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VOL. 126 | NO. 111 | Wednesday, June 8, 2011

Brewing Loyalty

Ghost River expands customer base through careful, steady growth

By Sarah Baker

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Many consumers of craft beer may not be fully aware of the operation involved behind each glass.

Head brewer Jimmy Randall, top, and Tyler Nelson work around two new 50 barrel fermenters recently installed at Ghost River Brewing. New equipment will help the brewery double its capacity.

(Photo: Lance Murphey)

Local craft breweries, like Memphis-based Ghost River Brewing Co., move beer out the door as fast as they can make it. That’s because small breweries have a set amount of alcohol they can brew, said company principal Chuck Skypeck.

“You’re literally bound by your tanks,” Skypeck said. “What small breweries are doing is really on a different scale and different product.”

Ghost River brews about 5,000 kegs a year. To put it in perspective, Anheuser-Busch Cos. Inc. brews that much Budweiser in 10 minutes.

But with the addition of two new fermentation tanks, Ghost River will soon be able to double capacity at its 827 S. Main St. location. The new tanks will come online within the next couple of weeks, after plumbing and refrigeration issues are resolved.

Memphis’ recent heat wave has provided various challenges for the brewing process.

“The beer when it’s fermenting actually generates a lot of heat,” Skypeck said. “Just as the air conditioning in your car doesn’t work quite as well when it’s hot, here we face those problems. Our refrigeration is pushed to the max when it gets hot.”

Founded in 2008, Ghost River, whose name comes from a remote stretch of the Wolf River in Fayette County, distributes beer to about 110 bars and restaurants in Memphis and North Mississippi, most of which are local businesses.

The company’s present brewing staff is made up of three full-time and one part-time employee, not including distributors. With the new tanks, that team will likely grow to four full-time employees.

Ghost River also plans to roll out a new bottling line by summer’s end, which will require additional help. Right now, the only product set to go into bottles is the Ghost River Golden Ale, the company’s most popular beer.

Chuck Skypeck is founder of Ghost River Brewing, which takes its name from the Ghost River section of the Wolf River. New equipment being installed will help the brewery double its capacity from 5,000 kegs a year to 10,000 kegs. 

(Photo: Lance Murphey)

The decision to add new tanks was made back in October, when the company realized the overwhelming demand for its product. But the most noticeable increase in consumerism was seen between February and March, Skypeck said.

“Our demand for beer increased so much this spring that our intention was once we got these tanks up and running, we would go immediately into the bottles,” he said. “Now, we’re actually going to brew in these (tanks) several times just to catch up on demand.”

Due to the expansion, Ghost River has canceled all of its Saturday afternoon tours, and isn’t taking on any new customers at the current time for draft beer.

Skypeck gets emails daily with inquiries about bringing Ghost River to other states. But that’s at the bottom of the company’s list, he said, because with expansion comes lower margins due to additional shipping, sales and marketing costs. The beer also loses its local charm.

“It doesn’t make sense for us to worry about other markets until we satisfy the demand here,” Skypeck said. “Once you start moving your beer around the country, you lose that local appeal and you also lose freshness. To me, that’s not a goal. The goal is to have a profitable business and satisfy your demand in Memphis and if something else unfolds from that, that’s another story.”

About 1,700 breweries are located in the United States, most of which are small breweries like Ghost River. That makes expanding into other markets even more problematic because it gives the consumer “an awful lot of choices,” Skypeck said.

“The craft customer beyond the local brewery aren’t very brand loyal, they’re always trying the next new thing,” he said. “Let’s just say we go to Nashville and we’re the new thing and everybody loves us. Well guess what happens next month? They’re onto the next new brewery that comes there.

“We would rather focus on establishing good, loyal core customers locally and then worry about expanding into other markets where you really have to start working hard to get those loyal customers.”

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