Most production at New Orleans-based Faubourg Brewing will cease next month, Faubourg parent company Made By The Water (MBTW) announced this week.
Alexi Sekmakas – CEO of MBTW, a southeastern portfolio company that merged with Faubourg in September 2022 – told Brewbound high water and tax bills and difficulty staffing were all factors in the company’s decision, which “comes with a great deal of disappointment.”
“It’s been something that we’ve gone back and forth on for months and obviously did not want to see it come to this point,” he said. “It’s a devastating thing for the team down there and for us.
“As we look at it, we went into that facility in New Orleans as a brand new market with a new brand, new partners with all the hope in the world,” Sekmakas continued. “We really enjoy the time we’ve spent there and hope to keep growing and doing more there, but it’s been a huge challenge, so definitely not a decision made lightly.”
About 20 employees have been affected by the impending shutdown.
While Faubourg’s taproom, events space and R&D brewing facility will remain open, production of Faubourg and other MBTW brands for distribution will shift to contract brewing at IndieBrew in Atlanta, Georgia, and New Realm in Virginia Beach, Virginia, Sekmakas said.
Those contract partners were originally tapped as backup for hurricane season, but took on MBTW production in the spring for about a month following a fire at Faubourg in April.
“We’re going to be leaning on them more heavily over the next six to 12 months,” Sekmakas said.
Relying on those contract partners underscored how much more expensive it was to brew beer at Faubourg.
“The cost of water in New Orleans, particularly in the parish that we’re in, is between 10 and 20 times the cost of what would be equivalent for our size,” Sekmakas said. “What we’ve seen is a water bill consistently month to month that’s over $50,000. It’s obviously been a huge challenge.”
MBTW has been working with local leaders and the utility organization to bring down costs, but to no avail other than some “incremental reduction,” Sekmakas said.
The brewery’s $500,000 annual tax bill was another concern.
“When you compare that to other breweries, again, at our scale or even smaller, often it’s the other way,” Sekmakas said. “They get incentives from the local city and state governments as a thank you for creating jobs and the investments you’re making in the community. Obviously despite our best efforts, we haven’t been able to see that charge dramatically change.”
The third driver hampering Faubourg’s viability as a production hub was “general safety in the area,” Sekmakas said.
“We had a lot of difficulty staffing when we were trying to ramp up production past the current run rate,” he said. “We weren’t actually able to staff in for an extra shift because people were scared to leave in the late hours of the evening or early morning when the area was not considered safe.”
Faubourg’s 85,000 sq. ft. brewery, valued at $30 million, was intended to serve as MBTW’s main production facility. The company’s portfolio includes Catawba Brewing, Oyster City Brewing and Palmetto Brewing. The four brands combined produced 51,000 barrels in 2022, a +17% increase over the prior year, according to the May/June issue of the Brewers Association’s (BA) New Brewer magazine. MBTW was the country’s 50th largest craft brewery by volume last year, according to the BA.
At the time of the merger, MBTW looked to the Faubourg facility to drive volume north of 100,000 barrels annually. However, work still needed to be done to outfit the brewery to meet the company’s needs, which was “definitely a contributing factor” to the decision to shift production elsewhere, Sekmakas said.
“The taproom and event space is going to remain open into the foreseeable future,” he said. “We also have a small-batch program that’s very active on site, so everything that’s on tap at Faubourg will continue to be produced and made there so people can come out and try all kinds of different things, just as they’ve always done.”
Faubourg will continue to brew some beers for the local market, but the bulk of production for distribution to the brand’s full footprint will occur elsewhere. Faubourg distributes to Louisiana, Mississippi, Alabama and the Florida panhandle, with plans to expand to Texas and Arkansas next year, Sekmakas said.
The ramp down at Faubourg follows MBTW’s closure of two Catawba-branded locations in Charlotte and Wilmington, North Carolina, in August. The company shuttered Catawba’s facility in Morganton, North Carolina, last fall as it prepared to shift brewing operations to New Orleans.
Even before the merger with MBTW, Faubourg had a tumultuous 100-plus-year history since its founding in 1907 (then called Dixie Brewing), including surviving prohibition, two world wars and Hurricane Katrina, which forced the company to relocate and contract brew its offerings. Former majority owners Gayle and the late Tom Benson – also owners of the National Football League’s New Orleans Saints and the National Basketball Association’s New Orleans Pelicans – restored the brewery and reopened it in New Orleans in January 2020, weeks before the COVID-19 pandemic forced the closure of on-premise establishments.
Amid the country’s racial reckoning following the murder of George Floyd in 2020, then-Dixie announced it would change its name to shed its connection to the Confederacy. The company underwent a rigorous search process and selected Faubourg, the French word for “suburb” which is synonymous with “neighborhood” in New Orleans. In March 2021, the company released its first beer under the new name Faubourg Brewing Co. with updated packaging to match.