Shipyard Brewing Inks Agreement with City Brewing Company Bringing 30,000 New Barrels Online

The nation’s 16th largest craft brewer needs more space and is traveling 1,500 miles away from home to find it.

The Portland, Maine-based Shipyard Brewing Company has inked an alternating proprietorship agreement with City Brewing Company in Memphis, Tennessee, bringing an additional 30,000 barrels of capacity online. That’s in addition to 180,000 barrels of capacity in Portland. Company President Fred Forsley said the combined 2012 barrel production goal is 185,000. The company produced 129,000 barrels in 2011.

Before inking the deal with City Brewing, Forsley was looking to purchase new property and also entertained other contract partners.

“We were searching for more capacity and began looking at a bunch of different opportunities,” Forsley said.“Our goal is to grow the brand down the eastern seaboard, with more focus on New Jersey and New York. We are also hoping to begin distributing in Texas this year.”

Forsley said the company is investing over $300,000 into retrofitting existing brewery equipment in Memphis for open top fermentation, Shipyard signature brewing method.

“We have a specific section of the brewery where three, retrofitted 1500-barrel fermentation tanks will sit,” he said.

So what brands are coming out of Memphis? Forsley told that Export Ale and Pumpkinhead – the company’s top-sellers – will comprise the bulk of production. The partnership also allows Shipyard the chance to move into cans, Export being the first to run off the line. Those cans will be hitting markets next week. The company will also can Pumpkinhead for a fall release and Sea Dog Blueberry Wheat Ale.

But the City Brewing deal extends beyond Shipyard. Forsley said the agreement allows Shipyard the ability to continue producing a number of additional brands with its various contract brewing partners.

“We were looking at a situation where we could have had to end those relationships,” he said.

The company currently has a number of partnerships in place with breweries like Peak Organic Brewing Company, Woodstock Brewery and Gritty McDuff’s among others.

Still, Forsley admits the relationship with City Brewing could end up being a temporary fix to a permanent capacity problem.

“Our goal is to be there a long time and grow but my background is in real estate and I am always looking at property,” he said. “We are still looking at ways to expand our currentl facility.”

Shipyard Brewing Company currently operates 10 different facilities including its brewpub locations and will open its 11th , a Sea Dog brewpub, this year in Clearwater, Florida. Forsley said they are also looking to open an additional brewing facility in Florida with a 20-barrel brewhouse that is currently being housed in storage.

Shipyard also recently took ownership of 180 wooden barrels and will be rolling out a brand new barrel-aging program before the end of the year.