The secondhand brewery market

Closures and divestments create low-cost opportunities

Monkey Paw will change hands for the second time in a year
  • Monkey Paw will change hands for the second time in a year

Monkey Paw Brewing is for sale, by its second owner. Less than a year after founder Scot Blair sold a majority stake of his award-winning East Village brewpub to Coronado Brewing Company, Coronado announced via press release this week that it will unload its new subsidiary and its 10-barrel brewhouse to, “refocus on its core business objectives.”

It’s not the only one. The secondhand market for breweries has practically become a fixture of the San Diego brewing sector.

The past year has been rough on the local beer business, with more than a dozen breweries closing, or, in the case of Green Flash Brewing, foreclosing. But when a faltering market closes a door, another business opens a window of opportunity. Due to the high cost and time needed to build and license a brewery, a turnkey brewhouse can look very appealing to startup beer businesses or one looking to expand. Most do not stay on the market long.

Vista’s SpecHops Brewing shut its doors at the end of December, and by mid-March, Beach Grease Beer Co. had already opened in its place. Beach Grease founder James Banuelos had planned to build a brewhouse from scratch. But when SpecHops became available, “We fast tracked the success of the company by at least two years,” he said at the time.

A similar story played out last fall, when startup Savagewood Brewing Company took over the location of O’Sullivan Bros. Brewing Company. Savagewood founder Darrel Brown was content to contract brew while he researched brewery properties and costs, but couldn’t resist the chance to become an active brewery owner overnight. “Turnkey is definitely 99-percent of why we're here,” he said, “It's beer today, not beer in six months.”

Next up will be a new business, Creative Creature Brewing, set to launch at the former URBN St. Brewery in El Cajon this summer.

Out of town brands are pursuing the second-hand option as an affordable means to enter the San Diego beer market. Earlier this year, a Los Angeles-based brewpub group opened The Bell Marker at East Village’s defunct The Beer Company, and Torrance-based Absolution Brewing Company became at least the fourth operator on the former site of La Jolla Brew House.

In the case of Kearny Mesa’s Council Brewing Company, another brewery’s closure enabled the 3-barrel nanobrewery to more than triple its brewing capacity. In March, Council claimed the 7-barrel brewhouse of Santee’s former Finest Made Ales, quickly renovating its tasting room and opening for business there in mid-May. Cofounder Curtis Chism said that he and partner Liz Chism had been looking to grow into a 7- to 10-barrel brewhouse for all of last year, but quickly realized that, due to the rising rate of closures, they could save 60- or 65-percent the cost of building one by taking over an existing space.

“It definitely factored into our thinking,” Chism said, “It was really evident that there would be more brewhouses coming available.”

Along with Monkey Paw, Cellar 3 —Green Flash’s former wild ale brewhouse in Poway — went on the market after the foreclosure, and Constellation brand, Ballast Point Brewing Company, will reportedly divest it Scripps Ranch production facility after moving out this summer.

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