Say hello to Payette Brewing Co.
The Garden City brewery plans to expand to a 60-barrel, approximately 40,000-square-foot brewhouse with the long-term potential to pump out as many as 100,000 barrels of beer annually.
The beefed-up operation would catapult Payette, which sold 5,348 barrels of beer in 2013, into a new role as Idaho’s largest brewery. Victor-based Grand Teton Brewing Co., which generates about 10,000 barrels yearly in its 30-barrel brewhouse, sits on that throne today.
“It’s definitely a big jump,” Payette founder Mike Francis said.
The site has not been chosen. The new brewhouse probably will be in the Treasure Valley, but all opportunities are being considered, Francis said.
“We’re looking at a few different sites and a few different options,” he said. “We’re not leaving the state, I can tell you that.”
Payette sells about 65 percent of its product in cans, including the popular Outlaw IPA. With out-of-state distribution now reaching into Utah, Oregon, Nevada and Washington, the brewery has maxed out its 15-barrel, 11,000-square-foot location at 111 W. 33rd St., Francis said.
“To be a regional brewery in the West, that’s kind of our goal now,” he said. “We love selling beer here. We want to let everybody else in the West know that there’s great beer in Idaho.”
Evolving from a local to regional operation brings new challenges, said Bart Watson, chief economist with the Brewers Association, a national trade organization representing the craft brewing industry. Those include maintaining quality and consistency as volume is increased, adapting to new distribution and state regulatory hurdles, and keeping a brand relevant in multiple areas.
Because other craft breweries have grown from local to regional and national, there’s also less shelf space than a few years ago, he said.
But opportunity awaits.
“It’s more competitive and crowded than ever,” Watson said, “but there’s still a lot of volume to be gained.”
In 2013, craft beer accounted for 7.8 percent of beer volume and 14.3 percent of retail beer sales in the United States, according to the Brewers Association. That’s 18 percent growth by volume and 20 percent growth by dollar sales over 2012.
So far in 2014? “We’re seeing the growth continue pretty much along that same trajectory in the first six months,” Watson said.
Francis hopes to have Payette’s larger brewhouse open in a “year-plus.” The possibility of a restaurant component has not been ruled out, but that will depend partly on where the brewery is located. Either way, there will be a tasting room.
Since opening in 2010, Payette has proved to be an ambitious, savvy player in Boise’s exploding beer scene. Canning its beers and aggressively pushing its products into stores and regional markets, Payette made waves among older, more established Boise breweries such as Sockeye Brewing and neighborhood brewpubs such as Highlands Hollow.
Francis said Payette’s business plan won’t change dramatically with expansion. Selling 12-ounce cans will remain a big part of it.
However, more brewhouse size will mean more freedom to experiment as a brewer. And since the markup on specialty beers typically is higher than on beer in cans, it might make financial sense.
“The idea of being able to do more specialty stuff would be nice, would be fun,” he said.
Some of that might be able to happen at the Garden City brewery.
“The plan is to keep it," Francis said. “But we’ll see.”
Ultimately, Watson said, the success of Payette Brewing Co.’s expansion will boil down to its beer — getting Payette brews to stand out among the competition in other states, including local breweries.
“Locally, I think you can still grow partly because consumers continue to want that local connection and local appeal,” he said. “As you move further away, your beer really has to differentiate and speak for itself, because you can’t rely on that local connection.”