Allagash Embarks on Multi-Million Dollar Expansion

Allagash Brewing Co. is getting set to begin the first stage of a multi-phase expansion that will eventually connect the Portland, Maine brewery’s two adjacent facilities.

With $4 million in bank loans secured for the first phase of construction, the 18,000 sq. ft. expansion will primarily enable the company to increase its packaging capacity, grow its lab program, implement a new tour route, and create additional office space. The brewery also plans install four fermentation tanks, said Naomi Neville, the brewery’s national sales director.

“It’s definitely going to help with capacity, just to keep up with our current existing markets,” she said. “We’re just lacking in fermentation and packaging capacity at this stage.”

The newest expansion plan, which is slated to commence next month, comes one year after the company installed a new brewhouse. At the time, that expansion increased Allagash’s theoretical production capacity to 200,000 barrels per year, a figure the brewery now plans grow into incrementally.

The first phase of this latest expansion, Neville said, will likely be complete by April 2015 and will help the brewery scale to “next year’s planned production of over 90,000 barrels.”

During the second phase of construction, the 19-year-old brewery plans to physically connect its facilities. The cost of doing so will be determined “based on market and sales demand,” Neville said.

Despite the extra breathing room, Allagash isn’t necessarily looking to launch into any new markets. Instead, the company will penetrate deeper into the 17 states (and Washington D.C.) where its beers are already sold.

“We’re just growing in our existing markets pretty heavily and we kind of like that business model,” added Neville.

The only foreseeable move, Neville said, is to re-enter western New York, a market Allagash was forced to exit in 2009 due to capacity constraints. The brewery will begin distributing its beers “right before Labor Day” with T.J. Sheehan Distributing, she said.

The company expects to brew upwards of 75,000 barrels this year, up from the 58,613 it produced in 2013, according to Brewers Association statistics.

Allagash White, the company’s flagship, still accounts for 80 percent of the brewery’s overall business and is growing at about 20 percent. Meanwhile, the recently launched Saison, which was rolled out in March, is off to a quick start. In the second quarter it accounted for 7 percent of total sales, Neville said.

“We hope that grows,” added Neville.

Those beers are the standouts, but overall depletions are up 25 percent year to date as well, said Neville. The company’s top-performing markets include California, Chicago, Ill., Massachusetts, and its home state of Maine.

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