Shawn DeWitt now knows what it feels like to be a rock star.
On a recent trip to Japan, the co-founder and director of brewery operations for Coronado Brewing Company was in a beer bar when the owner announced that the boys from Coronado were in the house. Before he knew it, the place turned into a mob scene as everyone suddenly surrounded them, clamoring for an autograph and photos.
“It was overwhelming,” DeWitt recalled. “We signed bottles, pint glasses, even the shirts they were wearing. I’ve traveled all over the U.S. and we have never experienced anything like that.”
The craft craze that’s been sweeping the U.S. is starting to go global as more and more countries are thirsting for something beyond the mass-produced stuff. The Brewers Association recently reported that in 2013 export volume increased by 49 percent over the previous year, representing 282,526 barrels and an estimated $73 million in revenue. In 2011, about 110,000 craft beer barrels were sent abroad for an estimated $23.4 million. (Note: Not all U.S. breweries that export beer are part of the BA’s export development program, which requires an additional fee.)
“We are pushing boundaries, no holds barred,” said Mark Snyder, who heads the BA’s export development program. “We are making the best beers in the world. And people see that, respect that and want our beers.”
In San Diego County, more than ten breweries are exporting their craft, mainly more established operations.
But there are smaller breweries, including Aztec Brewing Company in Vista, that are seeing value in reaching beyond the border.
Aztec first sent its beer to Hong Kong last year, and now is sending its Chipotle IPA and Noche de los Muertos Imperial Stout to Mexico, where the brewery was originally born in 1921. The new Aztec, which opened in 2011, has a deal in place with BeerBox, a chain of 40 retail craft beer markets from Baja to Cancun. Its first delivery of 120 cases of 22-ounce bottles shipped in May, ironically on Cinco de Mayo.
“We have come full circle,” said John Webster, Aztec’s marketing director. “To be developing relationships and establishing a presence in Mexico is exciting for us considering our history. I think the brand is something that resonates with them.”
Aztec, which produces about 1,500 barrels a year, is considering expansion into Japan and the United Kingdom.
“We do think it’s going to be a regular thing, and we want to do more in Mexico,” Webster said.
Coronado, which is projecting to produce about 29,000 barrels this year, continues to expand internationally. Currently in nine countries with about 5 percent of its production earmarked for export, DeWitt said he could easily see that increase to 20 percent within 5 years.
“I see this as only going up,” DeWitt said.
Brandon Richards, who heads up sales and marketing for Coronado, said the brewery receives at least five inquiries every month from international distributors.
“At one point we looked at exporting more like a hobby, but now it’s a very important part of our business,” Richards said.
For New York’s Brooklyn Brewery, the largest exporter of American craft beer with sales in 17 countries, foreign sales account for 20 percent of the brewery’s annual revenue of $50 million. Brooklyn is also building a brewery in Sweden.
Nagano Trading, the largest distributor of American craft beer in Japan, and Long Beach-based Global Craft Trading, which focuses on nine international markets, ships mostly San Diego beers. Since Global Craft was founded in 2011, it has experienced more than 100 percent growth every year, according to president Andrew Balmuth.
“In this global economy, there are craft beer geeks everywhere and there’s craft beer everywhere,” said Balmuth, who co-founded Yokohama-based Nagano in 2006 with his wife Akemi Ohira Balmuth. “Anywhere there is craft beer being brewed, there is an interested drinker who wants to try a Sculpin or a Stone IPA.
“San Diego beers are the very popular in our export portfolio. The popularity has to do with the style of beers being produced by those breweries and that San Diego has done a tremendous job in branding itself as a global beer city.”
Not for everyone
Jim Crute, owner of Lightning Brewery in Poway, has considered exporting but sees too much regulatory red tape for it to make sense for his operation.
“It’s almost a distraction,” he said. “In other countries there’s an entire byzantine set of alcohol trade rules and regulations. In the United States it’s a pain and overseas it doesn’t get easier. So you have to have enough volume for it to make sense for you.”
Crute said he was recently approached by an international distributor who wanted to sell his Thunderweizen Ale in Japan, but said the numbers didn’t add up.
“The distributor wanted a price that was lower than what we sell our beer for now,” he said. “If I was going to lower my prices, I would drop them in the U.S. first.”
Lightning produced 780 barrels last year and, for now, is focused on growing locally.
“Based on my interactions up to now, I am going to stay away from it,” Crute said.
DeWitt agrees that exporting may not make sense for some smaller breweries.
“If we were smaller, I wouldn’t even think about international distribution until I had enough capacity to do so,” DeWitt said. “I don’t know how much that does for you as a small brewery. I’d rather be strong in my own market because those customers can come to my brewery every single day.”
While the increasing demand from overseas countries such as Japan, Sweden, Spain and New Zealand is an exciting proposition, maintaining a quality product is a big concern for craft breweries. Balmuth said the supply chain is critical to delivering the freshest beer possible.
“Our supply chain is 100% cold,” he said. “That is the only way to maintain freshness. Fresh from the brewery allows the beer to develop the market in harmony with the sales efforts of the importer. Basic rule of thumb—it’s much easier to sell a fresh craft beer than one that’s old, oxidized and out of code. That is true for all markets domestic or abroad. We actually visit and monitor the market, we inspect the warehouse and delivery system and taste beers in the markets we supply. We monitor all points of the supply chain to protect the quality of the beer.”
DeWitt, who works with Nagano and Global Craft, said he has visited other countries specifically to see how Coronado’s beers held up during their voyage and was satisfied with what he discovered.
“The quality was better than I expected, but of course they weren’t brewery fresh,” he said. “But knowledgeable beer folks in Sweden and Japan understand that it takes time for beer to travel that far and they still feel that U.S. craft beers are still better than the beers being made in their own countries.”
Balmuth said maintaining that quality and freshness is vital because that gives the beer “the chance to express the brewer’s intent.” If it’s not fresh, it can’t do that. With shipping from Long Beach to Japan taking just 12 days, many beers go out to bars less than 30 days from packaging.
Shipping more than beer
Brewers are learning they are exporting more than just their product. With craft beer comes a piece of American culture as well. A good example of this is found at Antenna America, the tasting room and bottle shop of Nagano Trading. In addition to eight rotating taps, the tasting room also serves cheeseburgers, fish tacos and wings served with Stone sauces to give visitors a complete craft experience.
“We’re trying to brand American concepts around beer,” Balmuth said.
Added Webster: “There was a time when Americans were looking to drink European beers but now that has flipped the other way. And San Diego beers have a particular appeal. We’re selling a lifestyle along with a liquid.”
According to the Brewers Association, the largest importer of U.S. craft beers continues to be Canada with Sweden and the UK the next largest markets. Japan, Australia and Brazil are emerging quickly, and according to some insiders, Mexico and South Korea are the next two countries to take off because of recent changes in distribution laws.
The bottom line is the growth of American craft beer around the world isn’t going anywhere but up.
“The growth will look similar to the growth that many of these brands have had domestically,” Balmuth said. “Early export channels will become important to the future success of a brewery.”
SD Breweries Exporting Beer
AleSmith, Aztec, Ballast Point, Coronado, Green Flash, Hess, Iron Fist, Karl Strauss, Modern Times, Mother Earth, Pizza Port, Port/The Lost Abbey, Saint Archer, Stone… know of others? E-mail the author at email@example.com or leave us a comment below.