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Wednesday, Apr 25, 2018
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Cigar City taps extra capacity in new deal

LAKELAND — Two Central Florida craft brewers and a brew pub chain looking to expand its footprint in the state are the first clients announced for a new manufacturing facility slated to open next year.

Construction is ongoing at the 50,000-square-foot Brew Hub on South Frontage Road adjacent to Interstate 4. When completed in May, the facility will provide a model similar to contract-brewing, in which growing breweries use manufacturing capacity at another company to meet demand. The concept allows craft brewers to grow steadily without incurring the debt that comes with building new facilities.

Later today at the Brewbound craft brewing conference in San Diego, Calif., Brew Hub CEO Timothy Schoen is scheduled to announce three clients who have contracted to use the facility for the first year: Cigar City Brewing of Tampa, Orange Blossom Pilsner of Orlando and California-based BJ’s Restaurant & Brewhouse.

The three are expected to brew a combined 40,000 barrels of beer annually. The Lakeland brewery will have an annual capacity of 75,000 barrels, or 1 million cases and will be the first of five regional Brew Hubs across the country.

Cigar City recently spent $4 million to expand its brewing capacity and buy a second canning line, but has had difficulty meeting demand for its Jai Alai IPA and other varieties. Customer demand is so strong in Florida that it has forced the company to pull back from distribution in Georgia, New York, Virginia and other states to focus on its home market.

Although Cigar City has collaborated with breweries outside Florida, Schoen said the Brew Hub arrangement will be the first time that it will produce beers outside of its own facility on Spruce Street in Tampa and its brew pub in Carrollwood.

Schoen and Cigar City founder and CEO Joey Redner will announce the Brew Hub arrangement in San Diego today. Proximity to Brew Hub was a deciding factor, Schoen said Tuesday.

“These guys are a perfect fit with us,” he said. “This is a pretty nice testament to us, to our group and the model we’ve built.”

Orange Blossom Pilsner started in founder Tom Moench’s garage in 1978. The brand pre-dates the current craft beer boom, but the company has methodically built a loyal following during the past decade in and around Orlando. Orange Blossom is currently brewed by Thomas Creek Brewery, a Greenville, S.C., contract brewer.

Using Brew Hub will allow Moench to make more beer and hire additional sales staff and grow his distribution area, Schoen said.

“We looked at his brand portfolio and he fits our philosophy,” he said. “He’s strategically lined up to grow and hopefully we’ll help make that happen.”

BJ’s Restaurants of Huntington Beach, Calif., operates a chain of 151 brew pubs, including in Citrus Park, Pinellas Park and Clearwater. Their menu features house beers made through contract breweries. Using Brew Hub’s facilities will allow the chain, which is traded on the NASDAQ, to at least double the 15 restaurants it operates in Florida, Schoen said.

“Florida is an emerging piece of their growth engine,” he said. “Signing with us is putting a stake in the ground to grow their Florida business and expand their footprint in the southeast.”

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