Cape Breweries, Wineries Grow Industry

Each summer, hundreds of thousands of people visit the beaches of Cape May County. Most years, Memorial Day Weekend is the unofficial season starter.
Visitors come other times of year, but the period between Memorial Day and Labor Day is what makes or breaks the county’s economy. 
That flow of visitors was integral to Todd Wuerker’s decision to start a vineyard on land in Rio Grande, his grandfather, Felix Wuerker, bought decades earlier.
He and his brother Ken planted grapes in 1997. They learned about growing grapes and making wine. By 2009, they began bottling and selling the wine.
Hawk Haven at 600 S. Railroad Ave. in Rio Grande was not the county’s first winery. That distinction goes to Cape May Winery on Townbank Road. It was far from the last.
There are seven vineyards in the county. In a recent interview, Wuerker said he’d welcome more. Rather than serving as competition, he said, having a collection of vineyards has helped make Cape May County a destination for wine lovers and those who just enjoy a wine tour.
While Wuerker counted on the summer visitors, he said the wineries are bringing people to the county in the fall, winter, and spring.
February has become a busy month, he said, adding that it helps that the county’s multiple winemakers are producing high-quality wine.
Those additional visitors are renting rooms or using their second homes, spending money on dinners and groceries.
According to Wuerker, and many others, those visitors are improving the local economy.
A New Industry
Cape May County didn’t have a single winery 30 years ago. A decade ago, there were no breweries. Now, the wineries, breweries, and distilleries in the county have grown into a multimillion-dollar industry, representing a significant expansion in manufacturing in a field that mainly didn’t exist a generation ago – craft beverages.
A recent county report put the impact of beverage tourism at $200 million, describing that as a conservative estimate.
That’s a small slice of what visitors spend in Cape May County in a year – well over $6 billion – but it’s a bright spot on the economic reports, and one that supporters point out means year-round jobs in an area intensely dependent on seasonal jobs.
County officials have taken notice. The county has contracted with Atlantic Cape Community College to study the impact of what’s called “beverage tourism.” That report is expected to be released this year.
Some details were shared at the Cape May County Spring Tourism Conference, which focused on destination marketing.
Among the wineries, six breweries and three distilleries in the county, most visitors surveyed – 93 percent – were staying overnight.
The report indicates 55 percent were baby boomers, 12 percent were millennials.
The county is working with Dr. Richard Perniciaro of Atlantic Cape Community College to study the economic impact of wineries and breweries.
Perniciaro, who is set to retire in June, said he could not comment for this story, citing college rules about speaking to the media. No one else from the college was available for interview.
In an interview for the Herald last fall, before the rules were in place, Perniciaro said the new trend was bringing new visitors to the county and does not depend on sunny weather.
He described brewery jobs as good, year-round employment, and that he sees room for still more growth before the market is saturated.
Two Forklifts?
The vineyards may have been first, but beer has seen extraordinary growth. On store shelves and restaurant taps throughout the region, customers can find Cape May County beer from several suppliers.
Independent brewers have seen huge gains nationally over the past decade, driven primarily by consumer trends.
In New Jersey, a change in state law about a decade ago gave a much better chance for small, start-up breweries to begin and make money.
But even compared to other areas of the state, there’s been an explosive increase in the number of Cape May County’s breweries. They include Slack Tide on Route 83 in Clermont, Ludlam Island Brewing in Ocean View, 7-Mile Brewery on Route 9 in Rio Grande, Cold Spring Brewery, part of Historic Cold Spring Village, and the latest additions, Bucket Brigade Brewery on North Main Street in Court House and Mud Hen in Wildwood.
Mud Hen Brewing Company is unique, in that it has a liquor license and can serve food, opening to good reviews earlier this year.
The local brewery business started with Cape May Brewing Company at the Cape May Airport, cited by airport officials as a break-out new business at the site.
“When we started seven years ago, we were the first brewery at the Jersey Shore,” said Ryan Krill, one of the founders of the Cape May Brewing Company.
They started small, with one employee brewing 12 gallons at a time, but have grown steadily ever since.
“We have thousands of accounts in New Jersey and Pennsylvania. We have our own trucks and drivers and about 80 employees,” Krill said in a recent interview. “We brew more in one day now than we did in our first year.
“We have two forklifts. That’s how I measure success.”
Krill said he always saw his business as a manufacturing brewery, although he acknowledged that manufacturing and shipping anything from southern Cape May County provides challenges.
For one, the county is sort of a cul-de-sac, meaning transportation can be an issue, one that becomes more pronounced the farther one’s beer travels.
Changed Rules Changed Everything
Everything began with Bill Hayes, a retired Coast Guard captain who began Cape May Winery in his garage.
According to several accounts of the early days, Hayes was closer to a hobbyist than a business mogul. The business model changed when Toby Craig bought the winery.
The former owner of The Washington Inn in Cape May increased production and started to make the winery profitable.
That would likely never have happened if New Jersey had not changed the laws governing wineries in 1981.
Before that, the state allowed one winery for every million residents. The change reduced taxation and eased rules for vineyards selling their own wine.
When the law changed, there were seven wineries in the state, and launching a new one was difficult or next to impossible. Today, there are almost 50 wineries in New Jersey.
Something similar happened with breweries. A change in state law allowed breweries to sell beer by the glass as part of a tour.
“In New Jersey, some of the changed rules have opened up new business plans,” said Bart Watson, the chief economist for the Brewers Association, a national organization of small and independent craft breweries. “The vast majority of new breweries rely on that direct sale.”
Pouring a draft beer at your own site will make a brewer the most money. For some, the direct sales remain the focus of the business plan, but even breweries that expect to grow into a regional powerhouse often rely on direct sales to help them get started.
There are rules, of course. With the exception of Wildwood’s Mud Hen, which serves under a standard liquor license, brewery customers must take a tour before getting that pint.
The brewery can’t operate like a bar – no kitchen, no serving food, and only beer it makes available.
According to Krill, even as he tries to make the brewery a destination, he does not want to try to compete with bars and restaurants. He said a liquor license can run up to $1 million or more, and he said it is not fair for his brewery to compete.
It’s also bad business for someone hoping to get a tap in the very limited lineup at the bars and restaurants around the county and beyond.
According to Watson, the vast majority of beer Americans drink still comes from the large national brands.
About two-thirds of the beer sold still comes from a company owned by either Anheuser-Busch or MillerCoors. But, the independent market is growing fast.
He said independent craft brewers make about 13 percent of the beer now, a huge growth compared to just a decade ago. Because the beer is often more expensive, that is close to a quarter of the American beer market in terms of dollar sales, he said.
The trend follows others seen in high-end coffees and the market for local food, he said.
“We’re really seeing consumer demand change. People want more variety, and increasingly they want to support local businesses,” Watson said.
In recent years, he said, there’s been a tremendous success rate among local breweries.
To contact Bill Barlow, email bbarlow@cmcherald.com.