In February, more than a thousand people associated with Texas Craft Brewers Guild met up in Austin to drink beer, hand out awards, and talk about a growing issue in their industry: Many breweries are closing their doors.
For the past few decades, the world of craft beer has boomed, but last year, for the first time since 2005, more breweries shut down than opened in the United States – that’s according to the Brewers Association.
All this has meant that in order to keep themselves afloat, some of the breweries have gone through a process of reinvention.
Richard Santos is a writer and contributor for Texas Monthly who’s been following this story. He joined Texas Standard to discuss. Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: How big a deal is the craft brewing industry in Texas?
Richard Santos: It’s big. It’s a multi-billion dollar industry. It is one of the biggest. I think it’s the third biggest in the country both in terms of economic impact.
Why are breweries shutting down? I mean, if it’s that big… I know I see a lot of craft brews at the grocery store. A lot of Texans do, and it seems like they’re getting pushed pretty hard.
Yeah, there’s a lot of different reasons. Going into the store and seeing a lot of options is part of it. There’s some market saturation for sure.
Materials are getting more expensive. Inflation is starting to rear its head more and more. There is also really some evidence that younger people aren’t drinking beer, or even alcohol, as much as previous generations. Also just rising costs for rent and property taxes is pushing a lot of breweries out as well.
I don’t know that I heard you say “tariffs” there, but it’s my understanding that topic came up at the guild event, no?
Yeah, tariffs started a few years ago, but if they get increased, which it looks like they are going to, it’s going to be a big problem for brewers around the country.
A lot of hops and malt come from Canada, so that’s going to get more expensive. Most brewers, I know, use American-made aluminum cans and steel tanks, but that aluminum and steel is coming in from overseas, so those prices are going up and down the supply chain.
Well the big thing that your story focuses on is how in recent years some breweries have tried turning themselves into, what would you call these community centers, gathering centers? What do these places look like?
Yeah, the term “third space” comes up sometimes, a space where you can show up and maybe not even drink a beer.
You can get a taco from the food truck, you can let your kid run around the playground, you can order yourself a nonalcoholic beer and hang out for a few hours or listen to a band or there’s trivia night or there is board game night, all sorts of different things.
You know, it sounds like sort of a cross between Starbucks and an old English pub, almost.
Yeah, with a nice patio, you know, enjoy it on a spring afternoon or something. They can be pretty fun.
Well, you spent a lot of time looking into breweries around Texas for this story. Any recommendations for some spots folks should check out?
You know, one place that I didn’t get to go to that got mentioned a lot was El Paso. People are saying that El Paso’s got some really great breweries that have opened up in the past few years and that are doing good stuff. People single out Old Sheepdog and DeadBeach Brewing. Those are supposed to be really great.
I think one of things I discovered is that these breweries are all over the state, from Lubbock, Amarillo, up to El Paso, down along the coast, like everywhere.
Nobody is going to be all that far from some locals making some probably pretty interesting beer. And chances are there’s going to be some sort of festivities on the weekend, some sort of holiday occasion or festival of some kind.
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That’s interesting. What did you see when you went inside? Did you see people were actually taking advantage of these spaces? How’s this working out?
I think it’s working out, you know, this is really the model in Austin right now for sure. Most of the breweries here are going to have lots of space and lots of activities.
You know, this past Easter Sunday I was looking for an egg hunt for me and my five-year-old to go do and there were eight different local breweries – I had to go out and count them – doing egg hunts or doing Easter parties this Sunday afternoon, like on social media, and we stopped by two of them they were crowded. There were people everywhere.
They weren’t all drinking beer, certainly the kids weren’t, but there is space where you were set up and you could just enjoy the afternoon. It was actually like really pleasant
Sort of turning it into a whole family affair, as opposed to sort of a drinking hole. Do you think this is going to save these craft breweries? Is this the right recipe?
It seems to be for the moment. You know, one of the points that one of the brewers I spoke with made is that some of them sit on a lot of land because they’re in parts of the town or cities that might feel a little bit more far flung, where stuff can be linked to be a little cheaper. But after a few years, those parts of the cities aren’t so far flung anymore, partly because they are out there.
And so as those prices go up in the next couple of years, some of these bigger spots might have some trouble actually holding onto all that land. Or might be tempted to cash out and sell it if they’re sitting on land that they already own.
