Iron Hill expands production, starts canning after 25 years in brewpubs

On the eve of its 25th year in business, Iron Hill Brewery opened a production brewery — one large enough to brew 20,000 barrels annually, roughly 20 times what one of its brewpubs can make in a year. This is the 19th location for the brewpub empire that launched in Newark, Del.; its 20th outpost is expected to open later this year, just outside Atlanta.

Boosted by bigger tanks, the suburbs-centric chain plans to expand even further, getting its beer on the shelves in grocery stores and beer distributors. It also plans to open Iron Hill TapHouses — lighter-weight versions of its brewpubs, featuring its beers and food via counter service. They’ll allow Iron Hill to move into smaller spaces than those it would need to accommodate on-site brewing. The new Exton Taphouse, which opened last month, offers a preview of the new style of service.

That may seem like plenty to juggle, but Iron Hill has more on tap. We spoke with Iron Hill cofounder Mark Edelson and CEO Kim Boerema about the brewery’s ambitions and the challenge of balancing growth with pandemic realities.

This interview has been edited and condensed for clarity.

Kim Boerema: It’s going to be a little different than a traditional Iron Hill restaurant. It’s a fast-casual model where you can walk up to the counter or you can sit down. We have handheld technology to take orders. Every menu item will be $12 and under. We’ll have between 20 and 25 items. They will rotate based on chef discretion. We’re pricing this pretty low because we want people to come in and try it.

Mark Edelson: The one thing that you’ll see is different is counter service. It’s much more like the taphouse-style that you started to see pop up all across the country. We thought it was important to explore that as we built our larger brewery. This is a production brewery, so part of this is where we’re going to produce the cans that we currently have in both Pa. and Delaware.

KB: But one thing I think you’ll see, compared to other taphouses — our food’s going to be an amazing complement to the amazing portfolio of beers we’re going to have on tap.

ME: You see with a lot of taphouses brewers who do traditional brewing getting into hospitality, opening kitchens. The difference with us is that 70% of our sales comes from food. We’ve always been a hospitality company. And so the difference of walking into your garage brewery and seeing what they have available for food vs. walking into a taphouse developed by Iron Hill will blow you away on culinary end.

We’ve always prided ourselves in being able to have a large variety of beers — 15 — on tap in the pub. Here, we’re going to have 24. So we’ll be able to pull stuff here but also be able to bring beer from the pubs and showcase them here as well. So it’ll be a little bit of back and forth.

ME: As we started to grow the brand and open newer restaurants, one of the things is just always being mindful of our footprint and shrinking down some of our brewery sizes themselves. So we did need to supplement that side of the restaurant business.

Certainly, what we learned during COVID was, within breweries, everybody’s on-site sales are down significantly, but what thrived was their package beer. And so this lended us an opportunity, because we have this platform, to really launch [the retail business] sooner than we probably would have without COVID.

KB: This is going to give us a platform to really experiment with what we do on the beer side. Eventually we’re going to get into the spirits side of the business. We’re also getting ready to launch a phantom kitchen, which is Malty’s Tenders and Wings.

ME: We launched retail [beer sales] in Delaware in early November and right before Thanksgiving in Pennsylvania. We’re in the city and the nine-county area around Philadelphia. We’re in most of the Giants and Acmes and soon to be in Wegmans. So you can find our beer everywhere. It’s actually more convenient for our current guests to find it a little closer to their house than coming to the restaurants and getting takeout.

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KB: That’s down the road. Obviously we’ve got to get the production brewery up and off the ground, but we want to get in the distill business and create our own brand, like we’ve done here at Iron Hill with our beer.

KB: We had three projects to which we were committed. We just opened Atlanta in [the] Buckhead [neighborhood] and Exton and the TapHouse. And we have Perimeter [near Atlanta] later this year. I think it’s undetermined if we will continue to grow at the rate that we want to grow. I think the good thing about the TapHouse [concept] is it gives us another platform for growth outside a full-service restaurant. The economics of them are in our favor: We don’t need [as much] square footage; we don’t need to brew beer in a TapHouse — that’s where the production brewery will come into play. We are continually looking at options. However, our number-one priority is to take care of our employees right now. And our guests, through the pandemic, they’ve been loyal, they’ve been thoughtful, and we can’t appreciate them enough, and the hard work of our employees that has put us in the position we’re in right now.

KB: We are looking at two opportunities here in Pennsylvania and one in Delaware. These are going to be conversions of another fast-casual concept that decided to close here that we’re negotiating with. I can’t tell you which location yet will be our first.

ME: They’re in our current footprint right now.

KB: We look at a lot of different criteria. We are a community and restaurant. Outside of Center City — that’s our flagship, that’s been the first time we’ve done the downtown location — we live out in the suburbs. We want to be a family restaurant to people. So we look at growth markets, we look at traffic counts, at big-box mall retailers. We need concentration and density, but we think we can transplant anywhere being a restaurant company, and not a brewpub. And I think that’s where we edge out the competition a little bit in these types of communities, because we cater more to families.

ME: Where we’ve been looking is from the Mid-Atlantic down to the South. We kind of leapfrogged a little bit. Greenville [in South Carolina] has been open since 2018. And we just opened one in Atlanta and another one coming up in the spring right outside of Atlanta.

ME: The proliferation of [brands and offerings] even drives the wholesalers and the retailers crazy. They have to make more choices, because the number of brands has grown disproportionately to the amount of shelf space in retail. Absolutely. It creates winners and losers.

There are a lot of local, small taprooms that pop up, and we’ve seen this. And where we believe we also have an edge within our retail, is that people really have, in the last decade, latched onto local. They love local. I think the pandemic has helped that, because there’s a lot of support in the community for local. And so for us, on the retail side, if you look at where we’ve launched in the retail market, we’re local everywhere. While there are regional breweries that consider themselves local, we are physically local everywhere in Southeastern Pennsylvania.

KB: There are over 10,000 breweries in the U.S. today. The space is highly competitive. So it really challenges our crew to take a step up and be innovative, and lead and not follow.