Some North Carolina craft brewers endure as others exit.

AP--Ever since Bill Sherrill sold his first glass of Red Oak Amber in 1991, he has seen a lot of people get in the beer business in North Carolina-- only to get out just as quickly.

Sherrill, founder and president of Spring Garden Brewery Co., doesn't profess to have the secret to longevity in the challenging microbrewery industry. Yet unlike many of his former counterparts, Sherrill manages to build his business year after year.

While other brew pubs and microbreweries are going out of business, sales of Red Oak lager are so robust that Sherrill is plugging ahead with plans to build a larger brewery on a 12-acre site off Interstate 40 in eastern Guilford County.

Sherrill did not start out with empty pockets and a dream of brewing the best beer. A veteran of the hospitality business, he transformed a restaurant he already owned into a brew pub after taking a trip to Europe.

"I decided to sell this kind of lager after I went to a pub in Germany and I watched the brewmaster running his legs off," he said. "The customers couldn't get enough of it."

Sherrill isn't unique in his unyielding faith in the quality of his beer. Yet others with equally strong convictions are no longer in business.

The most recent victim is Johnson Beer Co. of Charlotte. Once one of the chic brews to drink in North Carolina's bustling financial hub, the small brewery's owners even took the ambitious step of bottling its ales.

After marketing its Amber Ale at some of the city's top restaurants and stores, the brewery is gone after six years. Its plant on Central Avenue is locked and messages left with the company's founders, Susan and Tim Johnson, were not returned.

Johnson Beer Co. joins Dilworth Brewing Co. and Lake Norman Brewing Co. in microbrew history.

Paul Gatza, director of the Institute for Brewing Studies, said the craft beer industry went through tough times in the late 1990s as many brewery owners lacked the financial backing to weather the bad times.

Figures released earlier this year by the Institute for Brewing Studies showed that craft brew sales increased 4.1 percent in 2000. That growth was twice the rate of the previous year.

Still, the sale of all microbreweries in the U.S. only represents a 3 percent share of the total beer market, which reported sales of $50 billion in 1999.

According to the Boulder, Colo.,-based association, microbreweries that went out of business in 2000 outnumbered ones that opened. There were 423 microbreweries in the nation at the end of last year, 10 fewer than 1999.

In North Carolina, there are 17 businesses that have permits to distribute the beer they brew.

"Largely, undercapitalization is the reason why microbreweries go out of business," said Gatza. "If you decide to get into the business you better have a lot of money or be connected to a restaurant that makes good food."

Gatza said a lot of brewers have tried to expand to other states without having the necessary support system.

"The winners are those who have the financial resources without having to go into serious debt to finance the operation," he said. "It also has a lot to do with the quality of the beer. If someone tries it and they don't like it, the chances are they won't buy it again."

Oscar Wong, who opened Highland Brewing Co., a microbrewery in Asheville in 1994, said it's not a business for the weak of heart.

"The margins are tight," he said. "Second, you are buying at a level that doesn't approach the big boys"--Anheuser-Busch, Coors and Miller.

Wong said a recent event put it in perspective. As he was visiting a suppliers to purchase 800 new kegs, the salesman mentioned in passing that one of his kegs was headed to Anheuser-Busch in St. Louis to be gold-plated. "It was to mark their 100-millionth barrel of beer," he said incredulously.

Highland Brewing Co. markets its ale in western North Carolina and parts of upstate South Carolina and eastern Tennessee. The brewery stopped distributing in Charlotte because of the high cost.

Unlike Spring Garden, Wong brews two or three days a week.

"Our universe of beer drinkers is narrow, so we try to get deep with them," he said.

For his part, Sherrill said he has no plans to bottle his brew or immediately expand outside the borders of North Carolina. Demand is forcing him to expand his brewing capacity.

A new, $5 million brewery that will be built within the next two years will be four times larger than the current one at the Red Oak Brew Pub, which operates around the clock to keep up with the demand at taverns, baseball stadiums and other venues.

Some of Sherrill's customers are across town and others are as far away as Charlotte, Raleigh and Wilmington. Despite its growth, Spring Garden's volume remains low, at 6,000 31-gallon barrels a year.

And while Spring Garden Brewery does make Battlefield Black and an occasional seasonal beer, its road to fame has been Red Oak.

"A lot of microbreweries try to brew a lot of different beers, which we don't," Sherrill said. "We ride on one horse."

With 50 employees, Spring Garden also has a distribution company, Avalon Trading Co., to service its markets. Its employees deliver the kegs and clean and maintain draft-beer equipment at the bars.

"We give great service, which is another reason for our success," said Sherrill. "You call and we'll come."

This day was no exception.

In the middle of the day, Sherrill got a call from War Memorial Stadium, home of the minor league Greensboro Bats. They needed about a dozen kegs of Red Oak for the game later that night. Sherrill immediately dispatched a truck to the ballpark.

"We outsell Budweiser at the Greensboro Bats games," he said, beaming.