Yazoo Founder Linus Hall Discusses Plans For New Destination Brewery

Yazoo Brewing Company plans to break ground in mid-June on its new, six acre, 30,000 sq. ft. destination brewery in the Madison neighborhood of northeast Nashville.

In a conversation with Brewbound last month, Yazoo founder Linus Hall said he is targeting a spring 2019 opening for the new facility. He added that a development group is under contract to purchase the land where Yazoo’s current facility, in Nashville’s The Gulch neighborhood, is located.

“Everybody says, ‘I can’t believe you’re doing this with the way that the industry is going right now,’ but it’s really a real estate thing,” Hall explained. “The real estate around here has just gotten to be nuts. So we can basically sell this property and finance most of the buildout of the next place.”

Hall declined to share how much the new project will cost. According to previous reports, the asking price for Yazoo’s current facility was around $9.75 million.

Hall said the move is necessary because Yazoo has grown to sell more than 20,000 barrels of beer in each of the last five years out of a facility with several logistical issues.

Despite Yazoo’s growth in previous years, production declined 4 percent in 2017, to 22,541 barrels, according to the Brewers Association.

Nevertheless, building a new facility from the ground up will solve the logistical problems, Hall said, while allowing Yazoo to relocate to an up-and-coming residential neighborhood near its primary wholesaler, Lipman Brothers, which handles 85 percent of the company’s volume.

“It reminds me of what east Nashville was like 20 years ago when I moved here,” he said. “A lot of young people moving there, still kind of affordable housing stock built right after World War II.

“It’s just time,” he added. “We’ve grown as much as we can here.”

Brewbound stopped by Yazoo during the annual Craft Brewers Conference to discuss the move with Hall. Below are excerpts from the conversation, which have been lightly edited for clarity.

Brewbound: What will you be able to do in the new facility that you’re not able to do here?

Linus Hall: “We’ve gotten to the point where we can’t really drop in tanks as easily anymore. So we’ll be able to keep growing. We’re not completely maxed out now, and if this opportunity wasn’t here, we’d probably figure out ways to keep adding more tanks or put some more out in the parking lot, but it’s mainly because of the value of this property that lets us finance a bigger one on a bigger property and solve some of the logistics headaches that we’re having right now.”

BB: What are those logistical headaches?

LH: “We have to back in 18 wheelers off the street out here to our one loading dock. There’s nowhere for them to turnaround. Usually that’s trying to happen as we have our taproom open and our employees already got most of the parking lot filled up. We don’t have space for much cold storage here, so we have to rely on getting our projections pretty much exactly right on what we need to be producing on a daily basis.”

BB: As far as production goes, you’ll be able to operate this place up until the opening of the new facility?

LH: “We have a leaseback period that will allow us, even after we sell the property, to continue to be here until we move out.”

BB: Who is buying the property?

LH: “It’s a development group. They’re pretty close with their plans, but they’ve done a lot of work with a hotel group before. More than likely it’s going to be a high-rise hotel.”

BB: So it’s not going to be another brewery operation?

LH: “I tell everybody, I couldn’t afford to do a brewery here right now, and I don’t know anybody else who would do that either.”

BB: As far as distribution goes, how many states are you in?

LH: “Statewide we’re in Tennessee and Mississippi. I’d say about 85 percent of volume is in middle Tennessee, within 50 to 100 miles of Nashville. That’s kind of our bread and butter. But we also sell some beer in Charleston, South Carolina, … [and] in Indiana.”

BB: When the new facility opens, will you look to expand that footprint?

LH: “As we build out the brewery, we’ll also be building out our sales team a little bit more. We’re not in Kentucky, which is only about 65 miles north of here. We’re not in other surrounding states like North Carolina. So we’re going to be looking at opportunities like that to keep growing. But we’re really focused on our home market, which I feel like is going to protect us if there is a contraction in the market.”

BB: How competitive has the market become and what strategies are you employing as it’s become more competitive?

LH: “Now it’s super competitive. You go into some of these bars and there’s five reps waiting for the beer buyer who gives you a few minutes at each one. It’s great to have established a lot of those relationships before, but Nashville’s grown so quickly that it’s almost like opening a new market ourselves every year as fast as it’s growing.

“Investing more in data and really breaking down our scan data. When you’re talking to chain accounts or big restaurant groups, instead of just promoting your new style, ‘Here’s how I think this can help you’ and ‘here’s what we’re doing in your restaurants now.’ It’s so competitive and they’re already talking with so many different reps that if you just go in and shake hands and say ‘thank you for your business,’ you’re not really going to get much more out of it.”

BB: Looking at what your vision for Yazoo is, what is a comfortable place for you?

LH: “You talk to other brewers and it’s kind of a step function in what you have to invest to get to the next level, and so we’re in a nice comfortable spot right now at 24,000 to 25,000 barrels that our equipment is paid for and we’re generating some cash to put toward the next place. If you want to grow to the next level, then you probably have to add more distribution, more sales people, more investments in kegs. So you take that whole other step function again, and now you’re waiting for your sales to catch back up with you again.

“I’d like to get to that next one, but I’d be perfectly fine if we stay where we’re at as well. It’s a nice living right now. I don’t have any aspirations to be a national brand, but we might take on a few more states once we get into the new spot. But I think it’s fun being a local brewery and having that designation and not getting too big for your britches.”

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