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New Realm Brewing Plans Move Into Canned Cocktails, Non-Alcoholic Beer

This article is more than 2 years old.

You won’t find New Realm Brewing on the Brewers Association’s list of the 50 largest craft breweries in America. In fact, you can’t even find the company’s beer outside of Georgia, Virginia, one coastal market in North Carolina and soon, South Carolina.

However, the Atlanta-based beer company – which over the last several months has transformed itself into a “refreshment business” – grew production from 15,000 to 21,000 barrels in 2020 and is poised to crack the top-50 in the coming years.

Launched in 2018 by beer industry veterans Carey Falcone, Mitch Steele, and Bob Powers, New Realm has expanded its physical presence to four locations across the Southeast in a relatively short period of time.

Within months of opening its original 20,000 sq. ft. brewery and restaurant along the Beltline in Atlanta, New Realm took over a 58,000 sq. ft. production facility in Virginia Beach, Virginia from a debt-saddled Green Flash Brewing Company that had to unload the location in April of 2018.

New Realm also just opened a 12,000 sq. ft. distillery and restaurant in Savannah, Georgia, and is preparing to open an 11,000 brewpub in Charleston, South Carolina next month.

Backed by DNS Capital — the investment office of Jean (Gigi) Pritzker, one of the wealthiest women in America – New Realm has steadily expanded both its brewery footprint and its portfolio of offerings over the last three years.

The company recently rolled out a hard seltzer line called AlphaWater, and it is also preparing to release a nonalcoholic IPA and nonalcoholic lager in the coming months.

Other forthcoming New Realm innovations include a line of ready-to-drink cocktails made with spirits, and possibly CBD or THC-infused beverages when legally permissible.

I recently caught up with New Realm CEO Carey Falcone to learn more about how the company has navigated challenges caused by the COVID-19 pandemic, and what’s on the horizon.

The following conversation has been condensed and lightly edited for clarity.

Chris Furnari: Can you walk me through 2020 and how things went compared to previous years?

Carey Falcone: 2020 was both challenging and rewarding. On the challenging side, watching our on-site business get virtually shut down during the busiest period of the entire year was very challenging. Watching volume shift from on-premise to off-premise, from a margin perspective, was also very challenging. However, on the rewarding side, we're a very core values-driven company. We talk everyday about core values and our core behaviors. It's always been important to us to not just “talk the talk” but also to “walk the walk.” COVID gave us that opportunity in a big way, and New Realm is a stronger company now than we were a year ago. We kept every single employee in this company fully employed. Even our servers. We took their average hours and their average pay — inclusive of tips — and made them whole. Only the executive team took pay cuts. And we were able to grow volume in 2020, going from roughly 15,000 barrels to about 21,000 barrels. So, we are excited that we behaved in line with our core values, and excited that we were able to grow volume during difficult times, but it was very challenging from a financial perspective because selling beer directly to consumers funds a lot of the business.

Furnari: How about revenue and profitability?

Falcone: We saw a lot of revenue growth off-premise, but a decline in on-site and on-premise revenue. And that impacts the overall profitability of the organization when it is such a massive margin shift. We had less EBITDA in 2020 than we did in 2019, despite the volume growth.

Furnari: Looking ahead to the rest of this year — there are millions of vaccines being administered every day, daily COVID cases have dropped considerably, and things seem to be moving in the right direct. So how will that impact New Realm and the beer business as a whole?

Falcone: We absolutely see that as well. We’ve put in place some incredibly stringent protocols around COVID, and our goal is to set a global example of how to operate a brewpub during a pandemic. We’ve focused on things like sanitation, spacing out tables, and wearing masks gloves. We COVID test every one of our employees, every single week. So, the cost associated with that over the long-term won’t be sustainable, but we believe it's imperative to think like that right now because we want to create a safe working environment for our employees, our vendors, and our community. It’s been expensive and challenging. However, right now we're running at about 85% of 2019. And we are benchmarking against 2019 because 2020 was such a strange year with the shutdowns. And we could be well above that, but we're not willing to dial back our COVID protocols at this point. We're very optimistic about this year and we can see things starting to rebound. We’re very fortunate that our Virginia Beach location has a very large beer garden, and in Atlanta we have 400 of our 650 seats outside. I think the combination of strict protocols and a consumer’s desire to eat outside has allowed us to make the most of this situation.

Furnari: It seems like you’re faring better than other operators, for a couple of different reasons. You have the outdoor dining capabilities, and you’ve got strong growth in the off-premise. Has that fueled your confidence a bit and enabled you to consider these more recent expansion projects?

Falcone: It has always been a part of our strategy to expand our localness. New Realm is very focused on being attached to the communities in which we live, work and brew. So, we don’t want to ship beer to state where we don’t have breweries. The way for us to expand our geography is to expand our localness. Savannah has a really cool beer scene and a cool food scene, so there’s great exposure for the brand. Virginia was the same way. Through all of this, we wanted to make sure that we did everything we could to strengthen our organization.

Furnari: Why are you getting into the distilling business and do you have any plans to release RTDs?

Falcone: To us, we’re in the refreshment business. While that might have meant just beer a long time ago, I don’t think it does anymore. We really learned a lot when we opened in Atlanta. We had a lot of guests asking us for spirits, and we operated under the assumption that if one person in a party of 10 didn’t drink beer, they were all going somewhere else. So, we developed a long-term strategy around distilling and spirits. Phase one started in Atlanta where we just served a vodka, bourbon, and gin, which we produced on-site and did not distribute. And we ended up selling more beer because we were offering spirits. Spirits also became a large portion of our overall mix. So, now that we have the distillery in Savannah, we will be going into distribution with our spirits, and we will expand our offerings. But we'll take a very slow and disciplined approach to this. We’ll also be rolling out RTDs with vodka, tequila, and rum in slim cans in the second quarter of this year.

Furnari: And how about some of your other innovations?

Falcone: From an innovation standpoint, we’re obviously very passionate about craft beer. But when you think about the fact that we’re in the refreshment business, you know, we’ve watched a seltzer category rapidly develop. We didn’t jump into it immediately, but we’re now rolling out hard seltzers. We’re also getting ready to roll out a line of nonalcoholic beers. One thing that we do love about the nonalcoholic category is that it’s growing and there is a high barrier to entry. Not everyone can produce a high-quality, good-tasting nonalcoholic beer. And we have the ability to do that. So, there’s a lot of R&D, but we’re also looking down the road and thinking about the total refreshment business. We see CBD coming, and we don’t know what the laws are going to be, but we don’t want to wait. We’re pretty aggressive from an R&D standpoint, and some of the stuff we’re starting to roll out now demonstrates that.

Furnari: Are THC-infused drinks also a part of your beverage philosophy?

Falcone: They are. We believe that it will be highly regulated, and we will not be at all surprised if those drinks go through a three-tier system like beer. From an R&D perspective, this is the stuff we’re working on. We know that changes to the law are coming, and we want to be prepared. We don’t believe that you’ll be able to have an alcoholic drink with CBD or THC, but this is another reason why we’ve made sure to be able to create nonalcoholic beer, so that we are prepared to make these types of products.

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