The craft beer industry is growing in many South Carolina cities, but the Grand Strand isn’t seeing much of it.
The microbrewery industry generates billions of dollars annually, but has yet to become an economic driver in the Myrtle Beach area as it has in Charleston or Asheville, North Carolina, and other tourist areas.
Every Friday at 4:30 p.m., the small New South Brewery tap room comes alive. Soon hundreds will pack the production facility, eating from food trucks parked outside, playing a game of corn hole, or trying to beat the heat inside the small bar attached to the warehouse.
The experience at New South here is unique for the Grand Strand.
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New South is celebrating its 20th year with a party planned for November. During that time, despite rumors of other breweries coming to town, it has had no production brewery competitor. There is a brewery called Pawleys Island Brewery but even that one is located in North Charleston.
Craft beer or spirits means different things to different people. South Carolina has two categories for breweries: brewpub or a production brewery. Liberty Brewery and Grill is an example of a brewpub as it makes craft beer but does not distribute elsewhere. Still, only a few other brewpubs exist in the area.
The tourism economy doesn’t explain it
Craft breweries often highlight the state or town it’s produced in on its product. In a town built for tourism, this could prove to be a problem if there are not enough people to frequent the brewery in the offseason.
Even in a tourist town, New South Owner David Epstein said business is good year round for his brewery. New South has developed a following of both people living here and visitors, he said, and does not see much of a drop-off in the offseason.
Further, breweries have become a driver of tourism as people make visiting local breweries a priority when visiting a new area.
“There are people that, when they come to a town, one of the first things they do, they Google where the local brewery is,” Epstein said.
Charleston, a hub of microbreweries in the state, offers city tours of its breweries and distilleries that help connect tourists with the city’s alcohol producers.
Kevin Osborn, who plans to open Twelve 33 Distillery in Little River later this year, said that the tourism season will be important for his business. He envisions his tasting room as an alternative activity for adult tourist and a chance to spread his brand as the tourists have to go home at some point.
Epstein agreed, saying that many tourist choose to buy a growler or a six-pack of beer before leaving.
The cost of production
Koty Price, an anesthesiologist assistant at Grand Strand Hospital, thought about starting a brewery. Even with partners willing to help, the cost and challenges kept him from doing so.
New South’s Epstein said the start-up cost for a brewery like his would be about $1.5 million. Once a brewery starts buying the equipment, it also needs money for recurring costs and emergencies.
“You’re not getting into it because it is a cash cow,” Price said.
Even with money in hand, finding the space in Myrtle Beach to host a brewery would be tough. There are industrial areas in the city that can host a large production facility. New South takes up a warehouse on Campbell Street and uses practically every corner for production and retail.
Many production brewery districts in nearby cities often see their breweries cluster in old industrial areas.
Given the costs to start a brewery, the room for error is small and breweries need to build a brand fast. For New South, the market is local and has actually scaled back how far it sends their beer. Epstein said it actually saw increase in sales when deciding to focus on the areas they know best.
Distribution laws are a hot topic in the brewing community. New South’s relations with its distributors, like the locally owned Better Brands, has been good, Epstein said. It saves his company from needing delivery teams.
But Epstein has heard distribution laws can create challenges for new breweries that haven’t developed connections with distributors.
Ray Strickland with Owens Liquors said he has noticed customers going across state boarders to North Carolina. He said North Carolina stores can more easily stock unique beers without having to ask a distributor.
He is concerned with the loss of revenue for local businesses as people look elsewhere to try the latest specialty beers that his distributors do not carry.
Coastal Craft Beverage Company is in Calabash, about a mile north of the state border. The bottle shop’s owner Paul Engstrom believes craft beer consumers prefer to drink locally. He said he doesn’t see a ton of traffic from Myrtle Beach since his store opened last year, saying if people are going to travel for beer, they will probably do it to visit a brewery.
His store deals with both distributors to get beer from out-of-state and directly with small breweries. Engstrom visits breweries, they visit him and he said he has a good relationship with distributors. North Carolina laws allow for this, but stores like Strickland’s in Myrtle Beach have to rely on the distributor.
“That’s the big difference between North Carolina and South Carolina,” he said.
Epstein said he thinks competition will come and New South welcomes it. He said another brewery will challenge his to be even more creative and to make better beers.
“Being the only production brewery in Myrtle Beach has helped us,” he said. “But at the same time we feel that another brewery or two coming into the area wouldn’t kill us, it would actually raise the awareness of craft beer for all of us here in the area.”
Tyler Fleming: 843-444-1702