A rough year for craft beer
Plus: 10 uptown towers are mostly empty; How sports gambling would work in N.C.; New CMS execs; Fort Bragg renamed; Former Hornets coach lands new job; Brit bewildered by suburban Charlotte life
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As competition heats up, growth slows at Charlotte’s biggest brewers; ‘The gold rush is over’
Charlotte’s breweries can still draw big crowds, like at Olde Mecklenburg Brewery’s beer garden. But new numbers show the industry’s growth is slowing in Charlotte and around the country.
by Tony Mecia
Charlotte is home to more than 40 breweries, with more on the way. Are we approaching a saturation point? Is Charlotte becoming over-breweried?
After more than a decade of rapid brewery growth, new data suggests the answer could be “yes.”
Charlotte’s big three brewers — Sycamore Brewing, NoDa Brewing and Olde Mecklenburg Brewery, which account for more than half of the beer made at Charlotte breweries — collectively produced less in 2022 than they did in 2021, reversing a longstanding trend, according to a Ledger analysis of figures from the Brewers Association, a trade group.
Charlotte’s dozens of local taprooms are still drawing crowds of thirsty drinkers. Many breweries still increasing production, and there are still opportunities for new neighborhood watering holes. But with craft beer consumption nationally leveling off, the new numbers suggest that opening a brewery with dreams of becoming a regional or national brand is a hangover from an earlier era.
“The local taproom guy can make a good living, along with having reasonable expectations about their ability to grow,” said Tim Kent, executive director of the N.C. Beer & Wine Wholesalers Association. “But it’s certainly more challenging now. The gold rush is over.”
The main growth challenge is that distribution to stores is getting tougher, because there are so many beer-makers competing for limited grocery shelf space.
“You walk into a grocery store, and you go down the beverage aisle, and geez, how many brands have you got? How many IPAs are out there?” Kent said. “… The bottom line is, the ability for someone to become the next Sierra Nevada or Boston Beer — that ship has sailed.”
More closings predicted: Nationally, the Brewers Association says the pace of brewery openings is slowing, and it anticipates more closings are on the way: “This is not a sign of a collapsing market or a bubble bursting, but the realization of a longer trend toward a more mature market,” the association’s chief economist wrote last month.
Instead of expanding their distribution to new territories, Charlotte’s biggest breweries are looking at other ways to continue growing. Some plan to open new taprooms, or to focus on beefing up beer distribution in markets they already serve.
◼️ At Sycamore Brewing, Charlotte’s largest brewer, owner Sarah Brigham says that “2022 was undoubtedly a challenging year for craft beer” and that Sycamore has “not been immune.” Sycamore brewed 28,000 barrels of beer in 2022, up 1% from a year earlier, following increases of about 40% or more in each of the previous four years.
She was unavailable for an interview but said in an email to The Ledger: “Our plans are to go deeper in our existing distribution footprint with an intensified focus on our established territories. Last year saw us drop a few markets in order to maximize profitability.”
Sycamore is also looking into opening additional taprooms, she said. Today, it operates just one, in South End. It moved next door to a new location on Hawkins Street and reopened last week, to much fanfare.
Asked how hard it would be to open a brewery now compared with when Sycamore started in 2014, Brigham said: “We wouldn’t want to develop an infant beer brand in the current environment. Of course, it can be done, but it has never been harder and more expensive.”
◼️ At NoDa Brewing, which surpassed Olde Mecklenburg Brewery last year to become Charlotte’s No. 2 brewer by volume, director of strategic development Jacob Virgil says “last year was quite tough, honestly.” Grocery store sales were challenging because of inflation and limited shelf space. Bars and restaurants weren’t fully recovered from the effects of the pandemic. And people visiting taprooms had more options close to home.
For some beer-drinkers, the mentality seemed to be, “Why drive across town to go to a brewery we really like when there are seven on the way there?” he said. NoDa, which has taprooms in NoDa and off North Tryon Street as well as the airport, brewed 18,688 barrels last year, an increase of 2%, down from 14% growth in 2021.
NoDa isn’t planning to add taprooms but is looking at “doubling down on the ones we have” — turning them more into destinations with events like music festivals and 5K races, Virgil said. And it is shaking up its offerings at grocery stores, with innovations such as a 12-pack of its popular Hop Drop ’n Roll IPA and a new ale in partnership with Cheerwine.
Other beer facts based on new data:
Olde Mecklenburg Brewery, which was dethroned by Sycamore as Charlotte’s largest brewery by volume in 2021, fell to No. 3 last year. It made 16,000 barrels of beer, down 6%. It is planning new locations in Ballantyne, Mount Holly and Cornelius.
Legion Brewing moved up to No. 4, growing production by 47%, to 10,799 barrels.
The majority of Charlotte breweries made fewer than 2,000 barrels in 2022. Most increased their production.
The largest brewing operations in the state are New Belgium and Sierra Nevada, which each brew more than half a million barrels in the Asheville area and are owned by out-of-state companies, according to the N.C. Beer & Wine Wholesalers Association.
The state’s largest N.C-owned brewery that makes its beer here is Highland Brewing Co. of Asheville. It made about 38,000 barrels in 2022, down 15%.
Today’s supporting sponsor is Landon A. Dunn, attorney-at-law in Matthews:
Whoa: At least 10 uptown office towers are more than 50% empty
It’s been no secret that the office market has fallen on hard times, but you might not have realized just how empty some of these uptown office towers really are.
According to figures we requested last week from real estate data provider CoStar, there are 10 office towers uptown that list more than half of their square footage as available for lease. And that doesn’t include office towers that are not leasing their mostly empty space, such as Two Wells Fargo, which will soon be empty but isn’t being leased, said Chuck McShane, CoStar’s director of market analytics for the Carolinas, in an email to The Ledger.
There are another 10 uptown office buildings that are between one-quarter and one-half empty, CoStar’s data shows.
Vacancy rates in uptown have risen and companies have consolidated space because of hybrid and work-from-home arrangements that remain popular after the pandemic. Some companies have also left older buildings in the center of uptown for newer space in South End or on the South End side of uptown.
Office brokers are fond of saying there is a “flight to quality” and that new office space is leasing well, while decades-old buildings are struggling to attract tenants. Still, no new office buildings have broken ground in the last year, as higher-than-usual interest rates, construction costs and office vacancy rates have led developers to say, “Let’s just wait a little bit.”
Coincidentally, the Charlotte Business Journal also thought to look into this issue last week, with a cover story in its edition on Friday entitled “Looming Trouble” (subscriber-only). It quoted several industry officials expressing characteristic Charlotte optimism, including one who told the publication that “the situation uptown is not as dire as it may seem.”
Ledger’s take: Maybe “dire” isn’t the right word, but having so many majority-empty uptown office towers seems like a huge problem — both for the owners of those towers, and for an uptown that wants to continue to be a vibrant area. There’s no obvious policy solution. We understand many of the towers are unsuitable to be converted into apartments, for instance.
Like many of Charlotte’s problems, this is a struggle for many urban centers around the country. —TM
Let the betting on games begin: N.C. on verge of approving sports gambling; Details on what, when and where
The General Assembly is expected to give final approval this week to a bill that would legalize sport gambling in North Carolina — both on mobile phones and at in-person betting rooms at pro sports venues.
House Speaker Tim Moore said he expects the House to agree to minor changes made to the bill by the Senate, which passed it last week by a bipartisan vote of 37-11. The House passed a similar version in March, 64-45. Gov. Roy Cooper is expected to sign it.
Here are the highlights of how it would work:
Where would there be gambling? The bill would allow the state’s Lottery Commission to grant 12 operator licenses, which could be used for mobile betting (on your phone, like with FanDuel or DraftKings) and in-person betting. In the Charlotte area, the in-person venues could be at Bank of America Stadium, the Spectrum Center, Quail Hollow Club and the Charlotte Motor Speedway. Typically, 80-90% of betting is on mobile apps.
What kind of gambling? It would allow bets on professional, college and other sports, including horse racing and the Olympics. There’s no betting on youth sports. It would allow “single-game wagers, teaser wagers, parlays, over-under, moneyline, pools, exchange wagering, in-game wagering, in-play wagers, proposition wagers [and] straight wagers.”
When would it start? Sometime between Jan. 8, 2024, and mid-June 2024. The Lottery Commission would decide.
How much would operators pay? Operators would pay $1M for a five-year license, plus 18% of gross receipts to the state. N.C. figures it could generate $100M a year in tax revenue by 2027.
Where would that tax money go? It would be used for a variety of purposes, including battling gambling addiction, to certain state universities, to the state’s general fund and to a fund to attract major events and games. (Thought bubble: Could that money be used to help attract the pro tennis tournament under discussion for the River District?)
Related Ledger article:
“Game on: How sports gambling would work in N.C.” (June 6, 2022)
More details on new outside faces joining CMS’ top leadership
After our item on Friday that briefly mentioned management changes at Charlotte-Mecklenburg Schools, several readers contacted us asking for details.
A press release Thursday from CMS announced “significant changes to its executive leadership team,” which were approved at a special CMS board meeting on Wednesday. They included the appointment of:
Ingrid Medlock as chief of staff, effective July 10. Medlock serves as the chief human resources officer in Chapel Hill-Carrboro Schools.
Melissa Balknight as new deputy superintendent, effective Aug. 2. She is the associate superintendent in Gaston County Schools.
Kecia Coln as chief human resources officer, effective July 12. She is the executive director of human resources in Gaston County Schools.
Kelly Kluttz as chief financial officer, effective July 10. She is chief financial officer for Rowan-Cabarrus Community College.
Angie Wood as associate superintendent of human resources, effective July 10. She is the assistant superintendent of human resources in Stanly County Schools.
“We are thrilled to welcome these exceptional leaders to our executive team," Superintendent Crystal Hill said.
There were no mentions of departures in the news release — but that information is not something that would usually be in a news release.
The school board selected Hill as superintendent on May 19, less than two weeks before these appointments were announced. She either hires amazingly fast or had a hunch she might get the job and had some folks ready to go. —TM
🍎 STICK WITH THE LEDGER FOR COVERAGE OF TOMORROW’S SCHOOL ASSIGNMENT VOTE
The big CMS school board vote on south Charlotte school assignment is scheduled for a meeting that starts Tuesday at 6 p.m. The Ledger has been on this story like white on rice since Day 1 — we literally broke the news in 2019 about CMS buying the high school site that is now causing a reshuffling affecting 27 schools attended by tens of thousands of students. So we’re not stopping now.
We’re reviving our popular LIVE BLOG feature which we tested a couple weeks ago at the public hearing. And we’ll of course have thorough and complete coverage in Wednesday’s Ledger (that’s a members-only day 🔒 — if you’re not a paying member, join if you want to read it). Paying members will also have the ability to comment and ask questions on the LIVE BLOG.
➡️ To follow along tomorrow’s meeting in real time, go to our “CMS Decision Day” blog. It will rev up Tuesday at 6 p.m. The meeting could go late. We’ll send a reminder tomorrow afternoon.
You might be interested in these Charlotte events
Events submitted by readers to The Ledger’s events board:
WEDNESDAY: Charlotte Area Chamber of Commerce Young Professionals, 5-7 p.m., Hi-Wire Brewing. Come to an informal networking event aimed at bringing together “young professional-minded” people who are looking to meet new people, learn new skills, and explore the Charlotte area. Don’t forget your business cards! Registration required. $15 for members, $25 for non-members, includes 2 drink tickets.
◼️ Check out the full Ledger events board.
➡️ List your event on the Ledger events board.
In brief:
Red Ventures settles federal case: Internet marketing company Red Ventures agreed to pay $2.75M to settle claims from the federal government that its MyMove subsidiary improperly withheld money owed to the U.S. Postal Service when handling change-of-address forms. U.S. Attorney Dena King said in a statement: “This settlement demonstrates that those who cheat the government will be held accountable.” Indian Land-based Red Ventures did not admit wrongdoing. (Observer)
Remembering fire victim: Demonte Sherrill, one of two men killed in last month’s SouthPark fire, was remembered at a memorial service Saturday as someone who liked to fish for bass on Lake Norman, play practical jokes on his friends and care for his four children. The 30-year-old Kannapolis native wanted his kids to go to college. (Observer, subscriber-only)
New job: Former Charlotte Hornets coach James Borrego is being hired by the New Orleans Pelicans as an assistant coach, unnamed sources told ESPN.
Council updates: City Council committees are expected to receive updates today on the Charlotte Area Transit System, potential changes to rules for duplexes and triplexes in neighborhoods and the old Eastland Mall site.
Fort Bragg renamed: North Carolina’s Fort Bragg was officially renamed “Fort Liberty” on Friday. The U.S. Army base outside Fayetteville was originally named in 1918 for slave-owning Confederate Gen. Braxton Bragg. (Associated Press)
Taking stock
Unless you are a day trader, checking your stocks daily is unhealthy. So how about weekly? How local stocks of note fared last week (through Friday’s close), and year to date:
Loves me some internet: A Brit discovers suburban Charlotte life
A 31-year-old self-described “full-time dog mum and housewife” from Britain made a series of videos expressing bewilderment about her Fort Mill neighborhood that have gone viral on TikTok, London’s Daily Mail reports:
The video titles include “Things in American house that British people would find strange,” “Stuff in an American neighbourhood that makes no sense to a British person” and “Things that scream I’m in America.” …
[She] documents uniquely American customs such as “weird” drive-through ATMs, “odd” outdoor TVs on porches and “glittery” fake boulders that are designed to obscure neighbourhood power boxes.
Other unusual-for-British-people features she captures on camera include a drive-thru pharmacy (“helpful if you’re really sick”); wreaths on doors (“I don’t understand why, it’s not Christmas”); colourful flags pinned outside houses (“I don’t know what the point of them is”); water coolers in homes (“random”) and top-loading washing machines (“I did not even know this was a washing machine when I came here… so strange”).
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In one video, she reveals that she was fined for leaving garbage cans at the curb for too long, or, as the publication puts it, “leaving their wheelie bins on show.”
The original video has more than 11 million views. —TM
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Executive editor: Tony Mecia; Managing editor: Cristina Bolling; Staff writer: Lindsey Banks; Contributing editor: Tim Whitmire, CXN Advisory; Contributing photographer/videographer: Kevin Young, The 5 and 2 Project