Baxter Brewing Hopes New Taproom will Boost Bottom Line

When Baxter Brewing opened inside of the 168-year-old Bates Mill Complex in Lewiston, Maine, in 2011, the state did not allow breweries to sell beer directly to drinkers for on-premise consumption.

State laws loosened in 2012, but Baxter – which is ranked as the third-largest brewery in Maine — had already dedicated the vast majority of its facility to production.

As a result, it could never fully tap into the growing trend of direct-to-consumer sales, which the Brewers Association estimated at 9.5 percent of all craft beer transactions in 2016.

“When we designed our space, we modeled it more like a gift shop,” founder Luke Livingston told Brewbound. “We knew we would sell some beer to go, offer tours and give samples. But it was never designed to accommodate crowds of people.”

That will change this summer, when Baxter opens a proper taproom that is 10 times larger than its current space.

“We have this really fascinating, 170-year-old brick building,” Livingston said. “People can come and have a beer at a table built out of a compressor that powered a mill that made the uniforms for the Army of the Potomac. I am fairly certain that nobody else can say that, and we need to be capitalizing on it.”

At 4,800 sq. ft., the taproom — which will also feature a new pilot brewing system for the creation of specialty beers, as well as dedicated space for barrel-aging — will offer customers the opportunity to purchase several “unique and hard-to-find” beers, according to a press release.

The opening of a larger taproom, which will be financed by the company’s existing network of investors, will immediately impact the company’s bottom line, Livingston said.

“In the three-tier system, there is no other way for us to have such quick access to capital,” he said. “You see lines of people at a brewery in Portland at 11 a.m. on a Saturday morning, and you can’t help but want to be a part of that. We are hopeful it has an impact on the bottom line.”

Baxter, which distributes its products to eight East Coast states, produced about 15,000 barrels of beer last year, down from the 18,750 barrels it made in 2016, Livingston said.

He attributed the decline to increased competition – Maine has issued approximately 100 new licenses since Baxter opened its doors – and said the company made a conscious decision to focus on improving sales in existing territories instead of opening new markets in an attempt to “artificially inflate” numbers.

“It didn’t create a panic,” he said. “Thankfully, we are well-funded, and I have some incredible people that work with me who know better than that, and know to play the long game.”

He also admitted that the company got caught “flat-footed” on the innovation front and didn’t introduce enough new products to capture drinker attention, something that will change with the opening of the new taproom.

“Last year was about getting our ducks in a row, taking the time to hire the right salespeople and bring in world-class brewers,” he added.

In addition to the expansion and plans to return to growth in 2018, Livingston said Baxter would convert its existing taproom into a new biology lab and look into the possibility of expanding distribution into Pennsylvania as well as some international markets.

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