By Eric Peterson | Apr 28, 2014
Santa Fe, New Mexico
Mike Levis started Santa Fe Brewing, New Mexico's oldest microbrewery, in 1988. The operation was born in a converted horse barn in Galisteo, 15 miles southwest of Santa Fe.
Owner Brian Lock bought the brewery with three partners in 1997, moved it to Santa Fe proper and subsequently bought out his partners about 10 years ago.
From Levis' original dinky, seven-barrel set-up to a "Franken-brew” system, production grew to 17,000 barrels in 2013, the most of any brewery in New Mexico. Lock forecasts a jump to 22,000 barrels for 2014 and expects to max out production capacity and hit 30,000 barrels by 2016.
And Santa Fe Brewing is about to get a lot bigger. Lock is bringing a centrifuge online later this year to wring about 20 percent more beer from his fermentables, with a pair of 150-barrel fermenters also slated for installation by summer 2014.
Then the brewery is embarking on the first phase of a three-phase, $10 million expansion opening a new packaging hall with a high-speed canning line next to the 12,000-square-foot brewhouse. Lock describes the expansion as "a big undertaking."
He says the next phase will bring a bigger brewhouse and taproom, allowing for a step up in production above 30,000 barrels, followed by a new warehouse and distribution center for the third phase.
Underpinning the move, Santa Fe Brewing started canning in 2010 and its Happy Camper IPA emerged as its flagship label. "That became our bestseller 10 months after releasing it in a can," says Lock.
New Mexico is the brewery's top market, and Colorado and Texas are "neck and neck” for the second spot. Santa Fe's suds are also available in Louisiana, Kansas, Oklahoma, Arizona, Missouri, and Nevada.
New Mexico's brewing scene is "booming," Lock says, especially on the nano scale in Albuquerque. Lock says state laws allow self-distribution, and it's allowed him to develop great customer relationships in Santa Fe, but credits Admiral Beverage, his Albuquerque-based distributor.
"They've done a real good job with our brand," he says. "They've been growing it 40 to 60 percent for the past five years."
Creative seasonal beers (with and Irish Red in springtime and a Black IPA come winter) and a series of even more exotic "Los Innovadores” bottle releases -- including bourbon barrel-aged barley wine and The Kriek, a sour beer with cherries -- have helped fuel a fierce local following.
Lock says 2014 will bring another limited-release series. "We're going to do the equivalent of a local series, an ever-changing series." First up (in June): a double white IPA.
Challenges: "Just in the past couple months, the challenge was being able to source of financing for the expansion," says Lock, noting that he secured commitments from banks and federal sources earlier in 2014. "Even with all of the growth and cash flow, banks were reluctant. It's just a different landscape than it was before the recession."
Opportunities: Expanding into other states adjacent to the current distribution footprint, which might mean entry into California and/or Illinois.
"I've always been a believer in growing the brand from the roots out, digging deeper holes, not more holes," says Lock.
Needs: The high-speed canning line, set to be operational by early 2015, can't come soon enough, says Lock. The brewery's current system only does 30 cans a minute, but the new one will be able to can about 300 units a minute.
"That's our bottleneck in production," says Lock of the current canning line. "We're running that thing five or six days a week, 20 hours a day."