Interview With Peter Egleston of Smuttynose and Portsmouth Brewery

Peter Egelston, President Smuttynose Brewing Co.From TheFullPint – When we began our craft beer journey years ago, one of the first New England craft breweries outside of Sam Adams that caught our attention was Smuttynose Brewing in Portsmouth New Hampshire. Their Big Beer series captured our imagination, as they brought bold and balance at the same time.  We sat down with the President of Smuttynose and sister brewery, Portsmouth Brewery to discuss their business, the New England Craft Beer scene, and overall thoughts on craft beers current booming landscape. Enjoy!

The Full Pint: How is business going for both your labels?

Peter Egleston: Business at both the Portsmouth Brewery, our brewpub, and Smuttynose Brewing Company has been great. Now in its twentieth year, the Portsmouth Brewery is no longer able to expand its physical capacity, yet we continue to serve more guests each year. Some of that is a reflection of Portsmouth’s growth as a restaurant destination in New England and part of it is due to the growing interest in craft beer, but I think a great part is due to the hospitality we provide and the role the Portsmouth Brewery plays as a public gathering place, the “third place” for many people in our community. And of course, the Brewery’s legendary Head Brewer, Tod Mott, has played a huge role in putting us on a the beer map since his arrival here in 2003.

Smuttynose will see its volume increase this year by more than 20% over last year. And while some of that growth comes from markets we’ve recently entered – Ohio for instance – a lot of it is coming in areas where we’ve been distributed for years. And it’s been across the board for us, with growth in all of our brands. Capacity at our existing facility is pretty much tapped out. As most people are aware, we had our friends at FX Matt’s brew our Pumpkin Ale this year, and they’ll be doing batches of our Summer Weizen and Winter Ale in 2011. This is a temporary arrangement to help bridge the gap till our new brewery is completed, sometime in 2012.

We hope to begin construction on our new facility, which will be in Hampton, about seven miles due south of our current location, later this year or early next year. We own the property & have an approved site plan. Architecture and engineering is nearly complete, and we’re securing permits even as I’m writing this.

Smuttynose Brewing Co.TFP: The craft beer market has grown exponentially since you began years ago, has it become more difficult to get shelf space compared to the past?

PE: Off-premise retailers today devote a good deal more space in their coolers and on their shelves than they did in years past. At the same time, there are a lot more breweries competing for a spot in those coolers and on those shelves. At a certain point, the retail market will no longer be able to grow fast enough to accommodate all the brands in our category, and some will be left out in the cold. That said, I like the situation today better than, say fifteen years ago, when most retailers still didn’t yet grasp the concept of craft beer. Many bought into the notion – promoted by major brewers and their wholesalers at the time – that “microbrewery” beer was just one more fad whose time had come and gone, like dry beer or ice beer.  Back then, we not only had to fight for a spot on the shelf, we had to justify why a retailer should carry craft beer at all.

I see four basic challenges facing craft brewers:
(1) pushback from the big guys: for the longest time, they didn’t take our category very seriously, but now they are taking notice and they want a piece of the action. They’ll try to buy their way in by partnering with established craft brewers; they’ll try to freeze out whoever they can, using their considerable influence with their wholesalers and national supermarket and restaurant chains; and they’ll try to produce their own ersatz “craft” brands which has the double effect of capturing some craft market share and pushing authentic craft beers off the shelves.

(2) Retailers start focusing less on craft brands and more on craft styles, organizing their beer departments like their wine departments. This, I believe, is bad for craft producers as it undermines the equity they’ve built into their brands (just like it’s done with wine). Furthermore, an obsession with “style” will have the inevitable effect of stifling innovation, one of the hallmarks of craft brewers. I’m fond of quoting Duke Ellington: “There are two kinds of music. Good music, and the other kind.” I think the same should apply to beer.

(3) Continued consolidation at the wholesale tier and attempts to dismantle the “three tier” system. Craft brewers need to have access to market. A market landscape dominated by massive suppliers and enormous chain retailers, with a limited number of wholesalers in between will not serve consumers or craft brewers well. Beer lovers should not take for granted that the amazing variety of beers that they have access to today will always be there. I came of age in the seventies and I can testify to living in a world where the most exotic beer you could hope to find was a Heineken or a Michelob. It wasn’t much fun. Let’s not let that happen again!

(4) Consumers’ and retailers’ lust for the latest and greatest undermines established brands and trivializes the category as a whole, sacrificing quality on the altar of novelty. One could argue that this is the direction the music industry, which is in deep trouble, has been going for years.

TFP: Do you have any plans to distribute to any west coast states ever?

PE: While it’s probably not wise to say “never,” this is my opportunity to restate my belief that craft brewing is largely a regional phenomenon. In the final analysis, there may be some successful national players – some cleary have that aspiration, but for the most part the jury is still out on how successful that will be. On the other hand, most craft brewers remain firmly anchored to their regional roots. From a business standpoint, it’s not a good use of resources to be spread a mile wide and an inch deep, and I do wonder about the long-term prospects some of the brands I see that are spread so thinly from coast to coast – their hold on markets far from their home base seems so tenuous to me.

Portsmouth Brewery LogoTFP: What is your take on folks who claim West Coast style IPAs are the new standard, and the more balanced style found on the east coast are inferior?

PE: That’s silly. I eavesdrop on online beer forums pretty regularly, and I have to say that a lot of the chatter about east versus west starts to sound like little boys taunting each other in the schoolyard – “My dad could beat up your dad!” Why do people feel compelled to put everything into little conceptual boxes? We should be recognizing and celebrating diversity, complexity and individuality, not boiling everything down to simplistic binary categories which often don’t reflect the reality on the ground.

TFP: What are your thoughts on Kate The Great Day?  Any plans to tweak it? Any plans for a larger batch?

I love Kate Day. It’s an event that popped up, fully formed, out of nowhere, like Athena from Zeus’s head. Shortly after Kate the Great Russian Imperial Stout was so highly rated in Beer Advocate Magazine’s 2007 year-end roundup, I asked Tod Mott (Head Brewer at the Portsmouth Brewery and creator of Kate) to pick out a random date and time for its next release, about six months later. I put a countdown clock up on our website, and that was the full extent of our promotion. And that’s pretty much been the extent of it ever since, yet every year more people line up at our door for Kate Day. And it’s an amazingly friendly, easy-going group of people, too. However, given that more and more people are interested in getting their hands on some Kate, and given the fact that we are not able to produce more of it, at least in the immediate future, the math doesn’t work in anyone’s favor.

Because of that, this year we’re devising a system that we hope will result in a more fair and equitable distribution of the 900 bottles we’ll have available, a system that will make overnight camping on our sidewalk unnecessary and raise a boatload of money for a non-profit organization of our choice. That’ all I can say for now (except that 2011’s Kate Day will take place on March 7).

As far as making more Kate goes, due to capacity limitations at both the Portsmouth Brewery and Smuttynose, it’s off the table for now. Once Smuttynose has a new facility, we’ll revisit the notion.

Click here for info on Kate The Great Day 2011, given to us after we conducted this interview.

TFP: Any plans for collaborations for 2011?

PE: At any given time, Dave Yarrington, Smuttynose’s DoBrO, has conversations going with colleagues at other breweries, but he’s not told me about any specific projects yet.

TFP: There don’t seem to be many sours coming out of New England. Why do you think that is?

PE: I’m not sure if there really are fewer sour beers coming from New England, or if that’s merely a perception. Has anyone actually taken a survey to see if that’s really the case? Without knowing that to be true, I’m hesitant to venture an opinion.

TFP: What trends to you see coming down the road for craft brewers and drinkers alike?

PE: Not long ago I was in a state that recently had raised the permitted alcohol content in beer. Wholesalers, retailers and consumers there were revelling in the arrival of an amazing array of new brands. Someone commented to me that the beer culture there was going through a “teenage” phase, where the obsession was with big, badass, high-octane beers, and he was personally looking forward to a time when people began to rediscover all good beer, regardless of its ABV. Personally, I look forward to the day when the BA’s top twenty-five list contains more than two dozen Imperial this and that’s and represents a broader spectrum of great beers. I think that day is coming.

In the on-premise trade (bars & restaurants) good beer is no longer limited to beer bars, brewpubs and corner cafes. It is getting more and more play in both high end restaurants, and mainstream restaurants, even national chains. A draft lineup featuring a couple of domestic lights, an industrial import or two, and possibly a Sam Adams handle, is a lot less common than it used to be. This is a major shift, one that has been coming for a long time, but is accelerating quickly today.

TFP: Any new beers on the horizon from Smuttynose, any beers retiring?

PE: We’re not adding any beers to our full-time or seasonal lineups. Dave and Greg are working on the 2011 Big Beer Series schedule. They’re planning a new addition to the series, but they’ve not selected it yet. And as always, we’ll have new offerings in the Short Batch Series, as well as lots of cask and barrel-aged one-offs, so there’s always a lot of new stuff going on at Smuttynose.

Sadly, we made the difficult decision to retire our spring seasonal – Hanami – this year because it makes sense for us to focus on our Winter Ale and Summer Weizen, both very popular seasonal offerings.

TFP: What is your favorite non Smuttynose/Portsmouth beer?

PE: I travel a good deal these days, so I often find myself asking for what’s local in hopes of discovering something really cool that I can’t get at home.

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