Off the Kuff Rotating Header Image

Town In City Brewing

Is the craft brewing business in a slowdown?

Item one.

Alluring as those wide-open skies and rugged vistas may be, the hardscrabble life in West Texas can be unforgiving. And so it was last year for the region’s popular and award-winning craft brewer, Big Bend Brewing Co., despite a planned expansion to San Antonio that might have turned its luck around.

In December, the 6-year-old brewery surrendered to multiple challenges and announced it was shutting down Big Bend Brewing’s hometown operations and taproom in Alpine and abandoning the move to San Antonio.

“We had high aspirations and lofty goals, and we did everything we could to achieve them,” read the Dec. 21 Facebook post announcing the closure. “We remain hopeful and are working hard to make the stoppage temporary. The goal is to come back better than ever. We are no stranger to adversity – forging a craft beer brand in the rugged frontier of West Texas is no easy task.”

[…]

“The main trend is if you’re a local brewery doing small-batch beers, with an old-school small brewpub and restaurant model – those that are still popping up – if they are well-enough financed, they seem to be doing OK as local or hyperlocal places,” said Travis Poling, co-author of San Antonio Beer: Alamo City History by the Pint.

“But the time of the large regional breweries seems to have kind of come and gone,” Poling added. “Everybody wants to be the next Sierra Nevada or Sam Adams, but … the barrier to entry is a lot higher because there’s a lot more competition not just from larger regional brewers, but also the regional breweries bought up by Anheuser-Busch, Coors, and others.”

The Brewers Association reports there are 6,372 breweries in the nation, and of the $111 billion overall beer market, craft beer accounts for $26 billion, up 5 percent in 2017. Texas ranks ninth in the country for most craft brewers with 251 total breweries, or 1.3 per capita. The industry had a $4.5 million impact on the state’s economy in 2016.

In March, Brewers Association Chief Economist Bart Watson wrote, “Compared to many parts of the U.S. economy, craft’s 5% growth rate [in 2017] is quite strong. That said, it’s probably not as strong as many breweries expected as they built their business plan.”

“It’s a difficult time to invest in craft beer,” [Mahala Guevara, vice president of operations for Big Bend Brewing] said. “There’s been an enormous number of breweries opening in the last five years, and we’ve seen a lot of high-profile closures and reductions-in-force and layoffs. Five years ago, the market was going wild, everyone was making money, experiencing tremendous growth. Now there’s depressed investment in craft beer, so even though people are interested, everyone wants to wait out the business cycle.”

I don’t think the cash flow problems of one brewer in a rural part of the state is representative, but I’m keeping an open mind. Item two:

“I think people think Houston is getting saturated, because they haven’t been to a big beer city,” Platypus Brewing’s head brewer Kerry Embertson told me last week during an interview. “Like, Houston’s beer scene is relatively new. Yes. There are the St. Arnold and Southern Stars that have been around forever. But there’s a bunch of people like us that have been around three years or less. There’s plenty of room to make good beer, and customers will come to your place. Especially as spread out as this city is.”

John Holler, who co-owns Holler Brewing along with his wife Kathryn, just a couple blocks from Platypus echoed his colleague’s thoughts.

“I think Houston can definitely accommodate more breweries,” Holler said, during that same interview for an upcoming story. (Sorry! No spoilers!) “The key is, you know, we can accommodate probably 20 or 30 more Platypuses or Hollers. But not 20 or 30 more Saint Arnold.”

This story was based in part on a recent NYT story on the slowdown in growth of the craft brewing industry, and noted the switch from beer to cider at Town in City Brewery. As far as Houston goes, I think John Holler is exactly right. There’s still plenty of room here for small breweries that mostly serve the neighborhoods they’re in and a few bars and restaurants in town. Very few, if any, of those places are going to grow up to be Saint Arnold, or Karbach. Nothing wrong with that, and no reason to panic. Just a bit of perspective.

A switch to cider

Some craft brewing news of note.

The taps, they are a-changin’ at Town in City Brewery, where owner Justin Engle has decided to pause beer brewing and focus instead on creating hard cider.

The folks at Town in City began building their reputation in cider about a year ago, when they launched Houston Cider Co., in a shared space with the beer-brewing operation. But this month, Engle said he decided not to renew his brewer’s permit when it expires.

“We were given legal advice that if we were to renew our brewer’s permit prior to the TABC Sunset hearings, that we may be stuck for two years in old TABC rules,” Engle said of the current fight between brewers and legislators to modernize state laws for alcohol sales. “If the new rules are passed, it would still take us two years to get to the next rules. So we decided not to take that gamble, and so we’re not going to renew right now.”

But that doesn’t mean things at the brewery on Cavalcade near the Heights are going quiet.

On Dec. 18, Houston Cider Co. took a leap that Town in City never attempted: It began canning. Now, three of the cidery’s mainstays — Dry, Cherry and Rosé — are available at Whole Foods and a few other shops across the city.

Cider production began outpacing beer production at the Heights brewery back in August, Engle said.

Still, cider isn’t exactly a sure thing — especially not when compared with the ever-growing popularity of craft beer. According to Drizly, an eCommerce marketplace for alcoholic beverages, only 7.1 percent of sales in the beer market went to cider in October, the most recent month for which data are available. At that same time, 26.7 percent of sales were for craft beer.

But there’s another way to read that: Cider isn’t as crowded a space.

See here for some background on the ongoing legislative battle, which begins again in earnest as the Lege reconvenes. I note that one of the two incumbents that CraftPAC had been supporting as of that January publication date was defeated in November (Tony Dale of HD136). Sure hope they backed some other winners, or the slog will be harder than it needs to be. As for cider, the story notes that there are only eight such breweries in the state, with Houston Cider Company being the only one in our fair city (there is another one based in Dickinson that is the nearest neighbor). Here’s a Leader News story from January about their debut.

I blogged about Lerprechaun Cider Company, the first local cider company, back in 2011; they had a product relaunch in 2015 and according to a footnote at the end of this 2017 Houstonia story were never brewing here and had stopped distributing here. Their domain has expired, which I think tells you all you need to know. That Houstonia story was about Permann’s Cider Company, which as of last July was on track to have a taproom downtown. Not sure where that stands – they have a Facebook page that’s had five posts since February and a Twitter account that hasn’t tweeted since last August. I guess this is a longwinded way of saying that I wish the Houston Cider Company good luck, and that hopefully some day they’ll be able to brew beer again, too.

My craft beer options runneth over

2015 could be a very fine year.

My personal beer map

Several local brewery construction projects headed for completion in 2015 are designed to draw in visitors as well as ship beer out the door.

The neighborhood-centric Town In City Brewing Co. in the Heights could open in February, co-owner Justin Engle said earlier this week, as workers poured and leveled concrete for sidewalks and a driveway entrance into the startup brewery at 1125 W. Cavalcade.

In addition to selling beer to other retailers, Town In City will open each Wednesday through Sunday for customers to buy beer that they can drink in its 700-square-foot taproom or 1,400-square-foot outdoor beer garden. Food trucks will be invited on-site, and there will be a dedicated secure bicycle parking area.

Engle said the goal is to create a neighborhood gathering spot like many of the breweries he enjoyed visiting when he lived in Colorado. He’d prefer a steady daily business to a more crowded once-a-week tour.

Engle and partner Steven Macalello bought a vacant lot on Cavalcade, between Main and Airline, and built a brewhouse with initial capacity of 2,300 barrels of beer a year. Watching over the final concrete pour was a major step for a project that began more than 3½ years ago.

“I’m ecstatic,” Engle said.

Meanwhile, Brash Brewing, at 510 W. Crosstimbers in Independence Heights, also could begin producing beer in February. Owner Ben Fullelove said the brewery plans to install glycol lines for chilling next week and get a final city inspection soon after. It’s licensed as a brewpub, though Fullelove said it won’t be open to the public right away.

“We are almost done,” he said in an email.

Although its beers have been brewed under contract in Massachusetts since 2012, Brash has strong Houston roots. Fullelove founded craft beer hot spot Petrol Station, and he hired Vince Mandeville, formerly of Saint Arnold, as head brewer for the local operation.

[…]

Last spring, Karbach broke ground on a $15 million project that will do more than just boost capacity.

The project, facing Dacoma on a 1.2-acre tract adjacent to the current brewery at 2032 Karbach, includes not only a new 19,000-square-foot, two-story brewery but also a public tap room and kitchen that will be open daily, plus space upstairs that will be available for special events.

Spokesman David Graham said Karbach hopes to open the space around the end of the first quarter.

I’ve highlighted these three breweries, plus Buffalo Bayou Brewing, on the embedded map. All are within about ten minutes of my house, with Buffalo Bayou and Town In City both being within biking distance. City Acres up on 59 North isn’t too far away either. I’m thinking I need to plan a few weekend beer tastings once the weather gets warm and all these places are open. Sounds like a good reason to get out of the house and hang out with some friends. For all that could be better in the world today, we do live in prosperous times.