USA: Deschutes Brewery loses battle for Virginia

Four West Coast breweries were competing to open their first East Coast brewery in Virginia. As the first ones already started operations it becomes clear that the loser is called Deschutes Brewery.

In 2013, Green Flash Brewing Co. headquartered in San Diego/California announced to open a new east coast brewery with a capacity of 100,000 barrels in Virginia Beach, Virginia.

One year later, in October 2014 Stone Brewing Co. also based in the San Diego area in Escondido/ California selected the states capital Richmond/Virginia only 100 miles north-east of Virginia Beach for its 600,000 barrels East Coast brewery and distribution center.

In March 2016, Deschutes Brewery, also based on the west coast in Bend/Oregon announced plans to build a 150,000 barrels brewery for $85 million in Roanoke/Virginia 165 miles west of Richmond.

Only two months later in May 2016, Ballast Point Brewing Co. the third brewery based in the San Diego area and since November 2015 part of Constellation brand completed the round to announce it was opening a 240,000 barrels east coast brewing operation at a cost of$48 million in Daleville/Virginia only 30 miles north of Roanoke.

Green Flash Brewing Co. was the first to open its East Coast brewery and distribution center to the public on Nov. 13, 2016. Shipping of Green Flash beer from Virginia started early this year. Next was Stone Brewing Co. with an official opening of the retail store and tasting room on March 2, 2017. A release of the first Stone beers brewed in Richmond is expected in the next days. Third was Ballast Point, which opened its new 18,000-square-foot tasting room & kitchen last week on June 12, 2017. Completion of the brewery is expected to occur later this year.

Last in the row is Deschutes Brewery. A 4,700-square-foot taproom is expected to open by the end of August and the construction of the brewery has not started yet. It is planned to break ground in 2019, with production to start as late as 2021.

Considering the fierce competition, some people even doubt, if construction of Deschutes’ new brewery will ever start. Sales of the 8th largest craft brewery in the United States declined 9.7% in the first four and a half months of 2017 according to IRI Worldwide. Even more, production capacity of the Bend brewery is 575,000 barrels annually, but only 385,000 barrels of beer were produced in 2015.

Meanwhile, Gary Fish founder and owner of Deschutes Brewery announced this week to step down from the position as CEO of the company, making way for Michael LaLonde, up to now the company's president and COO. He joins the list of craft beer pioneers who have stepped away from CEO duties including Greg Koch (Stone Brewing Co., Escondido/CA), Tony Magee (Lagunitas Brewing Co., Petaluma/CA) and Larry Bell (Bell’s Brewery, Comstock/MI ).

Anyhow, in view of the challenges ahead the move can be seen as paving the path for a new start of the company.  But Fish has dampened expectations for a radical change. He says: “In reality, Michael has been serving in a CEO capacity for some time now, as he handles many aspects of strategic planning and daily operations of the company. The title president and CEO more accurately describes Michael’s role and his guidance will continue to help us fulfill our goals.”

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