A California-based craft beer company that had aspirations of expanding into China with a new line of products has gone belly-up after a series of events forced the company to back away from both ventures.
Schubros Brewery, based in the eastern region of the Bay Area, has permanently closed, according to company founder Ian Schuster.
A separate project led by Schuster, called San Francisco East Bay Brewing Inc. (SFEBB), which was aimed at capitalizing on an emerging craft beer market in China, has also been put on hold, he added.
Speaking to Brewbound, Schuster provided a litany of reasons for the failed endeavors, including President Trump’s recently imposed steel and aluminum tariffs and rising minimum-wage costs in California.
According to Schuster, Schubros Brewery stopped production and closed its taproom in San Ramon, California, when the company’s lease expired on May 31. Additionally, Schuster told Brewbound that a move to nearby Hayward, California, fell through when a second company it was partnering with to buy a building did not qualify for a loan.
Also among the reasons for the Schubros’ brewery closure, according to Schuster, were his landlord refusing to renew the company’s lease, poor performance by beer wholesaler Young’s Market and exorbitant moving costs.
The company’s brewing equipment has since been sold to an undisclosed beer company based in Reno, Nevada, according to Schuster. The complete microbrewery was being offered at auction for $250,000, according to a listing on the website of Rabin Worldwide, a California-based auction and real estate company.
Last year, Schubros’ beer sales declined from an estimated 480 barrels in 2016 to 330 barrels, according to data from the Brewers Association. Schuster pinned his company’s declining sales on Young’s Market, which he said “lost 90 percent of our sales due to their lack of deliveries.”
“We lost every single account in San Mateo, Santa Clara and every Safeway and Costco,” he said. “Basically, we lost every account that they touched.”
Young’s Market did not offer comment as of press time.
Meanwhile, the China project — which was announced in late December and aimed to raise more than $1 million via WeFunder, a Securities and Exchange Commission-approved crowdfunding portal — will likely not come to fruition, according to Schuster.
As part of that campaign, Schuster had hoped to sell a 23 percent stake to non-accredited investors at $250 a share. As of press time, the campaign has raised $66,144 from 101 investors. However, at least 39 other investors have pulled an additional $72,000 out of the project since late February.
Several investors, according to Schuster, were scared away by President Trump’s tariffs — 10 percent on aluminum and 25 percent on steel.
“We lost 95 percent of our funding within a week thanks to Trump’s tariffs,” he said.
Schuster — who spent 5 1/2 years working for Philip Morris Japan and helped expand the company’s category management team into China, Korea and Hong Kong, according to his LinkedIn — told Brewbound that SFEBB’s future is uncertain.
“My goal is still to get into the Chinese market somehow,” he said.