Guinness to open brewery in Baltimore County

The maker of the famed Guinness stout said Tuesday it wants to build a brewery and taproom at its former whiskey bottling plant near Relay in southern Baltimore County, reviving the site with the brand's first U.S. brewery in more than 60 years.

Diageo tentatively plans to makeover the hulking former Seagram's buildings on Washington Boulevard as not only a brewery but as a tourism destination like its original St. James's Gate brewery in Dublin, Ireland.

The brewery would focus on new beers for the U.S. market while the brand's classic Irish dry stout would continue to be made in Dublin.

The proposal is contingent on the General Assembly's approving a new kind of liquor license that would allow the scale of on-site sales Diageo envisions for the brewery.

Diageo would invest $50 million in the project and could create up to 70 jobs, including 40 in brewing, warehousing and packaging. About 30 people could work on the visitor side of the operation, which would include a restaurant.

Diageo hopes to begin construction this spring and open in fall 2017, coinciding with the 200th anniversary of imports of its stout to the United States.

"What we're looking to do here is to really be able to build off the brand, bring new products in … and be able to tell our story," said Tom Day, president of Diageo Beer Company USA, a Connecticut-based unit of Diageo.

The plant is designed to serve as a kind of test kitchen for new products, Day said. The firm also sees it as a way to boost consumer connection with the brand, at a time when competition from local craft options has grown.

The brewery would breathe new life into a site that has lain largely dormant since Diageo closed bottling operations there in 2015. At the time more than 100 people worked at the plant.

Diageo is a London-based liquors conglomerate that owns brands such as Johnnie Walker and Smirnoff. It inherited the property when it bought Seagram's wines and spirits business in 2000. The site was the state's first legal distillery after Prohibition was lifted in 1933, which boosted its appeal for a brand that celebrates its history.

It's close to Interstate 95 as well as the airport and rail transit, which makes it readily accessible for tourists, Day said. Diageo said it hopes the brewery and taproom to draw more than 250,000 people for tours and tastings in the first 12 months.

"Guinness' plan to build a brewery at its historic facility in Relay, Md., is great news for job creation, manufacturing, and tourism in our state," Governor Larry Hogan said in a statement. "Beer tourism attracts millions of visitors to towns and communities across the country every year and I look forward to welcoming Guinness to the roster of excellent breweries we have here in Maryland."

A Maryland Department of Commerce spokesman did not respond to questions about the deal. Baltimore County is not providing any subsidies, said Fronda Cohen, a county spokeswoman.

Baltimore County Executive Kevin Kamenetz said county officials highlighted the site's history as they worked with Diageo to come up with a new use for the site. Officials pointed to the growth of other breweries in the area, including Heavy Seas Beer, which is less than two miles away.

"We could see a Baltimore County beer trail in our future," Kamenetz said.

While the Heavy Seas plant is focused on its beer distribution, the brewery also receives more than 20,000 visitors a year for tours and tastings, said Fred Crudder, its director of marketing.

"What this facility could do is it could bring people to the Baltimore area that weren't coming here before," Crudder said. "If Diageo spends the kind of money that they can because of who they are to make that location an absolute tourist destination, then that could be good for Maryland, the surrounding areas of Baltimore County and could be good for us in the long run."

The scale of the company's proposal means Maryland will have to craft a new kind of liquor license for the facility.

Lawmakers said that's still being negotiated, pointing to concerns from some traditional distributors and retailers about lifting the current rules that cap on-site beer sales at 500 barrels, about 1,000 kegs. The company is seeking permission to sell as many as 5,000 barrels a year.

Jack Milani, legislative co-chair for the Maryland State Licensed Beverage Association, said the group is concerned about the facility's impact on existing retailers and distributors. But he said he wanted to see a bill before commenting.

"It just comes down to what they're asking for," he said.

Chesapeake Beverage, one of the state's largest distributors, endorsed the project.

"Not only will this project help build the Guinness brand in Maryland, the tourism piece and brand experience planned for this project will certainly enhance Maryland's beer industry and be a benefit to our retail customers," said Evan Anthanas, president of Chesapeake Beverage, in a statement.

A Diageo spokesperson said negotiations over the barrel cap and other matters are just beginning. The company hosted a reception for lawmakers at an Annapolis restaurant Tuesday night.

"We have huge projections in terms of what this can do, but it's all contingent" on the legislation, Day said.

Politicians said they generally favor Diageo's plans and believe they can reach a compromise.

"The Guinness facility will be a strong boost for our economy by creating good-paying jobs for Marylanders and by attracting visitors from across the region and the country," state Comptroller Peter Franchot, whose office regulates liquor licenses, said in a statement. "I am optimistic that all stakeholders will come together and work collaboratively with the General Assembly to ensure that this innovative project moves forward."

Baltimore County Council chair Tom Quirk, who represents the area, wrote a letter to General Assembly members in support of the plans. He called the jobs and investment an "economic win" for the county, adding that he resisted a proposal to turn the site to residential use.

"It's definitely a move in the right direction," Quirk said. "I hope it leads to more things in the future as well."

Guinness started in 1759 and is sold in more than 150 countries globally. Guinness has brewing operations in 49 countries.

While it's one of the world's most successful and best-known beer brands, its sales growth, like that of other legacy brands, has been slow in the face of growing competition from craft beer brewers. Last week, Diageo reported its U.S. sales of Guinness grew just 1 percent in the six months ended Dec. 31.

While its creamy stout remains the mainstay, Guinness has placed more emphasis on new flavors, said Scott Kerkmans, professor and brewing program director at Metropolitan State University of Denver. It's launched a Guinness Blonde American lager and a Nitro IPA (India pale ale) as well as other variations of stouts, porters and ales.

The company opened its experimental "Open Gate Brewery" — a model for the Maryland proposal — in Dublin in 2015.

"As they see the proliferation of craft-style take off in the U.S. market, they want to tap into that," Kerkmans said. "I think they have the desire to expand their offerings to fit that craft beer consumer that is looking for a different style every time they drink … it's taken a priority lately."

A domestic Maryland brewery might help the firm with its U.S. distribution as well, Kerkmans said. But the move is primarily about building the brand, he said.

"I think that breweries are becoming educated to the fact that these 21- to 35-year-old drinkers are wanting to feel like they help shape a brand, help build a brand and giving them a physical location to go to and interact with will make that relationship much more meaningful," he said.

What's not clear is whether visitors will want to go to an industrial area in Baltimore to taste an Irish brand, said Bart Watson, chief economist of the Brewers Association. But, he added, Baltimore is easier to get to than Dublin.

"They're clearly betting that they think they can make this succeed," he said.

An earlier version of this story misattributed a comment about craft beer to Bart Watson. It has been corrected.

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Story originally posted at 11:20 a.m. on Jan. 31, 2017.

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