We’ve spent the past few weeks catching up with occupants of H.G. Fenton’s trio of lease-to-brew Brewery Igniter facilities, asking what their intentions are beyond their current workspaces. Pariah Brewing and Rouleur Brewing reported that they are in a holding pattern, waiting to see how the unstable brewing industry settles out before determining their next moves. Meanwhile, Eppig Brewing signed a lease on a much larger, under-construction brewery and tasting room in Vista, signaling the start of a likely-lengthy transition period.
From the beginning, Brewery Igniters were built and marketed as temporary homes. That said, when speaking with tenants at H.G. Fenton’s original Brewery Igniter in Miramar, we happened upon strategies that fly in the face of that concept. The campus’ first lessee, Pure Project Brewing, recently celebrated its third year in business with a grand-scale parking lot party just beyond its front door. Meanwhile, there is a lot happening behind the scenes, namely a cellar expansion that will allow the company to increase annual production from 2,000 barrels to 4,000 barrels.
“We are in the process of opening two new tap rooms this year—permits and CUP pending, of course. Adding a full brewery move at the same time felt like a bit too much all at once, and the size-growth that Miramar could offer seemed to fit in well with our retail focus for 2019,” says Pure Project co-founder Mat Robar. “We also felt that keeping our core team at one centralized location rather than spreading our team between multiple locations seemed to be the right play during this phase of growth.”
Late last year, Pure Project announced it is building a pair of satellite tasting venues in Banker’s Hill and Carlsbad. That many more taps telegraphed the need for greater production capabilities. Hunkering down in their current digs will meet that need in the near-term, allowing them the potential to extract maximum revenue from their new facilities before moving into a larger, costlier production facility.
In addition to its main Brewery Igniter suite, Pure Project currently occupies two additional suites in the same complex; one abutting the brewery, and another next-door to the Brewery Igniter space belonging to Amplified Ale Works. That Pacific Beach-based business signed on with H.G. Fenton for a different reason than its neighbor. Rather than proving itself, that existing interest—which operated a single brewpub at the time but had plans to grow and has since opened a downstairs tasting room at its PB location as well as an East Village restaurant and bar—wanted to scale up its production capabilities. Like Pure Project, it has leased an additional unit at the Miramar campus in order to do so. And like Pariah and Rouleur, the state of the industry has owner Alex Pierson feeling tentative.
“Our plans have shifted over the last 18 months or so as we became increasingly cautious about the ever-expanding growth of breweries in the San Diego market,” says Pierson. “Rather than focusing on moving out of the Brewery Igniter to expand production, we decided to grow production within our current space, adding two 26-barrel fermenters and a 20-barrel hot-liquor tank for RO-water capture, which now enables us to brew multiple batches per day.”
Amplified’s cellar previously consisted of four 15-barrel fermenters and a 10-barrel fermenter, plus two seven-barrel tanks in Pacific Beach. With its flagship and recently-established hospitality venues, Pierson reports that on-site consumption of the business’ beers equated to roughly 85% of the 1,200 barrels the company produced in 2018. He expects that percentage to grow as Amplified grows its production to 2,000 barrels this year. This is by design; Pierson wants to maintain growth through on-site sales rather than rely on packaging or distribution, given the large number of local breweries that have the economies of scale to do both better than he and his team are able.
“While we intend to take a breather on new developments in 2019, we anticipate once again maxing out our capacity this year and will begin our scouting of a potential long-term home,” says Pierson. “Ideally, we are looking for a space that can function as both a production and brewpub space in a community that we feel is under-served. Finding this ‘forever home’ will be a major move for us and one we don’t intend to rush into, so if it takes an extra year or two, we’re willing to wait at our current location.”
Expanding within the Brewery Igniter framework has been key to both Pure Project and Amplified’s game plans thus far. It is important to note that H.G. Fenton’s facilities in North Park and Carlsbad do not offer that option; there are no additional units to grow into. Another factor that has helped the Miramar Brewery Igniter’s tenants is the fact its rent is lower than that of its centrally-located, higher-trafficked North Park sister campus. Despite those differences, the owners of each tenant-business have all conveyed that Brewery Igniter has served a useful purpose for them.
Says Robar, “H.G. Fenton has been a great partner for us as we have grown the past few years, and has been helpful through this growth phase, as well. We appreciate having them as a landlord and partner.”
“When H.G. Fenton started Brewery Igniter, our intention was that it would be a short-term solution for start-up breweries,” says H.G. Fenton commercial portfolio leader Bill Hooper. “Over the past three years, we have found that ‘short-term’ doesn’t just mean one or two years. The costs associated with funding a new, larger space, building out a brewery and relocating existing businesses are still extremely high. The fact our tenants are staying a little longer and taking more space is further proof of concept that the San Diego brewing industry needs a resource like Brewery Igniter.”