Frank Zappa once uttered in part: “You can’t be a real country unless you have a beer and an airline.” While Zappa was taking a swipe at our testosterone culture, he did live and die in a time before the current golden age of locally-brewed beer. Zappa, who advocated entrepreneurship and capitalism, surely would not have objected to this twist on his infamous sentiment: “You can’t be a real town until you have your own craft beer brewery.”
Southwest Colorado is awash in locally-brewed beer. Durango, Montrose and Grand Junction, the “big cities” of the region, boast at least ten breweries between them. Durango, a city of 18,000, has five. But many of the region’s small towns such as Ouray, Ridgway, Paonia and Palisade – some with less than a thousand people – make delicious craft beer. Talk to any of the brewers in these towns and you will hear a variation on the same story: they had a dream to make better beer to drink in fellowship with their friends and neighbors. Many of these artisan brewers were accomplished in other professions, but they didn’t go to work happy until they became full-time brewers. What is evident from a tour around this corner of the state is that happy craft brewers make for really happy civic leaders. Craft beer, it turns out, is good for small town economies.
Neal Schwieterman, mayor of Paonia for seven years, attributes the opening of Revolution Brewing as a contributing reason that the town got through The Great Recession as well as it did.
“The recession just slaughtered many small town budgets. We saw a fall in sales tax revenue at most of our businesses. But the Paonia budget was stable for four years. The fact that Mike and Gretchen King [Revolution Brewing’s owners] showed up right before the recession to open a brewery was important in our town getting through the recession as well as we did,” says Schwieterman. He noted that Paonia has a diverse tax base, including tourism, lumber, hunting, agriculture, and retail. It’s also headquarters for the High Country News. But even while grocery store sales tax revenue declined in the Great Recession, Schwieterman noted that beer sales persevered.
Schwieterman’s sentiment that alcohol sales, especially craft beer, stay strong in hard economic times is supported by many sources. According to the research group Minter, which tracks trends in several industries, a quarter of craft beer drinkers reported drinking more craft beer in bars and restaurants from 2007-2012, during the depths of the recession. According to the Brewer’s Association (BA), the largest trade group for craft beer manufacturers, from 2011 through the first half of 2013 craft beer sales, by volume and dollar, grew approximately 12 to 14 percent a year.
The BA places the number of breweries in Colorado at 154 in 2012, and that number has grown in the past 18 months. The economic value of all the flowing beer was measured at $446 million in a mid-2012 report commissioned by the Colorado Brewer’s Guild in April of 2012. For a local small town economy, the direct financial impact comes from sales tax on each pint sold. Privacy provisions in the tax code make sales tax a confidential issue and brewers are not eager to divulge numbers, but with a little bit of math, it is possible to arrive at a good estimate.
According to a Beer Advocate, there are 1.24 million 16-ounce pints in 5,000 barrels of beer, with a barrel of beer holding 31 gallons. If a small town brewery is producing 1,500 barrels of beer annually, it is selling 372,000 pints. If the average price of a pint is conservatively $4, annual beer sales will net about $1.5 million. At a town tax of 2 percent, this yields approximately $30,000 annually. Add in food that most small breweries sell, and that figure will be even higher.
But, town officials stressed that breweries contribute much more to a local economy than sales tax. They provide jobs. And, as with wineries and distilleries, craft breweries are becoming part of the travel destination economy.
“I would find it hard to believe that they [tourists] would just come to town for a couple of beers and not find something else that they couldn’t live without,” says Jen Coates, town manager in Ridgway, which is home to Colorado Boy Brewing (and restaurant). She noted that 20 percent of local tax revenues are derived from restaurant and bar sales. According to Kelly Flenniken, Executive Director at the Grand Junction Economic Partnership, an average tourist will spend between $500 and $750 during a two-to-three-day stay. Such spending is vital to the region, affirmed Patrick Rondinelli, city administrator in Ouray, home to two breweries.
“We are a tourist destination and it’s important to have something for people to do when they’re here. Breweries help contribute to our economic well being,” he says. “Local craft beers are key supporters for the summer concert series here in Ouray, Ridgway and Paonia that draws visitors from around the region and even the Front Range.” Rich Sales, town administrator in Palisade, says that his town could not afford to hold its annual Bluegrass Festival without the support of Palisade Brewery. The proceeds from the beer the brewery donates help pay for much of the expense of the event.
“When you see a town with a brewery, you know something creative is going on,” says Laura Grey, Director at Colorado Heritage & Agritourism Program. “These breweries integrate into the community. Local breweries pass their spent grain along to farmers as hog feed and they use local graphic designers to create their labels. It all has a ripple effect.” Most breweries also organize charity events in support of their community, such as the Monthly Firkin Fundraiser night at Kannah Creek Brewing Company in Grand Junction. According to Katlin Lubeley, Marketing Coordinator, Kannah Creek donates 100 percent of the proceeds and has raised more than $14,000 for 15 different local nonprofits since it started the event in late 2012.
For Erik Maxson, who opened Brew, Durango’s fifth brewery, last year, the very essence of craft beer is to make the community a better place. Maxson’s unique beer-making philosophy seeks to move beyond defining beers by color, but rather by the range of taste influenced by the malt, hops and yeast which is possible with any color of beer. He buys as much as he can from local producers, including produce, beef and pork.
“We’re not trying to take care of the world,” Maxson says. “We’re trying to take care of our neighborhood. The very essence of a brewery is about community. Our history is that of the old public houses where people would meet to trade news and gossip over a pint. That’s the foundation of craft beer.”