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Steamworks Brewing Co.

by Chris Meehan on October 3, 2018, 06:22 pm MDT

www.steamworksbrewing.com

Durango, Colorado

Founded: 1996

Privately owned

Employees: About 200

Industry: Brewing & Distilling

Products: Beer

CEO Kris Oyler has guided the landmark Southwestern Colorado brewpub back into retail distribution with a partner on the Front Range.

"People will come in and say, 'Do you have any domestic beer?' We tell them, 'Look at the brewery, it doesn't get any more domestic than being brewed right behind us in the building,'" quips Oyler

In 1996, Oyler and his co-founder, Brian McEachron, opened the brewpub just off Durango's main drag, making it the town's fourth brewery. "At the time, Durango was a little smaller, the county was a little smaller," says Oyler. "We weren't on Main Avenue and a lot of people thought that we weren't going to make it. So definitely every year that passes is another milestone for us."

Steamworks may also be the only brewpub where you can watch a bike race -- go through the brewery. "That's the Iron Horse Bicycle Classic," Oyler laughs. "We started doing that way back in the early 2000s." A race organizer asked: "How about we ride through your brewery and on top of the bar?" he continues. "[W]e figured out a way to make it happen. It hasn't happened every year, but most years since then we've had a mountain bike race that goes through the inside of the brewery."

That type of community interaction is key to the company's marketing. "Our whole marketing philosophy since day one has been event-based," says Oyler. "You won't see us run ads in magazines or newspapers and things. We go to festivals, we support events at Purgatory ski resort." He notes that another recent event it supported used a steamroller to make unconventional art prints at the Durango Arts Center.

Oyler says the brewpub supports local producers as well. "We try to do as much as we can both on the restaurant side and the brewery side," he explains. Steamworks uses local hops and grain from the San Luis Valley for some brews.

While Steamworks' beers are becoming more common throughout Colorado, Oyler says the operation is a restaurant first and foremost, as it produces about 60 percent of Steamworks' sales. There's also a focus on pairing foods with beer. "Our executive chef, Sean Clark, has done an amazing job and I think he's become one of the best people in the country that's actually pairing food with beer."

All of the beers served in the brewpub are brewed on-site. The brewpub is putting out plenty of award-winning suds like its Night Train Dark Lager, which won gold medal at the World Beer Cup in 2018. "It was recognized as the best American-style dark lager in the world," Oyler says.

That's impressive for a facility that's brewing about 1,700 barrels of beer a year. But Steamworks has gone beyond that. "We do have partner brewing arrangements with Dry Dock Brewing in Aurora. They make upwards of about 4,000 barrels of beer a year for us," Oyler explains. "We've been doing that for about three years now. Prior to that we had a similar arrangement with Ska Brewing in Durango."

Dry Dock's economies of scale and location make it ideal as a brewing partner, Oyler says. He notes that its helped cut shipping costs ant the the distributor is only eight miles away.

That's allowed Steamworks to expand throughout the state -- again. "At one point before the Great Recession, we were in nine states," Oyler says.

The company is only distributing in Colorado this time around. "Frankly, we love that model. We can control our product, we have better control of the shelf life while getting out in the market," Oyler explains. "We have one distributor in the entire state. It allows us to continue to focus on making great beer instead of being in the sales and distribution business as much as we were."

Steamworks is now growing slowly but steadily. It's a trend Oyler is seeing in the broader beer industry. "We kind of like the year-over-year, manageable growth," he says. "That seems to be a great recipe for us."

Steamworks' parent company, Peak Brewing Co., LLC, also is growing outside the brewery. Oyler and McEachron own El Moro Spirits and Tavern in Durango and are in the process of launching a new restaurant in a former KFC location the company recently acquired. "We started construction and we're going to make it into another a chicken rotisserie restaurant that's going to be heavy in canned and craft beer," says Oyler.

Favorite beers: "On a hot day, a Colorado Kölsch is light and refreshing. It's a great beer," says Oyler. "If it's December and it's dark and cold it's a nice Backside Stout it's a little thicker and tends to warm me up. If I'm having a spicy Thai dish, a Third Eye Pale Ale is amazing."

He adds, "I do like more balanced, delicate style,s because you have to be an excellent brewer to make a style like kölsch beer or a pilsner or a Munich helles. Those are beers that I lean to these days."

Opportunities: The plan is to continue growing in Colorado, but Oyler won't rule out other markets. "If we were to expand into markets it would most likely be in the Four Corners states, like New Mexico and Arizona -- those markets might make sense," he says. "If we can keep making better, more interesting beer and better, more interesting food, and keep trying to do good things in our community, then I think good opportunities will always come our way."

Challenges: "Labor. With unemployment being so low, people have opportunities to find other jobs," Oyler says. "I think the marijuana industry has had an impact on the restaurant industry, and even the brewing industry to a degree." While Steamworks has always paid more than minimum wage, Colorado's minimum wage increase to $12 an hour in 2020 could be a challenge, he adds.

Needs: "Even though it's a huge restaurant, we could always use more space," Oyler says. "We could get creative and use the space to our advantage. Real estate isn't all that easy to come by."

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