Third Space Brewing growing again in 2020 as it eyes a future as production brewery

When Third Space Brewing opened its doors in the Menomonee Valley in September 2016, it had the ambitious goal to be more than a brewpub or taproom.

With its 11,000-square-foot facility at 1505 W. St. Paul Ave., co-owners Andy Gehl and Kevin Wright purchased a 30-barrel brewing system to follow with the brewery’s planned identity.

“We made the decision early on that the best opportunity for us was to be a production brewery,” Wright said.

The brewery’s initial capacity was about 2,400 barrels. As Third Space grew in popularity, the Menomonee Valley brewery added more fermenters, currently totaling four 60-barrel, two 30-barrel and four 90-barrel fermenters. The brewery will be installing two additional 90-barrel fermenters and has room for just two more potentially in 2021, Gehl said.

That increases the brewery’s capacity from 12,000 barrels in 2019 to 15,000 barrels in 2020.

Because those targets are a theoretical capacity, Gehl said Third Space is setting a goal of brewing 12,000 barrels of beer this year. In 2019, the brewery produced 8,658 barrels, according to Wright.

Wright had experience in the brewery industry, having received a brewer’s diploma and working in the craft beer industry in California. He came up with the idea to begin with a 30-barrel brewhouse, a large expectation for most craft brewers. Most craft breweries in Milwaukee have started on five- to 10-barrel brewing systems.

“He [Wright] said we’re going to take a little bigger risk from the start and have a lot more beer to sell and hopefully this catches us. But down the line, it’s going to serve us in that all we need to do to grow is add fermentation tanks and other pieces but basically add to the cellaring and packing side of the business. The brewing side is in place and where a substantial portion of the investment goes,” Gehl said.

The co-owners sum up Third Space’s beer portfolio as flavorful yet balanced.

“I call that the Midwestern concept to our brewing is that everything has big flavors, interesting flavors, but each beer has a real balance to it meaning it’s enjoyable to have one,” Wright said.

Its best-selling, flagship beer is its Happy Place Midwest Pale Ale. The brewery focused on high-quality beers and innovation. Late in 2019, Third Space added a five-barrel pilot system, which is piped into the whole commercial system.

Several of Third Space’s new year-round beers are available for distribution — including Frog Weiss, a kettle sour beer brewed with fig, raspberry, orange and ginger — and were first brewed on the pilot system. The brewery also has a well-developed barrel-aged program and has plans to release new barrel-aged beers this year.

“Because of my technical brewing education, quality has always been on the forefront of everything we do,” Wright said. “We’ve made investments beyond breweries of our size at every step of the way. We try to be out on the leading edge of quality and the investments we make in the equipment and the people reflect that commitment and focus on quality.”

Third Space is about to roll out a companywide quality manual. The brewery recently promoted one of its production staff members to a full-time quality manager. The brewery also added a sensory tasting panel, which is run by the quality panel. About 10 staff members will test each batch of beer before it is distributed to make sure it is up to Third Space’s quality standards.

The brewery has 14 full-time and 14 part-time employees. Third Space is looking to add four full-time staff members and at least three more part time.

“We’re still growing. We’re still adding to the team. We’ve invested a lot in the people and in training and things like that to really make sure we have a high-quality staff as well as a high-quality product,” Gehl said.

Last year Third Space also improved its canning line, which it initially installed in summer of 2017. It was upgraded to a faster canning line with improved design and better quality and more liability in the equipment, Wright said. Now the brewery can measure the dissolved oxygen and fill height in every can to create consistency throughout a batch.

As the brewery continues to grow, so does its distribution. Third Space started distributing to Milwaukee and the surrounding suburbs in 2016 and 2017. In 2018, the brewery signed with a distributor and grew to seven counties in southeastern Wisconsin. In 2019 the brewery expanded to Madison, growing to 12 total counties.

“It wasn’t just adding that,” Gehl said. “We grew by over 50% in Milwaukee in our home market which is pretty crazy. That is a huge growth number for the third year in the market. People expect you to have a sophomore slump or that kind of thing. We haven’t really seen that. The growth curve has continued up, which is great.”

In early 2020 Third Space announced it was launching distribution in the northeastern portion of the state, adding 10 full counties and two partial counties. Gehl said that Third Space has continued with its mantra of an organic approach to growth. Because the brewery is so focused on quality, it does not want to put a beer on a shelf where the demand is not there.

“That’s a major hindrance to quality as well,” Gehl said. “You want to drink fresh beer.”

Margaret Naczek, Milwaukee Business Journal

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