Yankee Brew News Archive

Brewpub Closings in New England: No, Nay, Never?

Originally Published: 01/96

By: Dann Paquette

Perhaps one of the most intriguing aspects of the New England brewing scene is that brewpubs thrive here like no where else in the country. Each year since 1989 between five and six percent of operating brewpubs close their doors nationwide. In fact during the five year period from 1989 to 1994 fifty-two brewpubs closed their doors.

Yankee Brew News repeatedly offers its opinion on where it thinks the industry is going and has speculated on future growth at every curve in the road. It seems that each time we think that we've hit the "final" spurt of growth another bigger growth spurt appears. 1991 looked like an impressive year in terms of brewpub openings but then 1993 became our yardstick.

But who knows? As we enter a new era in New England, that of the brewpub chain, we're liable to see some things we haven't seen before. Perhaps we'll see a few closings.

We can now confidently say that between the brewpubs that are operating and the ones that are presently under construction there are fifty brewpubs in New England (give or take two).

Since 1985 three hundred and eighty-four brewpubs have operated in the United States. Fifty-two of them have closed. That means that 13.54% of all American brewpubs that have opened their doors have closed. Apply that number to fifty New England brewpubs and you get 6.77.

So if New England followed the national average about seven brewpubs would have closed already--while in reality not one New England brewpub has ever closed. Why?

Why is New England an unusually healthy climate for brewery/restaurants? Is it because the industry is still young here? Well we're approaching eight years since our first brewpub opened in Boston. There are much newer markets that have had closings already.

Is it because of population? Or is it something less tangible?

I called the Institute for Brewing Studies in Boulder, Colorado and they tell me that the top two reasons for brewpub closings are first "undercapitalization" and then "mismanagement". Two good reasons for us to stop speculating here. Both of these issues are virtually invisible to the public.

However, Greg Noonan, who has opened a couple of northern New England brewpubs, the Vermont Pub and Brewery and the Seven Barrel Brewery, points to the fact that no one city has been oversaturated with brewery restaurants. The breweries are still supported by population, that's why they don't close.

"But I wouldn't want to be the second or third brewpub opening in Portland (Maine)" said Noonan. "And I wouldn't want to be the second brewpub coming into Burlington (Vermont)."

Really? Noonan's opinion is in contradiction to what we in the local industry have been thinking about those cities for a few years now. But take the nine hundred barrels that Noonan 's Vermont Pub & Brewery sells in a year and divide that by two if someone else builds a brewpub. There alone is a good reason not to be opening a brewpub across town.

In Portland, Maine two new brewpubs (Stone Coast Brewing and The Hedge Hog Brewpub) will be opening downtown and creating what has been described as a "miracle mile of beer". But take the sixteen hundred barrels or so that Gritty McDuff's in Portland sells and divide that by three. Sounds like some serious competition in Portland huh?

You're right, the math in those two scenarios isn't based on anything. In fact all three brewpubs could be full to the ceiling every day. After all Brattleboro, Vermont with a population under 10,000 boasts two, albeit small, brewpubs.

I remember reading about a group of researchers who were studying Boston's Central Artery project and concluded that no matter how wide the roads are, how easy the changeovers are, the Boston traffic will suit to fit. In other words there's some kind of innate human comfort zone. There's also a widely believed marketing rule of thumb that one novel product can create a demand that will support competition.

Perhaps the New England beer community will suit to fit. After all the craft brewing market share is still growing noticeably. And we at Yankee Brew News do submit to you that any brewpub located in Portland or Burlington can be classified as a "innate human comfort zone".

But seriously brewpubs do close. Recently a brewpub I go to when I visit my in-laws in the Cleveland area closed and there were no other brewpubs within miles of it. Was it mismanaged? Was it under financed? Well it's hard to tell isn't it?

It's going to happen. Brewpubs will close in New England. We're not immune. Just think of it this way. But for the grace of God we've got those seven.

PULL QUOTES:

If New England followed the national average about seven brewpubs would have closed already.

The top two reasons for brewpub closings are first 'undercapitalization' and then 'mismanagement'.