March 28 2016 07:40 AM

Growing pains abound in a niche on the ascent

Omar Passons
Photo by Andrew Dyer

The latest tally of brewhouses in San Diego County is 121, with another 26 planned or in the works. As with so many other industries that are prone to boom-and-bust cycles, it’s only natural to wonder if San Diego is entering a bubble.

Vince Vasquez, senior policy analyst at National University, doesn’t think so. In fact, he said there is room to grow.

“Through the end of the decade it’s looking to be a good business proposition to open a brewpub in San Diego County,” he said.

One factor to consider is the county’s changing demographics. “Millennials are now the largest percentage of the American workforce, but these jobs are mostly entry-level,” he said.

Census Bureau statistics confirm Vasquez’s numbers. Millennials now also outnumber Baby Boomers in population. As the millennials’ earnings increase, Vasquez said, they will consume more craft beer.

“San Diego is growing as well,” Vasquez added. “Fifty thousand people move (here) every year. As San Diego grows, craft beer is going to be part of that. You’re going to see more demand, not less,” he said.

This year two breweries, Twisted Manzanita and URBN, ceased brewing operations. Vasquez said these failed ventures were outliers. “I don’t think San Diego is over its love affair with craft beer,” he said, noting consumption statistics in the county.

“At last measure, [craft] was 35 percent of all beer consumed in San Diego,” he said. “If you look at Portland [OR], they’re closer to 50 percent. At some point, we’re going to get to that point, if not this year, maybe next year.”

One issue that has dominated discussion locally is the impending opening of Anheuser-Busch owned 10 Barrel Brewing in East Village. The San Diego Brewers Guild has expressed concern over the blurring of the lines between macro-owned faux-brands and genuine craft beer.

At a February meeting of the Downtown Community Planning Council, SDBG president emeritus Kevin Hopkins talked about the Guild’s concerns.

“We don’t want a wolf in sheep’s clothing,” he said.

Garrett Wales, co-founder of 10 Barrel, said he understood local concerns but that his brewery had not changed since the buyout.

“(We are) still in the exact same jobs, the exact same roles,” he said. Part of the concern over the blurring of lines is that 10 Barrel will be brewing in San Diego, allowing it to claim to be crafted in San Diego. Wales said the brewpub would be “brewing local beer.”

Vasquez said beer could look to a similar industry for solutions. Napa and Sonoma Valleys enacted conjunctive labeling laws to protect the branding of their wine, with certain requirements for a bottle to claim to be from either region on its label. No similar law exists in the U.S. for beer labeling. Vasquez sees it as a potential solution to an issue permeating the craft brewing industry nationwide.

“It’d be a big industry coup if we were the ones to figure out how to solve this issue,” he said. “People will be looking to San Diego as a leader.”

Omar Passons, a land-use and construction attorney who does community development work, said in an email response that conjunctive labeling is something local breweries should consider.

“[It] has been very significant for other industries and has merit,” Passons said. “I think identifying the product as both San Diegan and independent would be a good idea, but that’s a call for the SDBG.”

Conjunctive labeling would not only benefit brewers in the local market, but also out of state, said Vasquez.

“It took Napa years to have conversations, to have everybody in the room,” he said, noting that outside of California, people are not aware of how robust the brewing scene is in San Diego.

Current SDBG president Mike Sardina said conjunctive labeling was an interesting idea, but soured on importing too much from the wine industry.

“Wine has kind of always been a little more pretentious and unapproachable,” he said.

Another issue mentioned by Sardina was the alienating effect staunch localism could have in the eyes of other beer communities.

“If we want other markets to appreciate and really love San Diego we just need to keep making great beer,” he said.

As the San Diego brewing industry continues its transition from garages to boardrooms, and craft’s footprint expands, Vasquez said locals should consider a new approach to the challenges ahead, especially when it comes to fears about big beer.

“I get the anxiety, I get the frustration, but at some point the conversation has to shift,” Vasquez said. “But I’m not sure that means it should be used as a justification for a cultural war.”

A recent industry forum at Mission Brewing was an important step in bridging the divide in the industry. “I heard the audio from Cosimo (Sorrentino’s) forum,” Vasquez said, adding that the industry needed solution-based ideas.

“Long term, how do we manage these problems?” he asked. “Not with anger.”

Vasquez said he thought the forum was an important first step. “I think we need more of them,” he said.


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