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Year of the cat.

Year of the Cat

The noble feline head that graces Catamount Brewing Co.'s labels is that of an Eastern Cougar, a great cat that once thrived in the New England highlands. These Eastern Cougars (Called catamounts from the Old World |cat-of-the-mountain') have been considered extinct for decades, but occasional sightings persist, and many believe that a shadowy population of catamounts still lurks in Vermont's Green Mountain fastness.

The Catamount Brewing Co. of White River Junction, VT, is a similarly rare breed, a small American ale brewery. Although many ale breweries thrived in New England in the 19th and early 20th centuries, Prohibition and the post-war larger boom drove them from business. The residual ale market they left behind is now being served by a new generation of small ale breweries - Catamount among them.

In the three years since its start-up, Catamount has become the most prolific of these New England microbreweries, producing 6,650 barrels in 1990. Its rise has been accompanied by a marketing strategy that diverges from conventional microbrewing wisdom in several respects, including a wholesaler-based distribution strategy and exploitation of out-of-state markets.

Catamount was co-founded by Stephen Mason, a long-time homebrewer who had watched the rise of Western microbreweries with interest. "I took a fancy to the idea of turning my hobby into my avocation," Mason recalls, "but I realized that my technical abilities were insufficient. There's quite a difference between homebrewing in five-gallon batches and turning out 1000 gallons at a whack. I realized I needed to serve an apprenticeship of sorts."

Traditional British Ale

As a result, Mason turned his back on a career in education, and set off in 1983 for the Swannell Brewery in Hertfordshire, England, one of over 130 microbreweries that sprang up in Great Britain in the late |70s and early |80s. "I spent four months at Swannell," Mason says, "and it was an invaluable time for me professionally. I became aquainted with brewery design, equipment and procedures and learned a great deal about the product style I wanted to brew - traditional British-style ale.

"I came back from Great Britain commited to the idea of starting a small brewery," Mason recalls, "and I eventually fell in with Alan Davis and Steve Israel, who were also interested. In 1984, we started on the intensive process of producing a proper business plan."

Using that business plan, Catamount got to its feet in 1986, capitalizing through the combination of a private stock offering, a low-interest state development loan and a bank loan guaranteed by the Small Business Administration. "There was a window of opportunity at that time," Mason says, "because the economic climate was much better than it is today. That's not to say it wasn't a struggle. We had to convince a lot of people that this was a viable start-up for which financial survival was probable. We also had to find investors for whom a high-risk, low-return investment was O.K.

"The idea of brewing beer is very romantic to me," Mason says, "and I found a lot of people shared in that romance. Beer is a beverage that pervades our national life, something that has been an important part of our culture for centuries. I think that gave our project a lot of sizzle for investors."

Long-Range Plans

Although Catamount started out small, Mason realized that the company would have to move into the broader New England market. "Vermont is very rural," he says, "and we don't have the population base here to support a brewery producing more than 2,000 or 3,000 barrels a year. As a result, out-of-state markets are very important to our long-range marketing plan. Vermont will always be our number one market, but financially we can't survive selling only in-state."

Catamount facilitated its expansion by turning to distributors. "At the time we opened," Mason says, "Vermont state law didn't allow us to self-distribute our beer, so we began to look for someone to handle it. Our first distributor was the Farrell Distributing Co. of South Burlington."

Mason reports that Catamount gradually built relationships with wholesalers in out-of-state markets as well. "On the whole," he recalls, "we found distributors to be very receptive. I think they saw we'd done our homework on the beer business, and felt we had a very solid package design. The high-end segment has also been increasing," he notes, "so I'm sure wholesalers saw the brand as a vehicle for higher profits."

Catamount's aggressive out-of-state marketing effort, unusual for a young micro, has borne fruit. Mason reports the brewery currently sells about 50 percent of its production in New Hampshire, Massachusetts and parts of

Connecticut and upstate New York.

Bringing Home The Gold

Catamount's product line now includes three British-style ales - Catamount Gold, Catamount Amber and Catamount Porter. These ales have earned a far-ranging reputation for Catamount, with the Gold bringing home a gold medal from the 1989 Great American Beer Festival. In addition, the English beer critic Michael Jackson has written, "Catamount of Vermont is establishing itself as one of America's best [microbreweries]." Jackson went on to proclaim Catamount's porter as the best produced on the East Coast.

Although acclaim has been equally widespread among specialty beer consumers, mainstream consumers may prove elusive. Ale consumption has declined precipitously in the years after World War II, and the heavier, hoppier brews are still shunned by beer drinkers weaned on lighter brews.

Mason finds no rational basis for the decline. "Although people say ale has gone out of popularity," he says, "tastes in the U.S. today are largely conditioned by mass marketed, light lager beers. Many people are simply unaccustomed to the flavor and fullness of traditional ales. As a result, some people can't make the transition - but for those who do, it's really a breakthrough. At the brewery, people are always telling us, |I never really liked ale until I tried your ales.'

"New England is still a strong ale market," Mason continues, "and the imported ales like Molson and Bass have very impressive market share in the region. As Catamount becomes a bigger part of that market, we may begin to be competitive with some of those imports.

"We're a long way from putting a dent in their sales," Mason concedes, "but there's no doubt we're going after the same beer drinkers, and the reality of the beer market is that new products take share from older products. Right now, I don't think importers view microbrewers as a threat, but that may change. If microbreweries keep opening, they'll be brewing a lot of beer in ten years."

Contract Brands

Aside from the imports, brands produced by contract brewers constitute a large part of the competition for microbrewers. For Catamount, however, contractors are more ally than opponent. The Vermont brewery is one of the few micros in the country to produce brands under contract.

"The first time a contract brewer called me," Mason recalls, "I knew very little about contract brewing. I realized that some of the regional brewers had done it, so I figured |why not Catamount?'

"The way I look at it," Mason says, "brewing contracts are a vehicle by which we can increase production and sales without incurring the marketing expenditures that accompany expansion of Catamount brands into more distant markets.

"When we received our first offer to brew a contract brand we had just finished our second year," Mason says, "and we were operating at an annual clip of 4,500-5,000 barrels. We were seeing seasonal fluctuations in our market, and we wanted to even them out. My goal was to get ourselves to maximum capacity in a direct way, rather than fluctuate in and out of the 75 percent mode."

Mason reports Catamount is currently producing two brands under contract; Post Road Ale for the Old Marlborough Brewing Co. of Marlborough, MA, and Frank Jones Ale for the Jones Brewing Co. of Portsmouth, NH.

"The contract brands are hand-crafted products from our brewery," Mason observes, "but they are differentiated from our own brands. Although they compete with our own products to some extent, I think the beer market is big enough for a few more brands.

"The contract-brewed products are not perceived by the public as Catamount brands," Mason says. "They are seen as locally-produced products in their individual markets. Because sales are based largely on local appeal, we don't see our own brands taking a big hit."

For Catamount, taking on contract brands to build volume was a strategy that was almost too effective. "Last year, we reached a point where our contractors wanted more beer, and our existing market needed more beer," Mason observes. "We just couldn't make enough to satisfy everybody. You could say it's a good problem to have, but I never want to have distributors running out of our product. Although it's true that scarcity in the marketplace can facilitate demand, we wanted to be selling every barrel we possibly could."

Even before the crunch, Mason reports extra capacity was on the agenda. "In addition to our Gold and Amber ales," he says, "we'd decided to brew Catamount Porter year-round. We also produce a Christmas Ale and plan to introduce a product called Ethan Allen ale. In addition, we'd been looking at an expansion into other markets, and there was an opportunity to take on additional contracts."

Although Catamount's annual capacity was estimated at 6,000 barrels in 1990, contract brands pushed production to 6,650 barrels in that year. The brewery's 60-barrel stainless steel brew kettle and single-vessel mash-lauter tun were adequate, but the limitation lay in tankage. At that time, Catamount possessed two 82-barrel fermenters and six J.V. Northwest 71-barrel stainless steel aging tanks.

To bolster capacity, Catamount shoehorned an extra wing onto the company's small lot in late 1990, allowing installation of two JV Northwest 122-barrel fermenters and two 80-barrel conditioning tanks. According to Mason, the expansion allows the company to double its capacity, from 6,000 to 12,000 barrels.

Mason feels certain the extra capacity will be necessary as the segment expands. "I think the microbrewing niche is widening," he states, "because consumers are very concerned with quality today, and there is a growing appreciation for locally-produced products. I think more and more people are well-disposed to microbrewed beer. Beer tastes and product loyalties are changing all the time," he adds, "they aren't static."

Room For Micros

"Given the size of the beer market," Mason notes, "I think we'll see microbreweries continuing to spring up. As an example, New York City may be the largest market for imported beer in the country, and they have only one brewpub. Compare that to an urban area in the Far West, where there might be a dozen brewpubs," he says. "It's clear there's a lot of room for micros here.

"Although I see growth continuing," Mason says, "there will be casualties. Microbreweries face stiff odds, just like any small business. The beer business is very competitive, and it's particularly tough on young companies.

"A microbrewery needs four things to succeed," Mason observes. "It must be well-financed; it must produce a quality product; the product must be consistent; and it must be marketed properly. If any one of those four points are marginal, then the micro may not succeed. There's nothing mysterious about that," he notes, "that's just the way business is."

Consistent Quality

"Microbrewing in this country is at an important stage," Mason concludes, "and it's important that microbrewers take the technical aspect of brewing seriously. An adherence to consistent quality will boost the growth of the segment.

"Even with a technically-sound product," Mason continues, "a reputation for quality beer is not built overnight. It takes a long time to develop. At Catamount, I think we've got time on our side. We were one of the first microbreweries in the region, and our reputation seems to be getting stronger. That is positive for our long-term goal," he says, "which is to become an established specialty brewer in the Northeast."

Mason believes the company's location facilitates that goal. "The population of Vermont swells due to tourism," he says, "and that benefits us, because having people visit our brewery is a big part of our business. Hundreds of people tour Catamount every month, and we've had to expand our tour schedule to meet the requests. Originally we scheduled four tours a week, then it was six - now we do 14. The tours spread the word about microbrewing, and we also sell a lot of beer that way. On-premise retail sales are 10 percent of our business.

Hand-Crafted Beer

"Most importantly," Mason states, "I think that people touring the brewery will come away with a stronger feeling about the product. When a consumer tries a handcrafted beer for the first time, that's a very important moment. It's a type of product that they have never had before, and the first impression is crucial. If the beer has off-flavors or is spoiled, they may never give microbrewed beer another chance. If they like it," he says, "we've earned a customer."

As Catamount Brewing Co. earns its customers bottle by bottle, the company is building a strong presence in the New England specialty beer market, opening doors for microbrewed beer in the region. In a larger frame of reference, Catamount is reviving an important part of New England's heritage, helping save top-fermenting ale from an extinction it does not deserve.

PHOTO : Stephen Mason,co-founder of the Catamount Brewing Co. of White River Junction, VT.

PHOTO : Catamount produces - several English-inspired ales (ABOVE), including a porter that has been called the best in New England. Production manager Ron Schmidt (BELOW) in Catamount's aging room which features six J.V. Northwest 71-barrel stainless steel tanks.

PHOTO : Catamount's next product introduction will be Ethan Allen Ale (ABOVE). Brewer Tony Lubold (BELOW) is dwarfed by new J.V. Northwest tanks added in Catamount's recent expansion. The addition of new tankage pushes Catamount's capacity to 12,000 barrels.

PHOTO : Ron Schmidt works on Catamount's venerable Crown bottle filler.
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Title Annotation:Small-Scale Brewing in America; Catamount Brewing Co.'s traditional New England ale
Author:Reid, Peter V.K.
Publication:Modern Brewery Age
Date:May 13, 1991
Words:2341
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