A local brewery is making a big bet on bottles.
Hardywood Park Craft Brewery has begun producing 12-ounce bottles of its mainstay Singel beer. A shipment of about 12,000 bottles sold in six-packs will hit store shelves next week, almost a month after the brewery installed equipment to bottle beer and increase Singel production.
“We always had the plan to want to sell six-packs,” said Hardywood co-founder Eric McKay. “[Co-founder Patrick Murtaugh] and I certainly saw the velocity that six packs moved in grocery stores compared to single bottles.”
Large-scale bottling comes with a steep barrier to entry. Between the new automated system and equipment to increase brewing capacity, McKay said Hardywood would have invested $500,000 to get the first six-packs on store shelves.
Gallon for gallon, margins are typically better on packaged beer than drafts, McKay said, but without automated bottling, the retail price would have been excessive. McKay estimated the company would have needed to charge between $17 and $20 to break even bottling six-packs by hand.
“The economics just don’t make sense for breweries that are bottling one at a time by hand to do six-packs,” he said.
Hardywood has sold Singel in 22.5-ounce bottles that run about $7 apiece for about two years. Six-packs of 12-ounce bottles will cost about $11.
The 22.5-ounce Singel bottles are also sold in area bars and restaurants. Although Hardywood hasn’t decided whether or not the larger bottles will be continued in the long run, getting them out of restaurants in favor of 12-ounce bottles is a priority, McKay said. Hardywood will continue to sell its limited edition and seasonal beers in corked 25-ounce bottles.
Hardywood plans to put its six-packs in stores that already carry the larger Singel bottles. The brewery does not have plans to sell other beers in six packs, as fighting for cooler space can be a challenge.
“Instead of having five or so flagship beers that we’re trying to have space on the shelf for … we’re trying to brew the best beer in the Singel,” McKay said.
About 30 percent of Hardywood’s beer makes it into bottles or cans, with the rest sold on draft. McKay envisions a 50-50 split in the next year or so. He said he hopes to expand Hardywood beyond the Richmond market in January or February.
Steven Tuzeneu of Brown Distributing, which carries Hardywood products, said the company has shipped “multiple thousands of cases” of the Cream Ale can since the product’s launch in June.
The move into more bottling forced Hardywood to increase its brewing capacity by about 20 percent to handle increased bottled beer demand. The brewery now has a 5,000 barrel-per-year capacity, about half of which is brewing Singel.
Tuzeneu said that growth will be an important step towards eventually sending the product outside of Richmond.
“Now that they’re able to crank out more product at a much higher volume, that’s really the key for them to be able to open up other markets,” he said.