Craft Beer Booming in Nebraska

Craft beer makes up one of the fastest growing segments of the beer industry in Nebraska. Breweries and brew pubs like Nebraska Brewing Company offer a wide variety of craft beers for their customers. (Photo by Ryan Robertson, NET News)
Lucky Bucket Brewing Company's 18,000 square foot facility contains six enormous fermenting tanks, each standing about three stories tall. (Photo by Ryan Robertson, NET News)
This fermenting tank at Lucky Bucket Brewing Company has a capacity of 100 barrels, or 3,100 gallons. That's enough beer to fill an average sized above-ground swimming pool. (Photo by Ryan Robertson)
Brian Gress pours a glass of 5 O'clock Belgian Wit. Gress created the recipe and Lucky Bucket Brewing Company brewed it. Lucky Bucket's President Jason Payne says many craft brewers get their start as home brewers. (Photo by Ryan Robertson)
Lucky Bucket Brewing Company's Adam Palmer fills a growler of beer in the brewery's tasting room. Tasting rooms have become popular add-ons at many craft brewing facilities. (Photo by Ryan Robertson)
Lucky Bucket's Adam Cunningham pours a glass of 5 O'clock Belgian Wit. Many who work in the craft beer industry say sampling their products at the end of the workday is one of the most enjoyed perks in the business. (Photo by Ryan Robertson)
Blue Blood Brewing Company president Brian Podwinski displays some of the hops he uses in crafting his beer. Hops is one of the primary ingredients in any beer, adding to the taste and aroma. (Photo by Ryan Robertson)
All of the draft handles for Blue Blood Brewing Company are made in their brewery. (Photo by Ryan Robertson)
Blue Blood Brewing Company's 15 barrel brew house consists of six fermenters, two bright tanks, as well as canning and kegging areas. (Photo by Ryan Robertson)
Thousands of empty cans stacked in Blue Blood Brewing Company wait to be filled with one of the seven varieties of beer the brewery makes (Photo by Ryan Robertson)
Blue Blood Brewing Company president Brian Podwinski is a former Lincoln police officer. He says one of his favorite aspects of owning a brewery is giving tours and meeting the people who drink the beer he crafts. (Photo by Ryan Robertson)
K & Z Distributing Company Inc. in Lincoln primarily distributes MillerCoors products, but company president Milan "Deder" Knezovich says craft beers make up the fastest growing portion of his portfolio. (Photo by Ryan Robertson)
K & Z Distributing's 52,000 square foot facility has more than 35,000 square feet of storage. (Photo by Ryan Robertson)
K & Z Distributing trucks make daily runs to service more than 900 clients. (Photo by Ryan Robertson)
In response to the increase in sales of craft beers, MillerCoors developed new varieties of beer to compete in the market sector. (Photo by Ryan Robertson)
Nebraska Brewing Company in Papillion is a combination restaurant/brewery known as a "brew pub". (Photo by Ryan Robertson)
Sam Riggins, a brewer at Nebraska Brewing Company, and owner Kim Kavulak stand in the brew house, the heart of any beer making operation. (Photo by Ryan Robertson)
These chardonnay barrels at Nebraska Brewing Company contain Apricot Au Poivre Saison, the nation's #1 barrel aged beer in 2011. (Photo by Ryan Robertson)
A growing trend among craft beer enthusiasts is food pairing events. Nebraska Brewing Company partners with restaurants like Omaha's The French Bulldog for many beer pairing events. (Photo by Ryan Robertson)
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February 5, 2013 - 6:30am

When the economic recession hit in 2008, many industries experienced a drop-off in sales and growth. Not true for the craft brewing industry, which had double digit growth throughout the recession. In Nebraska, new breweries weren’t just created during the recession, but thrived as well.

Few people can say they work with Certified Evil on a daily basis, but at Lucky Bucket Brewing Company in La Vista, Neb. it’s quite common. Certified Evil isn’t some sinister villain. It’s a Belgian style strong ale and one of Lucky Bucket’s top sellers.

The brewery is housed in an 18,000 square foot facility, containing six fermenting tanks standing three stories tall. Adam Cunningham has worked at Lucky Bucket since 2009. Like everyone at the brewery, he wears many hats. In addition to running the bottling line and brewing on occasion, he is also the man in charge of getting the beer out of the tanks and into the kegs.

Photo by Ryan Robertson, NET News

Adam Cunningham works on transferring Certified Evil into kegs. The beer is a strong ale crafted by Lucky Bucket Brewing Company in La Vista, Neb.

“We’re not brewing beer to try and out do someone else,” Cunningham said. “We’re just trying to make the best beer we can make, and hopefully people like it.”

Lucky Bucket is part of the growing craft beer industry in Nebraska. The Brewers Association defines a craft brewer as small, independent, and traditional. Small means they produce less than 6 million barrels of beer a year. Independent in that they’re at least 75% owned or controlled by a craft brewer, and traditional meaning half of their brews are malt beer.

Craft breweries are not necessarily micro-breweries. According to the Brewers Association, micro-breweries produce less beer, and are usually housed in brew pubs (restaurants which make their own beer). Also, not all micro-brews use malted barley in their beer.

According to a leading market research company, Mintel in Chicago, the national craft beer industry has nearly doubled in the last five years.  The Brewers Association ranked Nebraska at 14th per capita in craft breweries in 2011, with roughly one brewery for every 101,000 residents.

Photo by Ryan Robertson, NET News

Jason Payne is the president, owner, and founder of Lucky Bucket Brewing Company. Payne credits brew pubs like Lazlo's in Lincoln's Haymarket and Upstream Brewing Company in Omaha as pioneers in the Nebraska craft beer industry.

Photo by Ryan Robertson, NET News

Briand Podwinski is the president of Blue Blood Brewing Company in Lincoln. Like many brewery owners before him, Podwinski started brewing beer at home before turning the hobby into his profession. In addition to being found at many restaurants and stores in southeast Nebraska,  Blue Blood recently began distributing in Kansas City as well.

Lucky Bucket started crafting beer four years ago. Jason Payne is the owner, founder and president. The 35-year-old holds degrees in biology and chemistry, which he said helps him formulate the recipes enjoyed by increasingly more Nebraskans.

“I think the first year we did about 400 barrels. The second year we did about 4,000 barrels,” Payne said. “This year, we’re just under 7,000 barrels, but we’re aiming high; we’re shooting for maybe 10 (thousand) next year.”

While brewing may be a science, not every brewer is a scientist like Payne. Brian Podwinski was a Lincoln police officer for six years. After drinking his first craft beer around 10 years ago, he said he was bitten by the brew bug.

“After we brewed for a while, more and more of our friends said they really liked our product and wanted to have us brew different things for fun,” Podwinski said, “and we figured we’d take it to the next level and brew it professionally.”

Podwinski is now the president of Blue Blood Brewing Company in Lincoln. While making beer is fun, he said making a living in the industry isn’t always easy.

Podwinski says craft brewers need to overcome a domestic beer culture by educating consumers about the different flavors and varieties.

Craft brewers are also in competition with companies like Anheuser-Busch, a subsidiary of Inbev, a Belgium based beer giant.

Anheuser-Busch Inbev, through its many brands, provides Americans with more than half of all their beer.

Many craft brewers, however, say the sheer size of companies like InBev is what’s driving more consumers to buy local.

Caleb Pollard is partial owner of Scratchtown Brewery. Pollard and his partners are currently in the process of constructing their facility in the Central Nebraska town of Ord, Neb. and should be open this summer. He said Scratchtown represents a movement in the beer industry of returning to the pre-prohibition model of regional brewers. 

“What we’re trying to do,” Pollard explained, “is carve out a major part of the market from the large scale domestic brewers, of which, aren’t even owned by American companies anymore.

Photo by Ryan Robertson, NET News

The founders of Scratchtown Brewing Company, along with their families and friends, stand at the future site of the brewery in Ord, Neb. The name of the brewery is an homage to the town's early days, when a wet spring led to an outbreak of insects.

“We’re going against a system, a domestic beer producing system, that is focused on investor return, focused on market share, and is focused on profits,” Pollard continued, “and when you look at the craft beer industry, the primary responsibility of the craft beer industry is to produce good beer, and be passionate about producing good beer, and the profits are following that.”

Pollard said he’s confident Scratchtown will do just fine in Ord. Finding someone to deliver his product to retailers, however, may be easier said than done, since Ord is 65 miles from the nearest distributor.

Scratchtown may have some difficulty finding a distributor, but most craft breweries in Lincoln and Omaha enjoy the benefits of being close to distributors.

At K&Z Distributing Company Inc. in Lincoln, forklifts moving swiftly to fill orders is a common sight. K & Z primarily distributes products from MillerCoors, but President Deder Knezovich said he has plenty of craft brews in his portfolio to offer clients.

Knezovich said craft beers must be carefully chosen for distribution, because competition at the retail level is fierce.

“It’s a fight in the stores, because you have limited shelf space,” Knezovich explained, “and in the bars you have limited draft handles, so you’ve got to do your best on how you differentiate yourself.”

A family-owned business, K & Z has been in operation for more than four decades, and they distribute primarily MillerCoors products in a 50-mile radius around Lincoln. K & Z started playing a vital part in Nebraska’s craft beer industry when they began carrying craft brews nine years ago.

Photo by Ryan Robertson, NET News

Milan "Deder" Knezovich II is the president of K & Z Distributing Co. Inc. in Lincoln. Inside K & Z's 52,000 square foot facility is a special cooler, specifically designed to keep certain beer varieties cold to maintain freshness and flavor.

Distributors like K & Z are sometimes referred to as the “gatekeepers to the beer world” by craft brewers. After prohibition ended, a three-tier system was established to distribute beer. Under the system, breweries must use distributors to deliver their products to stores. Knezovich said sometimes offering a new craft beer might mean taking one of his other products off his clients’ shelves, what he called a “management decision.”

But Knezovich said he and other distributors are quick to recognize the sales boom craft beers are creating. Knezovich said they easily make up the fastest growing segment of his portfolio, accounting for nearly 25 percent of his business.

As Knezovich described it, it’s the kind of growth which is forcing larger beer brewers to take notice and adapt.

“They even have differentiated themselves, the MillerCoors portfolio, as having established a micro-craft area or brand focus in their own corporation,” Knezovich said. "So they’re noticing there’s a big player out there to differentiate and go from there too.”

Even though distributors like K & Z  and Double Eagle Beverage in Lincoln and Quality Brands of Omaha are more than willing to distribute craft beer, because breweries are prohibited from self-distribution, some smaller brewers feel they’re at a competitive disadvantage. That’s why there are now talks to change the system.

Photo by Ryan Robertson, NET News

Kim and Paul Kavulak are the owners of Nebraska Brewing Company in Papillion, Neb. They say the beers their brew pub churns out have won more awards than all other Nebraska craft beers combined. They made the nation's #1 barrell-aged beer in 2011.

Photo by Ryan Robertson, NET News

Beer pairing events are a growing trend with craft beer enthusiasts. Nebraska Brewing Company recently partnered with The French Bulldog, a delicatessan restaurant in Omaha. The restaurant supplied charcuterie, which is an assortment of cured meats, cheeses, bread, and special spreads. The charcuterie was paired with Nebraska Brewing Company's Apricot Au Poivre Saison, which was named the nation's best barrell aged beer in 2011. The owners of Nebraska Brewing Company, Paul and Kim Kavulak, say much like wine, the complex ingredients in craft beers can enhance the flavor of food and add to the dining experience.

Paul Kavulak, owner of Nebraska Brewing Company in Papillion, Neb. is also the president of the Nebraska Craft Brewers Guild. He’s working with brewers like Pollard and Podwinski, as well as state legislators, to try and change Nebraska’s laws to make it easier for smaller craft breweries to do business.

“In many cases, it doesn’t make a lot of economic sense,” Kavulak said, “for [the brewer] or the distributor, so there’s some thought that maybe things should change a little bit to let these startups have some ability to service their own products and avoid the unnecessary struggle of trying to get this thing off the ground.

“When they grow up big enough that the distributors are very attracted by [the brewers],” Kavulak continued, “and there’s a great economic model for both of them, then the model shifts.”

Kavulak said making it easier for smaller breweries to do business will not only help grow the industry, but it would create more jobs as well.

In addition to employing people at the brewery, Pollard said local farmers could benefit as well by growing hops and barley, key ingredients in craft beers.

“There are plenty of opportunities for Nebraska producers to look at the craft beer industry, not just in Nebraska, but on a global scale, and look at possible secondary activities on their farm," Pollard said.  "Value added ag opportunities on their farm that can help margin the differences between market fluctuations in corn, soy beans, and the other types of row crops with specialty crops that are servicing a growing industry.”

A growing industry with growing demands, which craft brewers in Nebraska look forward to meeting.




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