Brewing A National Image Kalama’s Mom-And-Pop Brewery Schemes To Hit The Big Time

Scan the stock tables in the newspapers these days and there’s a newly public company with a ticker symbol that describes exactly what it does.

The company is Hart Brewing Inc. and the ticker symbol, which identifies it to investors who want to buy the stock, is HOPS.

Hart Brewing has come a long way since it was founded in Kalama in 1984 by Tom Baune and Beth Hartwell and later sold to a group of Seattle investors in 1989.

It has grown from a small mom-and-pop operation in a brick building on Kalama’s main drag to a regional company with headquarters in Seattle, three breweries and more than $18 million in gross sales at the end of the third quarter of 1995, said Don Burdick, Hart’s chief financial officer.

It took the next step toward its goal to become a national brewery last month, when it issued 2.6 million shares of stock to the public at an offering price of $19 per share.

“Going public means that we can become a national company,” Burdick said.

Craft beers are a small segment of the $50 billion domestic brewing industry. Hart estimates that craft beers accounted for only 2.5 million barrels out of the total 180 million barrels shipped by domestic producers in 1994.

However, craft beer shipments have grown at a compound annual rate of approximately 41 percent in the last five years, while sales in the overall beer market have been relatively flat, Burdick said.

Over this same period, Hart’s shipments of craft beer increased by a compound annual growth rate of about 72 percent, Burdick said. Hart’s gross sales have increased from $1.1 million in 1990 to $13.5 million in 1994, a compound annual growth rate of 87 percent, Burdick added.

Burdick said a large portion of the money from the public offering will be used to build a new brewery in Berkeley, Calif., as well as two other breweries. A portion of it will also be used to make improvements in Kalama.

“Our operations are very successful down there, and we will continue to work to expand that,” Burdick said.

Although it’s now headquartered in Seattle, Hart’s Kalama operations are still its anchor, producing the company’s Pyramid Ales for the Oregon and Washington markets and nine other states, said Clay Biberdorf, who came to work for Hart more than six years ago and who now is the Kalama brewery manager.

Hart Brewing made an estimated 170,000 barrels of beer in 1995, 105,000 in Kalama. When the Berkeley brewery is finished, annual production will total 290,000 barrels.

The variety of beers has grown to include such labels as Pyramid Amber, Apricot Ale, Wheaten Ale, Kalsch, Porter, Snow Cap Ale, Hefeweizen and a number of beers brewed under the Thomas Kemper label. Hart acquired Kemper in 1992. But the original Pyramid Pale Ale recipe devised by Tom Baune is still the company’s best seller, Burdick said.

“The company, we think, has been true to that formula and it’s still winning awards,” Burdick said.

On tap for Kalama in 1996 is a project that will enclose the brewery’s fermenting tanks, expand its bottling line and give its 38 employees more space in which to operate, said Biberdorf.

“The really nice thing about this remodel is that we’re finally able to catch up,” Biberdorf said over the clanking of the bottling machine. “It will make the whole plant more professional - more fitting for a company that’s publicly traded.”

The company would also like to open a brew pub in Kalama, but must wait for additional shoreline permits.

Hart plans to expand eventually with breweries on the East Coast, either by acquiring other breweries or by building new ones.

“We will look for the opportunity to brew Pyramid right alongside a local brand,” Burdick said.

The success of Hart and other microbreweries has attracted competition from small and large companies alike. But Burdick said he believes Hart Brewing will be able to stay ahead of the game.

“I think there will always be a niche for the local beer,” Burdick said, pointing to Germany and England, where each town used to have its own brewery. “Beer is a personal product. People like the idea of being close to a brewery.”