AP NEWS

Changes at Eagle Creek

November 22, 2016

It was a bit of a soft transition, with food brought from another restaurant in the absence of an approved kitchen. But Eagle Creek Brewing Company switched Thursday from being a brewery that gave away samples of its beers and ales during paid tours to a brewpub that retails beer, wine, liquor drinks and light meals.Statesboro City Council approved the new, local brewpub alcoholic beverage license Oct. 18. Getting the state license changed took a little longer. After Eagle Creek owner Franklin Dismuke gave an interview in anticipation that this story would appear before the changeover, he got the word and picked up the license Thursday afternoon from the Georgia Department of Revenue. So he went ahead and opened as a pub.Dismuke hopes the relicensing will lead to a more important transition, towards profitability. Last Thursday through Saturday, with the Georgia Southern game in Atlanta and students leaving Statesboro for Thanksgiving, Eagle Creek saw one of its smallest weekend crowds ever, yet he was encouraged by the cash flow.“I feel good that we’ll actually start doing what you’re supposed to be in business for, making a profit,” Dismuke said Monday. “It will be nice to actually have enough revenue to support the business, whereas we haven’t been able to with the distribution. Even though we had a very, very small turnout this weekend, we made about the same as we do on a normal weekend, so that’s encouraging.”That was with about 35 customers in three evenings instead of the typical 200.The brewery building already had a kitchen, but a couple of repairs were needed before it is certified by a Health Department inspector, Dismuke said. He hopes that will happen by next week. For its first weekend as a brewpub, Eagle Creek purchased barbecue from The Painted Chef in Register and served barbecue sandwiches and chips.Previously, the brewery could only charge for tours and gave away beer in the process. Now, having surrendered its manufacturing license for a brewpub license, the business is no longer allowed to charge for tours, but must instead charge guests for beverages and food.

Kegs and cansEagle Creek Brewing Co. has sold beer through distributors to bars and restaurants since July 2013. To reach stores, the little brewery in the historic brick building started packaging two varieties of beer in aluminum cans in May 2014. But at the mercy of distributors and Georgia’s long-established ban on breweries selling beer directly to consumers, the business struggled.Traditionally, alcoholic beverage sales in Georgia have operated under a “three-tier system” dating from the repeal of prohibition in the 1930s.The system was meant to keep the ownership of beverage manufacturers, distributors and retailers separate to avoid monopolies. But it conflicts with the desire of craft or microbrewers to retail their products in their home towns as a way to develop a following. Dismuke has been part of lobbying for changes through the Georgia Craft Brewers Guild.A change in state law last year allowed breweries to provide larger samples to people who pay for brewery tours. But the direct retail sale of beer is still prohibited at breweries, with the exception of brewpubs.When Eagle Creek opened three years ago, Georgia law limited a brewpub to producing just 500 barrels of beer a year. At that time Dismuke saw this as far too restrictive.Wanting to grow his brewing business, he didn’t budge when the state increased the limit to 3,000 barrels. But after another change in state law in 2015, the brewpub production limit is now 10,000 barrels, of which 5,000 barrels can be sold through distributors. Dismuke now saw the change to brewpub status as a necessity, he said.“This brewpub license kind of has a leg in both tiers, the retail tier and the manufacturer tier, and with that you get a limitation on your production,” Dismuke said. “But now that’s a 10,000-barrel limit and they’ve made some minor reinterpretations of the law as it relates to brewpub and retail sales, it makes no sense for us not to switch over.”

Distribution problemsEagle Creek’s malt beverages are distributed in the Statesboro and coastal Georgia areas and in the Athens and Gainesville areas. But the little company’s efforts to expand to other regions of Georgia have met setbacks and what Dismuke calls some “mischief” by distributors.Last year, a distributor in the middle Georgia region stopped distributing Eagle Creek’s products with only seven days notice, he said. But if a distributor accepts his product and then does not push it, as has also occurred, three-tier rules prevent him from switching to a competing distributor without his current distributor’s permission.“It’s coming to the point where the three-tier system is heavily damaged in the state of Georgia, and I see really no other option than to switch to a brewpub for survival,” Dismuke said.Craft beer makers probably will seek a further change to raise or remove the 5,000-gallon brewpub distribution limit, since even in a large urban area a pub producing 10,000 barrels would be unlikely to retail half its beer on-site, he said. A barrel is 31 gallons.

Expansion hopesEagle Creek’s current annual capacity is about 1,100 barrels, with three 30-barrel fermenters - big, shiny vertical tanks - in place now. He would like to add a fermenter in the next year and about 10 more in two to five years, building annual capacity to 10,000 barrels, which besides being the legal limit would be all that would fit in the building, Dismuke said.Right now, the brewery employs two brewers full-time, a marketer part- to full-time, and five part-time bartenders in the taproom. The taproom people will now be doing some food preparation, and he expects some new employees will be needed soon, but is waiting to see how it goes. The menu is also a work in progress, and will probably be limited to about 10 items in the beginning, he said.Dismuke has another job, as a financial and information systems consultant to a hospital in New York state. He doesn’t see that changing unless the brewpub business really takes off.But he has other plans to expand it. He has a can design for making Georgia Tea Party Amber, which contains a hint of sweet tea, the company’s third brew distributed in cans, after year-round Spot Tail Blond Ale and seasonal Grass Roots Hefeweizen. The brewpub produces several other beers for keg distribution and in-house retail.The brewpub retains Wednesday through Saturday afternoon and evening hours, but will now be staying open later on weekends, and Dismuke hopes to see it expand over time to six or even seven days, he said.Herald reporter Al Hackle may be reached at (912) 489-9458.