Farmstead the best brewery in the world. It was the second such award for the brewery in the last three years. 

Russian River Brewing Company

Russian River Brewing has been at the forefront of many of craft beers greatest movements. Owner Vinnie Cilurzo is credited with having invented the now ubiquitous Double India Pale Ale back in the 90's. Russian River was also one of the earliest American breweries to pursue a modern take on the Belgian tradition of producing spontaneously fermented, or “wild”, beers. Today, Russian River's sour beers are among the most highly regarded and sought-after in America. And their two signature IPAs, Pliny the Elder and Pliny the Younger, are both ranked in Beeradvocate.com's top ten list of best beers in the world. The release of Pliny the Younger, which occurs each February and usually sells out within a matter of weeks, results in lines winding through several blocks of downtown Santa Rosa, California, the brewery's home.

Procuring a pint or bottle of any of Russian River's beers is only slightly less difficult, as the brewery has capped both its production and the number of accounts who can receive its beers. It's a strategy meant to temper expectations, as Cilurzo and his wife Natalie, the President of Russian River, have zero interest in expanding beyond their current location. This strategy has been met with consternation, much of it similar to complaints leveled at Hill Farmstead. A segment of the beer drinking population will fail to understand why anyone, much less someone with a product that people are adamant about acquiring, would not want to meet that demand. But Russian River is more concerned with maintaining control over the quality of their product than with pursuing endless growth. This strategy has hardly hurt them, as craft beer fans continue to travel en masse to their brewery, and to seek out their beers wherever they're available.

The underlying reason that breweries such as Hill Farmstead and Russian River are able to be successful while staying in small is surely due, in part, to the quality of the products that they produce. A brewery producing sub-par beer would likely be driven to extinction, designs on expansion or not. But for craft beer drinkers, it's often about more than just the beer. Like so many specialty food products consumed and loved by millennials, the appeal is not just in the product, but in the ancillary factors. Craft beer has built a following on the tenets of being small, local, and putting quality and creativity above all else. Craft beer drinkers will be happy to support brewers who adhere to these tenets, and for this the craft industry as a whole should continue to thrive.