How Much More Craft Beer Can Dallas Handle? Lots.

At this year’s Brewfest, the number of local breweries was impressive. The big guys always dominate the Observer’s annual beer event, but this year the tide appeared to be turning. Local breweries accounted for just over 25 percent of the participants, taking over an entire row of tents and pouring delicious craft beer to a crowd of dedicated enthusiasts.

Rewind to 2011, and Brewfest was known as Brew at the Zoo, an event without any Dallas breweries because none existed yet. Just four years ago, Franconia and Rahr were the only local brewers in the beer-making game. Now the Texas Alcoholic Beverage Commission reports 31 brewers in Dallas and surrounding counties — brewers that have infiltrated taps at bars, shelves at grocery stores and kegs at backyard barbecues with unprecedented success.
Like the head on a hastily poured IPA, such rapid growth would seem prone to bursting, but the craft beer scene only seems to be picking up momentum. There were 117 craft breweries in Texas at the end of 2014, according to a database kept by the Brewer’s Association. That same database counts 142 so far this year, but the bigger news is that well over 100 additional Texas breweries are being planned or are in the works.

How much more craft beer can our livers handle? Nationally, more than 4,000 breweries are operating, according to chief economist for the Brewer's Association Bart Watson. But that number is still behind pre-Prohibition levels when the U.S. boasted 4,131 breweries. And with many small breweries reporting 20 percent growth each year, the Brewer’s Association expects the current trend to continue for some time.

Flowery reports about expanding markets are to be expected from trade associations, but performance of local Dallas breweries backs up the analysis. It’s not just that we’re getting more local brewers, but the existing brewers that have already set up shop are experiencing significant growth. This spring, Lakewood Brewing Co. completed construction of a facility that doubled its brewing capacity. That brewery now works with Andrews Distributing Co. and their beer is available at more than 250 locations around the Dallas area.
This September, Deep Ellum Brewing Co. announced it would also expand. Part of the new facility will be dedicated to distilling spirits, but a large portion of the space will be used to store and age beer brewed at their primary brewery. The new space will tap into barrel-aged craft beer, another quickly growing market segment among craft brewers.

Michael Peticolas just finished a third expansion of his Design District Brewery, maxing out his initial plan for the space. Peticolas is weighing whether he should build a second facility to streamline production, facilitate packaging and continue to grow his sales, or keep embracing the smaller business culture that’s served him so well.

“I think we still have a huge amount of growth,” Peticolas said of Dallas’ craft beer market, noting that on-premise sales at some U.S. cities including Cleveland and San Francisco have reached more than 40 percent craft beer, while Dallas lags behind at 20 percent. “The question is who is going to capture it."

And a battle is definitely brewing. Huge companies like InBev have started to buy up smaller breweries in an attempt to reclaim lost market share, while other breweries branch out to additional cities with satellite breweries. Colorado-based Oskar Blues Brewery recently announced it will open a third brewery and taproom in Austin by April 2016, and other brewers like Lagunitas Brewing Co. and Green Flash Brewing are taking similar initiatives. Beer drinkers can be assured they’ll have more craft beer to consume in the coming years, but who will be supplying that beer, and just how “local” it will be, is anybody’s guess.

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