Brewing

Making Craft Brew in Mississippi, the Land That Beer Forgot


Making Craft Brew in Mississippi, the Land That Beer Forgot

Photograph by Beth Wynn

When Mark and Leslie Henderson opened Lazy Magnolia Brewing in 2004, their hometown of Kiln, Miss., was an unlikely place to make beer. Halfway between New Orleans and Biloxi on I-10, the town of 2,000 was known for being the place where Brett Favre played his high school football and not a whole lot else.

While the nation has become obsessed with local brews, Mississippi has resisted the trend. It may be the driest place in the country: The state enacted its own version of Prohibition in 1907, 13 years before the 18th Amendment took effect, and was the last state to rescind its ban on making alcohol—in 1966. Until recently, Lazy Magnolia was the lone dot on Mississippi’s beer map.

The Hendersons almost didn’t get on the map at all. First they had to persuade state regulators that operating a packaging brewery—one that makes beer for distribution, as opposed to consumption on the premises—was even legal. One state official warned Mark Henderson that he could be fined $25,000 and sent to jail for six months. An incredulous local banker turned the couple down for a loan. “You’re going to sell a bunch of froufrou beer to South Mississippians?” Mark Henderson, 40, recalls the man asking.

Such obstacles help explain why America’s breweries cluster along the coasts and in a handful of hoppy outposts, such as Ft. Collins, Colo., and Austin, Tex. There were 880 breweries in the U.S. in 2012, up 131 percent from 2005, according to U.S. Census data, making brewing one of the fastest-growing industries in the country.

Whether specialty brew takes root in a region depends on “the initial entrepreneurs who forge the path and convince people that craft beer is great,” says Bart Watson, an economist at the Brewers Association, a trade group for small breweries. Local regulations matter, too. The presence of home-brewing clubs also helps, he says. Such clubs are the minor leagues for budding brewers, offering markets for local quaffs.

Mississippi poses special challenges. It’s the most religious U.S. state, according to a Gallup poll published last year, a characteristic that may bode ill for the beermaking movement. It’s also the poorest state, according to Census data.

That limits the local market for premium brews. Households that earn more money drink more craft beer, according to a 2012 study by Nielsen (NLSN). Beermakers tend to thrive in wealthier areas: Counties with breweries had an average median household income of $52,000 in 2012, according to Census data. The median for counties without one was $43,700.

“I think that craft market, whether it’s for beer or artisanal cheese, is driven largely by an affluent consumer class that isn’t restrained by whether they can afford to buy,” Mark Henderson says.

To cultivate that affluent class, Mississippi began to encourage brewers. A regulatory change in 2012 let Lazy Magnolia offer tastings, which helped increase business, and a handful of  entrepreneurs soon joined the Hendersons in opening breweries. “Food is an essential part of how people in Mississippi gather and celebrate,” says Mary Margaret White, of the state’s tourism board. “Having a craft beer movement makes a lot of sense.”

The Hendersons, both engineers, began brewing at home for fun in 2000. They constructed increasingly elaborate equipment for their hobby. The turning point came when Leslie asked her husband to weld a brew sculpture, a scaffold-like structure that can stretch to 10 feet long. Mark walked into his home office and counted 500 pounds of grain stacked against a wall. “I said: ‘Who are we making all this beer for?’” Leslie and Mark HendersonCourtesy Lazy MagnoliaLeslie and Mark Henderson

The Hendersons decided to take their hobby pro. They jumped through regulatory hoops and raised some money from friends and family. Leslie left her job at a startup that developed a new kind of plastic bullet casing for the U.S. military. The couple built a brewery, applied for a license, and in 2004 inaugurated Mississippi’s first packaging brewery since 1907. Leslie, now 38, apprenticed at the Crescent City Brew House in New Orleans to prepare for her role as Lazy Magnolia’s brewmaster.

Courtesy Lazy MagnoliaThe next year, Hurricane Katrina leveled the Gulf Coast, destroying the Hendersons’ home. Yet their business got a boost as bars and restaurants rebuilt—some decided they wanted to buy their beer locally. Lazy Magnolia’s offerings have all had a distinct southern flavor: A beer called Amberjaque, made with the same rye favored by Mississippi’s Prohibition-era moonshiners, gained notice at an international competition; it failed to sell, so  the couple discontinued it. Their Southern Pecan Nut Brown Ale found a stronger following.

A decade after setting up shop in Kiln, Lazy Magnolia employs 35 and is sold in 17 states. The business is on track to reach $5 million in sales this year. Yet the market for craft beer in Mississippi isn’t yet strong enough to let Mark Henderson quit his day job. He says the brewery is barely breaking even—and still moonlights as an engineer.

The bottom line: Counties with craft breweries had a median household income of $52,000 in 2012. Mississippi’s median was only $37,179.

Clark is a reporter for Bloomberg Businessweek covering small business and entrepreneurship.

 
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