As we begin a new year, it’s worth taking a moment to consider the state of the beer industry and where it’s headed. The total volume of craft beer produced increased 5 percent through the middle of 2018, according to the Brewers Association, but that pace pales in comparison to the double-digit growth that seemed unstoppable a few short years ago.
Breweries continue to open, though not with the same frequency they were a few short years ago. New and established breweries alike are all vying for the same shelves and tap handles to move their product, or investing in their own taprooms to increase their on-premise sales.
And breweries are closing, too: 2018 saw several breweries close their doors or foreclose, including Mystery Brewing Co. here in North Carolina and well-known brands like Smuttynose Brewing Co. in New Hampshire, Council Brewing in California and the Green Flash Brewing Co. facility in Virginia.
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Today, we’re sharing sad news. After almost seven years, Mystery Brewing Company will be closing its doors at the end of the day on October 31st. . . This has been an incredibly difficult decision. We’ve always been undercapitalized, and it’s been a struggle to operate for some time now. We’ve suffered a string of pretty bad luck over the past couple of years: equipment failures, construction and permitting delays, storm-related outages and losses. The end result is that we can no longer afford to operate. . . Over the course of the next week, we’ll be doing the best we can to celebrate everything we love about Mystery to give it a fond farewell, releasing some favorite old beers that we’ve had kicking around in the back of the cooler, and trying to say goodbye the best way we can. If you get a chance, please come and visit us, say hi, and enjoy a pint, a meal, or a night of music for the last time. The Wiley Fosters – our amazing house band – will be playing our last show at the pub on the evening of October 27th. . . We’re enormously proud of the community that has grown up around Mystery, and we’ll miss being here every day for Hillsborough. . . With one last raised glass, . . Erik Lars Myers Founder, Brewer, CEO Mystery Brewing Company
What will all of this mean for our local market, and for the craft beer industry on the whole in 2019?
It means we’ll likely see fewer big beer acquisitions. Anheuser-Busch InBev’s shopping spree approach of buying up breweries seems to have run its course. It’s more likely that in the coming year we’ll see craft breweries purchasing other craft breweries, or breweries selling a portion of their business to private equity.
Brewing is a very capital-intensive business; it takes money to make money. Even when the demand is there, it can take hundreds of thousands of dollars in equipment just to meet that demand. In recent years, many breweries in Charlotte and across the country have built “production breweries” — bigger facilities with larger brewhouses.
Even breweries that are in-demand will likely hesitate to undertake similar expansions given the drastic change over the last few years, and so I predict we’ll hear less about production breweries in 2019. But that doesn’t mean breweries won’t open smaller breweries or tasting rooms in locations where it makes sense.
In addition to expanding brewhouses, many breweries have expanded their distribution range well outside Charlotte throughout both Carolinas and beyond. Some have the reputation to support such a move, but still face tough competition from breweries in those markets.
In the coming year, I think more breweries will pull out of these areas and instead double down in the Queen City (which is admittedly quite competitive itself). Charlotte’s breweries won’t serve their home city exclusively, of course, but I suspect many will refine their range.
Those are things I think we’ll see less of in 2019. What will we see more of? In a word, innovation. As the market gets ever more crowded, breweries must take extra steps to stand out. Many of them will do this with more limited releases of bottles and cans, in addition to maintaining interest in their year-round and seasonal beers.
And many of those beers will no doubt continue to be adorned with the Brewers Association’s independent craft brewer seal. Independence is a point of pride for many small brewers and some consumers as well.
The Brewers Association defines a craft brewer as one that is independent (meaning no more than 25 percent of the brewery can be owned by a business that isn’t itself a craft brewery) and small (producing fewer than six million barrels in a year). Last month, the organization removed the “traditional” aspect from its craft brewer definition to accommodate brewers who make beverages other than beer.
Boston Beer Co. — makers of Samuel Adams as well as Twisted Tea, Angry Orchard and Truly Spiked & Sparkling — is one of the biggest such examples, but small breweries are also diversifying their portfolios with non-beer offerings.
Brizo, NoDa Brewing Co.’s new line of spiked seltzer, is now available on draft, with cans to come. The Unknown Brewing Co. moves a lot of cans of its craft ginger ale, and while that one doesn’t contain alcohol the spirits that will soon be coming out of the brewery’s new on-site distillery certainly do.
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ICYMI: @brizoseltzer, Charlotte’s first craft spiked seltzer, is officially out in the market! Look for these tap handles at your favorite bars/restaurants, and if you don’t see them, be sure to mention #BrizoSeltzer to your bartender/server! ✨ Follow @brizoseltzer to get all the updates on our natural, low calorie and carb spiked seltzer. ✨
If breweries can make additional “craft” beverages using similar ingredients, equipment or processes without taking away from the beer, then they might find a new profit stream or a way to weather the storm should the beer side slow.
Breweries can also weather the storm by sticking together. No matter how crowded the market, most brewers that I’ve spoken with insist there is always room for more good beer. Look for breweries across the country to unite through local guilds or organizations, as many of Charlotte’s breweries and beercentric businesses have done through the Charlotte Independent Brewers Alliance.
Despite a more challenging climate, new breweries will continue to open.
This coming year should see the following open in the Charlotte area: Armored Cow Brewing (8821 JW Clay Blvd.), Lower Left Brewing Co. (4528 Nations Crossing Road), Middle James Brewing Co. (400 N. Polk St., Pineville), Petty Thieves Brewing Co. (1110 N. Graham St.) Protagonist Clubhouse in NoDa (3125 N. Davidson St.), Southern Solstice Brewing (1200 S. Graham St.) and Southern Strain Brewing Co. (165 Brumley St., Concord).
And existing breweries will continue to expand: Wooden Robot Brewery is on track to open its new brewery in NoDa this year, and The Olde Mecklenburg Brewery is finalizing plans for a Cornelius location.
And what of the most important thing, the beer itself? If you’re a fan of big, juicy New England-style IPAs, rest assured they won’t be going anywhere anytime soon. The lager renaissance has been underway over the last few years, and many small brewers are now nailing great pilsners and other easy-drinking styles.
While this might lead to more “clean” beers of all kinds (I’m looking at you, English brown ales), sour beers are still en vogue thanks to many local breweries expanding their sour programs. Ales brewed with different varietals of grapes or with grape must are also catching on, and blurring the line between beer and wine.
So while there are some very real challenges facing brewers this year, there are also plenty of things to be excited about — especially here in Charlotte.
Editor’s note: This story originally appeared in The Charlotte Observer.