Struggling breweries, or businesses in general: Economist responds

WILMINGTON, NC (WWAY) — A popular Downtown Wilmington brewery will be closing its doors soon, making it one of several Cape Fear breweries shutting down over the past few months. 

WWAY spoke with an area economist on Thursday to see if the closures are a sign of trouble brewing for that industry in our area. 

“Clearly the “boom,” if we want to call it that, that we experienced for two or three years, is now starting to slow down a little bit,” UNCW’s Associate Professor of Economics and Regional Economist, Mouhcine Guettabi, said. 

New Anthem Beer Project on Dock St. in Downtown Wilmington posted on Instagram Wednesday that it will be experiencing an “indefinite closure.” 

While a reason for the closure was not given, many area breweries like Catawba Brewing, for example, have made that same choice. 

WWAY spoke with Economist Mouhcine Guettabi to see if there’s a correlation between the economy and these breweries closing. 

He said the conflict is not specifically targeting just breweries but businesses in general. 

“Whenever an area grows really fast, there are businesses that pop up all over the place. Now, one thing that sometimes tends to happen, is that you may overshoot how much growth an area potentially receives,” Guettabi said. 

He said inflation is likely to blame for many businesses struggling. A lot of people are limiting their leisure activities to accommodate what they can afford. 

“Rather than having two beers, you may be only having one, maybe you’re just staying closer to home. Maybe, you’re just not splurging as much,” Guettabi said. “Those are all potentially things that could be going on under the surface. But clearly, business closures are a case-by-case situation.” 

He said Southeastern North Carolina also has become a hot spot for those retiring. He said, in that case, struggling businesses may not have targeted the area’s current demographic. 

WWAY reached out to the NC Craft Brewers Guild about closures. They responded with a statement saying: 

“The craft beer market has been continually evolving since its height in 2017. In that year, North Carolina reached 245 breweries, with 54 breweries opening, and only 9 closures. 

In comparison, North Carolina now has approximately 420 permitted breweries in operation at the start of 2024, generating an estimated annual economic impact of $2.8 billion and supporting over 18,000 jobs. While the number of openings has slowed since 2017, we are still seeing more openings than closings overall. In 2023, we saw 34 brewery openings and 17 closures statewide. In the first quarter of 2024, five NC breweries have closed their doors. 

Today we see inflation as one of the most significant market factors impacting North Carolina’s craft beer manufacturers, affecting everything from long-term lease renewals, to the costs of brewing ingredients, packaging, and distribution. That said, we are not alone, as manufacturing, construction, and service industries across the country are all impacted similarly. 

North Carolina remains one of the strongest craft beer states in the nation, and the top beer state in the American South. Our craft breweries serve as community gathering spaces, and are a catalyst for economic development in the neighborhoods in which they reside. North Carolina truly is the State of Southern Beer!”