Odell's Denver Taprooms Show That the Gloves Are Off in Craft Beer

It’s almost not fair. Odell Brewing already makes some of the best beer in Colorado and, with thirty years behind it, has one of the best reputations and widest fan bases in the state.

But then last May, the Fort Collins brewery used that experience and cachet (and credit line) to open a gorgeous, two-story taproom and brewery, complete with a rooftop patio, in the River North Arts District — the beating heart of the city’s beer scene. It was bold, especially for a company known for slow change, and it opened a lot of eyes: Not only did Odell move into territory long held by other breweries, but it also chipped at the pocketbooks of its own customers: bars and restaurants it would now compete with for thirsty drinkers.

Last week, Odell announced that it will open a second Denver taproom and brewery — this one in a much different but also very prime location on the edge of Sloan’s Lake.

So, no, it's almost not fair. And it shows that, for the craft breweries that built their industry on the ideal of collaboration rather than competition, the gloves have come off.

Between 2014 and 2018, the number of breweries nationwide has grown from 3,879 to 7,450 (and it's now at more than 8,000), while total craft beer sales have slowed down dramatically, dropping from double-digit annual increases — 22 percent in the heydey of 2014 — to just 8 percent in 2017 and 7 percent in 2018.

The result has been a dramatic shift for craft breweries, especially mid-sized and larger companies that rely on bottle, can and keg sales for profitability. In the face of larger and more cutthroat competition, many have ceded territory in other states in order to shore up their home markets.

The most profitable way to do that is by selling beer directly to consumers across their dark-wood or beetle-kill bar tops. Oskar Blues, for example, has opened numerous restaurants and pubs, including two in Denver, in the past few years. New Belgium has a couple of branded taprooms (including two at Denver International Airport) and a standalone brewery inside the Source Hotel, where it sells its own beer almost exclusively. Great Divide has also opened a branded spot at DIA and is planning a new taproom and brewery in Castle Rock.

Smaller breweries — many of which had previously planned to focus on packaged beer — have changed strategies as well, opening second, or even third, locations instead. These include Denver Beer Co., Resolute Brewing, Grist Brewing, Lariat Lodge Brewing, WeldWerks Brewing, 4 Noses Brewing, Pikes Peak Brewing and Spice Trade Brewing, among others. Bruz Beers is the latest to launch a satellite, announcing just last week that it will open a second spot on East Colfax Avenue, in the heart of Denver's urban core.

Odell is a part of this trend. But its chess moves signify something more serious. If Odell is willing to risk old friendships and customers for increased sales, it must be a necessary tactic.

“It’s harder and harder to grow in far-off places,” Odell spokesman Alex Kayne says about selling packaged beer in other states. “We see more growth coming from Colorado, so we are looking to invest in our own back yard. We are closer to it, and we can keep an eye on it.”

The opportunity was just too good to pass up, he adds. “We’ve been successful in RiNo, more successful than we thought.” The Odell Sloan’s Lake Brewhouse, as the new one will be called, is in Denver as well, “but it’s far enough away from RiNo that you wouldn’t go from one to another in the same night. People like to stay in just one area for the night, and there are so many people moving to Denver that there are a lot of these hyper-local neighborhoods.”

Because Odell is Odell — it is still run by its well-respected founders, Doug and Wynne Odell, and owned by its employees — the company made an extra effort to talk the changes over with its Denver customers, as well as with other nearby breweries that might be irked at the new, and significant, competition.

One of those is Joyride Brewing, which has its own rooftop patio on the far side of Sloan's Lake from where Odell will be open. Co-owner Dave Bergen says he has talked with Odell, though, and decided that the larger brewery's presence will be good for the neighborhood. "I think it will be fun to have a big name to draw additional people to the area. Knowing Odell, I'm confident they'd want to work together and support the other local breweries, and would want to do co-branded events like brew buses," he points out.

But Juan Padró, who owns Sloan’s Lake Tap & Burger — just two blocks from the new brewery — had a much different take. Padró has been serving Odell beers for years in the restaurants he owns or partners with, including Highland Tap & Burger, Bar Dough, Morin and Señor Bear. “It’s not a good look to be opening across the street or a block away from businesses that you’ve been selling to. It doesn’t make sense from an optics standpoint,” says Padró, adding that Odell’s decision to also sell food — wood-fired pizza, in this case — makes it even worse. (Falling Rock Tap House owner Chris Black famously tore into Oskar Blues Brewery in 2016 after the Longmont company announced it would open a restaurant, bar and music venue in LoDo.)

“But the landscape has changed so much in craft beer, and they have a responsibility to their employees. And if what’s best for them is to do this, then that’s what they have to do," Padró continues.

And if longtime bar and restaurant customers choose to drop Odell from their tap lineups, then that is their right as well, he adds. “We will be less partners and more competitors now. It doesn’t mean we can’t have friendly competition, but the dynamics definitely change. That should be clear.” Padró says he will still carry Odell beers at his other restaurants, but won’t carry much of it at Sloan’s Lake Tap & Burger.

Odell “has done a lot of good things for craft beer — not only in Colorado, but everywhere,” he concludes. “They have done their part and they always give support. But in the end, it’s about making money, and they are taking care of their people. They have to, and so do we."

A decade ago, Odell still made a point of closing its Fort Collins brewery and taproom early in the evening and encouraging customers to drink at the nearby bars and restaurants where Odell beers were served. In fact, this was the case with many breweries, which didn’t want to compete with the businesses that bought their product, supported their sales campaigns and spread the good word about their beer.

Clearly, times have changed. In some states, like New Jersey, restaurants and bars are battling back against breweries by lobbying lawmakers to crack down on the kinds of events and activities that production breweries can have, or on the hours that they can be open. There have been rumblings of similar efforts in Colorado, though nothing significant has taken shape yet on a statewide level.

Breweries, meanwhile, feel like they should be allowed to run their businesses the way they see fit. This is a capitalist economy, after all, and they have just as many problems to contend with as any other for-profit enterprise. In addition, many have become local gathering places or community cornerstones. And breweries employ a staggering number of people these days and, in some cases, breathe life and energy (though some might call it gentrification) into stagnant neighborhoods in cities all over the country.

Odell is one of these big employers — the company is Colorado’s third-largest craft brewery — and it would certainly like to stay that way. What that means for the future of beer, though, remains to be seen.