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Tough to sell craft beer in Carlsbad

Failed brewery’s owner blames city, Brewery Igniter

Rawley Macias has had to work hard for Rouleur’s tasting-room traffic.
Rawley Macias has had to work hard for Rouleur’s tasting-room traffic.

With a September 30, 2017, Facebook post, Carlsbad’s Wiseguy Brewing Co. announced its “Last waltz,” with a photo making it clear that the Saturday would be its last in business.

Brewery closures in San Diego County aren’t all that rare — nine have closed within the past two years — but the timing of Wiseguy’s closing is noteworthy: it opened its doors March 18, 2017. Its life as a working San Diego brewery lasted just over six months: 197 days.

Wiseguy and Rouleur bought in to H.G. Fenton’s turnkey breweries and had different levels of success.

Wiseguy was in business so briefly that members of the local beer media hadn’t yet made the trip to southeast Carlsbad to sample their beers. Six months is usually the time it takes a new brewery to iron out any wrinkles and streamline both its brewing and retail processes — to figure out how much beer needs to be made, which styles perform well with customers, and make adjustments to opening hours as needed.

“I wish the beer was the problem,” said brewery cofounder Brett Gent a few weeks after closing, “but the location was our downfall at the end of the day.”

However, while Gent’s brewery has closed, the location remains. It sits along El Camino Real, four miles inland from Interstate 5 via Palomar Airport Road, a four-iron shot from the east end of the McClellan-Palomar Airport. Wiseguy was part of the county’s growing population of turnkey brewhouses. Gent, who started Wiseguy with his father, Tom, didn’t own the equipment he brewed on. Instead, Wiseguy leased a fully built brewery space from a business called Brewery Igniter, started by local property management firm H.G. Fenton Company in 2015.

Facebook post announcing Wiseguy’s closure

“Without Brewery Igniter,” the company’s website explains, “brewers have to finance expensive brewing equipment and bear significant construction costs, which means they carry significant debt for six months to a year before earning any revenue to pay it down.”

Brewery Igniter has built seven breweries for lease throughout the county, grouping distinct breweries in adjacent suites. Pure Project and Amplified Ale Works moved into the first pair in Miramar, while San Diego Brewing Company, Eppig Brewing, and Pariah Brewing Co. occupy the trio of spaces in North Park. Next door to Wiseguy, Rouleur Brewing Company took the second Carlsbad suite available. The brewhouses in Miramar and North Park have yet to lose a tenant, and in some cases its brewery occupants have found enough demand to maximize their brewing capacity.

That has not been the case in Carlsbad. When Wiseguy opened in March, an optimistic Gent told the Reader that Brewery Igniter’s turnkey model prompted him to move from his home in Costa Mesa to pursue his dream of starting a beer business. Between low startup costs and the evident success of other such San Diego startups, he said at the time, “That brought me down to Carlsbad.”

A few weeks after closing at the end of September, Gent was back living in Costa Mesa, left with a different view of the El Camino Real space. Via email, he called it a “terrible location” for a craft brewery. “The area we were in was a nice area,” he elaborated, “but more of a soccer mom type of community vs. a community of regular craft beer drinkers.”

Gent declined to say how much Wiseguy paid in monthly rent, but conversations with other Brewery Igniter tenants suggest the brewhouse spaces range from $4.50 to $7 per square foot. By comparison, commercial properties in high-foot-traffic areas such as North Park and downtown San Diego typically lease for around $3 per square foot. The higher cost of the Brewery Igniter spaces reflect the additional costs of purchasing and installing ten-barrel brewhouses, which start at about $200,000 for equipment.

During its six months in business, Wiseguy simply ran at too high a burn rate. “We had planned on our taproom doing a certain amount of sales each month to be able to start to hire employees to help us grow,” said Gent, “but it just never turned out that way.” So, with the help of an attorney, the Gents terminated their 12-month lease four months early, and negated years of planning by shutting their business down. “For this location at the current moment,” Gent added, “I believe the rent is definitely too high for a startup brewery.”

Gent is not alone in thinking this way, and Wiseguy has not been alone in trying to market this location. About the same time Wiseguy opened, Rawley Macias opened Rouleur Brewing in the Brewery Igniter suite next door to Wiseguy. The two businesses worked together to host a combined grand-opening party.

“Brett is right on many of those circumstances,” says Macias, who continues to serve beer from Rouleur’s business-park suite, though he doesn’t know how long he can continue to do so. “We’re really having to work for the amount of tasting-room traffic we get,” says Macias, who has been active promoting Rouleur on social media and enlisted a local PR agency to promote its opening but says it hasn’t been enough.

Like Gent, Macias only moved to San Diego within the past couple years and saw the turnkey brewery as a means of self-financing his business without accruing a lot of up-front debt. However, he agrees the high rent has proven untenable for a startup business at this location; he charges that his landlord oversold the location’s potential.

“I laid everything on the line for this brewery,” Macias says, “and a lot of that hung on what I was told by Brewery Igniter.”

Both Macias and Gent say the primary selling point pushed by Brewery Igniter agents was the traffic on El Camino Real. A traffic report conducted by the city of Carlsbad shows an average of more than 30,000 cars pass by the location on a daily basis.

“Part of our interest going into this location was we were told 30K cars drive by every day,” wrote Gent. Merely posting signs on El Camino Real would promote the breweries’ location to thousands of potential customers within the heavily trafficked business district. However, that plan, Gent added, “didn’t turn out in our favor at all.”

While the H.G. Fenton–owned business park where the turnkey breweries sit, fronts El Camino Real, the breweries themselves are tucked in the back of the park, 300 feet from the highway, and not visible to traffic. Following the cues of similarly situated breweries housed in industrial areas around Miramar and Vista, Rouleur and Wiseguy invested in eye catching signs to place beside the highway-like road.

Upon opening each day, Rouleur would plant non-branded feather banners along the highway, informing passersby, “Brewery 20 feet,” and “Turn here.” Wiseguy procured a large banner with its own branding.

However, as they soon discovered, the City of Carlsbad prohibits a long list of commercial signs along public roads. Citing concerns such as public safety and preventing “visual clutter” detracting from “community character,” Carlsbad prohibits the likes of billboards, A-frame signs, marker boards, and “most temporary signs, including but not limited to banners (i.e., feather banners).”

Not long after opening, each brewery lost its key marketing strategy. “We had a code-enforcement Prius car come by on a Sunday forcing us to take down any signage we had,” writes Gent. “The city even made us take down a banner we had on the business park’s private property because it could be seen from a public street.”

Rouleur was also forced to stop posting signs, and Macias says business immediately suffered. “It’s directly correlated with our ability to have tasting-room traffic,” he says. “When I had those signs up it directly correlated to a bump in monthly revenue.”

The brewers appealed to their landlords for help, and a Brewery Igniter spokesperson says, “We did contact the city regarding signage but were unable to persuade the city to change its sign regulations.”

However, the brewers feel as though they were misled by Brewery Igniter on the potential value of the location on a busy highway.

“That was a huge, huge selling point,” says Macias. “They sold us on how much that traffic would help us out.” He adds, “Had I known that the city was going to be strict and difficult to work with regarding signage, I probably would have been more hesitant to sign a lease for this location.”

Asked whether Brewery Igniter agents informed Rouleur and Wiseguy about Carlsbad’s prohibitive sign code, its spokesperson said, “We don’t represent or warranty what the City of Carlsbad will allow for signage and only manage signage on our property.”

Macias feels Brewery Igniter should have done more to set up their tenants for success, “When the city said no signage, they should have put up a fight,” he says, if only due to self-interest in helping the turnkey brewhouses remain appealing to prospective future tenants. Like Gent, he regrets buying into the location based on projections encouraged by Brewery Igniter.

“I laid everything on the line for this brewery, and a lot of that hung on what I was told by Brewery Igniter,” he says. “If I could go back, I would have all of those things put in writing, so shame on me for not doing that.”

In the wake of Wiseguy’s closure, H.G. Fenton has applied for and received permission to install a permanent monument sign for the business park. It will be visible from the highway and announce to traffic that there are brewery tasting rooms within. After months of fighting with the city, Macias finally received permission to resume putting up temporary signs until the new permanent sign is built. Whether it aids his business remains to be seen.

“We are sorry to see Wiseguy go,” said the Brewery Igniter spokesperson. “They were a great family. The Brewery Igniter model helps reduce the upfront capital cost and risk associated with starting a new brewery, but it doesn’t remove them entirely.” The spokesperson says Fenton has already had interest from at least two other prospective tenants to lease the vacant brewhouse.

Gent has returned to the job he had prior to launching Wiseguy. He said he misses brewing and looks forward to reviving the Wiseguy brand. He doesn’t know when that will be, but he does know it will not be in Carlsbad. “San Diego will always be a home to me,” he writes, “but I feel when the brewery goes for round two, it will be up here in Orange County.”

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Rawley Macias has had to work hard for Rouleur’s tasting-room traffic.
Rawley Macias has had to work hard for Rouleur’s tasting-room traffic.

With a September 30, 2017, Facebook post, Carlsbad’s Wiseguy Brewing Co. announced its “Last waltz,” with a photo making it clear that the Saturday would be its last in business.

Brewery closures in San Diego County aren’t all that rare — nine have closed within the past two years — but the timing of Wiseguy’s closing is noteworthy: it opened its doors March 18, 2017. Its life as a working San Diego brewery lasted just over six months: 197 days.

Wiseguy and Rouleur bought in to H.G. Fenton’s turnkey breweries and had different levels of success.

Wiseguy was in business so briefly that members of the local beer media hadn’t yet made the trip to southeast Carlsbad to sample their beers. Six months is usually the time it takes a new brewery to iron out any wrinkles and streamline both its brewing and retail processes — to figure out how much beer needs to be made, which styles perform well with customers, and make adjustments to opening hours as needed.

“I wish the beer was the problem,” said brewery cofounder Brett Gent a few weeks after closing, “but the location was our downfall at the end of the day.”

However, while Gent’s brewery has closed, the location remains. It sits along El Camino Real, four miles inland from Interstate 5 via Palomar Airport Road, a four-iron shot from the east end of the McClellan-Palomar Airport. Wiseguy was part of the county’s growing population of turnkey brewhouses. Gent, who started Wiseguy with his father, Tom, didn’t own the equipment he brewed on. Instead, Wiseguy leased a fully built brewery space from a business called Brewery Igniter, started by local property management firm H.G. Fenton Company in 2015.

Facebook post announcing Wiseguy’s closure

“Without Brewery Igniter,” the company’s website explains, “brewers have to finance expensive brewing equipment and bear significant construction costs, which means they carry significant debt for six months to a year before earning any revenue to pay it down.”

Brewery Igniter has built seven breweries for lease throughout the county, grouping distinct breweries in adjacent suites. Pure Project and Amplified Ale Works moved into the first pair in Miramar, while San Diego Brewing Company, Eppig Brewing, and Pariah Brewing Co. occupy the trio of spaces in North Park. Next door to Wiseguy, Rouleur Brewing Company took the second Carlsbad suite available. The brewhouses in Miramar and North Park have yet to lose a tenant, and in some cases its brewery occupants have found enough demand to maximize their brewing capacity.

That has not been the case in Carlsbad. When Wiseguy opened in March, an optimistic Gent told the Reader that Brewery Igniter’s turnkey model prompted him to move from his home in Costa Mesa to pursue his dream of starting a beer business. Between low startup costs and the evident success of other such San Diego startups, he said at the time, “That brought me down to Carlsbad.”

A few weeks after closing at the end of September, Gent was back living in Costa Mesa, left with a different view of the El Camino Real space. Via email, he called it a “terrible location” for a craft brewery. “The area we were in was a nice area,” he elaborated, “but more of a soccer mom type of community vs. a community of regular craft beer drinkers.”

Gent declined to say how much Wiseguy paid in monthly rent, but conversations with other Brewery Igniter tenants suggest the brewhouse spaces range from $4.50 to $7 per square foot. By comparison, commercial properties in high-foot-traffic areas such as North Park and downtown San Diego typically lease for around $3 per square foot. The higher cost of the Brewery Igniter spaces reflect the additional costs of purchasing and installing ten-barrel brewhouses, which start at about $200,000 for equipment.

During its six months in business, Wiseguy simply ran at too high a burn rate. “We had planned on our taproom doing a certain amount of sales each month to be able to start to hire employees to help us grow,” said Gent, “but it just never turned out that way.” So, with the help of an attorney, the Gents terminated their 12-month lease four months early, and negated years of planning by shutting their business down. “For this location at the current moment,” Gent added, “I believe the rent is definitely too high for a startup brewery.”

Gent is not alone in thinking this way, and Wiseguy has not been alone in trying to market this location. About the same time Wiseguy opened, Rawley Macias opened Rouleur Brewing in the Brewery Igniter suite next door to Wiseguy. The two businesses worked together to host a combined grand-opening party.

“Brett is right on many of those circumstances,” says Macias, who continues to serve beer from Rouleur’s business-park suite, though he doesn’t know how long he can continue to do so. “We’re really having to work for the amount of tasting-room traffic we get,” says Macias, who has been active promoting Rouleur on social media and enlisted a local PR agency to promote its opening but says it hasn’t been enough.

Like Gent, Macias only moved to San Diego within the past couple years and saw the turnkey brewery as a means of self-financing his business without accruing a lot of up-front debt. However, he agrees the high rent has proven untenable for a startup business at this location; he charges that his landlord oversold the location’s potential.

“I laid everything on the line for this brewery,” Macias says, “and a lot of that hung on what I was told by Brewery Igniter.”

Both Macias and Gent say the primary selling point pushed by Brewery Igniter agents was the traffic on El Camino Real. A traffic report conducted by the city of Carlsbad shows an average of more than 30,000 cars pass by the location on a daily basis.

“Part of our interest going into this location was we were told 30K cars drive by every day,” wrote Gent. Merely posting signs on El Camino Real would promote the breweries’ location to thousands of potential customers within the heavily trafficked business district. However, that plan, Gent added, “didn’t turn out in our favor at all.”

While the H.G. Fenton–owned business park where the turnkey breweries sit, fronts El Camino Real, the breweries themselves are tucked in the back of the park, 300 feet from the highway, and not visible to traffic. Following the cues of similarly situated breweries housed in industrial areas around Miramar and Vista, Rouleur and Wiseguy invested in eye catching signs to place beside the highway-like road.

Upon opening each day, Rouleur would plant non-branded feather banners along the highway, informing passersby, “Brewery 20 feet,” and “Turn here.” Wiseguy procured a large banner with its own branding.

However, as they soon discovered, the City of Carlsbad prohibits a long list of commercial signs along public roads. Citing concerns such as public safety and preventing “visual clutter” detracting from “community character,” Carlsbad prohibits the likes of billboards, A-frame signs, marker boards, and “most temporary signs, including but not limited to banners (i.e., feather banners).”

Not long after opening, each brewery lost its key marketing strategy. “We had a code-enforcement Prius car come by on a Sunday forcing us to take down any signage we had,” writes Gent. “The city even made us take down a banner we had on the business park’s private property because it could be seen from a public street.”

Rouleur was also forced to stop posting signs, and Macias says business immediately suffered. “It’s directly correlated with our ability to have tasting-room traffic,” he says. “When I had those signs up it directly correlated to a bump in monthly revenue.”

The brewers appealed to their landlords for help, and a Brewery Igniter spokesperson says, “We did contact the city regarding signage but were unable to persuade the city to change its sign regulations.”

However, the brewers feel as though they were misled by Brewery Igniter on the potential value of the location on a busy highway.

“That was a huge, huge selling point,” says Macias. “They sold us on how much that traffic would help us out.” He adds, “Had I known that the city was going to be strict and difficult to work with regarding signage, I probably would have been more hesitant to sign a lease for this location.”

Asked whether Brewery Igniter agents informed Rouleur and Wiseguy about Carlsbad’s prohibitive sign code, its spokesperson said, “We don’t represent or warranty what the City of Carlsbad will allow for signage and only manage signage on our property.”

Macias feels Brewery Igniter should have done more to set up their tenants for success, “When the city said no signage, they should have put up a fight,” he says, if only due to self-interest in helping the turnkey brewhouses remain appealing to prospective future tenants. Like Gent, he regrets buying into the location based on projections encouraged by Brewery Igniter.

“I laid everything on the line for this brewery, and a lot of that hung on what I was told by Brewery Igniter,” he says. “If I could go back, I would have all of those things put in writing, so shame on me for not doing that.”

In the wake of Wiseguy’s closure, H.G. Fenton has applied for and received permission to install a permanent monument sign for the business park. It will be visible from the highway and announce to traffic that there are brewery tasting rooms within. After months of fighting with the city, Macias finally received permission to resume putting up temporary signs until the new permanent sign is built. Whether it aids his business remains to be seen.

“We are sorry to see Wiseguy go,” said the Brewery Igniter spokesperson. “They were a great family. The Brewery Igniter model helps reduce the upfront capital cost and risk associated with starting a new brewery, but it doesn’t remove them entirely.” The spokesperson says Fenton has already had interest from at least two other prospective tenants to lease the vacant brewhouse.

Gent has returned to the job he had prior to launching Wiseguy. He said he misses brewing and looks forward to reviving the Wiseguy brand. He doesn’t know when that will be, but he does know it will not be in Carlsbad. “San Diego will always be a home to me,” he writes, “but I feel when the brewery goes for round two, it will be up here in Orange County.”

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Comments
3

is it? Burgeon just down the street, not on a major cross city street is flourishing. Beer quality, size of tap room, decor, quantity (and quality) can releases, as well as having a unique approach are larger factors than just "being in carlsbad"

Nov. 29, 2017

Remember all the cigar shops? Everyone was getting into rolling their own boutique cigars with a cigar star-up on every corner. Now there seems to be boutique brewery on every corner. A few will be here but most will disappear. Boutique breweries are a fad just like boutique cigar stores were.

Nov. 30, 2017

Th failure rate for small, startup businesses is very high, so high that it's a wonder anyone tries. So, this one isn't anything out of the ordinary. Then there is the number of these little breweries, many tucked away in hard-to-find-spots. The Vista Industrial Park has many of them, and even with directions can be a challenge to find. Just how big is the market for craft beer and for the products of micro-breweries?

I had no idea that the spot described had any breweries at all. So much of this is location, and if there's poor access and no visibility, it makes the chances of success very poor. A comment above referred to a lack of capital, and if that's the situation, it challenges even more.

Dec. 2, 2017

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