You could say that Stone Brewing Co. left the Palmetto State at the altar – but that would mean that the company ever promised anything to begin with.
South Carolina’s craft beer industry teamed with economic developers and legislators to engineer a huge overhaul of age-old brewing laws to attract the San Diego brewery’s $31 expansion east of the Mississippi.
The effort was even dubbed the “Stone Bill.”
Greenville put forth a recruitment effort, offering up properties and educating legislators along the way.
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The pristine quality of the Upstate’s water was pitched. So was the interstate system, a network that leads to Atlanta, Charlotte and a gateway to the eastern hemisphere, the port of Charleston.
There was no shortage of enthusiasm.
Yet, in the end, it comes down to Ohio and Virginia, economic development officials told The Greenville News this week.
It’s the question leaders of the effort to attract the nation’s 10th-largest craft brewery in Greenville and elsewhere in the Carolinas are asking.
“We do not know why they eliminated our properties,” Kevin Landmesser, interim CEO of the Greenville Area Development Corporation, said. “That’s something we hope to learn at some point.”
Stone leadership has declined to elaborate.
“After careful review and evaluation, we narrowed the candidates to locations that we feel better fit our needs and requirements,” Stone spokeswoman Sabrina LoPiccolo said. “We aren’t expanding on the reasons the locations were eliminated.”
State industry leaders say that if anything has been accomplished, South Carolina is well-positioned to grow its craft beer industry for those already here – with an eye toward the next big West Coast brewery expansions that are sure to happen.
Going for the prize
Unlike typical economic development recruitment efforts, Stone was quite public earlier this spring in how it sought request for proposals.
The brewery – which last year reported more than $135 million in revenue – wanted to build a sprawling brewery somewhere “east of the Mississippi” that could sustain East Coast operations, while at the same time operating a restaurant that would mirror its Stone Brewing World Bistro & Gardens in the suburbs of San Diego.
The problem: South Carolina’s laws, a legacy of Prohibition, wouldn’t allow food to be served at a large-scale brewery, nor would they permit more than three pints to be consumed on site in a day, a blow to the successful model of a brewery as a tourist destination.
The project was enticing.
Stone promised upwards of 400 jobs and more than $100 million in revenue by year four.
The effort, if successful, would have elevated the profile of South Carolina’s fledgling beer industry, helping it compete with North Carolina and the millions of dollars of investment it has landed with expansions by Sierra Nevada, New Belgium and Oskar Blues into the Asheville area.
In a matter of months, South Carolina’s laws were overhauled.
By June, the state was back in the game.
Until last week.
First, economic development officials with the city of Greensboro, N.C., revealed to the area’s stakeholders and the public that Stone had told them the company’s intentions lie elsewhere.
The eye toward Ohio and Virginia wasn’t a refocus as much as it was a fulfillment of plans the brewery had already stated, said Dan Lynch, president of the Greensboro Economic Development Alliance.
“From the beginning, they said their biggest market east of the Mississippi was the major population centers in the Northeast,” Lynch said. “It is a ‘miles-to-market’ calculation – the farther south they ship from, the higher the transportation costs.”
In June, Steve Selby, a Stone representative responsible for the South Carolina market, cited the port of Charleston as a key factor in the state’s desirability.
Stone exports to Europe but last week announced plans to open a brewery and restaurant in Berlin.
While Stone executives visited Virginia and Greensboro, the brewery never sent representatives to Greenville, Landmesser said.
“It was a little bit surprising to us that we weren’t given more serious consideration,” Landmesser said, “particularly given the quality of Greenville’s water and the excess capacity that the water system has.”
Also, he said, Stone is known for its maverick business philosophy, and “the feel of Greenville these days is edgy in a way that I think they would like.”
The development corporation identified properties to satisfy the company’s desire for interstate access, and it was a difficult effort because of the unique “hybrid of manufacturing along with a restaurant outlet,” Landmesser said.
The areas around Travelers Rest, Fountain Inn and Greer were potential candidates, he said, because they are emerging suburban communities that offer a “unique feel” and access to development but with enough space for the scale of Stone’s operation.
The focus on Ohio “is a real question mark,” because the only benefit would appear to be its well-known geographically central location, Landmesser said, noting Selby’s published comments regarding the Port of Charleston.
“With so much growth in the Southeast, and you hear about the Midwest not doing well, it was surprising to hear that would be a focus,” he said.
However, the issue likely comes down to logistics, because the company’s beers are “relatively available on the East Coast,” said Brook Bristow, a Greenville lawyer who represents the S.C. Brewers Association and assisted in commerce department’s recruitment efforts.
“We fall probably just a bit south of where they want,” Bristow said. “This is purely a logistical call on their part. It’s a geography call.”
Stone’s CEO, Greg Koch, known for his brash personality and business approach, grew up in Ohio before moving to California and founding the brewery.
Still, Bristow said he sees more appeal in Virginia, which has already landed the expansion of San Diego’s Green Flash Brewing Co.
“Virginia I’m not surprised by,” he said. “They’ve really come on in recent years. When I think of edge and attitude, I don’t necessarily think of Ohio. Ohio is a little surprising. Good for them.”
New breweries on the horizon
Those involved in the recruitment and law change are convinced that the effort wasn’t for naught.
“Because of the new law that passed this legislative session, South Carolina is now well-positioned to compete for these kinds of projects in the future, and our existing brewing businesses now have additional options to expand and create more jobs and impact in our state,” Allison Skipper, a spokeswoman for the state Department of Commerce, said in a statement.
The commerce department doesn’t comment on specific recruitment efforts, Skipper said.
However, there are sure to be other West Coast brewery expansions in the future.
The nation’s fifth-largest craft brewer – Oregon’s Deschutes Brewery – has indicated it might expand eastward but doesn’t have firm plans now, spokeswoman Marie Melsheimer said.
However, shortly after South Carolina changed its laws, the founder of Deschutes, Gary Fish, said in a statement that the brewery would consider the Palmetto State.
“Previously, we had dismissed South Carolina, along with some other states, as options for an East Coast operation based, in part, on outdated laws that discourage components of our business model, and craft beer in general,” Fish said. “And, although this is just a start in South Carolina, this progress may cause us to take another look.”
Currently, 31 breweries and brewpubs operate in South Carolina, Bristow said. As many as 15 are in planning now since passage of the law, which allows breweries to serve unlimited amounts in conjunction with food service.
The breweries have found little problems complying with the law, Bristow said.
The growth of new breweries in the Upstate – three newly opened within the past year – show that the area’s potential for industry expansion is ripe, Landmesser said.
“We’re starting to see a lot of growth in the industry in our area, so it makes sense to go after it,” he said. “It would be hard to argue against given all the activity going on right next door in Asheville.”
The next big expansion might not come for a couple years, Bristow said, but South Carolina will be in prime position when it does.
“We don’t have to play catch-up any more,” he said. “From the beginning, we’re going to be at the top of the list when people are looking. We’ll be ready next time.”