A beer ‘epiphany’

Steve Crandall, co-founder and CEO of Lexington-based Devils Backbone Brewing Co., wasn’t a beer connoisseur until he and his wife, Heidi, vacationed in the Italian Alps 20 years ago.

He decided to try a stein of wheat beer from the oldest brewery in the world, Weihenstephan, established in 1050. “The beer touched my lips, and I had an epiphany,” he says. “It had no additives and no preservatives. It was a clean, wonderful beer. I fell in love with it.”

After returning home to Virginia, Crandall traveled to the West Coast for business (he also owns the high-end residential and commercial construction company, Tectonics II Ltd.) There he discovered craft beer.

A light bulb went off, he says. “It came to me that we needed a brewery at the base of Wintergreen Mountain.”

The Crandalls teamed with another couple, entrepreneurs Rod and Martha Ferguson, to buy 100 acres of land near Wintergreen and develop a brewery. “A lot of people told us we were crazy,” Crandall says.

“We called up the Brewers Association in Boulder, Colo., and we got a book on how to build your own brewery.”

That initial research led to the opening of the company’s brewpub, the 6,000-square-foot Nelson County-based Basecamp, in fall 2008. In January 2012, the company began production at The Outpost, a 35,000-square-foot brewery in Lexington. It brewed 9,000 barrels in its first year.

The company now is installing a 120-barrel system at The Outpost as part of a roughly $6 million expansion in Lexington. “As fast as we can build the facility we will be utilizing the capacity,” Crandall says.

Last year, The Outpost brewed 45,000 barrels of beer. “This year we expect to brew 65,000 barrels,” Crandall says, noting that the smaller Basecamp brews one-off beers in styles from all around the world. “We also have 16 different styles of beers on tap,” Crandall says.

The company’s 110 employees, evenly split between the two locations, include 14 brewers as well as Jason Oliver, the Basecamp brewmaster, and Nate Olewine, head brewer in Lexington.

The company has won many national awards and was named Mid-Size Brewing Company and Mid-Size Brew Team of the Year at the 2014 Great American Beer Festival.

Many of the company’s products are “session” beers that contain a lower alcohol level. “They are very easy drinking and true to style,” Crandall says. “Our flagship beer is Vienna Lager. We have won gold medal after gold medal for this beer. It represents about 50 percent of our sales.”

When the company created its Striped Bass pale ale, it decided to donate $1 to the Chesapeake Bay Foundation for every case sold. “We have raised over $100,000 for them,” Crandall says.

The company now sells beer in Virginia, Maryland and Washington, D.C., and will be moving into North Carolina, Tennessee and West Virginia later this year. It may expand eventually into Ohio, Kentucky and Pennsylvania.  “We want to keep it as a regional footprint,” Crandall says, in describing sales. “By 2020 we would like to be in a 500-mile radius.”

The company has a market for its beer in Bermuda, and it also does contract brewing for Banks’s Brewery in England. “We sell in over 930 J. D. Wetherspoon pubs in England,” Crandall says. 

The company’s original business plan for The Outpost projected it would produce 30,000 barrels of beer in 10 years. “We did 25,000 barrels in our second year,” Crandall says. “We have been growing triple digits since we opened up. We are one of the fastest-growing craft breweries in the country and the most-awarded craft brewery in the country for the last three years.”

From 2010 to 2013, the company’s revenue grew 278 percent. “We will do close to $21.7 million this year with both facilities,” Crandall says. “We expect to be at 250,000 barrels by 2020.”