Brew Pubs Tapping Into Trend of Designer Suds

San Diego restaurant owner Paul Dobson appreciates finely crafted beers and ales. He enjoys drinking them and serving them in his three downtown restaurants.

Dobson, who describes himself as “insane about good beers,” even planned to open a small downtown brewery to make his own brand of beers and ales.

The planned microbrewery near Horton Plaza went flat because of a California law that prohibits people with liquor licenses from making beer.

“I have a feeling that I could have made a go of it,” said Dobson, who owns Dobson’s, La Gran Tapa and the St. James Bar. “I was honestly broken-hearted that I couldn’t do it.”

Dobson’s dream evaporated, but he isn’t the only San Diegan with suds on his mind. The Old Columbia Bar & Grill, downtown San Diego’s first microbrewery, opened in February, and a handful of other entrepreneurs hope to follow.

Typically trendy San Diego is just starting to catch the national wave of microbreweries, companies that brew small batches of rich, full-bodied European-style beers and ales that make the national beer brands taste comparatively weak.

Nationwide, an estimated 150 microbreweries already have sprung up, concentrated primarily in the Pacific Northwest, New England and the Great Lakes. In California, the number of small beer manufacturing licenses has rocketed to 60, up from nine in 1985. However, the majority of those licenses are held by brewers in Northern California, including a dozen in the Bay Area alone.

“It used to be that everything started in Southern California,” said Robert T. Patterson, a Los Angeles-based managing partner with the Laventhol & Horwath accounting firm. But microbreweries are one trend that “began in the Pacific Northwest and percolated--or brewed, you might say--out from there,” said Patterson, who tracks restaurant industry trends.

Downtown San Diego’s first microbrewery opened in February, when Christopher W. Cramer and Matthew H. Rattner opened Old Columbia Brewery & Grill, a restaurant that offers a wide range of beers produced under the direction of Karl M. Strauss, a relative of Cramer’s who spent 44 years as a brewer with Pabst Brewing Co.

Foote Development Co. hopes to open a restaurant and microbrewery early next year in the Mission Brewery complex now under development on Washington Street near Interstate 5. Mission Brewing Co. now produces several beers that are being sold at a handful of restaurants, including the San Diego Country Club and Barnetts.

Several entrepreneurs are considering boutique breweries elsewhere in the county, said San Diegan Mike Zislis, president and owner of Western Brewing, which manufactures microbrewing systems at a plant in Tijuana. Zislis, who plans to open a brew-pub in Hermosa Beach in June, wants to establish a second brew-pub in Pacific Beach.

St. Louis-based Anheuser-Busch, whose popular Budweiser and Busch brands control 42% of the U. S. market, will ship an estimated 79 million barrels of beer this year, a spokesman said. In contrast, Old Columbia will brew just 1,200 barrels during its first year, and Mission Brewing Co. hopes to brew about 4,000 barrels annually when its new plant is completed next year.

Much of the tailor-made beer produced by the nation’s growing number of microbreweries is drunk at on-site brew-pubs that offer both food and beer. But some microbreweries, including Mission Brewing Co., believe it is more profitable to produce beer for sale at other retail outlets.

Microbrewers think there is a solid clientele for their beers that includes “the guy in blue jeans and work boots” as well as well-heeled yuppies, Mission Brewing’s general manager, Bruce Kannenberg, said.

Besides producing beer, the gleaming microbrewing systems manufactured by Western Brewing and other companies are important to the “brew-pub experience,” according to Patterson.

Brew-pub owners take care to build their restaurants around the polished and intricate brewing systems, so customers can watch as brewers concoct unique blends of hops, barley, wheat and other ingredients. Purity and freshness--in addition to the unique tastes--are the driving force behind the growing number of brew-pubs, Cramer said.

For long-time San Diegans, the resurgence of local brewers rekindles memories of the pre-Prohibition days when most cities had their own brands. During the early part of this century, the old Aztec Brewery in Logan Heights brewed Red Spot, Old Dutch, Brown Derby and Associated. The old Mission Brewery, which now houses the Foote project, used to brew Old Mission Lager and Hopski, a non-alcoholic beer.

San Diego County’s microbrewing revolution began in 1987 when Paul Holborn, a home brewer, went public by offering his beer at Bolt Brewery, a Fallbrook restaurant and beer bar. Holborn closed Bolt in 1988 and joined Foote, whose microbrewery will be built at the site of the old Mission Brewing Co., a San Diego-based brewery that closed in 1918.

Zislis believes brew-pubs have spread slowly in San Diego because local landlords and city officials don’t yet grasp the boutique brewery concept. “They don’t want to put you in a commercial area,” Zislis said. “When they hear ‘beer manufacturing,’ they want to stick you in an area zoned for manufacturing.” But Zislis compares a brew-pub to restaurants that offer on-site bakeries that “manufacture” fresh baked goods.

Patterson predicted that brew-pubs will gain wider acceptance in Southern California because consumers “are looking for unique experiences when they go out to eat or drink.” Brew-pubs offer that unique experience “because you can literally not get their beer anywhere else,” Patterson said.

Consumers generally pay more for the premium beer offered at microbreweries. A 12-ounce glass of Old Columbia retails for $1.95. Mission Brewing, which will open in the spring, “is not trying to create a $3-per-six-pack kind of experience,” Kannenberg said.

In terms of growth, the brew-pub industry is “in its infancy . . . not unlike where the wine industry was 30 years ago,” according to Paul Gillette, publisher of the Los Angeles-based California Beverage Hotline, an industry newsletter. Consumer awareness of wines has gradually grown over the past three decades, expanding the market for a wide range of new, domestically produced wines.

But to be successful, a brew-pub should serve good food along with uniquely flavored beers and ales.

Brewers who were familiar with Santa Monica-based City of Angels, the Los Angeles area’s first microbrewery, described it as an attractive, upscale operation that produced hearty-tasting beers. But continuing losses on the restaurant side forced City of Angels to close earlier this year, brewers said.

“That’s the key,” Dobson said. “Food has to be an integral part of the operation. It’s not enough just to have great beer.”

City of Angels’ plight might have been linked to the fact that many Southern Californians prefer their suds “at home in six packs, not at a tavern,” said Bill Owens, a Hayward-based microbrewer who also publishes American Brewer, a trade magazine.

While many “basement brewers” yearn to turn their hobby into a business, opening a brewery that is equipped to serve food is an expensive venture. It could cost $350,000 to $600,000 to open a brew-pub, say those who have tried.

Although they are expensive to open, microbreweries and brew-pubs can be highly profitable because, unlike the nation’s giant brewers, there is no middleman.

“If you brew a thousand barrels a year, and you retail a barrel for $600 ($1.50 per glass) you’re going to gross about a million a year,” Owens said.

“It’s the difference between General Motors and the guy who handcrafts certain kinds of automobiles,” Gillette said. “You can start a brew-pub and make a nice living but you’re never going to become fabulously wealthy” with just one pub.

Although the nation’s major brewers are proud of their consistency--a glass of Miller beer tastes the same in San Diego or Chicago--variety is the goal of the new microbreweries. Many, including Old Columbia, rotate beers regularly.

Mission Brewing Co. now produces San Diego Amber and Aztec Red, a pair of European-style beers. Old Columbia’s revolving beer menu includes Gaslamp Gold, a strong ale; Downtown After Dark, a brown ale, and America’s Finest Pilsner. Old Columbia recently added a light beer named after Point Loma.

San Diego’s brewers know that they are introducing the brew-pub concept at a time when the nation’s appetite for alcoholic beverages is shrinking.

“People are drinking less but they’re drinking better products,” Cramer said. “Hard liquor took its worst dip in 30 years, but fortunately, beer and wine were not hit that bad, and the premium end, which we’re in, has not been hurt.”

The Mission Brewing Co. is “emphasizing the fact that we’re a restaurant that’s next door to a brewery,” said Kannenberg. The Mission Brewing office/restaurant complex will feature a “full-service restaurant with a diversified menu,” he said.

Not surprisingly, San Diego’s two microbreweries are trading heavily on their San Diego heritage. Old Columbia’s advertising slogan is “America’s Finest City, San Diego’s Finest Beers.” Mission Brewing Co.’s advertising slogan is “Taste San Diego’s Finest Beers.”