Craft Brewing Industry’s Growth Continues in Hudson Valley

John Jordan | April 2018

Dr. Tim Ryan, president of The Culinary Institute of America, shares a sake toast with Chairman Hiroshi Sakurai (right) and President Kazuhiro Sakurai of Asahi Shuzo to celebrate a new agreement between the CIA and the Japanese sake producer. Asahi Shuzo will build its first U.S. sake brewery near the CIA campus in Hyde Park. PHOTO CREDIT: CIA/PHIL MANSFIELD

MIDDLETOWN—The craft brewing industry in the Hudson Valley and New York State for that matter has become a true economic engine.

From what was a small niche sector six years ago, New York State and the Hudson Valley have seen exponential growth from this burgeoning sector. In March, Gov. Andrew Cuomo stated the number of craft beverage manufacturers holding a farm-based license had grown by more than 150% since the first Beer, Wine, Spirits and Cider Summit conducted by New York State in 2012. The same year, Gov. Cuomo implemented legislative and regulatory reforms to promote the state’s craft beverage businesses. Since then, 433 new farm-based craft beverage licenses have been issued.

According to the latest New York State figures, the Mid Hudson Valley as of March 2018 boasted 106 farm wineries, distilleries, cideries and breweries of the 715 establishments statewide.

Recent craft brewing related news in the Hudson Valley has included the expansion of a City of Middletown craft brewery in its downtown district and the development of the first Japanese sake brewery establishment near the Culinary Institute of America in Hyde Park in Dutchess County.

“New York’s craft beverage industry is booming, and by cutting red tape to industry development, we have seen significant growth in the number of manufacturers supporting our local farms and spurring job creation across the Empire State,” Gov. Cuomo said. “Home to more farm-breweries, wineries, distilleries and cideries than ever before, I encourage visitors and craft beverage enthusiasts to enjoy some of the best products around, right here in New York.”

The New York State Brewers Association, which represents New York State breweries, microbreweries, farm breweries, brewpubs and brewing affiliated businesses, stated that the growth of the Craft Beer segment continues to be strong and New York State’s share of that growth has exceeded that of breweries on the national level.

According to the association’s website, the number of New York State breweries grew from 95 in 2012 to 320 in 2016. New York State craft beer is currently ranked fourth in the country with an economic impact of $4 billion. New York State craft breweries increased production by 26% from 557,436 in 2011 to 1,089,536 barrels in 2016, according to the association.

New York State now ranks in the top five in the U.S. for its number of craft beverage producers in every category. The state ranks first in the U.S. for the number of hard cider producers, second for the number of craft distillers, fourth in the country for the total number of wineries and third in the country for the total number of breweries.

In response to the industry’s tremendous growth, the Hudson Valley Economic Development Corp. staged its first Beer, Wine, Spirits & Cider Summit in October 2013. The annual event has grown to be one the largest events of its kind in New York State, drawing a crowd of more than 500. It is a collaborative effort among HVEDC, The Culinary Institute of America and the state—through its Taste NY initiative. In 2016, the Beer, Wine, Spirits & Cider Summit was selected by the International Economic Development Council as a Bronze Award Recipient in the category of Entrepreneurship for Population Centers Greater than 500,000. This year’s Beer, Wine, Spirits & Cider Summit will be held on Oct. 11 at the Culinary Institute of America.

Equilibrium Brewery is acquiring the former TD Bank building to expand its operations in Middletown.

On April 3, the City of Middletown reported that Equilibrium Brewery was expanding its operations and would be purchasing the former TD Bank building at 2-8 South St. Equilibrium, which began operations in 2016, will continue operations at its current location at 22 Henry St. in Middletown. The City of Middletown is also home to Clemson Brewery, which redeveloped a former factory building at 22 Cottage St., also in the downtown district of the city.

City officials stated that Equilibrium plans to expand and centralize its can and bottle release operations at the South Street location, down the street from the Paramount Theater.

“The City of Middletown is happy that Equilibrium chose our downtown as their home and are thrilled that they chose to expand here as well,” said Middletown Mayor Joseph DeStefano. “They have had such a positive influence on not just our downtown, but Middletown as a whole.”

In July 2016, New York State awarded the City of Middletown $10-million in state funding to help revitalize its downtown district as part of Gov. Cuomo’s Downtown Revitalization Initiative.

Maria Bruni, director of economic and community development for the City of Middletown, said the brewery’s expansion will create more jobs, repurpose a former bank building and “continue to make Middletown a destination.”

“We are very excited to play a symbolic role with Middletown and our beer community, and it’s been a pleasure to start to get to know Middletown’s local community,” said Peter Oates, co-founder and COO of Equilibrium Brewery “We look forward to continue to share our liquid with everyone and help further enhance Middletown as a mostly balanced destination location.”

The City of Middletown acquired the TD Bank building in 2011 for $500,000. The city will be selling the building and a portion of the area behind the building to Equilibrium for $650,000. At press time, the transaction was to go before the city’s Board of Estimate and City Council for approvals.

Another major industry initiative announced this year was the agreement between the Culinary Institute of America in Hyde Park and Asahi Shuzo Co., Ltd., maker of world-renowned DASSAI premium Junmai Daiginjo sake.

At the Feb. 22nd announcement, Asahi Shuzo announced it would build its first U.S. brewery in less than a mile from the CIA campus, becoming the first Japanese sake producer to set down stakes on the East Coast.

Asahi Shuzo will also be collaborating with the CIA to further the education and awareness of sake within the United States. The CIA—with the support of Asahi—will be developing curriculum, certification programs, workshops, and special events and tastings.

“The Asahi Shuzo Company is a leader in its field, carefully combining both tradition and cutting-edge technology to craft its premium quality beverage,” says CIA President Dr. Tim Ryan. “We are honored that they chose to build their first U.S. operation in the CIA’s backyard, and look forward to a long and fruitful relationship.”

“When looking for a site to build our first U.S. brewery, we knew we wanted to differentiate ourselves from other sake brewers,” says Asahi Shuzo Chairman Hiroshi Sakurai. “The proximity to the CIA, located in the heart of the Hudson Valley, is an ideal fit. We are excited to cultivate this new relationship.”

The CIA and Asahi Shuzo are also going to seek research and development opportunities to further identify ways in which sake and the by-product from the sake-making process can be used to expand food flavors and culinary techniques, along with the potential for new lines of sake-based products.

The brewery—located at the corner of Route 9 and St. Andrew’s Road—is to begin construction in the spring of 2018, with a scheduled opening in early 2019. The brewery will total 52,500 square feet, including a retail space, and will be open for public tours. In addition to several company employees who will relocate from Japan to the Hudson Valley, the facility will create at least 32 new local jobs, the company stated. At full capacity, the brewery will produce 332,000 gallons of sake a year. Asahi Shuzo says it is investing more than $28 million in the project.

“We are excited that Asahi Shuzo has selected Dutchess County for the location of its U.S.-based sake brewery. From fine foods, to craft beer, wines, and distilled spirits, Dutchess County has become a food and beverage destination,” Dutchess County Executive Marcus Molinaro said. “Now, CIA students and visitors alike will have firsthand access to a working sake brewery. The economic impact through this project, with the addition of new jobs and increased tourism, will not only benefit Hyde Park, but all the surrounding communities.”

John Jordan
Editor, Real Estate In-Depth