St. Louis-based Urban Chestnut Brewing Company is betting big on craft beer’s growth potential in the Midwest.
On Tuesday, Urban Chestnut founders Florian Kuplent and David Wolfe announced plans to invest $10 million into a 75,000 sq. ft. “green” brewery that will eventually be capable of churning out 100,000 barrels of beer annually.
It’s a big project for a brewery that produced just 3,500 barrels of beer in 2012 and is planning for 7,000 in 2013, but Kuplent said that a second facility was the only option if the company wanted to continue to grow.
“We needed to find new space,” he said. “The new space is a little big, but we wanted to set it up so that we wouldn’t be in this same situation anytime soon. We are looking at the future.”
Kuplent said he believes there is plenty of running room left in the Midwest.
“We feel pretty confident that we have an opportunity to grow volume here,” he said. “I think we make some approachable, sessionable beers and our clientele might be a little wider than some other brewers in the region.”
The new brewery will feature a 60-barrel brewing system and an initial capacity of 15,000 barrels. Kuplent hopes to begin construction on the new space in the next two months and believes the space could open in early 2014. The project is being financing through a combination of bank loans and investment from friends and family, Kuplent said.
The brewery expansion will allow the company to grow its distribution footprint, Kuplent said.
“We really believe that St. Louis has a lot more growth potential,” he said. “We plan to focus on Midwest markets within a five-hour driving window.”
Urban Chestnut will also continue brewing at its current location, a 10,000 sq. ft. brewpub that boasts a 20-barrel brewing system and 400-seat beer garden. When the second production facility officially goes online, production of specialty and seasonal beers will remain exclusively at Urban Chestnut’s current brewing location.
Urban Chestnut products are marketed in two distinct groups, the Revolution Series and the Reverence Series. The Revolution Series focuses on American-style craft beers, while Reverence Series beers are brewed in a more traditional, European style. The company’s flagship beer, Zwickel Bavarian Style Lager, accounts for nearly 40 percent of the company’s production and its Winged Nut Chestnut Ale is roughly 20 percent of production, Kuplent said.