A new 50-barrel fermenter tank is unloaded last week at Crux Fermentation Project in Bend. Crux doesn’t have plans to expand its beer into major chain stores, said co-owner Dave Wilson, “but never say never.”

When 10 Barrel Brewing Co. opened in 2007, brewers produced enough beer annually to provide a pint for every resident in the city of Bend. By the end of this year, partners in the company expect 10 Barrel will brew enough beer — 25,000 barrels — to serve 1.5 pints to every resident in the state of Oregon. That is, if no one spills any beer.

Grocery chains in Seattle carry 10 Barrel, and Chris Cox, a partner in the company, said that’s the current limit of what the brewery can produce. If 10 Barrel tried to expand further right now, “they’d run us out of beer,” Cox said.

Other new breweries are growing at a similarly rapid pace in Bend. Boneyard Beer Co. opened in 2010 and sold 476 barrels of beer in Oregon that year. Partner and brewmaster Tony Lawrence expects to produce 15,000 barrels next year.

GoodLife Brewing sold 540 barrels of beer in Oregon when it opened in 2011. Now, co-owner Ty Barnett expects to produce 9,000 barrels in 2013.

Julia Herz, craft beer program director for the Brewers Association, said there is no shortage of demand for craft beer, but there are challenges for brewers as they try to increase production. The Boulder, Colo.-based trade organization represents craft brewers across the country.

Brewers must contend with high taxes and a complicated web of federal, state and local regulations, Herz said. Other hurdles include forming relationships with good distributors to get beer onto restaurant taps and store shelves across the region, and then keeping up with demand once a major grocery chain agrees to stock the brewery’s product.

“I think the big picture is small craft brewing is big business, and you’re seeing an evolution in the entire category. … It is not just the artisans that are making this world-class beer … that are essential,” Herz said. “Today’s craft brewers are artists. They also have to be business savvy to keep up with a fast-paced and demanding marketplace that is advancing and is full of paperwork and demands that are really not required of other industries.”

Large breweries often hire business school graduates to calculate sales forecasts and production goals, but 10 Barrel turned to a consultant that Cox refers to as “moneyball,” because the consultant uses analytics to help breweries make business decisions. “Moneyball” is the title of a best-selling book — adapted into a 2011 film — on the use of statistical analysis in baseball.

The owners of 10 Barrel learned the business of operating a brewery along the way. As the company grew, it was particularly challenging to figure out exactly how much of a particular beer to brew to meet demand. “That was our biggest struggle when we were smaller,” Cox said.

Brewing just enough

The goal at 10 Barrel is to produce just enough beer to satisfy demand, so the product does not sit long at the brewery, in a distributor’s warehouse or on store shelves. “Everything we package in that week goes out into the trade that week,” Cox said. Distributors often prefer to carry enough inventory to last approximately 30 days, but Cox said 10 Barrel tries to limit the distributors’ stock to 10 days’ worth of beer.

Cox said 10 Barrel is able to achieve this because of Bend-based beer analytics consultant Ross Ackermann.

Ackermann helps 10 Barrel determine which types of beer to produce and how much of those particular types. “Our seasonals all sell differently, and depending on the month, different beers sell at different rates,” Cox said. “He has all that put into his model.”

Ackermann grew up in Missouri and eventually earned an MBA from Olin Business School at Washington University in St. Louis. He went to work for a wine and spirits wholesaler in Missouri. The company acquired the Anheuser-Busch wholesaler Western Beverage Co. in Oregon, and Ackermann moved to Eugene in 2010. That is how he met employees at breweries such as Ninkasi and 10 Barrel.

“One of the things I noticed was all these growing pains breweries were having,” Ackermann said. “When I decided to go out on my own, I thought they could use something like that instead of depending on the distributors.”

Ackermann and his business partner Brian Belobradic started their brewery analytics consulting business, GP Analytics, approximately 18 months ago, and now also work with Hop Valley Brewing Co. in Eugene and Starr Hill brewery in Crozet, Va. Ackermann said part of his inspiration was the Toyota system in which the company does not produce vehicles until it receives an order from a dealership.

“The advantage it gives you is you can have the freshest beer possible,” Ackermann said. “There are so many great breweries popping up, especially on the West Coast. You’ve got to have a point of differentiation to make yourself stand out.”

Good analytics can also help breweries decide when to purchase additional tanks, Ackermann said. “Unfortunately, I think people get really excited about, ‘I’m growing, beer is selling’ and they get ahead of themselves.”

A brewery might rush into a major expansion in a large city or a major retailer such as Costco, and quickly deplete its supply. “And now you can’t supply Bend with draft beer,” Ackermann said. “Or you’re scrambling to buy tanks that take six to 10 months.”

Since brewers at 10 Barrel know exactly how much of a particular beer to produce, the company can maximize its current production capacity and defer investments in additional brewing equipment until the numbers show it is necessary. “It’s kind of giving 10 Barrel the ability to grow faster,” Ackermann said.

Quality beer isn’t enough

It’s common for brewers to say companies survive or fail based on the quality of their beer. Ackermann’s view, and the pitch for his services, is that this was true “back in the day” for breweries such as Petaluma, Calif.-based Lagunitas Brewing Co. Ackermann believes that breweries need more than a good product these days. They also need to have excellent operations and marketing.

“I haven’t run across anyone else doing what I do,” Ackermann said. Herz, from the Brewers Association, said the people she knows who work in brewery production analytics are in-house brewery employees, not consultants.

As breweries expand, one of the major decisions they face is whether to begin selling beer in large grocery store chains such as Safeway and Fred Meyer. Once a brewery begins to sell beer at a major chain, it has to provide a constant, dependable supply. “That’s where it becomes very difficult when you’re trying to have all the chains covered,” Cox said.

Breweries also have to compete for limited shelf space. Until recently, many grocery chains dealt primarily with large distributors that did not carry craft beer.

“People don’t get how their beer gets onto the shelf or the restaurant menu,” Herz said. “The small and independent producers don’t have the same methodologies and means to get placed on those shelves and menus as the large producers, such as ABInBev and MillerCoors.”

Dave Wilson, a co-owner of Crux Fermentation Project, said he noticed large grocery chains began to change how they approached their beer selection a couple of years ago. Wilson is also vice president of sales and marketing for San Francisco-based 21st Amendment Brewery, and frequently interacts with large stores as part of that job. These chains now allow breweries to supply beer for smaller regions, so they can stock brands even if the brewery does not have the production capacity to serve the entire West Coast. Large grocery stores needed to do this to compete with more nimble stores such as New Seasons Market and Whole Foods, Wilson said.

Herz said large chain stores now realize that to appeal to certain customers, they must stock local, regional and international craft beer. GoodLife is one of the breweries that is expanding onto Safeway shelves across the Pacific Northwest. GoodLife beer will hit the shelves of 100 Safeway stores in Oregon this fall and expand into 100 more of the grocery chain’s Washington locations in the spring, Barnett said.

Not all want chains

At some local breweries, business plans do not call for expanding into major chain stores. “That has never been the vision of Crux,” Wilson said. “Success for us is (for people) to go, ‘Wow, if you really want crazy variety or high-impact beers, that’s your first stop, go to Crux.’ It would be very difficult for us to service that (chain store demand) right now. But never say never.”

Boneyard Beer is another brewery whose expansion plans do not include sales at grocery chains. Until a few months ago, the company’s three partners — Lawrence, and Melodee and Clay Storey — hoped to eventually produce 100,000 barrels of beer annually and begin operating a canning line soon.

“We’re a young company,” Lawrence said. “We got caught up in the growth of the industry.” When the partners took a step back and re-evaluated the future of the company, they decided “our end game is to try to produce roughly 40,000 to 45,000 barrels annually,” Lawrence said. Boneyard Beer will also stick with draft beer for now, because the partners believe they can meet their expansion goal by selling draft beer in Oregon and Washington.

And as long as Boneyard Beer limits distribution to Washington and Oregon, it can continue to win over more customers with fresh, high-quality beer. “We don’t want to ruin that for us,” Lawrence said.

Cox also cited the relationship between distance traveled and freshness as a reason to focus on expanding in Oregon, Washington and Idaho. 10 Barrel sells nearly all of its beer in Oregon, with roughly 10 percent of sales in Washington and Idaho. “It’s just expensive to grow a brewery, and the farther you grow out, the more kegs you need to buy, because it takes longer to get them back,” Cox said.

“That’s kind of our philosophy, to sell as much as we can locally to people who support our brand,” Cox said. “I’m sure there will be a point where we start looking at other markets. … There’s all types of different business plans. Our best opportunity is to stay as local as possible.”