IBJNews

Holy Cross startup sees plenty of room for more craft brewers

Back to TopCommentsE-mailPrintBookmark and Share
Profile - Small Biz

Neighbors call it the Miracle on Dorman.

A startup brewery called Flat 12 Bierwerks has ignited a revival along lonely Dorman Street in Holy Cross, one of the city’s oldest neighborhoods.

Three co-founders are spending about $2 million to renovate an old industrial building and outfit it with high-tech brewery and bottling equipment and a chic tasting room.

Flat 12 From left, owners of Flat 12 Bierwerks: Sean P. O’Connor, Steve Hershberger and Rob Caputo. The city’s newest brewery is taking shape in a Holy Cross warehouse. (IBJ Photo/ Perry Reichanadter)

Plans call for a community garden next to the brewery—managed in partnership with local produce specialist Green B.E.A.N. Delivery—that would allow the brewery to grow some of its own hops and spices such as coriander and cinnamon.

And across the street, inspired in part by the brewery, indie grocer Goose the Market is planning a smokehouse and a retail outpost to complement its popular shop at 25th and Delaware streets.

The story of breweries helping revitalize neighborhoods is repeating itself all over Indianapolis—a city, it’s worth noting, that once boasted dozens of independent breweries before Budweiser and the like established a stranglehold.

Flat 12 follows in the footsteps of upstart Sun King and at least three others that plan to launch in 2011: Triton Brewing Co., Bier Brewery & Taproom and Thr3e Wise Men Brewing Co. In-state powerhouses Upland and Bloomington Brewing Co. also are expanding.

The brewers contend there’s plenty room for new breweries to thrive, and the numbers seem to back it up.

Craft brews make up only about 1.25 percent of the beer sold in Indiana, lagging a national average of about 5 percent. In Oregon, craft beer makes up about 20 percent of beer sold, and in Colorado and California, the proportion stands at 10 percent.

“There’s plenty of space for everyone to thrive,” said Sean O’Connor, a Flat 12 co-founder and its CEO.

But success is no sure thing for a startup brewery.

Making it in the craft-beer space requires a formula of a great story, great products and access to the market, said Mark Hellendrung, CEO of Rhode Island’s Narrangansett Brewing Co.

“With all the choices out there, you have to be strong and specific with your messaging to differentiate,” he said, noting that the most successful craft brewers wind up with a flagship brew (Harpoon’s IPA, Shiner’s Bock, New Belgium’s Fat Tire).

Flat 12Hellendrung bought the 120-year-old Narrangansett brand—which once held a 65-percent market share in New England—about five years ago. He tracked down the old recipe for the brewery’s signature beer and also relaunched a line of craft beers.

He figures Boston Beer Co. CEO Jim Koch is on target with a prediction that craft beer could someday attain a 20-percent share nationally.

His advice to startups: “Start small, stay small, focus on the bars, and feel the real connection with consumers.”

That sounds a lot like the game plan for Flat 12.

“First, we want to be a really good brewery in Indianapolis,” said O’Connor, an Indianapolis native who fell in love with craft beer while living in Europe. “As we have opportunities to grow, we want to retain a very local presence.”

The plan is to produce five beers to offer at bars and package stores and seven beers exclusive to the tasting room. The first round of offerings include a winter seasonal called Glazed Ham, an India Pale Ale called Half Cycle, an Upside Down Blonde, and a porter and amber ale still in search of clever names. Growlers will go for $12 and refills will be $8.

The founders—O’Connor, Steve Hershberger and Rob Caputo—are funding the venture with their own money, investments from a handful of private investors, and a loan from Fort Wayne-based Star Financial Bank.

O’Connor and Hershberger met each other as board members of the ATO fraternity at IU and were introduced to Capto, a longtime home brewer, through a friend.

They named the brewery for an engine in a nod to the city’s motorsports heritage.

The building was constructed in at least three phases, starting in the 1930s with a section—set to become a tasting room—that features a wood-frame-supported ceiling and an exposed brick wall. Additions were built in the mid-1950s and early 1960s. The building was home to a wood furniture manufacturer, a distributor, and most recently, a squatter.

The brewery will have capacity to produce 3,000 barrels (6,000 kegs) in its first year. It can be scaled up quickly to produce as many as 30,000 barrels, and there’s room for an expansion that could triple the output.

That could take a while.

It took 21 years for Kansas City-based Boulevard Brewing Co., the nation’s ninth-largest craft brewer, to reach 150,000 barrels per year. And starting from scratch today is more daunting, said Bob Sullivan, the brewery’s chief sales and marketing officer.

Local breweries will have an advantage provided they produce products as good as the market leaders in craft beer—including Boston Beer Co., Colorado’s New Belgium and Michigan’s Bell’s, and extra points for “gateway beers” with flavors that are palatable to drinkers more familiar with Bud and Coors, he said.

The question is whether local breweries can collectively drive more consumers to buy craft beer. After all, most of the craft beer sold in Indiana is not made in Indiana.

“You immediately have an advantage being local, and people want to support the local guy, but if the beer isn’t as good, they’re not forgiving,” Sullivan said. “That’s the challenge.”

Boulevard, by the way, began selling its lineup of brews in Indiana this year. The best-seller is a sampler pack.•

ADVERTISEMENT

  • geography
    South of Michigan is Holy Cross Blogo. North of Michigan is Cottage Home.
  • Holy Cross
    Isn't Dorman St. technically Cottage Home?
  • See below
    Akiva, see below. Sorryfor the confusion. Bier Brewery is on 65th near Allisonville Rd. and has been producing beer legally for a few weeks. Flar 12 Bierworks is a startup microbrewery that has yet to produce any finished beer, and has claimed (indirectly) to produce "Indiana's best beer."

    Talk is cheap...we shall see, if they ever do actually sell their beer instead of talking about it?
  • Beer
    Bier Brewery has been selling beer for a few weeks now, and have been doing so legally. Darren is a good guy. Flat 12 sold beer at some "festival" with beer that was brewed...where? Their brewery as of this day has yet to be produce any finished product. Selling home brew is highly illegal in this state...one must wonder if some "hopstars" were brewing on the side and providing said beer for promotional purposes?
  • Funny
    I find it funny that any brewery producing beer would put Flat in their name.
  • Questionable sales
    While Flat 12 received their Indiana brewers permit on Dec. 9 (as posted on the ATC website), they were selling beer and hosting tastings with beer they claimed was Flat 12's before that date. It would not be possible for them to be offering any beer brewed at their facility until at least the end of the month. Not sure what they were representing as their beer- home brew, maybe?
  • @JG
    Bier has been selling beer in growlers since it opened. Are you saying that they're doing so illegally?
    • Beer
      Open, but not legally selling beer, yet...
      • Congrats!
        Congrats, Sean. I know that my former neighbor Kevin W. and I are wishing you all the best!!!
      • Correction
        Bier Brewery has been open since around Thanksgiving.

      Post a comment to this story

      COMMENTS POLICY
      We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
       
      You are legally responsible for what you post and your anonymity is not guaranteed.
       
      Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
       
      No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
       
      We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
       

      Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

      Sponsored by
      ADVERTISEMENT

      facebook - twitter on Facebook & Twitter

      Follow on TwitterFollow IBJ on Facebook:
      Follow on TwitterFollow IBJ's Tweets on these topics:
       
      Subscribe to IBJ
      1. By Mr. Lee's own admission, he basically ran pro-bono ads on the billboard. Paying advertisers didn't want ads on a controversial, ugly billboard that turned off customers. At least one of Mr. Lee's free advertisers dropped out early because they found that Mr. Lee's advertising was having negative impact. So Mr. Lee is disingenous to say the city now owes him for lost revenue. Mr. Lee quickly realized his monstrosity had a dim future and is trying to get the city to bail him out. And that's why the billboard came down so quickly.

      2. Merchants Square is back. The small strip center to the south of 116th is 100% leased, McAlister’s is doing well in the outlot building. The former O’Charleys is leased but is going through permitting with the State and the town of Carmel. Mac Grill is closing all of their Indy locations (not just Merchants) and this will allow for a new restaurant concept to backfill both of their locations. As for the north side of 116th a new dinner movie theater and brewery is under construction to fill most of the vacancy left by Hobby Lobby and Old Navy.

      3. Yes it does have an ethics commission which enforce the law which prohibits 12 specific items. google it

      4. Thanks for reading and replying. If you want to see the differentiation for research, speaking and consulting, check out the spreadsheet I linked to at the bottom of the post; it is broken out exactly that way. I can only include so much detail in a blog post before it becomes something other than a blog post.

      5. 1. There is no allegation of corruption, Marty, to imply otherwise if false. 2. Is the "State Rule" a law? I suspect not. 3. Is Mr. Woodruff obligated via an employment agreement (contractual obligation) to not work with the engineering firm? 4. In many states a right to earn a living will trump non-competes and other contractual obligations, does Mr. Woodruff's personal right to earn a living trump any contractual obligations that might or might not be out there. 5. Lawyers in state government routinely go work for law firms they were formally working with in their regulatory actions. You can see a steady stream to firms like B&D from state government. It would be interesting for IBJ to do a review of current lawyers and find out how their past decisions affected the law firms clients. Since there is a buffer between regulated company and the regulator working for a law firm technically is not in violation of ethics but you have to wonder if decisions were made in favor of certain firms and quid pro quo jobs resulted. Start with the DOI in this review. Very interesting.

      ADVERTISEMENT