Outlook 2018: A Brew Economy

Two new breweries and a cidery slated to open this year in the Flathead

By Tristan Scott
Construction of the new Sunrift Brewery in Kalispell on Dec. 19, 2017. Greg Lindstrom | Flathead Beacon

The simple, thirst-slaking union of a few basic ingredients — water, grain, hops, yeast, and fruit — has created a groundswell of economic activity in the Flathead Valley, and the surging craft-beer industry shows no signs of flagging locally or statewide.

Beer is as old as civilization, dating back to when grain was first domesticated and borne of the discovery that moldy bread produced an odd sensation. Adding to the established custom of imbibing alcohol is a gathering force behind craft breweries, which continue to spring up in the region and statewide, with no sign of slowing down.

In the Flathead Valley, the trend is most evident in the success of downtown Kalispell’s first microbrewery, Kalispell Brewing Company, which opened its doors in 2014. That evidence continues to mount with the upcoming debut of two new breweries in downtown Kalispell, as well as a handcrafted hard-cider orchard and brewing facility east of town.

SunRift Beer Company is setting up shop in the former Alano Club building north of the Kalispell Center Mall along the railroad tracks near U.S. Highway 93.

Having entered its final phase of construction, head brewer and proprietor Craig Koontz said he plans to open this winter and is excited to join the downtown core and provide a vibrant gathering place and a taproom that features quality product.

Koontz’s experience in the craft beer industry runs deep, and includes work as head brewmaster at Tamarack Brewing Company in Lakeside, as well as stints brewing at West Seattle Brewing in Seattle, Wash., Baranof Island Brewing Co. in Sitka, Alaska, and Four Peaks Brewing Company in Arizona, where he cut his teeth in the business.

Although he’s never owned his own brewery outright, he has helped build the breweries into models of success.

What’s the secret?

“If you offer a quality product and you are passionate about what you’re doing, you’ll be all right,” Koontz said. “Those with quality beer will last.”

Koontz plans to feature six or seven staples and offer a rotating cast of beers that play with diverse flavor profiles. He’ll sell his beer by the pint and by the growler, so the key to success will be drawing people to his taproom in Kalispell’s growing downtown core.

“We are just really focused on creating a space where people want to hang out,” he said.

Meanwhile, Adam and Amanda Robertson, a husband and wife who live in Whitefish, are in the final stages of transforming the former American Carpet Center building at 409 First Ave. E. in downtown Kalispell into a 6,500-square-foot taphouse and brewery called Bias Brewing, which is also slated to open this winter.

In Whitefish, Bonsai Brewing is seeking to expand its operation into adjacent buildings on its Wisconsin Avenue property, allowing more storage space and the creation of an office.

And finally, the Flathead Valley is on the cusp of welcoming its first hard-cider apple orchard and cidery in Big Mountain Ciderworks, a family-owned operation set to open its cider house and tap room in the spring of 2018 on Old Reserve Drive.

The debut of these small, local craft breweries and their subsequent success is mirrored across the state and nationally.

Craft beer production climbed again in 2015 in the Treasure State, rising to 15 percent above where it stood in 2014 and 87 percent greater than its 2010 standings, according to a study published last year by the University of Montana’s Bureau of Business and Economic Research.

At the same time, Montana brewers continue to employ more people, increase payroll and make a greater number of purchases year over year.

Montana’s craft brewing industry has more than doubled its workforce over the past seven years, and the number of people working for craft breweries went from 231 in 2010 to 1,044 in 2015, according to senior research economist Kyle Morrill, who authored the BBER study, which was commissioned by the Montana Brewers Association (MBA).

Furthermore, the share of expenditures to Montana businesses continues to increase, with a total of $19.8 million paid directly to Montana businesses. The study was the first to estimate agricultural purchases totaling $4.5 million in 2015, 36 percent of which were Montana agricultural producers.

Last year, craft breweries produced 12.3 percent of the beer Americans bought, up from just 2.8 percent in 2004, according to the Brewers Association, a national trade group. Meanwhile, overall U.S. beer volume sales were static

The report found that economic benefits include more than $33 million in income to Montana households; sales from businesses and organizations are $103 million higher; and tax and non-tax revenues, not including property taxes, were more than $4 million higher.

The study also found that the industry’s overall economic impact grew by about 20 percent over 2011 numbers, reaching roughly $60 million in 2013.

And with brewing falling under the major industry heading of manufacturing, Montana’s manufacturing sector has enjoyed the largest output gain of $41.6 million due to craft brewing operations, according to Sorenson.

The sales of all kinds of Montana entities benefited from craft brewing, notably construction, as well as state and local government, retail trade, and health care, according to the report.

Still, small craft breweries chafe under production constraints, among other pressures that stem momentum.

To help alleviate those burdens, U.S. Sens. Jon Tester, a Democrat, and Republican Steve Daines have thrown their support behind the Craft Beverage Modernization and Tax Reform Act, which lowers the federal excise tax fore breweries. The bill passed Dec. 20.

“Our senators understand that with 75 breweries creating jobs and economic growth in communities across our state, Montana craft beer is good for Montana’s economy,” Nolan Smith, executive director of the Montana Brewers Association, said.

Under the bill, the federal excise tax will be reduced by half to $3.50/per barrel on the first 60,000 barrels for domestic brewers producing less than 2 million barrels annually, and reduced to $16 per barrel (from $18/barrel) on the first 6 million barrels for all other brewers and all beer importers.

According to Smith, the savings will allow Montana’s 75 small breweries, including many manufacturers and entrepreneurs, to reinvest in their businesses, expand their operations and hire more workers.

Known for their passion for the craft, brewers said they plan to turn those savings around to make capital improvements and investments.

“I absolutely see brewers reinvesting in their business. That’s just their style across the board,” Koontz said. “It’s their passion and it’s a healthy business.”