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Sand Creek Brewery
The Sand Creek Brewing Company in Black River Falls, Wis.

BLACK RIVER FALLS - Aran Madden hopes to someday make his beer in Spring Green, Wis.

He has plans for a brewery. But for now, he's quite happy with his Furthermore products being made here, 120 miles away in Jackson County, within the 154-year-old stone and red brick walls of what is now the Sand Creek Brewing Co.

The arrangement, called contract brewing, allowed Madden's company to begin production in 2006 within months of its inception, fulfill an agreement to make beer for American Players Theatre and avoid going $1 million in debt to build a brewery.

"We had shallow pockets," Madden said. "As soon as we walked in the door to Sand Creek, we said, ‘This is silly not to utilize this facility. They're hungry and we're hungry.'"

Contract brewing is big business in Wisconsin, home to some of the biggest contract brewing facilities in the nation.

The players include City Brewing Co. in La Crosse with a capacity of about 7 million barrels a year; Stevens Point Brewery in Stevens Point; and Minhas Craft Brewery in Monroe, where about 10 percent of the 280,000 barrels made this year will be for other brewing companies.

The relationships have helped the rapid expansion of the domestic craft brewing industry that grew to 9.1 million barrels in 2009 from 5.9 million barrels in 2000, according to the Brewers Association in Boulder, Colo. In the first half of this year, craft brewing was up 9 percent by volume.

Paul Gatza, director of the Brewers Association, said there are about 350 alcoholic beverage companies in the country that have their products made by other brewers. Between 150 and 200 of them are beer companies. Some do not have their own facilities, while others with breweries lack the capacity to meet the demand for their products.

"There's such a long brewing tradition (in Wisconsin) and, for efficiency's sake, they want to fill that capacity," Gatza said of contract brewers. "It's an inexpensive way (for brewing companies) to get into the market."

Chicago-based Berghoff has used the Monroe brewery, the second-oldest in the country, since 1955. Minhas allowed the Dixie Brewing Co. to survive after its brewery in New Orleans was destroyed in 2005 by Hurricane Katrina. Since 2006, Minhas has made 5,000 to 7,000 barrels of Dixie per year, according to Tyler Peterson, brewery development manager for Minhas.

"Right now, we have some great relationships we contract for," Peterson said. "We're partners in this, and it benefits both of us."

Randy Hull, director of business development at City Brewery, said the company does not discuss the specifics of its operations or what it makes but said the brewery, which employs 430 to 530 people depending on the time of year, works with about a dozen companies.

According to published reports, it makes "Game Day" beer for the 7-Eleven chain and the controversial Four Loko, a brand owned by Chicago-based Phusion Projects that has been criticized for its combination of alcohol and caffeine. Four Loko announced earlier this month it will reformulate the drink and no longer use caffeine.

Many of the contract brewing arrangements in Wisconsin involve relatively small brewing companies.

When Peter Fauerbach and his family set out in 2005 to revive Fauerbach beer, brewed in Madison from 1848 to 1966, they set up an agreement with Gray Brewing Co. in Janesville that would pay the family a royalty for every barrel sold. It was the job of Fauerbach to market the 300 barrels of beer produced each year.

"It's a fun thing to do and people loved it, but it takes a lot of time," said Fauerbach, who is a health care consultant, and stopped production of the beer last year. "We learned a lot."

Fauerbach's contract was unique. Most contract brewing arrangements involve flat fees charged by the brewing company based on how many barrels are brewed. In some instances, a brewing company will lease a brewery to make its beer using its own brewmaster. This is done by the Potosi Brewing Co., which expects to make 1,800 barrels this year and 4,000 next year at the Stevens Point Brewery.

"That's an important piece," said Greg Larson, executive director of the Potosi Brewing Co. "You can say it's brewed and bottled by the Potosi Brewing Co."

Others using Stevens Point include Esser's Cross Plains Brewery. The Esser family in 1995 relaunched the Esser brand - produced in Cross Plains from 1863 until Prohibition in 1920. It now produces about 2,000 barrels a year. Capital Brewery makes its beer in Middleton but trucks it to Stevens Point for bottling. Kegs are filled in Middleton.

When Madden and his business partner, Chris Staples, came up with a plan for their Furthermore Brewing Co., they spent $60,000 to buy the former public works building from the village of Spring Green. They have since sold the building but recently purchased land in the village's industrial park that could someday be home to a brewery.

"It has always been six months away," Madden said. "We're always thinking about it."

Instead, their physical brewing company consists of an 8-by-11-foot rented office with a 600-square-foot storage cooler in a barn at Renaissance Farm. In the beginning, Madden made the more than two-hour drive from Spring Green to Black River Falls to brew the beer and return on bottling day.

Now he leaves the brewing to Todd Krueger, brewmaster at Sand Creek, who brews about 40 barrels of Furthermore products a week. That allows Madden and his partner to focus on marketing and developing new recipes.

"I think some people can get away with just doing the marketing even with bad beer, but it's hard to have good beer and not marketing and expect that to work for you," Madden said.

The Sand Creek Brewery is no giant. It was founded in 1999 in a dairy barn in Downing, about 40 miles northwest of Eau Claire. In 2004, founder Jim Wiesender joined forces with Krueger to buy the Pioneer Brewing Co., founded in 1995 in a building that was originally built for the Oderbolz Brewing Co. in 1856.

Sand Creek, which has a 98-foot well drilled through granite, has a capacity of 12,000 barrels but makes about 7,000 barrels a year. About 30 percent of that production is from contract brewing companies such as Furthermore; Pangea Beer Co., based in the Marquette County community of Neshkoro; Falls City Brewing in Louisville, Ky.; and Griesedieck Brothers Brewing Corp. in St. Louis.

"Every time I send out a beer and it's got whatever name on it, it still has our address on it," Krueger said when asked about the pressure to get the brew correct. "It's a learning game. You're not just doing the same thing every day."

Other challenges of brewing for others include making sure brewing schedules mesh so they meet the demand of the contract brewing companies and allow for the host brewer to make its own beer, having the correct ingredients and making sure packaging is on-site before the brewing begins, something Wiesender demands.

He's considering building a larger brewery and gets two to three inquiries a week from brewing companies looking for a facility to make their beer.

"It keeps the tanks full. It keeps the beer flowing through the system here," Wiesender said. "It's a good thing for us to be doing here."

 

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