A real estate entrepreneur from Maine and an English biochemist by training may seem like an unlikely pair to launch and run a successful brewing company
By Ian Armitage
In the early ‘90s when Fred Forsley was working as a real estate broker, he tried to entice a Portland brewer to locate to Federal Jack’s, a restaurant in Kennebunk, Maine. At that time, Alan Pugsley, who had apprenticed with a master brewer in his native England, was working in the United States to establish the nascent craft brewing industry.
The two met during discussions, and although the original deal didn’t pan out, Forsley and Pugsley decided to launch a brewing venture together. Shipyard first began as Kennebunkport Brewign Company which opened in 1992 at Federal Jack’s. In 1994, the two set up a 2,500 square-foot brewery in downtown Portland on the site of a former foundry and Shipyard Brewing Company began.
Since those early days, Shipyard has grown consistently and is now Maine’s largest brewery. The company’s English-style ales, which obtain a unique flavor because they are fermented in open-top vessels, are available in more than 35 states. The brewery has about 50 employees who produce 13 varieties of ales and seven flavors of soda under the Capt’n Eli’s brand name. Another 300 people work at seven affiliated brew pubs (all of which naturally feature Shipyard’s family of ales), all located throughout Maine.
In 2006, the brewery shipped more than 960,000 barrels of its ales or nearly 70,000 barrels, representing a growth rate of nearly 25 percent over the previous year. There are about 1,400 U.S.-based craft brewers according to The Brewers Association trade group, so Shipyard is expanding well in a crowded market.
How has the company done it? Co-owner and president Forsley first and foremost attributes Shipyard’s success to its quality products. As a brewer of English-style ales, Shipyard from the outset has planted its stake in a niche area of the market since most brewers adhere to closed-top fermentation techniques.
Growing the brand
The company also maintains a very focused approach to marketing. “We focus on our brand and growing our brand,” Forsley says. To that end, the company strives to build solid and personal relationships with the distributors, retailers and restaurants that carry Shipyard ales.
Forsley also says that one of Shipyard’s strengths is its local, small-company approach to marketing. Nearly 7,000 consumers have joined the Shipyard Ale Society; by submitting their email address on the company’s website, members receive updates about events, products and promotions, and can communicate with the company and fellow members. Website visitors are also invited to email ale-related questions directly to master brewer Pugsley right from the company’s home page. Plus, Shipyard maintains a website called Shipyardtv.com that features video clips about Shipyard’s products and brew pubs.
Despite its growth and plans for future expansion, Forsley says the Shipyard will maintain its small-company mentality by remaining locally-owned and family-run. “As owners, Alan and I are directly involved in running the business,” he says. “My cousin is my sales manager. We’re not run like a huge corporation.”
Beyond Boston
Currently, Shipyard’s largest markets are in its own backyard, with Massachusetts, New Hampshire, Maine and Vermont leading the way. In both Massachusetts and New Hampshire in particular, Forsley sees significant growth opportunities. “Right now, we’re primarily in and around Boston,” he says. To expand beyond that, Forsley aims to forge relationships with so-called on-premise accounts - the restaurants and bars that agree to feature Shipyard’s ales by putting them on draft.
Ultimately, Forsley says, it’s consumers that drive the growth of Shipyard’s products, because there’s no way a craft brewer can go head-to-head with the marketing resources of a big, national brewing company. So Shipyard’s marketing strategy concentrates on getting its products on the shelf at retail locations or on draft at bars and restaurants. “If ten people try your product and two like it, then it’s a success,” Forsley says.
For the next few years, Shipyard will focus on expanding in California and Florida, two huge markets that Forsley feels could fuel plenty of growth for his company. California has a lot of craft beer but “very few English-style ales like ours,” Forsley says, and he has recently hired two sales representatives to drum up business.
Florida, on the other hand, offers potential due to the large number of New Englanders who have relocated there - either permanently or during the winter months. A few years ago, Shipyard did have a brew pub in the Orlando airport but closed the location after five years in operation. To increase its presence in Florida, Shipyard works hand in hand with distributors throughout the state.
“Our goal is to build on the brand, quality and niche we’ve built over the years,” Forsley says. Over the next three years, Forsley says a realistic milestone is to sell 200,000 cases each in both California and Florida. “That volume will be big growth for us,” he says.
At the Portland brewery, there is ample capacity to accommodate that growth. With an annual brewing capacity of 140,000 barrels, Shipyard can double its production over the next few years.
Given the company’s origins and Forsley’s background in real estate, it perhaps was a natural for Shipyard to want to venture into setting up affiliated brew pubs and restaurants. With seven brew pub locations in Maine—including at Sunday River and Sugarloaf, the state’s largest ski resorts—Shipyard’s related brew pubs are a venue to expose the company’s ales to a wider audience.
Maine focus
While the brew pubs are successful, Forsley says there are no plans to expand the concept beyond Maine at this point. “Restaurants are tougher once you get farther from Maine,” he says.
Also tougher are current business conditions. With the push to plant crops for biofuels, the worldwide supply of barley and other crops critical for beer making is feeling the pinch. For brewers, the problem is two-fold: prices are on the rise and there are shortages of certain supplies. The craft brewers that by-and-large lack the clout of large national companies are particularly vulnerable.
Shipyard relies on suppliers in England, the Pacific Northwest and Canada. “It’s a major crisis due to shortage in supply,” Forsley says. Like all craft breweries, Shipyard strives to keep relationships with suppliers strong and, to combat the problem, will need to raise prices and stay on top of this trend. Still, despite the tough conditions, Forsley remains optimistic and focused on growth in both existing markets and new ones. “We will continue to build in many markets,” he says.