Staying Craft: Chatting with Portner Brewhouse

For a little change of pace during the month of Oktober we’ve been running a series of articles focused on the craft beer industry, its dynamics, and market forces affecting the industry.

Due to the positive feedback and interest in our recent Craft Brew spotlight, we decided to expand upon our microbrew expose with a series of interviews.  Each segment will provide a detailed view into each brewer’s perspective of the industry, goals and aspirations in entering the market, and valuation trends, risk factors, and growth initiatives.

 

Continuing on with our Craft Brewing theme, we recently had the opportunity to chat with Cathernine Portner of Portner Brewhouse.  Ms. Portner is continuing in the family tradition and opening the Portner Brew House.  She has some big shoes to fill- her great-great grandfather opened and ran the largest pre-prohibition brewery in the Southeast.  Read on for more on her take on the craft market.

Margaret (L) and Catherine (R) - Portner Brewhouse Co-founders
Margaret (L) and Catherine (R) – Portner Brewhouse Co-founders

Excerpts From Our Recent Interview:

QBV: Catherine give us a little background on Portner Brewhouse. 

CP: My great-great grandfather was a German immigrant and came to Alexandria just before the Civil War.  He opened and ran the largest pre-prohibition brewery in the Southeast.

My sister and I are now resurrecting that company as Portner Brewhouse – a full service restaurant, brewery, and Craft Beer Test KitchenTM inspired by the original history.

QBV: That’s a great story.  Where are you in the process?

CP: We are currently looking for the best location in Alexandria.  We anticipate we’ll be open at some point next year.  We currently brew beer at another location and host local tasting events.

We have four recipes that are reconstructed from our family’s brewery, as well as contemporary seasonal beers.

QBV: Lets talk about the business model.  Brewpub? Distribution?  How do you plan to go to market? 

CP: We are a brewpub.  It’s another segment in the craft market where we brew beer and serve food in the same location.  As a brewpub you have a much higher cost per square footage than a manufacturing brewery because your location is of higher importance for convenience to restaurant customers. This higher real estate cost makes adding packaging equipment cost-prohibitive and thus all of our beers will be served on draft as opposed to bottles or cans.

For our story, we want to give the history a home and our customers a venue to experience what was once here.

QBV: What about the test kitchen?

CP: The Craft Beer Test KitchenTM is our development program for home brewers that are interested in going professional.  They’ll have the opportunity to work on a recipe, see it sold and collect feedback and sales data on their own creation.

QBV: What do you see as the keys to being competitive in your local market?

CP: For us it’s about authenticity.  To the extent that we honor and pay respect to the history and showcase that in a way that today’s generation will understand and appreciate.  Our second unique selling proposition revolves around the future of craft beer, where as a customer you can have a beer and a year down the road actually see it on the shelf somewhere from a Craft Beer Test KitchenTM participant.  We’re adding a stepping stone into the process that doesn’t currently exist.

Old Town Alexandria prides itself on its history, yet this particular story is not one being told.  We can be another major contributor to the city.  We saw our family previously do that as the city’s largest employer in the years leading up to Prohibition.

QBV: The craft beer industry is taking off – the number of participants is increasing.  But there is a huge segmentation between large and small companies.  Have you given any thought to these big picture things in the industry? 

CP: Craft beer is in its second renaissance.  The first was in the early 1990’s following the legalization of home brewing.  It’s one of the few areas where someone can take a hobby and turn it into a viable business. The taste of the consumer is also changing in the movement towards local sourcing, knowing where you food comes from, insourcing… this has all influenced the second wave of craft beer growth.

The consolidation has really not yet happened in the smaller segments.  It’s happened at the top, but not in the smaller segments.  What you see though is larger players seeking to replicate the success of craft through product lines like “Shocktop”. The number of players and rate of entrants is very interesting.  My hunch is that the rate of consolidation would be somewhat lower than in other industries.

QBV:  How about consolidation? M&A?

CP: I don’t think there is a lot of exit strategy planning by the current craft entrants in terms of M&A.  They are more concerned with being open, their own growth, and growing as their own company or maybe having a second location.  Some of those strategies can be seen with the increase of West Coast breweries opening East Coast locations.

There’s been some conversation as to whether there is a “Craft beer bubble” – but really the most direct comparison that seems to make the most sense is that while there are more than 3000 breweries today, there are over 8,000 wineries.  It seems like we haven’t hit our ceiling yet.

QBV: That’s great.  Thanks for your time today Catherine – looking forward to our first tasting at the Portner Brewhouse!

About Catherine Portner and Portner Brewhouse

Catherine Portner is the Co-founder and President of Portner Brewhouse (www.portnerbrewhouse.com), a brewery restaurant and Craft Beer Test KitchenTM concept opening in Alexandria, VA. She is also the great-great granddaughter of pre-Prohibition beer titan Robert Portner, who ran the largest brewery in the South for the 60 years between the Civil War and Prohibition – The Robert Portner Brewery which inspired her to launch her own brewing venture along with her sister and partner, Margaret. Together the sisters are poised to bring this rich brewing history back to the forefront of the beer industry and provide opportunities for others to do the same.

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