Red Lodge brewery crafts big growth
By Paul F. Vang
Montana Tavern Times
Craft beers have been outpacing the major beers in building their niche in the market. Make no mistake, craft brews are still just a small niche in the beer market but it's a niche that continues to grow.
Red Lodge Ales in Red Lodge, the site of the luncheon at the 2011 Montana Tavern Association convention last September, is a case study in a small craft brewer who has achieved amazing success.
About a dozen years ago, this reporter was in Red Lodge for a Kiwanis convention, and we spotted this brand new microbrewery. My wife and I stopped in, and met Sam Hoffmann, who had just launched Red Lodge Ales in a small building that barely had room for a small brewing facility and tasting room.
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Sam Hoffman poses in front of his Red Lodge Ales facility in September 2011.
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Sam was still laying the foundations of the business. He had local bars stocking Red Lodge Ales draft beer and once a week Sam would close the doors of the brewery and load kegs of beer in a pickup truck and hit the road to service out-of-town customers and, perhaps, line up another bar or two to dispense a Red Lodge Ales draft beer.
With that background it was huge contrast when some of us conventioneers stopped at Sam's Tap Room for lunch as part of the Red Lodge city tour.
After an intervening stop at another building, Red Lodge Ales built a new facility in 2009 that dwarfs that initial brewhouse, and at that, the facility is straining to fill customer demand.
I caught up with Sam Hoffmann to learn about the growth of Red Lodge Ales.
Sam modestly says, first of all, that Red Lodge is a great place to make beer. “We have great water here; it's very soft. All we have to do is filter out the chlorine.”
He describes the current brewery as, “a 20 barrel brewhouse,” meaning he can brew up to 60 barrels of beer a day, and they're brewing beer 3-4 days per week.
Red Lodge Ales uses Montana barley from the big malting facility in Great Falls as a base for their brews, though other malts from other parts of the country and from Europe supplement those malts.
They also now have a high speed bottling line and Sam says that 37 percent of their production goes out in bottles. He points out that this gives them an entry to places such as Costco, Sam's Club, and grocery chains. Still, 63 percent of their beers are sold as draft beer and are now available from Bozeman to the North Dakota border. Recalling the days when he used to go out in a pickup truck to peddle beer, Sam says they still self-distribute to their Red Lodge customers and in Billings, but the rest goes through distributors.
When Red Lodge Ales built the new facility they went out of their way to make the brewery a “green” building. When you approach the facility the first thing you notice is the array of solar panels on the south-facing roof of the building.
A green building
The solar panels routinely heat water to around 140-150 degrees, and sometimes up to 175 degrees in summer months, which brings it close to brewing temperatures. Another heat exchanger heats the floor in winter months.
On the other side, the big cooler room has a computerized sensor that detects when it's cold enough outside to run the cooling room without running the compressor. “It'll go months at a time, during winter, without the compressor.”
Sam estimates that his green building concepts saves the business around $3,500 per year, though he'll point out, “Some people talk about energy-efficient businesses and going off-grid. That can't happen here,” conceding that brewing beer is an energy-intensive process.
An area rancher for cattle feed uses the leftover grains from the brewing process.
Another new wrinkle is that Red Lodge Ales no longer has a tasting room. Instead, they've acquired an all-beverage license that's owned by Sam's mother, and they opened Sam's Tap Room, serving Red Lodge Ales, wine and other beverages, and a limited food menu.
With this, he's now a full-fledged member of the Carbon-Stillwater Tavern Association and the Montana Tavern Association. He points out that it's a separate business and, in fact, charges the Tap Room the same price for beer he charges other customers.
Sam says they don't have gaming machines, keep the menu fairly limited, and they close around 9 p.m., out of consideration to their customers in town. “We don't want to compete with local tavern owners. They've been great to us.”
As it happens, when Sam showed me the taproom, the ranching family that takes the leftover grains for cattle feed were there enjoying a beer.
Ross Anderson, the son of the Anderson family said with a laugh, “Our cows run for hay in winter. They gallop for mash.” There's another connection with the Anderson family, in that wood accents used in Sam's Tap Room came from an old barn on the Anderson ranch.
Hop fines in courtyard
In an enclosed grassy courtyard next to the taproom, there are hop vines growing along arbors. Sam said in the spring he supplies local property owners with hop rhizomes that they plant.
In late summer they harvest the hops flowers and bring them back to the brewery and they make a special, and quite popular batch of beer made with locally grown hops. The roots, Sam notes, are perennial, though the vines die off in winter.
Across the parking lot is a special events area, where the convention Wednesday luncheon at the MTA convention was held. Sam says a lot of weddings and other functions happen there. There's a stage, bar, and a tent with seating there. In fact, he says with a smile, he built the area for his own wedding a year ago, adding that he and his wife are now expecting their first child.
Brewmaster no more
In other changes, Sam says, with a note of regret, that he's no longer the brewmaster of Red Lodge Ales. Justin Moore, a professional mechanical engineer, is now the production manager.
While he says he frequently gets drafted to fill in when needed, most of his working time is in running the office and keeping up with a demanding amount of paperwork.
“I'm pretty much the office guy.” He also says another challenge is keeping the brewery fully staffed, as they lose a lot of people who move on to make bigger wages on the North Dakota oil fields.
Red Lodge Ales has had substantial growth since Sam started the business in 1998. In 1999, the first full year of operation, he produced 250 barrels of beer. In 2011, he anticipates they'll produce almost 5,000 barrels of beer. At that, he says their production capability is stretched to capacity, especially in summer months.
While Red Lodge Ales has had remarkable success in developing a market for their beers, Sam Hoffmann, a Massachusetts native, continually expresses how pleased he is that he established his business in Red Lodge. “I love living in Red Lodge. It's a great town.”