Bartender Jess Grimm pours beer at Battery Steele Brewery Thursday, March 16, 2023. Shawn Patrick Ouellette/Staff Photographer

Two Maine craft breweries will soon open new outposts, expanding the geographic footprints of the businesses and following a strategic shift in their industry.

Battery Steele Brewing and Brickyard Hollow Brewing Co. are the latest to add pub-style restaurants in new towns.

“What we’re seeing at the highest level is the next move in a maturing marketplace,” said Sean Sullivan, executive director of the Maine Brewers’ Guild, a trade group.

Tasting rooms still draw visitors who want to try the latest beers. But the market has changed since the heyday of specialty can releases, when people would line up outside breweries to get the newest creation before it sold out.

The beer makers have also changed. Craft breweries are outgrowing their first tasting rooms, adding second or third locations in new towns, building in-house kitchens and expanding their food menus.

The evolving businesses include Goodfire Brewing, which has a tasting room in Portland’s East Bayside and now a restaurant in Freeport; and Definitive Brewing Co., which added a restaurant at Sunday River Resort to tasting rooms in Portland and Kittery.

Mast Landing Brewing Co., which started in Westbrook, now has taprooms in Freeport and South Portland. Banded Brewing Co. was Biddeford’s first brewery when it opened in 2013 and it added a Portland location in 2020. Brickyard Hollow, which opened in Yarmouth in 2018, has now six locations and is planning a seventh in New Gloucester. Battery Steele will realize a longtime goal by opening a restaurant in Wells.

“As fun as 1 Industrial Way is, expecting the masses to show up like they did five, 10 years ago for a garage door and a food truck, I think that business model has probably run its course,” said Jake Condon, one of the owners of Battery Steele.

COMMUNITY GATHERING SPACES

Sullivan said a number of factors are contributing to the growth spurt.

One is an expanding customer base. The craft beer crowd isn’t just people in their 20s and 30s anymore, and businesses are making room.

“It’s families with young kids, it’s groups of retirees, it’s other people who want to spend a couple hours at the brewery,” he said. “As breweries serve more as this community gathering space, it’s only natural that they offer other things that people might want.”

Often, those second or third locations include more food options or even a full restaurant. Ten years ago, more than half of breweries were brewpubs. Today, they make up roughly one third. But industry experts have said that number is on the rise again, and they expect to see a return to the brewpub model.

The pandemic contributed to some of the shift.

Ryan and Emily Brooks-Newton of Albany, New York drink beers in the tap room at Battery Steele Brewery in Portland Thursday, March 16, 2023. Shawn Patrick Ouellette/Staff Photographer

Sullivan said COVID-19 restrictions allowed brewpubs that served food to reopen before breweries that didn’t, and some decided to adapt their operations to include restaurant space as a result. Sullivan said food trucks are still important partners for breweries, especially those outside of Greater Portland. But some beer makers found that opening their own kitchens gave them more control over their offerings and broadened both their revenue streams and their customer base.

“That definitely forced a business switch for a lot of breweries,” he said. “I actually thought a lot of them would give up their licenses thereafter. It’s a totally different business than brewing beer. But a lot of them have found new customers that way, and they found new revenue that way, and so most of them have stuck with offering food as well.”

And then there’s the sheer number of licensed breweries in Maine. There are 165, more than double the 73 in 2015. That’s a lot of competition for tap lines and shelf space, which also come at a cost. At a recent industry conference, one beverage expert said Maine’s tasting rooms and brewpubs are the industry’s most profitable tools.

“Some of our brewers are so small that if they have to sell a beer through a distributor or sell it off premises, the margins will just not work for them,” said Sullivan. “Selling your beer right where you brew it is both a better experience for the customer as well as a way for breweries to be able to expand their business that makes financial sense.”

At Battery Steele, Condon said the owners always hoped to add a restaurant someday. He and co-founder Shane Noble worked at Gritty McDuff’s before setting up their own shop, and they saw the enduring model there.

The second Battery Steele location, in Wells, will be at the former Varano’s Italian restaurant, which closed in December. Condon said the new spot will offer a small menu of “elevated pub food” and hope to bring new life to a basement patio bar that has been mostly unused. He said he hopes to open as soon as possible but wouldn’t give a date.

Kori and Chris Pelley of Portland drink beer at Battery Steele Brewery. Shawn Patrick Ouellette/Staff Photographer

“The old guards of the industry, the Gritty’s and the Shipyards, there’s a reason that they’re all still in business,” he said. “A lot of breweries have come and gone, but these guys are still there, and a big part of that is these wonderful locations they have, and we think we found that in Wells.”

MATURING MARKET

The original business plan for Brickyard Hollow didn’t include a restaurant, but the brewery’s president, Brad Moll, said he added one because Yarmouth zoning wouldn’t allow a brewery without food. Now, the business has six locations, from Ogunquit to Eustis, that serve craft pizza and other light fare.

Brickyard Hollow will open a seventh site, after recently purchasing NU Brewing in New Gloucester. Malone Commercial Brokers confirmed the sale price of the 7,640-square-foot building on Lewiston Road was $1.6 million.

“In order to provide continued quality beers and an inviting location for tastings and events, we have decided to sell our business to Brickyard Hollow Brewing Company effective immediately,” said a post on the NU Brewery Facebook page. “Their well-known and expanding brand started in Yarmouth a few years ago and has grown to multiple locations throughout Maine. They are entirely owned and operated by Mainers living and supporting their communities in so many unique ways.”

Moll said the brewery was looking for a place to expand its production. The New Gloucester property has a large outdoor space that isn’t available at Brickyard Hollow’s other locations, and Moll said it will be perfect for live music and disc golf. Brickyard Hollow plans to add a kitchen to offer the full menu of the other locations, with an ideal opening date of June 1.

“The industry has matured, and the types of places that we’re becoming are really a product of the people that want to come there and what they want to do,” said Moll. “People really enjoy spending time at these craft breweries. Being able to offer food allows people to stay there longer.”

Sullivan, from the brewers’ guild, said he expects to see closings as the market shifts, but he has also been hearing that brewers who want to sell are finding eager buyers. It’s all part of “a healthy market,” he said.

“The craft beer industry has been on this hyper growth trajectory for a number of years, and the success rate has been nearly 100%,” said Sullivan. “That’s totally unusual in any sort of economic market. Where we’re at now, I think we’re getting to a more mature market for craft breweries. Which is to say I expect to see some closings, I expect to see some breweries expanding and buying old brewery space.”