May 2, 2024 - News

Recent Miami brewery closures reflect craft beer industry struggles

Illustration of a mug of beer, with a sad face in the foam

Illustration: Sarah Grillo/Axios

Greg Berbusse sees a "myriad of factors" working against Florida's craft brewery industry: inflation, narrowly written laws and a pandemic-era hit from which many have struggled to recover.

Why it matters: Locally, a handful of breweries have closed in recent months, and some say the closures mirror national trends suggesting more could be in the pipeline.

  • "Everyone is going to have to step up their game as far as advertising and getting their [brand] in front of [the public]," Berbusse, head brewer at Bay 13 Brewery and Kitchen in Coral Gables, tells Axios.

Catch up quick: Earlier this month, Union Beer Store, a beloved Calle Echo tap room, announced it was closing after seven years because of "too many obstacles looming."

  • In February, Wynwood Brewery Company — which opened in 2013 and was considered one of the first craft breweries in Miami — closed its flagship location and merged with its sister brewpub, Veza Sur Brewing Company, per the Miami Herald.
  • In November 2022, Dogfish Brewery Company in Wynwood closed because of rising rent, the outlet reported.

The big picture: Nationally, 495 new breweries opened last year while 418 closed, Axios Denver's John Frank reports.

  • In 2022, the craft beer industry fell flat, showing no growth for the first time since the pandemic.
  • But in 2023, the industry saw a 1% production decline — the worst on record since the late 1970s, data shows.
  • In Tampa, Cigar City Brewery in March closed its main Tampa facility and laid off most of its staff, despite being among the nation's top craft beer producers in 2023.

Friction point: According to Berbusse, one of the challenges facing Florida breweries is what's commonly referred to as the "three-tiered system," or the licensing agreement breweries have to enter into with distributors to sell their beer.

Case in point: If Bay 13 sold its beer to a cafe or restaurant, it couldn't simply deliver the product.

  • Instead, Florida law requires Bay 13 to sell the beer to a distributor who then sells it to the other restaurant.
  • The middleman can lead to additional fees that are often not sustainable for smaller breweries, Paloma Mejia, executive director of the Florida Brewers Guild, tells Axios.

Zoom in: In the current economic landscape, "people are weighing where they're spending their dollar," Berbusse says, and the lack of options could be negatively impacting breweries, especially smaller ones.

  • Many breweries are starting from a small, niche market already, he says. "Add in not having a kitchen, and you're not setting yourself up for continued success."
  • "The breweries having an easier time going forward are those with a tap room presence, a [steady rotation of] food trucks and any kind of following," he says.

Between the lines: Union Beer Store owners "started getting into food" because "craft beer [was] not what it was years ago," and Miami was becoming a "saturated" market, they told the Herald.

  • Many breweries are also diversifying their portfolios with seltzers and nonalcoholic beers, Mejia says.

Zoom out: The brewer's guild, he says, has been lobbying the state to "do what some 37 other states have already done" and allow brewers that produce up to a certain amount to distribute directly within a certain radius.

  • A bill pushed by the guild proposing minor reforms to the franchise law failed to find support.

Bottom line: Breweries are often considered a gathering place for a community, says Berbusse.

  • He's encouraging residents to call their representatives, invite them to a taproom and "actually do something to support small businesses."

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