San Antonio’s Craft Beer Scene Faces Uncertain Future as Breweries Grapple with Closures and Sales

San Antonio Breweries Face Challenging Times Amid Closures and Sales

In San Antonio, the craft beer scene, once bubbling with excitement and growth, is now facing some serious challenges. The two largest breweries in the city, Alamo Beer Co. and Freetail Brewing Co., are currently exploring options to either sell or restructure their businesses in a bid to stay afloat. Their struggles are echoed by the scrappy Black Laboratory Brewing Co., which has also put its assets up for sale after shifting its focus to hard seltzers didn’t quite boost sales as hoped.

So far this year, the craft beer community has seen losses with the closure of Second Pitch Brewing Co. despite gaining national recognition for its beers, and Weathered Souls folded earlier this summer after failing to secure a new equity partner. Adding to the list, the beloved Busted Sandal Brewing Co. called it quits earlier this month. “The headwinds are real, and it’s tightening the margins for breweries,” said Matt Gacioch, staff economist for the Brewers Association, which supports independent brewers across the nation.

Rising Costs and Evolving Strategies

The challenges stemming from rising costs for ingredients, labor, rent, and transportation are persistent. Gacioch did offer a glimmer of hope, stating, “We expect macroeconomic forces to swing back around,” but for many passionate brewers, these words provide small comfort amidst fading dreams.

Despite the turbulence, it’s worth noting that San Antonio has seen an influx of openings over the past decade and a half. Back in late 2008, Freetail opened its original brewpub when local competition was sparse. Today, there are 21 breweries bustling in Bexar County, alongside others in the Boerne area, New Braunfels, and Seguin. Since 2008, the city has only experienced five brewery closures, three of which have sadly happened this year.

Brewery owners who rely heavily on sales beyond their taprooms are feeling the squeeze in today’s competitive landscape. Consequently, many are shifting their focus to onsite-only sales or adapting brewpub models to weather the storm better. Interestingly, all the breweries that opened in San Antonio in 2023 followed this onsite model, which reflects a national trend observed by Gacioch.

Evolving Business Models for Survival

The switch in tactics can be illustrated by the struggles of Busted Sandal Brewing, which lost 90% of its tap placements due to a larger distributor’s actions. This rapid loss came just three months after the change, leading co-founder Mike Diccico to grapple with the tough reality of a challenging business environment. His comments on social media reflected a broader sentiment in the brewing community: “Imagine a business where your rent and supplies continue to rise, but you must hold strong on your prices or risk losing valued customers.”

In a bid to adjust, Busted Sandal expanded its taproom hours and even rolled out new offerings such as artisan pizzas. However, these efforts weren’t enough to keep the doors open. Breweries like Gather Brewing Co. and Southerleigh Fine Food & Brewery have thrived due to their commitment to combining great food with craft beer, attracting a wider range of customers.

Looking Ahead: Cautious Optimism

Interestingly, some newer breweries like Wild Barley Kitchen & Brewery have taken a much more cautious approach, delaying their beer offerings until after they established a solid business model around food. Their method offers an example of resilience. Co-founder Holland Lawrence mentioned, “We would grow, wait a little bit and see what happens, then do it again.” This strategy enabled them to navigate the pandemic without facing devastating consequences.

Nationally, the craft beer scene has witnessed phenomenal growth from about 1,500 breweries to nearly 10,000 in the past 15 years. While some may view the situation as an industry teetering on the edge, experts like Gacioch argue it’s a sign of a maturing landscape rather than a dying industry. “We’re seeing a maturing industry,” he said, with banks still willing to lend for new breweries.

In Conclusion: A Brewing Future?

The pressures facing San Antonio breweries reflect broader trends in the industry, and even veteran establishments are feeling the burn. As owners like Eugene Simor of Alamo Beer Co. look for ways to adapt, they hold onto that deep love people have for local pubs. “There will always be a spot in people’s hearts for the local pub. I just hope that there will be locally brewed beers available to drink,” he said.

As we keep an eye on this evolving story, it’s clear that the future of San Antonio’s craft beer scene may depend on how well breweries adapt to changing market conditions and consumer preferences. With that in mind, here’s to hoping for a wave of success as these local brewers navigate through these challenging times.