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Beer Boom: How One City Used Suds to Brew Up a New Economy

Roanoke, Va., is betting big on beer.

Roanoke Va
Roanoke, Va.
Roanoke, Va., was a city built by the locomotive. Crisscrossed by rail lines, Roanoke served as a regional freight hub as well as a manufacturing center for steam engines for the Norfolk and Western Railway.

By the time the railroad shuttered its Roanoke headquarters in 2015, however, the city had already worked to wean itself off the rail industry. Like many other successful former factory towns, Roanoke had developed a solid "eds and meds" economy focused on health care and higher education centers, such as the Virginia Tech medical school. The city has also begun to capitalize on the nearby Appalachian Mountains to attract visitors and residents who enjoy biking, hiking and other outdoor activities. 

But there's something else that's helping Roanoke's economy thrive: beer.

"For most of our history we thought of ourselves as an old railroad town," says Beth Doughty, executive director for the Roanoke Regional Partnership, which works to attract business to the area. "In 10 years we've changed the narrative. Today, she says, "we use the term 'beer, bikes and brains.'"

At least 15 breweries have opened in and around Roanoke in the past six years. It's an investment that's expected to pump more than $500 million into the local economy over the next several years.

What's notable about Roanoke's beer boom, though, is that it's not just fueled by the sorts of microbreweries and tasting rooms that have popped up in towns across America in recent years. Roanoke has also landed full-scale production facilities from beer companies with breweries in other cities. San Diego-based Ballast Point, for example, opened a new brewery just outside Roanoke last summer with 100 employees and the current capacity to produce 200,000 barrels of beer a year -- a number that's expected to grow. Deschutes Brewery, an Oregon-based beer maker, is also expanding its operations to Roanoke (although the company may be downscaling its original plans for a $95 million facility initially employing 108 people).

Like beer-making itself, Roanoke's beer transformation began with water.

Fifteen years ago, the area was a myriad of small water utilities, with separate operations being run by the city of Roanoke and Roanoke County, as well as standalone utilities in adjacent Botetourt and Franklin counties. Starting in 2004, those wastewater operations began to merge into a new regional system, the Western Virginia Water Authority. Indeed, the authority was the first in the state of Virginia ever to merge two existing water operations.

“All the utility systems developed along those municipal lines," says Michael McEVoy, executive director of wastewater services at the Western Virginia Water Authority. "We had these duplicated systems where the county would have infrastructure on one side of street and the city would have infrastructure on the other side of the street.”

With the merger of the city and county utilities, and later with the two systems in Botetourt and Franklin counties, the new authority doubled Roanoke's capacity to supply water and to treat wastewater. Combining the small water authorities and infusing a $210 million capital investment was intended to attract large food and beverage producers. Besides beer companies, Roanoke is home to one of the nation’s largest Coca-Cola bottling plants.

Brewers need high-quality water, of course. But they also require a good wastewater system. Producing 31.5 gallons of beer creates more than 100 gallons of wastewater. And beer waste is heavy in organic materials like yeast and sugar. The water authority invested $60 million to upgrade its treatment facility. “What brewers need is a really strong wastewater system. Brewers are releasing strong effluent with a lot of organics,” McEvoy says.“You get some waste alcohol and some sugars, and all those organics need to be treated before it gets released.”

But good water isn't enough. Even with its new water capacity in place, Roanoke initially struggled to attract big beer brands. In 2012, the city tried to lure Sierra Nevada, which was looking to build a production brewery on the East Coast. But Roanoke didn’t have enough beer makers at the time to create a robust local beer culture. Sierra Nevada picked Mills River, N.C., just outside of Asheville, instead.

“Roanoke needed to have a community culture that matched the beer culture,” says Doughty, the Roanoke Regional Partnership director. “The large craft brewers want to be somewhere that people speak their language and people understand the characteristics of craft beer culture.”

By the time Ballast and Deschutes began their search, Roanoke’s beer culture had matured. What started with a few local brewers, Doughty says, had grown to more than two dozen within a 50-mile radius of the city. Brewers began to see the area as a place where beer companies felt a sense of community, where they could trade tips, collaborate and engage in industry talk. 

“We wanted there to be other breweries in the city where craft beer was being developed," says Deschutes Brewery CEO Michael LaLonde. "Craft brewers have historically helped each other, whether it’s on brewing or how to run a production line. It's about having a community to enter into." 

And that -- along with plenty of good water -- is exactly what Roanoke now has, he says.

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