MARYLAND BREWHOUSE RISING LIKE FOAM : GETTING IN GEAR, MAKING CRAFT BEER.

Byline: Dale Hopper Associated Press 

Brewmaster Steven Nordahl stood in the nearly empty hangar-size space of his new brewery and dreamed aloud.

``We would like to fill this with our beer,'' he said.

Behind him, crammed into one end of the Frederick Brewing Co.'s pristine $8 million plant, stood eight 200-barrel tanks. The bomb-shaped vessels would have filled the company's downtown Frederick brewery, but are dwarfed by this new plant a few miles south of the city.

Having started the microbrewery with his partners in 1992, Nordahl is watching their vision slowly take shape.

``We got into this for one reason only,'' said Nordahl, 28. ``We are selfish and don't want to pay for good beer.''

The new plant makes Frederick Brewing Maryland's largest brewer, and means the company has outgrown its microbrewery status, Assistant State Comptroller Marvin Bond said.

Frederick makes craft beer, a term usually associated with small brewers and defined by the Institute for Brewing Studies in Boulder, Colo., as beer that contains no more than 10 percent of corn, rice or refined sugar and no artificial colors or flavors.

``We use just four ingredients,'' Nordahl said. ``Water, malt, hops and yeast.''

Frederick started humbly, but has ridden the growing wave of demand for craft beers that held 2 percent of the $50 billion domestic beer business in 1995, up from 1.3 percent the year before.

``Just as the American consumer has moved to demanding good coffee, good wine and good cheese they are moving to fresh, full-bodied beer,'' said Bud Hensgen, executive director of the Mid-Atlantic Association of Craft Brewers, a trade association with 21 members in Virginia, Maryland and Washington, D.C.

The demand for craft brews has made Frederick the first of the microbreweries in an area that stretches from Pennsylvania to Virginia to open a ``second-generation'' plant, Hensgen said.

The company's markets have grown to include 10 states and the District of Columbia, with more expected now that capacity has tripled, said Kevin Brannon, chairman and chief executive officer.

Inside the new plant, each stainless steel hulk looms 29 feet high and can hold the equivalent of 2,600 cases of beer. The brewery has space for 24 more tanks - enough to fill 46.8 million bottles.

If Frederick meets its current capacity, the company would reach 150,000 barrels a year. Last year, Frederick produced 12,000 barrels and had sales of $1.9 million.

To help finance the new brewery, the company went public in March and raised $8.3 million. The majority of the stock is held by residents of Frederick County, Brannon said.

``When we started we were pretty much creating jobs for ourselves and making a good beer,'' said Marjorie McGinnis, president and one of the founders.

She and Brannon, a former corporate attorney, met in a West Virginia bar and married before starting the business. She had developed a taste for fine beer at 17 when her father was stationed in Germany. Brannon had been home-brewing beer in Portland, Ore., since 1980.

``He talked me out of going to graduate school to open the business,'' she said.

They met Nordahl, from Seattle, at a craft brewing convention in Chicago and got to know each other as they sampled other brewers' beer.

The entrepreneurs considered opening a brew pub to serve their beers but saw limited opportunity in Maryland. State law prohibits companies that sell their own beer in a restaurant or bar from making more than 10,000 barrels.

Frustrated after unsuccessful attempts to persuade legislators to change the law, Bill Meuhlhauser, owner of the Ram's Head Tavern in Annapolis, plans to build a second brewery in Delaware to increase capacity for his Fordham Brewing Co. beer while keeping his Maryland restaurant and bar open.

State legislators are considering a bill this year to raise the limit to 22,500 barrels, Bond said.

ATlthough Frederick Brewing did not want to be limited, they weren't thinking too big when they started. In the first business plan, no new hires were expected for six months.

``That lasted about three days,'' McGinnis said, sipping the company's alcohol-free Birch Beer and holding her four-week old daughter. They hired two people the first week and now employ 30.

The new plant's technology will make it possible to cut hours and triple production with no new beer-making employees, Brannon said. But the sales staff could be tripled by the end of the year.

The sales people will have their work cut out for them to compete with the likes of well-known craft beers like Sam Adams and Pete's Wicked, as well as local competitors including Old Dominion, a brand brewed across the Virginia bank of the Potomac River.

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Photo

Photo: Plant engineer John Niziolek walks around the tanks at the Frederick (Md.) Brewing Co's new brewery.

Associated Press