The HVADC Cultivator
HVADC Client Spotlight:
Arrowood Farms Brewery and Distillery
Arrowood Farms Brewery and Distillery in Accord, the first recipient of funds through the HVADC Agricultural Loan Fund, grew fast from its early days as a hop farm in 2013. Owner Blake Arrowood realized right away that the Ulster County farm wasn’t to survive on hops alone and started brewing his own beer with the help of managing partner and co-founder Jacob Meglio. The line of beer was an instant success and each year the business expanded. They opened a tasting room in 2016, but even that wasn’t enough to contain demand or budding ambition.
In 2017, Arrowood, New York’s only farm brewery growing Northeast Organic Farming Association (NOFA)-certified organic hops and grains, started planning an expansion on scale with their fast rate of growth. They turned to HVADC for help crafting their business plan. Their plan was so strong that HVADC decided they would be the ideal first candidate for the HVADC Agricultural Loan Fund.
The Agriculture Loan Fund Program is one of HVADC’s newest tools to help provide access to capital for small agribusinesses that otherwise may face limited opportunities. This capital is available because HVADC has been named a designated lender to help administer a $10 million fund from the New York Job Development Authority (JDA), which operates under Empire State Development (ESD). The funding is available to assist small agribusinesses across the state access low-interest loans ranging from $50,000 to $200,000 that are distributed through eight approved third party lenders throughout the state, with HVADC focusing on the Mid-Hudson and Capital regions.
Through its Incubator Without Walls program, HVADC provided Arrowood with the expert services of business advisor Brian Zweig. Working with Zweig on their plan, and through HVADC’s funding program, Arrowood was able to secure the JDA loan and begin their ambitious but attainable goals.
The brewery’s original three-barrel system was at capacity and unable to support demand. The new project involved more than quadrupling production capacity to keep up with projected sales and to reach a sustainable volume. The expansion included a turnkey 50 by 110 foot, ten-barrel brew house, blending and storage tanks, a grain silo, water tanks, storage barrels, kegs, an industrial keg washing machine, a forklift, lab equipment, and computers. Along with the expanded production facility the brew house also includes the farm’s amazing Apiary Kitchen+Bar restaurant. The taproom features over fifteen draft beers to choose from, as well as growlers, bottles and can to go. And, given its picturesque location situated between the Catskill and Shawangunk Mountains, Arrowood offers an event venue and services for weddings and other celebrations.
“Arrowood was a perfect first candidate for our Agricultural Loan Fund Program. They are the type of new business that makes the Hudson Valley’s economic ecosystem vibrant and enduring. Young people with new ideas and bold visions are transforming farming through diversification and technology,” said Mary Ann Johnson, HVADC Deputy Director. “We are so happy that our involvement in Arrowood’s planning helped ESD see the many merits of the project and award this JDA loan, a welcome and effective new funding stream.”
With the expansion of production capacity and its marketing plan, Arrowood will be able to profitably grow sales exponentially and hire an additional 12 full-time-equivalent employees by 2023. It will also attract an additional 12,000 visitors to the farm annually, according to its projections. In addition to activities on the farm, Arrowood also operates The Outpost in New Paltz, which features a rotating selection of the brewery’s beers, local hard cider, other beverages and small bites.
“Mary Ann and Brian helped tremendously through the process. HVADC’s business planning was critical. We couldn’t have done it without them.” Blake Arrowood said.
Blake is originally from North Carolina Farm Country. His grandparents came from a farming tradition and he had a dairy just past his back yard. Despite his love of agriculture he went to school for advertising and communications, started working in the field and immediately hated it. So he traveled for a while, teaching English overseas. He came back, intending to settle into the New York City media world but he knew immediately it didn’t suit him. He learned about the Hudson Valley’s “undercurrent of agriculture being revived by young energy,” as he put it, and moved up to the area to begin a new agrarian chapter. After interning at the Hudson Valley Seed Library, the opportunity to start the hop farm emerged and the ball began rolling fast. He soon partnered with Meglio and together they have brought about every new step in the business to marked success.
The Arrowood Apiary Kitchen+Bar opened this year and while opening a restaurant during the pandemic is more than a little complicated, the farm’s abundance of outdoor space made bucolic, socially-distant outdoor dining a convenient and elegant solution.
“It’s been tremendous through the pandemic being able to spread everyone out,” Blake said. “But you can have three wonderful months followed by three bad ones.”
Now that the weather is getting colder and outdoor dining is a dwindling option Arrowood is hoping their renovated website will help further increase their direct sales business and keep their upward trajectory chugging through winter.
While Arrowood was thrilled to receive the JDA funding they requested. The loan only paid out after completion of the project and a subsequent audit. The construction timeline was understandably impacted by the pandemic so HVADC also helped the Arrowood secure a bank loan to provide vital gap funding.
“It’s been nutty but the latest round of funding HVADC helped us secure made it possible,” Blake said. “It made all the difference for our survivability.”
In addition to being a farm brewery Arrowood is also a farm. Operation has been small but diverse; grazing a neighboring farm’s sheep and razing pigs and chickens, the compost from whom is recycled into crop production. They are aiming to expand farming operations in the coming years, hosting other’s on unused acreage and developing produce and animal programs specifically for use in the restaurant so the menu can be as farm to table as it gets. Or would this count as bringing the “table to farm?”
In addition to all this, Arrowood also launched their operation’s small-scale distillery on October 1, producing vodka, gin and bourbon using barley, wheat, rye and corn all grown in Accord. They sold out of their gin almost immediately. Their first batch of bourbon was being released in the beginning of December.
To learn more about the HVADC Agriculture Loan Fund, visit https://www.hvadc.org/hvadc-agriculture-loan-fund-program.