In 1992, brewer Chuck Skypeck c0-founded the first brewpub in Tennessee — Boscos in Germantown — with the goal of bringing good craft beer to skeptical Mid-South consumers.
Meanwhile, Ghost River Brewing — a beer brand founded by Skypeck & Co. in 2008 — has landed its beers on the taps of 110 bars and restaurants in the Memphis metropolitan area.
In Memphis, Boscos and Ghost River are craft beer.
In 2011, Skypeck is upping the ante. Ghost River is embarking on a $750,000 expansion to double capacity at its Downtown Memphis brewery and install a bottling line that will bring Ghost River beer to even more bars and restaurants and, ultimately, area retail shelves.
Ghost River’s expansion will entail improvements to just about every inch of the brewery on South Main Street.
Two 50-barrel fermentation tanks are being installed, as well as a new steam boiler, new refrigeration and a modern keg filler and cleaner. Drainage throughout the brewery is being expanded and improved.
For bottling, a 12-head filler made by an Italian company called Comac will be installed.
Ghost River’s current capacity — 2,500 barrels, or 5,000 full kegs — will double to 5,000 barrels.
On brew days, Ghost River will be doing “double brews,” brewing batches back-to-back.
Ghost River has two full-time employees and one part-time employee in the brewery. With the expansion, the company will add two to three jobs.
“We’re selling all the beer we can make, so we have to be able to make more beer before we can bottle,” Skypeck says.
Most, if not all, of the additional beer produced will be bottled — up to about 137,000 six-packs annually. “Within about a year, we’ll probably be producing and selling that capacity, I think, but it won’t happen overnight,” he says.
Ghost River produces three beers year-round — Golden Ale, Glacial Pale Ale and Copperhead Red — plus several special and seasonal beers.
For now, only the Golden Ale — a lighter beer brewed with German variety hops and malts, which is Ghost River’s most popular beer — is headed for the bottling line.
Skypeck believes Ghost River can sell all the additional capacity in Golden bottles.
The Glacial Pale Ale is Ghost River’s second-best-selling beer and would be a candidate for bottling, as would some of the seasonal beers. But bottling more than one kind of beer is more expensive and logistically difficult, and federal laws that require approval of labels and six-pack holders are additional roadblocks.
“We want to learn to walk before we learn to run, so we are focusing on one product right now. Where we go after that, we’ll figure it out,” Skypeck says.
Bars/restaurants, then retail
With Ghost River beer available on draft at more than 100 bars and restaurants, Skypeck says Ghost River is close to reaching the point of saturation when it comes to Memphis taps.
The company has targeted primarily independent, locally owned places to sell beer — businesses that actually have control over their menus and can add new beers to their offerings.
“Memphis is not a big draft beer town, and there’s a finite amount of potential sources for us to sell craft beer,” he says.
When bottling begins, Ghost River initially plans to target bars and restaurants that don’t carry draft beer as a way of introducing their product in those establishments. At bars that sell Ghost River beer on draft, but not the Golden, Ghost River plans to approach those bars about selling the Golden bottles.
After that, bottles in six-pack holders will be headed to retail shelves, but don’t expect to see Ghost River beer in your neighborhood Kroger.
“We’ll get into retail outlets — which are typically called off-premise outlets — quickly. But we’re going to be following that same route of looking for smaller, independent operators rather than large chains,” Skypeck says.
Southwestern Distributing Co. will continue handling distribution for Ghost River Brewing when bottles hit the market.
In terms of price, Ghost River is still grappling with the decision of what to charge for a six-pack.
“We don’t have control over that final price. The only thing we have control over is how much we sell it to the distributor for. The distributor will set his price, accordingly, and then the retailer will set their own prices, accordingly. So I can’t tell you how much each retailer is going to sell it for,” Skypeck says.
“There’s been a fair amount of discussion about where we want to be positioned in the market, and we actually haven’t make that decision yet.”
For now, Ghost River only plans to sell bottles in the metro Memphis area — minus Arkansas, which charges a hefty sum for a license to sell packaged beer. That means folks in Jackson, Miss., Jackson, Tenn., and Nashville aren’t likely to find Ghost River beer for awhile.
“Being a smaller business and not having economies of scale, our margins are very, very tight. And selling in farther markets is less desirable simply because we have decreased margins. We have to ship the product, and we have to then support it with some level of sales and sales activity in different markets.
“We are much better off finding ways to sell that product in Memphis than worrying about being somewhere else with it.”
Memphis and craft beer
Memphis, itself, has been no easy sell when it comes to craft beer, as Skypeck has found over the years. “Memphis has never been a good craft beer market and still is a hard craft beer market,” says Skypeck, who won ribbons in the Mid-South Fair homebrew competition before homebrewing was even legal in Tennessee.
Some of that stems from demographics. “Craft beers drinkers tend to be higher than average levels of income and education, which Memphis lags behind on. And then there’s a whole lot of cultural factors involved.”
In Memphis, that includes evangelical Christians, Southern Baptists and a large African American population, which have not participated in the development of the craft beer market, he says.
“I used to think that at Boscos we were doing a pretty good job of educating people about craft beer. I’ve kind of revised that thinking,” he says. “We’ve done a real good job of preaching to the choir. People who have gotten interested for whatever reason and come to us, I think we’ve done a good job of exposing them to a lot of different things.”
In a lot of ways, he says, Memphis is still at “square one” when it comes to craft beer.
Ghost River’s beer, he says, is not nearly as aggressive as many popular craft brands across the country.
“We’re not putting out Dogfish Head 120 minute IPA or Stone’s Arrogant Bastard or things like that. But I don’t think we would be selling the volumes of beer we are if we were doing that type of product,” Skypeck says.
“I think we still are in the phase of really trying to educate consumers that it’s OK to have a beer with more flavor than Bud, Miller or Coors, but not drive them away.”
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