It’s easy to look at a seemingly successful large brewing company, see their beers (and those of their acquired brands) on the taps and shelves all over the county, knowing they are also distributed throughout most of the country, and assume all is well. But even though the craft-beer boom is in full swing, with a record number of new breweries opening throughout the nation, the industry has never been more challenging, especially for regional breweries ranking among the nation’s largest.
Last January, Mira Mesa-based Green Flash Brewing—which also operates a satellite barrel-aging brewery in Poway as well as a production brewery in Virginia Beach, Virginia, and a soon-to-open brewpub in Lincoln, Nebraska—laid off around 25 employees. Given Green Flash’s status as the 41st largest craft brewing company in the U.S., this was big news. And so, too, is today’s announcement that the company has made the difficult decision to let go of 15% of its workforce.
That percentage equates to 33 employees. Owner Mike Hinkley says that while no Green Flash tasting room or Alpine Beer Co. (a brand acquired by Green Flash in November 2014) staff will be impacted, it will touch on other departments, primarily those serving business administration functions—marketing, events and the like—in both San Diego and Virginia Beach.
“I am greatly saddened by folks having to leave the company. We simply could not compete effectively with such broad geographic reach,” says Hinkley. “We will soon discontinue shipments to distributors that currently constitute about 18% of our wholesale trade revenue. With that reduction in revenue, we have to reduce expenses accordingly.”
Hinkley reports the company has decided to consolidate distribution, reconfiguring to best serve locales nearer to its production facilities. Moving forward, beer brewed and packaged at Green Flash’s Mira Mesa facility will be shipped to California, Arizona, Hawaii, Nebraska, Nevada, Texas and Utah, while Virginia product will ship in-state as well as to Delaware, Maryland, New Jersey, New York, Ohio, Pennsylvania and Tennessee. According to a press release, the refocus will enhance the company’s operations and ability to provide consumers with fresh beer.
When asked what factors led to the need to reconfigure distribution and consolidate Green Flash’s workforce, Hinkley responded, “The industry has continued to grow more crowded and complex in recent years. Big Beer’s acquisitions and consolidation of the biggest brewers created pressure from the top. Thousands of small brewers opening across the country created pressure from the bottom. Under those conditions, we are pulling back into the territory where we are the strongest and concentrating our resources.”
When asked about the future of Green Flash’s Poway-based Cellar 3 barrel-aged beer operation, Hinkley says it will remain open and that, months ago, the decision was made that, despite management’s belief that the beers are of high quality, the amount of beer that is packaged there and shipped to retailers will be reduced significantly.
Even in the midst of consolidation, Hinkley and company are looking to the future with optimism. The Lincoln brewpub is on-schedule with a February opening timeframe confirmed. Head brewer Jeff Hanson (formerly of Omaha’s Brickway Brewery and Upstream Brewing, and Boulevard Brewing) will create Green Flash core beers under brewmaster Eric Jensen’s supervision, as well as beers of his own devising, and that facility will eventually supply the entire state of Nebraska with Green Flash product.
Should this prove a viable business model, Hinkley says they will look to replicate it elsewhere, but there are no plans for such expansion in the immediate future. For now, the company will focus on its revised approach to distribution—it had distributed to 50 states, 35 more than the count listed on its newly announced business plan.
In 2010, an entrepreneur from north of San Diego County delivered a brewpub concept to downtown’s Gaslamp Quarter. Dubbed The Beer Co., it was a spin-off operation that failed to generate much of a reputation among San Diego’s craft-beer enthusiasts. Not even a gold medal from the 2012 Great American Beer Festival for its barrel-aged strong ale, The Manhattan Project, measured so much as a ripple in local waters. Still, it soldiered on for more than half-a-decade before closing down. Now, the space that housed it is ready to birth a second brewery-restaurant brought to San Diego by nearby out-of-towners, The Bell Marker (602 East Broadway, Downtown).
That business will debut on January 22, complete with a veteran, native San Diegan brewer at the helm. That individual, Noah Regnery hails from vaunted locally-based business, Pizza Port, where he worked at the chain’s San Clemente brewpub from 2007 to 2011 and contributed to its award-winning reputation before departing to become head brewer at Hollister Brewing in Goleta, California, a post he held until 2014 when he departed the industry altogether. His return should be highly anticipated, but as with so many developments in the suddenly complicated local suds scene, it comes with some drama. The Bell Marker is the first location south of Los Angeles for LA-based Artisanal Brewers Collective, a company established by Golden Road Brewing co-founder Tony Yanow. That in itself is not all that significant, but the fact Yanow and Golden Road partner Meg Gill sold the business to macrobeer conglomerate AB InBev in September of 2015 muddies things a bit for fans of independent craft brewers as well as members of the local industry.
Since Golden Road’s sale, Yanow (a bar owner before and throughout his tenure with Golden Road) and his ABC partners have been busy gobbling up hospitality venues throughout LA. The Bell Marker is the first to possess a brewing component and Yanow’s original venues—Mohawk Bend and Tony’s Darts Away—were craft-centric venues which were ahead of their time. Figuratively, this is not unfamiliar territory for this seemingly insatiable entrepreneur, even if it is from a geographic standpoint. How it will be received from a local population which vehemently eschewed last year’s arrival of AB InBev’s 10 Barrel Brewing brewpub in the East Village remains to be seen.
The Bell Marker houses a copper-clad, 15-barrel brewhouse that will be utilized to produce American, English, German, and Belgian beers. The opening-day line-up will include a cream ale, hefeweizen, brown ale, pale ale and IPA augmented by guest beers selected to fill in any stylistic gaps. There will also be a full cocktail program to appeal to non-beer fans. The 8,000-square-foot venue can seat 212 at a time and will be open seven days a week from 5 p.m. to 2 a.m.
When it comes to local personalities, few were as ingrained in the multi-tiered fabric of San Diego’s beer scene as Derek Gallanosa. After years spent at Karl Strauss Brewing Company, he went on to be the opening head brewer for Rancho Bernardo’s Abnormal Beer Company, while at the same time serving as an instructor for the marketing component of San Diego State University’s Business of Craft Beer certificate program. On top of all that, he was a constant fixture among beer geeks, coordinating and participating in epic bottle-share events throughout the county. Everyone knew this omnipresent fermentation fixture, which made it all the more surprising in August when he announced his resignation from Abnormal and SDSU along with plans to leave San Diego. Since then, he’s been traveling while awaiting the moment when he would be contractually able to announce plans for his future. Today is that day. Gallanosa has taken up residence in the Sacramento area to helm operations for start-up business, Moksa Brewing Company.
Located at 5860 Pacific Street in the city of Rocklin, directly northeast of Sacramento, the brewery-to-be is named for a Hindu term referring to finding one’s freedom. Gallanosa says this describes his and his partners’ intentions from a brewing perspective. They intend to break away from the norm and create their own path, exploring how to further express familiar flavors found in beer, while also striving to discover new taste sensations to showcase via ales and lagers. They will do that from a 4,960-square-foot former car dealership, roughly 1,100 square feet of which will be used for the brewery. Moksa’s 100% steam-heated 10-barrel Premier Stainless brewhouse will be fully visible through a glass wall; a setup Gallanosa refers to as a “brewquarium” like he worked within at Abnormal. Moksa’s cellar will consist of two 30-barrel, three 20-barrel and two 10-barrel uni-tanks plus a pair of brites.
Moksa has also brought on brewer Cory Meyer from popular Sacramento interest New Glory Craft Brewery. He and Gallanosa will put their heads together to determine what styles they will brew. So far they know they will craft India pale ales similar to the mixture of West-Coast and hazy IPAs Gallanosa made at Abnormal. Rich stouts with adjuncts will also figure in along with barrel-aged imperial stouts, but the sky is the limit outside of those staples. The current estimate for Moksa’s debut is December of January. Total 2018 production figures to come in around 1,000 barrels, but once everything is maximized, the business should be able to churn out 2,500 barrels of beer annually.
Yes, it is a good opportunity with the benefit of partial ownership, but what could inspire a brewer synonymous with San Diego to pull up stakes for unfamiliar territory? Love, it turns out, was his primary motivator. Gallanosa’s fiancé landed a dream job to be a State-employed archaeologist based in the Sacramento area. Upon learning this, he contacted some people he knew up north and was made aware of the Moksa project and its team’s need for a brewer. The rest is history. Even with all of the pieces falling in what would appear to be perfect placement, Gallanosa says he will miss working with the talented team at Abnormal and the restaurant that houses it, The Cork and Craft. But he is bullish about Sacramento’s burgeoning craft-beer scene (having visited the region four times in the past two years, I can attest that it is growing and an exciting place to be for beer enthusiasts) and happy to become a part of it.