A small brewery in southern Indiana plans to start selling its beer around the state as a new facility will boost its production capacity by 1,000 percent.

The Bloomington Brewing Co. has been selling its beer for 14 years at one restaurant: Lennie's, in Bloomington. Work started this week on a new $700,000 production facility in a former warehouse that is expected to be completed in about three months.

Its existing 700-square-foot brewery has been running at full capacity for almost five years, co-founder Jeff Mease said.

"It is undoubtedly the smallest brewery in the state in terms of square feet," he said.

The company has a deal to start selling its beer at three Indianapolis-area bars and will look for others. It could also start selling in some grocery stores next year.

Selling beer only at Lennie's allowed Bloomington Brewing to ease into the craft beer industry, Mease said.

The company is getting more ambitious as it's become familiar with the industry and the craft beer market.

"There is not so much brand loyalty as there are people seeking new and interesting flavors," Mease said.

The company won't immediately go to full production at its new 2,800-square-foot brewery.

"We will be looking to grow quite a bit once we have the capacity," Mease said.

The microbrewery's expansion comes as Indianapolis entrepreneurs draft plans to open their own beer production facilities. Triton Brewing Co., Bier Brewery & Taproom, Flat 12 Bierwerks and Thr3e Wise Men hope to open in the next few months.