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In July, one of D.C.’s oldest production breweries, 3 Stars Brewing Company, announced its sudden closure, citing the ongoing challenges of the COVID-19 pandemic. Other Half Brewing Company DC, which opened during the pandemic and is still rolling more than two years later, has become the biggest brewery in the city. The Other Half brand was born in Brooklyn and its staff had worked with 3 Stars prior to opening in the District in 2020. The closing of a standard bearer and the opening of a big and busy new operation reflect some of the changes bubbling up in the D.C. beer world.
When a brewery like 3 Stars dies, drinkers and brewers can feel a range of emotions. Sadness is perhaps the most common. If your neighborhood loses a business, or a dozen people lose their jobs, nobody is happy.
“It’s a big loss of community in that small neighborhood. It was a local watering hole for a lot of people that would walk to 3 Stars every given day that we were open,” says Lyn Holland, who served as events manager at 3 Stars’ Takoma facility prior to the closure. Holland is now the assistant general manager and events coordinator at Atlas Brew Works’ Ivy City location.
“I think it’s definitely cause for concern,” says Atlas founder and CEO Justin Cox. “D.C. is still very much in recovery mode … You see restaurants and bars are still announcing closings as we see the cracks showing in businesses likely put there due to COVID or some that may have pre-existed and were exacerbated.”
“I was deeply saddened when [co-founder] Mike [McGarvey] called to let me know that he was closing 3 Stars,” writes Brandon Skall, CEO & co-founder of DC Brau Brewing, D.C.’s oldest production brewery. “The brewery has been a staple in the DC Beer universe for over a decade and seeing it close felt like watching local history unfold.”
In 2011, 3 Stars launched their brand with their first commercial batch of beer, the Syndicate Saison, brewed at Evolution Craft Brewing. Their production facility in Takoma wasn’t finalized and it would be another year before they opened their brewery on Chillum Place NE.
When the Syndicate was released in May 2011, seven D.C. establishments served it on draft: ChurchKey, RFD, Scion, Pizzeria Paradiso Dupont, Bourbon, Meridian Pint, and The Big Hunt. Out of these seven bars that served 3 Stars 11 years ago, only two are still in existence. ChurchKey and Pizzeria Paradiso Dupont still serve high-quality draft beer and food today, but the other five businesses have gone the way of the dinosaur. It’s perhaps too reductive to say that these five bars and restaurants closed because D.C. lost interest in beer-focused bars and restaurants, but a common refrain dozens of brewers and brewery owners have repeated is: It’s no longer enough to just brew good local beer.
“We did projects with 3 Stars over the years,” says Matt Monahan, CEO of Other Half Brewing, which launched in New York in 2014 before opening a D.C. location two years ago. “That was tough, to see that facility shut down. It was really tough. It’s hard. It’s hard for everybody right now.” Other Half is D.C.’s largest brewer, producing 15,000 barrels of beer annually, but they’re also D.C.’s only brewer to own and operate two breweries in Brooklyn, one in the Finger Lakes, and one in Philadelphia, in addition to taprooms and beer gardens in Manhattan and Buffalo. The D.C. brewery services the Maryland, Virginia, and Delaware markets, with some of its production heading north to New Jersey, New York, and Connecticut. D.C. is the company’s most efficient brewery when it comes to making lager.
“I think as an industry, it’s terrible,” says Daniel Terrones, lead brewer at Other Half DC, of the 3 Stars closing. “You go into any taproom and typically you’re going to see people from other breweries there. If the brewery promotes a sense of community, you should see that, which is important. So just simply from a brewery perspective, I think it’s super shitty.”
“I think it signals that we’re coming to the end of Chapter 1 in the modern D.C. brewing story,” says James Warner, owner and founder of City-State Brewing Company. “If [3 Stars] couldn’t make it work, is that a single case or is it foreboding?” City State opened in June 2021, one of several newer breweries that have opened over the past four years.
“What could’ve helped us and maybe helped us to stay running is if we could’ve got more people on premise,” Mike McGarvey, 3 Stars owner says. “Being able to set up another premises, where there’s higher traffic … absolutely would’ve helped us.”
It’s notable that until now, D.C.’s breweries and brewpubs haven’t expanded into Virginia. On Friday, Jan. 6, Atlas Brew Works announced a forthcoming third location in the new Carlyle Crossing mixed-use development in Alexandria. The brewery and tap room will serve food from Andy’s Pizza.
Virginia, on the other hand, has brought Solace Outpost Navy Yard, a facility that sells Solace beer across the street from Nationals Park. Crooked Run Fermentation, which has facilities in Sterling and Leesburg, just opened its Union Market taproom to the public.
“With the pandemic, the change happened so quickly, but there’s not a change back that’s happening,” McGarvey says. “I think that’s also a trend we’ve seen in D.C. The high traffic areas are killing it, the places people were going to before that? Not so much.”
He says his brewery suffered from a reduction in on-site foot traffic. A lack of people visiting breweries affects sales. It hits them particularly hard because beer sold over the bar offers brewers the greatest profit margin.
3 Stars also had more competition when more local breweries were starting to distribute their beers during the pandemic. If more breweries were competing for consumer dollars during the height of the pandemic, there would be less sales for a brewery looking to gain customers via distribution. “Where does that distribution come from? We lost distribution during that time,” McGarvey says. According to Brewers Association numbers, 3 Stars’ beer production dropped from 5,500 barrels in 2019 to 3,206 in 2020 and 3,500 in 2021.
“[T]here were so many mixed factors that I think affected us: what our strategy was going into the pandemic, how things changed during the pandemic,” McGarvey says. “We changed as much as we could with what access to capital we had. There’s also the dynamics of when you receive financing for grants and loans and what position you’re already in with your balance sheet. There were just so many factors during that time period that as much as we tried, we just hit a point where we just didn’t have that runway anymore.”
“You have to spend money to make money,” says Meth Gunasinghe, who was 3 Stars’ lead brewer before closing. “But toward the end, we were spending too much and weren’t able to make enough back. So just trying to keep up with all the pivots we had to make over the past two years and everything getting more expensive and not as many people coming out as there used to, it all created the perfect storm.”
Gunasinghe now brews for Atlas, but spent the past six years working his way up from assistant brewer to lead brewer at 3 Stars. After brewing 3 Stars’ beloved brown ale, Southern Belle, for the better part of a decade, he thinks he’s roasted tons of pecans.
With a strong brown ale in its core lineup, 3 Stars stood out. The fact that the brown ale was 8.7 percent alcohol by volume and featured roasted pecans further set it afield. Though brown ale has died down in popularity, during the rise of small breweries between 2007 and 2010, they seemed ubiquitous.
“Twelve to 15 years ago, [brown ale] was going to taste kinda like dishwater. A darkened, maybe a little smokey, like ashtray beer,” McGarvey recalls. “We kind of took that one as a challenge and that’s where Southern Belle came from.
“And at the time, our lineup was really heavily focused on higher ABV stuff. We were trying to position these products toward barrel aging because that’s where all the good stuff was at that point. So the idea to add nuts was just to add another dimension to it. People really liked that beer.”
Southern Belle gave 3 Stars recognition among customers looking to support local beer, as well as those searching out a frequently hard-to-find style of beer. Despite the brown ale’s popularity, even more barrels of Peppercorn Saison, the Belgian-style ale that 3 Stars became well known for, were brewed. “Peppercorn Saison hands down was the one we were brewing the most … brewing multiple batches of that every week,” Gunasinghe says.
“We would have liked to have been doing sour beers, barrel-aged sour beers, right out of the gate” says McGarvey. “But we just didn’t really have financing, the facilities, all of the things necessary. With saison, we could often get a flavor profile or in a clean cellar [void of wild yeast], we were producing something that was tart and still a little funky.”
When 3 Stars opened in 2012, it joined the company of two other local production breweries who are still in existence today: DC Brau in Northeast D.C. and Port City Brewing Company in Alexandria. The owners planned to keep their beers on the extreme side. Their intent to produce funky beers with wild yeast came to fruition and in 2017, the brewery offered memberships to a group it named the Funkerdome Society. “With the Funkerdome Society we will continue to explore the art and techniques of souring and blending beers while working with different bacteria and yeast strains,” the brewery wrote in late 2016.
In 2023, more than two dozen breweries are operating in greater D.C. and even more are operating in the further reaches of Maryland and Virginia. Nationally, similar numbers play out. When 3 Stars’ physical brewery began making beer in 2012, it was one of 2,670 breweries in the U.S., according to the Brewers Association. In 2022, the Brewers Association reported 9,500 total U.S. breweries.
Despite more breweries opening, sales are never guaranteed. Events outside of a brewery’s control, like a World Series or Stanley Cup championship, can greatly affect beer sales. “As teams are doing well and having exciting seasons, more people are watching those games out at bars and restaurants around town, which equates to more beer activity,” says Atlas’ Justin Cox. “If the team’s doing well just on a statistical level, if they’re in the playoffs and there’s more physical games, that means more beer sold.”
The massive decline in beer production in 2020 was largely thanks to the pandemic, and the forced closure of indoor taprooms effectively killed off the production of draft beer. Draft beer has historically been a massive category of sales for local breweries.
“Obviously when the shutdowns happened and then draft beer business went to zero, that was a pretty significant event,” Cox says. “At the time we didn’t know how long the shutdowns were going to happen, but while it was shut down, we knew we needed zero draft beer.”
Even ballpark sales couldn’t help in 2020, when Major League Baseball played just 60 games. Cox recognizes the Nationals as a leader for their District Drafts program. This June, the stadium poured beer from 10 different local breweries: 3 Stars, Atlas, City-State, DC Brau, Denizens, Old Ox, Other Half, Port City, Right Proper, and Solace. Of these 10 breweries, six are based in D.C. proper, three in Virginia, and one in Maryland.
“Draft beer is easier and there’s less quality control concerns with keg beer versus canned or bottled beers, which is awesome, but when that light switch gets turned off, 70 percent of our business is dead, whereas a Virginia brewery may be the opposite of that, maybe 30 percent is draft beer,” Cox says.
As the success of the District Drafts program proves, the consumer wants variety. If there were only one local brewery on offer at the ballpark, that brewery would sell a ton of beer. But that’s not reality.
“Are there going to be production breweries in D.C. 10 years from now?” James Warner of City-State asks. “We’d say yes because we’re here, but there’s a lot of adjustments we’ve had to make from when we started.”
For Other Half DC’s two-year anniversary in October, the brewery released five beers. Two were stronger IPAs with ABVs of 8 and 10 percent; one was a fruited sour beer with passion fruit, orange, and guava; and another was a 4.7 percent ABV pale lager. The biggest beer of the lot was Quiet Space, a barrel-aged, 13 percent ABV stout.
In years past, an anniversary stout like this may have had coffee, vanilla, or chocolate in it, called “adjuncts” in the brewing world. “A lot of the highly adjunct-ed stuff we don’t do anymore,” says Monahan, Other Half’s CEO. “Adjuncts are expensive. Coffee is expensive. Chocolate is expensive. Vanilla is expensive … Those styles, like all styles, ebb and flow in terms of demand. People’s tastes change and as a business you have to respond to it.”
Between 2016 and 2019, the DC Homebrewers Club raised more than $2,000 using 3 Stars’ space for their annual fundraiser. For a club with zero membership dues, this was a way that a brewery who may not have had cash to donate to a home-brew club helped foster the District’s home-brewing community.
In addition to helping the DC Homebrewers Club, 3 Stars regularly had small local businesses popping up at the brewery. Now there’s one less space for these vendors to gather pursuing their entrepreneurial dreams.
“I’d say on a monthly basis we worked with probably about 25 to 30 [small businesses], depending on the month, who would come set up shop on plant swap days. Or just the local makers market that we’d try and do to support local businesses,” says Holland, the former staffer. Holland has successfully resuscitated the popular plant swap formerly at 3 Stars to Atlas Brew Works but there are still many gatherings, of small business owners, and local residents, whose fate hangs in the balance.
In a straightforward sense, the death of 3 Stars means less opportunity for local businesses. Whether or not local breweries and small businesses can continue to thrive depends on many things but there is no question that an engaged community makes brewers’ jobs easier.
In the past two months, the region has seen three breweries announce closures: Rocket Frog Brewing and Beltway Brewing Company in Sterling, along with New District Brewing in Arlington, which plans to close in May pending finding a new location. There is a sense among brewers and brewery owners that things will get worse before they get better.