Joey Redner was just a beer geek who wanted easier access to craft beer in Florida. Opening a brewery was never part of the plan.
In the early 2000s, Redner tried to educate himself as much as possible about the craft beer industry to make himself a more attractive candidate once someone opened a brewery in Tampa. He owned his own bar, worked in sales for Dunedin Brewery and imported craft beer on the side. He also wrote a beer column for the Tampa Bay Times and frequently tagged along with a beer distributor friend.
Redner waited for a new brewery to open for several years before writing an opinion paper about why there wasn't a major craft brewery in the area. “Is the equipment too expensive? Are the raw ingredients too hard to get? Is the market not there?” he asked. After answering all of his questions on paper, Redner realized he had a business plan.
He raised $850,000 in family funding to cover a salary for a brewer, licensing, permitting, marketing, and extra runway. In 2008, he started to build Cigar City Brewery in Tampa.
The brewery has grown from two employees producing 1,000 barrels in its first year to 66 employees and 34,000 barrels last year. This year Redner expects to produce about 55,000 barrels. Redner thinks he's lucked out as far as getting good employees. “Because there weren't a lot of breweries in the area, we got the pick of the litter,” he says.
Five years in, Redner says he never imagined outgrowing his 32,000-square-foot warehouse. “I thought that would be 50 years of space.”
Demand for the beer exploded within six months of opening the brewery, Redner adds. “Growing is what we are; it's part of our DNA.”
At times, the fast growth has been hard to manage. A few years ago, some of Cigar City's beer was cross-contaminated during the canning process, a flub that caused the brewery to recall beer off shelves. A few months ago, the brewery made headlines for a botched beer release event.
“You can't buy back that negative experience,” Redner says. He tells his brewers and assistants, “Let's make sure that when this beer meets the person's lips, it's exactly the way the brewer intended it to be.”
In the last two years he invested hundreds of thousands in equipment that focuses on yeast handling, pitching properly, attenuating beer, and spectrophotometry. He also spent more than $1 million on a canning machine that speeds up the process from 60 cans a minute to 170 cans a minute.
At first, Redner says he lost money on cases of beer because the labor it took him to produce was more costly than what he made after selling it to distribution. He had to pass the 7,000- to 10,000-barrel production mark to find economies of scale. Now the company sells 95% of its beer to distributors and 5% directly from the brewery.
Distributors include J.J. Taylor in Tampa Bay, Goldring Gulf to the Panhandle and Brown Distributing for the rest of Florida. The company also distributes to Georgia, Alabama, Northern Virginia, Philadelphia and New York City. Redner says they are focused on covering the Southeast and moving up the east coast.
Florida doesn't make expansion easy, according to Redner. Other states tout lower taxes, incentives for breweries and the ability to self distribute. Now that Cigar City is tapped out on space, Redner is considering expanding to the Northeast. Redner estimates a new brewery with the same equipment would cost $10 million to $15 million.
He's bought time on making that decision by partnering with Brewhub, an independent production facility that is scheduled to open this month in Lakeland. Brewhub will be brewing at least 20,000 barrels of Cigar City in the first year, with the potential to increase to about 70,000 barrels.
Redner says he still won't be meeting demand. “If we could brew the beer, I think we could sell 175,000 barrels.”
He's not worried that his brewery has become a “feeder program” for the other breweries popping up in the area. Every new small brewery helps the craft beer industry grow. Craft beer makes up just 6% of beer sales in Florida, with 129,946 barrels of craft beer produced in the state in 2013, according to the Brewers Association.
That's why Redner is actively fighting legislation to protect smaller breweries. “The ripples reach the whole pond,” Redner says.
“I know it's weird five years in to running your business to be thinking about what my legacy will be when I leave, but it's really what is craft beer in Florida is going to look like in 20 to 25 years. That's my primary concern.”
Year Revenue Growth
2011 $3.8 million
2012 $5.4 million 42.1%
2013 $9.7 million 80%
Source: Cigar City Brewing