November 2, 2017 Patrick Leary  Milwaukee Business Journal

Third Space Brewing ‘exceeds expectations’ in first year, considers adding distributor

A little over a year after delivering their first keg, Third Space Brewing co-founders Andy Gehl and Kevin Wright find themselves in a Happy Place, and not just because of the success of their signature beer by that name.

Gehl and Wright think Third Space, located in an decades-vacant industrial building at 1505 W. St. Paul Ave. in Milwaukee, exceeded expectations in its first year. Third Space beers are on more than 200 taps and in roughly 50 stores in the area already, and Happy Place, a Midwest pale ale, was successful this summer as one of Miller Park’s most popular craft beers.

“Our whole business model was based on the fact that we thought Milwaukee was ready for more craft breweries because there were so few in the city,” Gehl said. “We saw that business opportunity and we went for it.”

Gehl feels Third Space has carved out a niche in the growing market with its beers strong on hops, Happy Place and IPA Upward Spiral. Happy Place’s success in bars and stores and at Miller Park has really impressed the Third Space team.

“It was great for us,” Gehl said. “As a new brewery, to get our name out there and get our beer in front of 2.5 million fans or whatever went to the ballpark this summer was huge.”

The success of its hoppy beers makes the recent gold medal win at the Great American Beer Festival — for Unite the Clans, Third Space’s Scottish-style rye ale — a significant victory for the brewery.

“We’re excited that a beer like Unite the Clans can show people, ‘look, we’re not just hoppy beers,’ Gehl said. “We’re making fun, flavorful beers for everybody.”

And it’s not just the beers that are fun. Wright said that Third Space emphasizes fun and friendliness through its bright-colored packaging, while Gehl said the brewery’s “open-concept” layout creates an exciting environment.

“Generally, the brewery is open and people come and they have a pint, they have a flight and it’s a chance for them to check out our beers and check out our company,” Gehl said. “They can literally come and sit and there’s no glass separating them from the brewing operation so they can watch, they can smell the smells, they can talk to Kevin and his team back there when they’re canning beers or kegging beers and learn about the brewing process and watch the beer being made while they have it.”

Third Space also runs brewery tours twice every Saturday and hosts “a lot of small private events,” like corporate happy hours, birthdays and rehearsal dinners.

Looking forward, Third Space is continuing to roll out more specialty and limited-time beers, including a new barrel-aging program which began this week with Haunted Barrel, a new candy bar porter. The brewery also is rolling out a spiced barley wine for Black Friday and a Russian imperial stout for the Christmas season.

“You’ve always got to be coming up with something new and something fun and something different,” Gehl said. “It’s not just responding to drinkers; it’s trying to create things.”

The other big change in the coming year for Third Space will be an uptick in distribution. The brewery purchased a canning line recently and will focus on expanding its distribution reach in the region.

“We’re not even in southeast Wisconsin yet,” Gehl said. “It’s really centered in Milwaukee and the suburbs. In 2018, I think people will see that spiral grow a little bit.”

To aid with that expansion, Wright said Third Space will sign with a distribution partner in the new year, although they’ve yet to decide who the partner will be.

“It’s because of the speed that we’ve been growing,” Wright said. “For us to keep up doing it here would be a significant investment in trucks and people and software and becoming more of a distributor and we don’t want to do that. We want to be a brewery.”

Looking back on the first year though, Gehl feels the brewery is well ahead of where he expected it to be.

“It panned out the way we were hoping, but I don’t know if we expected the excitement and buzz to last as long as it has,” he said. “It’s just continuing to grow.”