Delaware craft breweries are fruitful and multiplying

Frank Pagliaro of Frank’s Wines in Wilmington says he now keeps more than six refrigerator cases of craft beers, and just one case for the major national brands//Photo by Luigi Ciuffetelli.

By Rob Kalesse

Special to Delaware Business Times

Before 2009, you could count the number of microbreweries and brewpubs operating in Delaware on one hand. Today, that number has nearly tripled, with 13 fully functioning breweries in Delaware, and two more set to open in the new year.

Undoubtedly, the interest in craft beer in America has had an influence on the uptick in breweries and beer production and consumption in the First State. And while veterans like Iron Hill, Dogfish Head, Stewart’s and 16 Mile have a firm foothold in the marketplace, the new brews on the block are looking to get a piece of the action.

But like any fledgling business, want-to-be-breweries must write up a coherent business plan, convince investors their product will stand out in the marketplace, and provide enough reasons for banks to grant them loans to get started.

For Eric Williams, president and founder of Mispillion River Brewing in Milford, it took several revisions of his business plan and meetings with nearly seven banks before a loan officer called to say he’d been approved.

From left: Founder Eric Williams, Marketing Director Lauren Bigelow, and Brewmaster Ryan Maloney are celebrating the two-year anniversary of Mispillion River Brewing//Photo by Joe del Tufo.

“Getting the investors on board was the easy part; they were mostly people that knew us and knew we were passionate and made good beer,” Williams said. “Banks are a lot more difficult, but eventually County Bank, a small, local bank here in Milford, gave us the approval.”

Mispillion, which will celebrate its two-year anniversary Nov. 15, is now a household name in craft-brew circles in Delaware and beyond. Their beers, like the highly popular Reach Around IPA and Beach Bum Joe Belgian pale ale, can be found on tap and in cans all around the state.

For Williams, it comes down to passion, not necessarily profitability, when starting out. The former corporate lifer and home brewer surrounded himself with “smart people” and focused making a name for themselves in their first year of operation, rather than worrying about the bottom line.

“Anyone who comes into this business – and it’s a damn cool business, but a business nonetheless – looking to make money right away is out of touch,” Williams said. “This is a small business operation we have here, so the struggle to pay our bills demands a lot of hard work.”

Ron Price, a mechanical engineer by training and home brewer since 1992, is the owner of another young brewery in Delaware, called Blue Earl. Located in Smyrna, Price opened his doors in May, after facing a lot of the same challenges as Williams.

“It’s true that getting investors is the easy part, because for us, it was a lot of friends and family that helped our cause,” Price said. “The loan is difficult, sure, but another challenge you face is making a name for yourself through eventual distribution.”

Price recently signed on with NKS Distributors and will be kegging their beers for distribution in mid-November. Their line of beers, which feature a lot of higher alcohol and more robust beers, like the Hoochie Coochie Imperial Porter and Blue Train Double IPA, will hit restaurants in time for the cold winter months.

Price said he hasn’t turned a profit as of yet, but expects to do so in the new year, as his business grows. “A lot of people don’t know who we are yet, but distribution, I believe, will change that.”

Eric Williams has this advice for anyone starting out: Follow your passion first, and worry about profit later.

Both Williams and Price also said that talking to town councilors and business owners in their respective communities helped as well. In the end, they gained perspective on running a successful business and what kind of licensing they’d be required to obtain in order to open their doors.

As more and more breweries pop up in the state of Delaware, more and more start-up companies must apply for proper zoning, permits and licenses. John H. Cordrey, commissioner of the Alcoholic Beverage Commission, believes the trend will continue, and says there is no limit on the amount of licenses the ABC may grant.

“This nationwide trend to go smaller with local establishments has definitely been a benefit to Delaware and the craft beer community,” Cordrey said. “The challenge for new breweries, however, has to do with federal licensing and zoning. They have to go through a more rigorous process than your average restaurant or package store.”

“If the microbreweries or brewpubs have a solid business plan and convince their communities that they will do good work to help with economic development, I don’t see this trend slowing down anytime soon,” Cordrey said.

Currently, Cordrey said, the ABC continues to see applications and filings for new breweries in Delaware on a regular basis. For home brewers-turned-pros like Price and Williams, the friendly competition can only be seen as a good thing.

“The craft beer community, here in Delaware and nationally, is very supportive of each other,” Williams said. “Knowing that more and more breweries are entering the market, and can help Delaware become more known as a “˜brewing state,’ will only help us all.”