Brewers Find a Wealth of Opportunity on Tap

Linette Antillon and Kyle Jefferson opened Pueblo Vida Brewing Company seven months ago in downtown Tucson to great fanfare and even greater projections.

“The minute we opened, we had a plan for expansion already,” said Ms. Antillon, whose beer is distributed at 15 or so local bars.

Pueblo Vida expects to nearly double its production from 650 barrels per year to 1,200 per year once more equipment is installed in the fall.

“Tucson is thirsty,” as a local saying goes, is an understatement. The beer business here is bubbling.

Tucson has 10 craft breweries, and over the last year, several of the established ones have expanded. At least three new breweries are expected to open this summer, and at least four more are in the works.

Nationwide, the craft beer movement is having a moment — some say a renaissance. The number of craft breweries has grown to 3,418 in 2014, from 1,596 in 2009, according to the Brewers Association.

Last year, Arizona produced nearly 157,000 barrels of beer.

With its 10 breweries, Tucson is less saturated than places like San Diego County, which has more than 107 breweries, and the Portland, Ore., metro area, which has 83, according to their brewers guilds.

“Tucson’s population could probably sustain 20 more breweries, if not more,” said Sarah Ritchie, co-founder of Tucson’s chapter of Girls Pint Out, a national craft beer organization for women. “It’s nowhere near the capacity of what you see at cities like Portland or San Diego.”

When the Sentinel Peak Brewing Company opened in January 2014, it quickly ran out of beer and had to close down for a couple of weeks. “We completely underestimated with our small system just how much Tucson loves craft beer,” said Jeremy Hilderbrand, the co-founder and head brewer.

Pinar Istek/NYT Institute

Scott Safford, an owner of Tap And Bottle, a popular bar in downtown Tucson, and his wife, Rebecca, offer more than 600 styles of craft beer.

As some brewers enjoy the success of the growing beer scene, prospective brewers are experiencing a higher barrier to entry.

Hank Rowe, a former middle school social studies teacher, said he had a private investor backing him, but he fell through, and Mr. Rowe was forced to rely more heavily on a loan.

Despite setbacks, Mr. Rowe said he was optimistic about his brewery’s becoming a hit in northwestern Tucson once it opens. “The industry is absolutely exploding,” he said.

While the rate of success can be high, profit margins vary, brewers say.

“I was making more as a teacher,” Mr. Rowe said. “It falls under the passion play, but once you get into the larger systems, then obviously you’re generating larger revenues, and you’re able to pay more staff and things like that.”

In addition to running the brewery, Mr. Hilderbrand and his co-owners at the Sentinel Peak Brewing Company are all full-time firefighters. Mr. Hilderbrand estimated they put in about 20 to 30 hours a week at the brewery.

At Pueblo Vida Brewing, krausen, a fermenting liquid, topped off beer on Thursday.Pinar Istek/NYT Institute

Christopher Shepard, assistant editor at Beer Marketer’s Insights, a trade publication, said brewers’ grand expectations aren’t off-base.

“The growth of the industry has been so large and the demand that people are seeing, particularly on a local scale, has warranted those plans and those investments,” Mr. Shepard said.

A recent bill (SB 1030) passed in Arizona, known as “The Arizona Beer Bill,” raised the production cap from 40,000 barrels to 200,000 per year and allows microbreweries to operate up to seven retail shops, among other changes. The new cap won’t immediately affect Tucson brewers because none are producing beer at such high rates — yet.

Dragoon Brewing Company, Tucson’s new darling of craft beer and one of the leading brewers in town, produced 2,550 barrels in 2014. Dragoon was founded by Eric Greene; his father, Bruce; and Bruce’s friend Tristan White in 2012.

When they opened Dragoon, it was producing 500 barrels a year in a 5,700-square-foot warehouse. After expanding to 18,000 square feet in December, Dragoon now has the capacity to eventually produce up to 10,000 barrels.

Mr. Greene said he took a slow and steady approach to growth when he opened Dragoon, although his brewery produced 500 barrels its first year, which is above average for most Tucson breweries.

“In hindsight, I wish we had planned for more growth,” he said.