Sept. 23 (Bloomberg) -- When visitors get carded during weekend tours at the Brooklyn Brewery in New York, the company says the most common form of identification isn’t a local driver’s license. It’s a Swedish passport.
Soon, Swedes won’t have to travel so far. Sweden, already the craft beer’s biggest market outside the Big Apple thanks to a Nordic affinity to all things Kings County, will be home to Brooklyn Brewery’s first overseas plant. In January, the company will start producing ale and open a restaurant in an old light-bulb factory in Stockholm.
The beermaker, founded by a former journalist and a banker who wanted to bring good lagers back to New York in the 80s, claims to export more beer than any other American craft brewer. While it could just keep doing that, the new plant gives the company a priceless asset: street cred.
In an age where local is best and everything from the meat at Chipotle to the wheat in Russian Standard vodka has a story, craft beer has grown into a $12 billion industry in the U.S., with sales doubling in the past six years, according to researcher Mintel. That’s “the big oxymoron of the proposition of craft,” said Spiros Malandrakis, an analyst at Euromonitor International.
Much of the appeal of craft beers is “the localization and the small scale,” he said. So as Brooklyn becomes more global - - it now sells in 20 countries -- it risks being seen as the next Bud Light. “The more successful you become,” Malandrakis said, “the less you can claim to be the underdog.”
On the shores of the Baltic Sea, Brooklyn is seeking to avoid that fate. Brooklyn has teamed up with the Swedish unit of Carlsberg A/S, D. Carnegie & Co. and a few private investors to create “The New Carnegie Brewery,” with an annual capacity of 1 million liters. Carnegie Porter, available since 1836 and now made by Carlsberg, was originally brewed by Carnegie and is Sweden’s oldest trademark still in use.
Carlsberg shares were little changed at 575.50 kroner at the close of trading in Copenhagen. They’ve gained 3.9 percent this year.
The brewery and pub will cost 25 million kronor ($3.9 million). Brooklyn beers sold in Sweden will still be made in the U.S., while the new brewery will develop recipes in collaboration with its New York owner.
“We intend to have some fun exploring the great things Sweden has to offer,” said Eric Ottaway, general manager of Brooklyn Brewery. “It’s an exciting and dynamic market with soaring interest in craft beers.”
While craft beers represent just over 1 percent of the global market, they account for around 4 percent of the beer consumed in Sweden, according to Nomura Holdings Inc. The country is fertile ground for craft beers. The state liquor store chain, Systembolaget, which controls all beer sales via its monopoly, last year had 3,290 types of beer for sale in its 422 shops.
Sweden is the second-biggest export destination for American craft beer, after Canada, according to the Brewer’s Association, a U.S. industry group. Brooklyn’s lager has a 39 percent share at Systembolaget of the most expensive brews, those costing more than 17 kronor for a 12-ounce bottle.
Eager to boost the bonafides of New Carnegie is its head brewer, Anders Wendler, a fan of Brooklyn’s Radius unfiltered beer and Sweden’s homebrewing champion.
The company hasn’t yet decided how evident the Brooklyn affiliation will be, but “we are our own brand, our own brewery,” said Wendler.
He will work with Garrett Oliver, Brooklyn’s brewmaster since 1994, to create as many as four new beers. “We’re certainly not just going to copy recipes,” Wendler said while sitting in the sun outside the waterfront brewery. “We will work together and come up with our own ideas.”
Brooklyn Brewery first started selling beer in Sweden in 2006 when Carlsberg imported the brand. So how did Sweden, a country the size of California with a population of 9 million, become Brooklyn’s biggest export market?
Part of the reason for its success, according to Brooklyn, is its partnership with Carlsberg, the market leader in Sweden. Carlsberg and the New York brewer have stoked interest with an annual event called Brooklyn, Sweden. In its second year, the festival of Brooklyn bands, food, film and art had more than 5,000 visitors last month.
The Brooklyn brews are a “tasty alternative to common, boring beers,” said 31-year-old ad executive Oscar Trollheden, while quaffing a pint in Stockholm. “Swedes love N.Y. and think Brooklyn is a cool place.”
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