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Massachusetts Craft Breweries Face Closure and Bankruptcy

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The last few months have proven tumultuous for a handful of Massachusetts craft breweries.

Although some beer companies in the Commonwealth have recently announced expansions and new locations, others have experienced financial difficulties.

Earlier this week, Chelsea-based Mystic Brewing announced it will close on October 19th. Meanwhile, Somerville Brewing filed for Chapter 11 bankruptcy in late September. And Everett-based Down the Road Brewing closed this summer by court order following the death of its founder.

In the Bay State, 185 craft breweries are currently in operation, including seven companies which opened in 2019, according to the Massachusetts Brewers Guild.

Guild executive director Katie Stinchon told Brewbound that the growing number of breweries in the state means existing operations experience added competition for customers, shelf space and draft lines.

“There is no common reason why we are seeing brewery closures, and we can’t comment specifically on any one business,” she wrote in an email. “Like all small businesses, challenges exist from all angles, whether it be landlord issues, financial difficulties, management challenges, or differentiating themselves to consumers.”

Night Shift Brewing co-founder Rob Burns, who serves as guild president, added that new companies today are opening to much savvier craft consumers.

“Consumers were a little bit more forgiving when our beer wasn’t perfectly executed; now, they’re not,” he said. “That only adds to the challenge.”

Had Night Shift opened in 2019 rather than 2012, Burns said his popular craft brewery might have struggled to develop a fan base. In an effort to help those breweries that are having difficulties, Burns said the guild is creating presentations and discussions about common business problems breweries encounter and how to navigate them, which the guild will share during its member conference next year.

Mystic Brewing’s Last Call

In late September, Mystic Brewery founder and brewer Bryan Greenhagen announced via Facebook that his business would be ceasing brewing operations and winding down after eight years in operation.

“It has been a wild ride from the first saison in 2011, through the barrel program highlights of Entropy and Ventus, and onto Voltage IPA and Post Apocalyptic Xanadu,” he wrote. “Personally, I am very proud of the many Mystic alumni going on to their own success as well as the incredible team of great people we have now. We are sad to wind down our work here, but we are proud of what we accomplished and know in our hearts that the impact of Mystic will remain long after the doors are closed.”

In a post on the BeerAdvocate forum, Greenhagen cited an increasingly fragmented marketplace, decreased social media reach and “a dramatic change in taproom volume” as reasons for Mystic’s impending closure.

According to the Brewers Association (BA), Mystic produced 3,015 barrels of beer in 2018, up from an estimated 1,640 barrels in 2017.

In an email to Brewbound, Greenhagen also pointed to construction near the brewery and traffic associated with the Encore Boston Harbor casino in neighboring Everett.

“Congestion was the major issue,” he wrote.

Somerville Brewing Files for Bankruptcy

Somerville Brewing, which sells beers under the Slumbrew Craft Ales brand, filed for Chapter 11 bankruptcy protection on September 27th. Court records show that the microbrewery, which was founded in 2011, owes more than $1.2 million to six lien-holding creditors.

Somerville Brewing operates two locations in its namesake Boston suburb, including a brewery and taproom on Ward Street and the “American Fresh Taphouse” brewpub in the Assembly Row entertainment district. The company produced 2,750 barrels of beer in 2018, according to the BA,

In court documents, Somerville cited “cash flow shortages” and “debt service” associated with the buildout of its Assembly Row location as reasons for falling behind on its rent payments and ultimately filing for bankruptcy.

Both Somerville Brewing locations have remained open during the bankruptcy process, co-founder Caitlin Jewell said in an email. She also expressed gratitude for the support the company has received in recent weeks.

Requests for comment from Somerville’s attorney were unreturned. A representative of its Assembly Row landlord declined to comment, citing “on-going legal matters” with Somerville Brewing.

Down the Road Closes

Down the Road Brewing, which started contract producing its beer in 2013, closed in August following the death of founder Donovan Bailey, who died unexpectedly at age 46 on July 31st.

According to the Secretary of the Commonwealth of Massachusetts’ website, a “dissolution by court order or by the SOC” was filed to dissolve Down the Road’s business on June 28 after payment for the company’s 2017 annual report did not clear. The company also did not file a 2018 annual report.

An August 10th message posted to the Everett-based brewery’s Facebook page announced the brewery’s closing.

“The taproom at Down the Road will be closed until further notice while we mourn the loss of our beloved friend and leader,” it said. “We appreciate your understanding during this difficult time for all of us at Down the Road and look forward to serving our guests once again very soon.”

Down the Road opened its Everett taproom in November 2017. The company produced 3,500 barrels last year, according to the BA.

Backlash Space Listed for Rent

The future remains uncertain for at least one other Massachusetts craft brewery. The landlord for Backlash Beer Company’s brewery and taproom space has been advertising the location for rent since midsummer.

Backlash, which started producing beer under contract in 2011, opened its $1.5 million brewery last September, behind schedule and $250,000 over its original budget, according to the Boston Business Journal. The company started construction in August 2017, with hopes of opening in November 2017.

The flyer advertising the Backlash address promoted it as a “fully built out brewer/tap room space in Boston.” The listing from Perishable Management Services remains active on LoopNet.

“This property is great for any occupant that needs to service the core city,” the flyer reads. “Breweries, pop-up restaurants, catering companies, cooking schools, cloud kitchens, and food production companies will all thrive in this dynamic space.”

The listing notes that the space has “won many architectural awards for its 2018 renovation,” and touts the facility’s amenities, including off-street parking for 22 or more cars, a walk-in cooler, patio space, proximity to downtown Boston and public transit, and two overhead drive-in doors.

Rent for the 7,750 sq. ft. space is listed at $20 per sq. ft. per year, for a total of $155,000 annually, or $12,916.67 monthly. Terms are available for five to 10 years, and the space can be available in 60 days, according to the real estate listing.

Backlash co-founder Helder Pimentel declined to comment when reached via email. Both the agent listed for the property and the building’s owner declined to discuss the listing.

Backlash produced 1,100 barrels in 2018, according to the BA.

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