The owners of established craft breweries, often an anchor of hip projects in older neighborhoods, have closed locations this summer in two major Southeast markets in a potential sign of tempered demand for developers who rely on brewpubs to headline projects.
In Charlotte, North Carolina, Catawba Brewing closed its taproom in the Belmont neighborhood on Monday after a six-year run, according to media reports. In June, Second Self Beer closed its Atlanta location in the Underwood Hills neighborhood, according to the company.
Weakness in the craft beer segment has affected commercial developers that tout taprooms as high-profile tenants in new shopping centers and entertainment districts, with some breweries recently dropping plans to open new locations. Atlanta Brewing Co. last month canceled its pending move to Lalani Ventures' Underground Atlanta entertainment district, where it planned to open a taproom.
The sector has been hurt by an oversupply of breweries, labor shortages and rising state excise tax rates. The trend has disrupted some well-established players, including San Francisco’s Anchor Brewing, which ceased operations last month. Anchor is liquidating its real estate portfolio.
Small brewers in Georgia are pushing for a new state law to allow them to self-distribute their products. Craft beer companies must rely on large alcoholic beverage distributors, such as Republic National Distributing Co. in southwest Atlanta and Eagle Rock Distributing in Norcross, Georgia, to sell products on a wide scale across the state.
To be clear, new brewpubs and taprooms continue to open in the United States, as about 600 began doing business last year, according to the Brewers Association. For instance, in downtown Atlanta, Wild Leap Brew Co. opened a taproom at CIM Group's $5 billion Centennial Yards project in the past year. And the number of active U.S. craft breweries still rose 2.4% to 9,336 in June 2023 from the same time a year earlier, according to the Boulder, Colorado-based trade group.
Facing Challenges
Even so, the number of microbreweries, taprooms and brewpubs that closed in 2022 climbed 41%, to 314, from 2021, according to the Brewers Association.
Catawba's Charlotte brewery was located in a former Kellogg plant that was renovated and rebranded as the Hub 933 retail center. Catawba invested $1 million in the 10,700-square-foot location when it opened in 2017, according to media reports.
"We are permanently closed. Thank you for the years of support," Catawba said in a sign posted on the door of its Charlotte brewpub at 933 Louise Ave., according to the Charlotte Observer.
Catawba, whose White Zombie beer is sold at Bank of America Stadium during Carolina Panthers football games, last week also closed its Wilmington, North Carolina, taproom. Catawba still operates two taprooms in Asheville, North Carolina, at 63 Brook St. and 32 Banks Ave.
Second Self closed its Atlanta taproom at 1317 Logan Circle. The company’s owners cited Georgia state law that favors wholesale distributors as the reason for the business’s failure, according to Second Self social media posts.