Alluring as those wide-open skies and rugged vistas may be, the hardscrabble life in West Texas can be unforgiving. And so it was last year for the region’s popular and award-winning craft brewer, Big Bend Brewing Co., despite a planned expansion to San Antonio that might have turned its luck around.
In December, the 6-year-old brewery surrendered to multiple challenges and announced it was shutting down Big Bend Brewing’s hometown operations and taproom in Alpine and abandoning the move to San Antonio.
“We had high aspirations and lofty goals, and we did everything we could to achieve them,” read the Dec. 21 Facebook post announcing the closure. “We remain hopeful and are working hard to make the stoppage temporary. The goal is to come back better than ever. We are no stranger to adversity – forging a craft beer brand in the rugged frontier of West Texas is no easy task.”
Trouble first appeared on the horizon early in 2018 when Big Bend Brewing lost a capital partner, said Mahala Guevara, vice president of operations, who spoke with the Rivard Report on Monday between bottling batches of Valentine’s Day Beer for its traditional release in the nearby town of Valentine next month.
“This would be our seventh [batch of Valentine’s Day], hopefully not our last,” she said, though the brewery has announced it is suspending operations, has laid off 14 of its 16 employees, and stopped construction on the San Antonio facility.
Established in 2012, Big Bend Brewing won not only praise from beer fans but also more than 30 medals in beer competitions, including a gold medal in 2018 for its National Park Hefeweizen in the World Beer Cup. A new brewmaster, Jan Matysiak, who was trained at the Technical University of Munich in Weihenstephan, took the helm of Big Bend Brewery in 2016 after its founder, Steve Anderson, died the year before.
“We make really fantastic beer. It’s easy to underestimate the enthusiasm people have for great beer, but it still matters,” Guevara said. Another part of the enthusiasm for Big Bend Brewing, she added, comes from the fact that people love to visit scenic West Texas and the nation’s most remote brewery.
But the brewery had never managed to become cash-flow positive, Guevara said, and had struggled with product recalls and quality issues during its first few years. That led to Big Bend signing a contract with a Florida brewery for its large-scale production, a necessary but costly move and, thus, not a viable long-term plan for the 7,000-barrel-a-year brewery.
“We basically came to the understanding, as we dived further, that we were never going to be cash-flow positive if we only had the Alpine facility, and that’s when we started working on the plan for San Antonio,” she said. That was in 2016, but by 2017, the plan was moving more slowly than anticipated, Guevara added, and the brewery was still struggling with product quality issues.
Then, in early 2018, a major investor pulled out. “The [investor] ended up buying a different brewery out of foreclosure,” Guevara said. “Because it’s been a really challenging year for craft beer – some [breweries] have gone under and had their assets auctioned off by the bank – it’s a lot cheaper to buy a brewery than to invest in a growing concern. That’s what happened with the partner we lost. They ended up investing in Green Flash instead of working with us.”
Since then, the Big Bend team has persevered and, buoyed by interest from both potential investors and encouragement of devoted fans, hoped that a turnaround was possible. Market forces dictated otherwise.
“The main trend is if you’re a local brewery doing small-batch beers, with an old-school small brewpub and restaurant model – those that are still popping up – if they are well-enough financed, they seem to be doing OK as local or hyperlocal places,” said Travis Poling, co-author of San Antonio Beer: Alamo City History by the Pint.
“But the time of the large regional breweries seems to have kind of come and gone,” Poling added. “Everybody wants to be the next Sierra Nevada or Sam Adams, but … the barrier to entry is a lot higher because there’s a lot more competition not just from larger regional brewers, but also the regional breweries bought up by Anheuser-Busch, Coors, and others.”
The Brewers Association reports there are 6,372 breweries in the nation, and of the $111 billion overall beer market, craft beer accounts for $26 billion, up 5 percent in 2017. Texas ranks ninth in the country for most craft brewers with 251 total breweries, or 1.3 per capita. The industry had a $4.5 million impact on the state’s economy in 2016.
In March, Brewers Association Chief Economist Bart Watson wrote, “Compared to many parts of the U.S. economy, craft’s 5% growth rate [in 2017] is quite strong. That said, it’s probably not as strong as many breweries expected as they built their business plan.”
“It’s a difficult time to invest in craft beer,” Guevara said. “There’s been an enormous number of breweries opening in the last five years, and we’ve seen a lot of high-profile closures and reductions-in-force and layoffs. Five years ago, the market was going wild, everyone was making money, experiencing tremendous growth. Now there’s depressed investment in craft beer, so even though people are interested, everyone wants to wait out the business cycle.”
In the past year, Big Bend Brewing has hosted a number of parking lot parties at is planned brewery space at 1310 Cornerway Blvd. on the city’s far East Side. “We’ve had plenty of pint nights and meet-the-brewer events at retailers and tried to be visible in the San Antonio community,” said Guevara. “I personally moved to San Antonio and lived there full time for about a year. I’m crazy in love with San Antonio.”
The team chose San Antonio for its expansion because of the city’s size and its developing and welcoming beer scene. As plans took shape, Big Bend paid a Canadian manufacturer, Diversified Metal Engineering (DME), $1 million for brewing equipment, Guevara said.
In early December, nearly 26 months after DME’s merger with Newlands Systems, the combined company declared bankruptcy, leaving hundreds of craft brewers in limbo. For Big Bend Brewing, that means some of its equipment is completed and waiting to be shipped, some was half-built by third-party manufacturers, or wasn’t built at all. Guevara is working to contact those manufacturers to see what can be salvaged, if anything.
“Plan ‘A’ will be to find a capital partner to build in that building [in San Antonio] and the equipment will be there when it’s ready,” she said. “Plan ‘B,’ at least we’ll have the equipment on site to know what our next move is.”
For fans of Big Bend Brewing, it’s not over quite yet. Guevara said the brewery is working toward a specialty bottle release later this week. Its Russian Imperial stout beer was aged in apple-brandy barrels that once sat in the Alpine tap room.
But only 12 cases of the Brewster County Brand Stout are headed to San Antonio, with most of those set for the shelves at Alamo City Liquor at 2943 Thousand Oaks.