When bad things happen to good breweries

The San Diego craft beer community was rocked this week by the news two of its best small breweries are in serious trouble.

First, on Tuesday, Rachael and Matt Akin, the husband and wife team behind Benchmark Brewing, announced they are pursuing options potentially to sell their brewery for cash as they try to resolve a landlord dispute, and are at risk of being forced out of their brewing facility as soon as December 13. Wednesday, things got even bleaker, when Liz and Curtis Chism, the married duo responsible for Council Brewing Co., announced their company will close both its brewery locations and go out of business by December 15.

Ironically, the San Diego Brewers Guild recently released a study showing local craft beer sales as a whole keep rising. It said that, in 2017, brewery income exceeded $900 million, providing a local economic impact over a billion dollars (a larger amount than the San Diego Padres, as the study pointed out).

However, on the ground, economics move way faster than the gathering of statistics, and over the course of this year, cracks have started to show in the craft beer marketplace. As 2018 began, the active brewery count in San Diego county had reached 156. Despite more than a dozen new breweries opening in the months since, the end of Council Brewing could return that number to 156 by year’s end. That’s because several breweries that had previously been in expansion mode were forced to close this year, including cult favorites Intergalactic Brewing Company, ChuckAlek Independent Brewers, and Toolbox Brewing Company.

Council’s unexpected announcement particularly struck beer fans hard. It’s only been nine months since the highly regarded brewers added a second facility in Santee. That location will serve its last beers on December 14, while its original Kearny Mesa brewery will close December 15, with discounted beers and special releases as part of a day-long celebration with fans from 11am til 8pm.

In a public Facebook post, Curtis Chism explained that increased competition and the rising cost of doing business forced Council to close. “We had many significant cost increases this year (freight, labor, rent, utilities, etc.) and much lower tasting room/distribution sales due to over-saturation of the brewery market. He added, “we began taking heavy losses part way through the year. As a result, we’ve had too long of a stretch of declining sales that we can’t sustain any longer.”

Rachael Akin says Benchmark has experience similar pressures, in particular flagging distribution, with outside sales declining 50 percent the past two years. “It’s harder to sell a keg than it was five years ago,” she says, acknowledging competition has gotten tough. She points to the proliferation of social media culture as contributing to the decline in business, as capricious fans spur each other to bypass familiar brews, regardless of quality, to chase beers that are new and hard to get.

“The internet is ruining beer,” she says, citing social beer review apps such as Untappd, where user earn added cachet for every new beer they rate. “People are seeking out very specific things that are only available very specific places,” Akin adds, noting that beer buyers have followed suit, consistently expecting breweries to come up with the next new hit. “You can’t just make beer that’s good to drink every day.”

The good news is, the Akins aren’t done with Benchmark just yet. Matt Akin continues to brew as they search for a way to keep from being forced out of their brewery headquarters, and in that event, the business will continue to distribute as long as possible, and serve award winning beer out of its recently opened Bay Park tasting room (4112 Napier Street, Bay Park). They have severed ties with their previous distributor, and signed with a new one, and remain optimistic as they pursue opportunities to remain in business, staying true to their motto to promote the never boring, “beer flavored beer.”