Beer and Breweries in Virginia

It makes sense to locate a brewery near a major city; transportation costs from the manufacturing site to the customer can be reduced, but the costs of labor and taxes will be low outside the city limits. That's why Budweiser is brewed in James City County.

The other major manufacturer with a brewery in Virginia is Coors. In 1987 Coors built a plant near Elkton where they blend, package and distribute 7 million barrels of Coors beer to Eastern markets. Rockingham County has excellent water supply and water quality, so Coors beer in Virginia includes Shenandoah Valley - as well as Rocky Mountain - water.

If you ever saw the movie Smokey and the Bandit, you remember that the thin plot line was based on a race to deliver Coors from the western states. That's now an outdated scenario. Coors can sell its beer nationwide now, in part because starting in 1987 it sent tank cars with "beer concentrate" (a specially-brewed, high-alcohol version of its standard beer) from Golden, Colorado to Rockingham County. Adding water and packaging in Virginia reduced the shipping costs substantially to the Northest and Middle Atlantic markets.

Coors fermentation tanks at Farley Vale Farm
Coors fermentation tanks at Farley Vale Farm

Coors upgraded that packaging plant to a full-scale brewery in 2006. This involved importing 40 fermentation tanks from Ziemann, Germany, and shipping the tanks to Elkton. The tanks were shipped to Hampton Roads, then barged up the Chesapeake Bay and the Rappahannock River to the Farley Vale Farm just downstream of Fredericksburg.

Geting the 70-foot long, 21-foot in diameter tanks from a farm in King George County to Rockingham County required truck transport over the highway. Traffic lanes on Routes 3, 29, 33, 649, 340 are about 12-feet wide, so special convoys were arranged to interrupt regular traffic and two lanes, in order to ship the fermentation tanks by truck the last 100 or so miles across the Blue Ridge to the Shenandoah Valley.

transport route for Coors fermentation tanks in 2006
transport route for Coors fermentation tanks in 2006
Source:
Virginia Department of Transportation

Yes, it might have been easier to install the tanks in 2006 if Coors had decided in 1987 to build its packaging plant in King George County. However, the company found the right mix of cheap land, abundant and clean groundwater, available labor force, and access to markets in the Eastern United States via rail (Norfolk Southern) and truck (especially via I-81) in a different location - Rockingham County.

Shenandoah Brewery for Coors has access to high-quality groundwater and also the Norfolk Southern railroad
Shenandoah Brewery for Coors has access to high-quality groundwater and also the Norfolk Southern railroad
Source: US Geological Survey,
McGaheysville 7.5x7.5 topo quadrangle (2013, Revision 1)

The major commercial breweries manufacture beer in a few massive facilities and ship their product to stores and restaurants. Most Virginia microbreweries produce much small batches of beer, and have to attract customers to their facilities or rely upon just local retail sales. Combining a microbrewery with a restaurant can showcase brewing equipment to attract customers, and sell the product directly.

The microbreweries in Virginia are located with a different pattern than wineries. Wineries are typically in rural areas, but most Virginia microbreweries are located near universities or in large population centers (especially Alexandria/Arlington and Richmond).

The Old Dominion Brewing Company started operations in an office park in Ashburn in 1989, and struggled to attract enough customers to the brewpub onsite. The operation also experienced a problem after a major storm caused Loudoun Water to add additional chlorine to ensure delivery of safe drinking water - that affected the taste of the beer for several batches of beer and root beer. The brewpub closed in 2008, and the entire operation moved to Delaware the next year, but Northern Virginia has no shortage of brewpubs today.1

Old Dominion Brewery
bottling Old Dominion beer at the brewery in Ashburn (Loudoun County)

The General Assembly encouraged development of bewpubs in 2012, when it passed a law allowing beer to be sold for consumption at brewpubs without requiring a restaurant license. Within two years, the number of craft breweries in Virginia increased 75%, mimicking the growth of wineries once sales were permitted at tasting rooms without full food service operations. A 2014 law enhanced the ability of farm breweries to sell on-site, so long as the beer uses agricultural products from that farm (such as hops).2

Tourism officials see great potential in creating craft beer trails such as the Brew Ridge Trail in Nelson/Albermarle counties and the city of Charlottesville. Making breweries into destinations, comparable to wineries, creates jobs in rural areas; each craft brewery is estimated to create 10-50 jobs. The top tourism official for Virginia noted:3

People are looking for unique experiences... When they go to a destination, they can come home with a fantastic story of "I had this, I did this."

hops require poles and a network of twine, and a lot of labor to grow the vines on the rellis system and harvest the flowers
hops require poles and a network of twine, and a lot of labor to grow the vines on the rellis system and harvest the flowers
Source: Virginia Co-Operative Extension blog, Meet Huguenot Hops (Again)

Craft beer is brewed to be distinctive. Using local ingredients provides unique flavors not available in standardized, nationwide brands such as Bud Light that are intended to taste the same everywhere.

One key component to beer is the flavoring from the flowers of hop vines. Growing one or two vines does not add substantial workload for a hobby gardener, but a commercial-sized craft bewery needs a quantity of hops that requires creating a hopyard. As one hopgrower has noted:4

Hops are not an easy crop. If you want to grow for the beer industry, and do it easier, grow barley.

Hops are a high-value specialty crop; a half-acre of hops can be a profitable farming operation - but commercial operations require specialized equipment. The vines grow up 15' high poles and across string/rope trellises, so workers use elevated equipment when growing hops.

Small-scale operations can not afford to invest heavily in specialized equipment used for only a few days/year in managing hops. One option is for a community of hop growers to share equipment. An alternative is to develop a large hopyard to supply multiple breweries in the Mid-Atlantic market, with equipment to grow and to pelletize hops for storage and shipping.

The Huguenot Hops operation in Midlothian supplies breweries in the Richmond area. In 2014 two hop growers in the Shenandoah Valley advertised for investors willing to finance $1.5 million for the poles and other infrastructure required to develop a large commercial operation.5

Centralized growing of hops will not result in centralization of the craft brewing industry in Virginia, but a large-scale hopyard would offer an opportunity to create a unique tourist destination. Location of the hopyard could be determined by local soils and micro-climate, but proximity to an interchange on I-81 or I-95 could also be a factor.

Virginia Beer Factoids:
- on January 25, 1935, the first cans of beer (Krueger's Finest Beer and Krueger's Cream Ale) were sold commercially in Richmond
- neon signs advertising beer may be placed inside a bar, but not in the front window of a restaurant; Virginia's Administrative Code prohibits advertising alcoholic beverages on any exterior window6

Links

References

1. "About Us," Old Dominion Brewing Company, http://www.olddominion.com/about-us/ (last checked October 27, 2013)
2. "'A rising tide' of craft breweries in Loudoun and beyond," Washington Post, July 14, 2014, http://www.washingtonpost.com/local/a-rising-tide-of-craft-breweries-in-loudoun-and-beyond/2014/07/08/30d08c0c-0611-11e4-bbf1-cc51275e7f8f_story.html (last checked July 31, 2014)
3. "County brewing a 'wet' economy," Virginia Craft Brewers Guild, July 30, 2014; "The rapid growth of craft breweries is changing Virginia’s vibe," Virginia Craft Brewers Guild, July 30, 2014, http://virginiacraftbrewers.org/post/The-business-of-beer.aspx (last checked July 31, 2014)
4. "Ag experts: Untapped potential for hops industry in Virginia," The Daily Progress< February 18, 2014, http://www.dailyprogress.com/news/local/ag-experts-untapped-potential-for-hops-industry-in-virginia/article_a76b6416-981d-11e3-aa03-0017a43b2370.html (last checked September 1, 2014)
5. "HopsFromVirginia.com," EquityNet, (last checked September 1, 2014)
6. "Beer Can History," Brewery Collectibles Club of America, http://www.bcca.com/history/beer_can_history.asp; Virginia Administrative Code, 3VAC5-20-30.2.c "Advertising; exterior; signs; vehicles; uniforms, http://leg1.state.va.us/cgi-bin/legp504.exe?000+reg+3VAC5-20-30," http://leg1.state.va.us/cgi-bin/legp504.exe?000+reg+3VAC5-20-30 (last checked October 27, 2013)


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