About a half-dozen large blue shipping containers sit arranged in a square behind a chain-link fence on the corner of L and 19th streets in Sacramento. Stacks of wooden barrels perch on top of one container, while another houses brewing equipment. Tables and strings of lights stretch across a courtyard still under construction.
Golden Road Brewery from Los Angeles will soon open an outpost on this busy corner in the heart of midtown’s entertainment district. The shipping containers scream craft brewery, but in fact Golden Road was purchased by industry giant Anheuser-Busch InBev in 2015.
This modest-looking outdoor venue represents the first attempt by a major beer conglomerate to get in on Sacramento’s exploding craft beer scene – and a sign of the local market’s maturation. This is what California Craft Brewers Association’s (CCBA) executive director, Tom McCormick, calls the “If you can’t beat ’em, buy ’em” strategy.
California’s capital is catching up to other major craft beer markets in the state, with the number of taprooms and breweries opening in the area continuing to rise. Even with the rapid growth, experts say the market here still has room to add more players despite the recent closures of some newcomers along with Rubicon, one of Sacramento’s oldest craft brewers.
Golden Road’s brewpub will be situated about a block from the Big Stump Brewing Company and just around the corner from Rubicon, which shut down last August after 30 years.
In 2009, Sacramento had just eight craft breweries. The number has grown to more than seven times that in the last decade, with the region currently boasting 58 working breweries and another nine that are either opening soon or are under construction, according to information gathered by Sacramento Beer Frontier.
The California Department of Alcoholic Beverage Control lists at least 12 craft breweries or taprooms with pending license applications in the city of Sacramento alone.
While the Sacramento craft brewing industry “has really blossomed” in the last four or five years, McCormick said the area arrived late to the California craft beer game. San Diego has more than 170 breweries, and McCormick said it is just now seeing some signs of saturation and businesses closing their doors.
According to an economic impact study from the Brewers Association for Small and Independent Brewers (BA), California had more than 600 breweries in 2016, hundreds more than any other state. California now boasts more than 900 breweries statewide as of December 2017, according to statistics from CCBA, with 94 percent of residents living within 10 miles of a brewery.
“We’ve been on a pretty extraordinary pace over the last four, five, six years,” said McCormick. “Over that period of time we’ve seen, on average, about 100 new breweries each year.”
McCormick acknowledged the craft beer market has become more competitive and that a slowdown in the industry may start to occur in another year or two, with fewer breweries opening up and some more closing their doors. But he also said the same thing 12 months ago.
The market slowing down isn’t necessarily something negative, said McCormick, calling it “healthy stabilization of the industry.”
Those who work in the local craft beer scene say they aren’t opposed to new competitors opening up.
There is “always more room for quality beer establishments,” said Kenny Hotchkiss, co-owner of Capitol Beer and Taproom and the Capital Hop Shop. He noted that craft beer drinkers are “nomadic” and like to visit multiple venues in any given area they are visiting.
But Hotchkiss said, as the market gets more competitive, it’s going to be harder for homebrewers to transition to the professional level than it was five years ago. He said he doesn’t know if people will be able to duplicate the success of breweries like Track 7, Device and Claimstake, all of which started as homebrewers.
Where the market is seeing higher levels of saturation, according to local craft beer experts, is in the middle and upper tiers of the industry – breweries that operate regionally or across state lines. They say the ability to operate at that level has continually become more difficult. Craft brewing is exploding across the country, and other areas and states have their own local breweries.
But as long as a the primary goal isn’t to be on as many tap handles and store shelves as possible, there is plenty of room for new and current craft breweries to thrive, experts say.
Breweries have to be willing to adapt to changes in the market, evolve with consumer tastes, have a solid business plan that includes marketing, finding the right location and being able to come to the industry with a product that’s ready to impress the customer.
“We’ve created a consumer base that is really knowledgeable,” said Ryan Graham, co-owner and brewmaster of Track 7 Brewing. “They’re demanding nothing but the best product, and their tolerance for failing to meet that is really short.”
That high bar isn’t stopping new arrivals from giving it a go.
Sacramento Pipeworks, a climbing and fitness gym on North 16th Street, will eventually be adding a microbrewery to its facility in Sacramento’s River District. The brewery will be called Touchstone Brewing, after Pipeworks’ parent company, Touchstone Climbing. The operation’s brewmaster, Ryan Campagna, said the booming craft beer industry in this area is one of the reasons the company decided to bring a brewery to Sacramento.
“It’s not too terribly scary,” Campagna said.
Dozens of places have opened in the last couple of years compared to only a few having closed, said Campagna. He said there’s no reason why Sacramento, with the number of breweries in the area and the quality product currently being put out, can’t become a major craft beer destination like Portland, San Diego or Denver.
No one would bat an eye if another winery opened up in Napa, added Campagna, noting that large grocery stores have three aisles of wine to every one of beer.
McCormick echoed his comments, saying he thinks there are a lot of parallels between the beer and wine industries.
Both are bound by the same regulations, he explained, and the new trend for craft brewers is to cater to their own local city, town or neighborhood markets and sell their product on-site, similar to the business model long adopted by smaller wineries.
This is where many local craft beer experts agree the future of their industry lies, in brewers carving out a good location, opening their own taprooms, and focusing less on packaging and distribution. It cuts out the middle man and increases direct profit. Plus they say, while some small pockets have become saturated in the Sacramento region, many more are underserved and hoping for their own local brewery to come to the neighborhood.
“There are certain beer deserts within the greater region,” said Scott Scoville, co-founder of Beers in Sacramento, adding that people just want be able to walk or bike to their own local brewery.
Sacramento Beer Frontier creator Aaron O’Callaghan, echoed these sentiments. He noted that the ratio of breweries per capita in the Sacramento area is low compared to others.
California only ranks 23rd in the nation at 2.2 breweries per every 100,000 adults 21 years of age or older, according to BA statistics. Vermont has the nation’s highest concentration – with 10.8 breweries for every 100,000 adults.
Callaghan added that the actual beer is often secondary to creating an atmosphere.
“Neighborhood breweries have become informal community centers,” he said. They serve as things like “gathering places for people with families and pets; event space for celebrations and fundraisers; and meeting spots before a bike ride, hike or weekly running club circuit.”