Sobering times for some San Diego breweries as closures rise

After years of booming business, San Diego’s craft brewing industry saw a record number of brewers close their doors last year.

Industry experts say there are a number of reasons for the brewers tapping out, including economic challenges and changing tastes.

Athletic Brewing in Mira Mesa is a sober-curious beer drinker’s dream. Co-founder John Walker gave NBC 7 a tour of their 107,000-square-foot brewery, where they produce the No. 1 selling non-alcoholic beers in the U.S.

“It’s really exciting and awesome to see a great category grow," Walker said.

The company is in the middle of expanding operations to a second building to increase to 900,000 barrels.

Its growth comes as around 40% of Americans said they're drinking less alcohol. That trend is sobering for the craft brewing scene nationally and in San Diego.

Places like Border X in Barrio Logan and what was once One Season Brewing in the Mira Mesa area are among the record 11 San Diego-area closures in a year, according to San Diego Beer News.

“There’s been no shortage of challenges for the local breweries, and it started out with COVID," said Brandon Hernández, founder and executive editor of San Diego Beer News.

Hernández explained some of the challenges the industry is seeing.

“There's been rising real estate costs, rising costs of goods, higher wages coupled with increased competition, lower market share, and what we've seen is a little bit of a less demand for craft beer,” Hernández said.

Industry experts say part of that flat demand is because of changing tastes.

“I kind of take it back to the fact that as soon as marijuana was legalized, there was another option out there, and that kind of took away, along with alternative beverages, such as hard completely to a hard seltzer, and there's a plethora of things out there on the beverage aisle," explained Hernández.

Athletic beer is one of those alternative choices. Though it’s ridden the wave of the non-alcoholic beer category that’s grown to nearly $700 million in sales, Athletic says they’re not a substitute.

"Eighty percent of our customers still drink alcohol," Walker said. “You can continue drinking the great beer you want to drink: an IPA or a lager of sorts, and keep drinking. Maybe you quit drinking at halftime and move on to the non-alcohol."

While the industry saw closures, six new brewing companies opened last year, according to San Diego Beer News. That’s double the number in 2023. Some of the closed breweries were opened in new names.

Brewers are hoping it’s a healthy consolidation on the road to better days ahead.

“I think craft beer was always probably meant to be smaller because it's a niche thing. It's artisanal, and people like to support local and small," Hernández said.

According to the San Diego Brewers Guild, the county is home to more than 150 independent craft breweries.