San Diego was once celebrated as the "Capital of Craft," home to a burgeoning craft brewing scene that shaped the direction of American beer for decades. At its peak, the county boasted over 150 breweries, making it a mecca for hop heads and beer enthusiasts alike. However, as the industry matured, some of the city's biggest names - Stone Brewing, Green Flash, Ballast Point, and Modern Times - struggled under the pressures of overexpansion, corporate acquisitions, and fierce competition. The stories of these craft beer titans, along with the role of early pioneers like Karl Strauss, reflect both the meteoric rise of San Diego's beer scene and its subsequent decline.
The Early Days: Karl Strauss and the Birth of San Diego Craft Beer
The craft beer revolution in San Diego began humbly in 1989 with the opening of Karl Strauss Brewing Company. Founded by Chris Cramer and brewmaster Karl Strauss, the brewery introduced locals to the idea of high-quality, hand-crafted beer in a market dominated by mass-produced lagers. Karl Strauss's flagship Amber Lager and later the award-winning Red Trolley Ale paved the way for what would become a craft beer explosion in the region.
At a time when there were fewer than 300 craft breweries in the entire United States, Karl Strauss was a pioneer, educating San Diegans about the artistry of brewing and establishing a model for what a local brewery could achieve. As the brewery thrived, it inspired a new generation of brewers, sparking the launch of many more craft beer operations in the area. By the late 1990s, the seeds of San Diego’s craft beer revolution had been sown, and a new wave of breweries began to emerge.
The Rise of a Craft Beer Empire: Stone Brewing’s Bold Gamble
In 1996, San Diego saw the arrival of what would become its most iconic brewery: Stone Brewing Company. Founded by Greg Koch and Steve Wagner, Stone was unapologetically bold, known for its aggressive hop-forward beers and its rebellious stance against mainstream beer culture. Stone's Arrogant Bastard Ale became a hallmark of the brewery's ethos, signaling to beer lovers that they were drinking something entirely different from the bland, commercial offerings of Big Beer.
Stone Brewing helped solidify San Diego's reputation as a craft beer powerhouse. The brewery expanded quickly, opening a massive facility in Escondido and later establishing a presence on the East Coast with a second brewery in Richmond, Virginia. By 2016, Stone was one of the ten largest craft breweries in the U.S., producing more than 325,000 barrels of beer annually. At the height of its success, Stone opened a brewery in California's wine-soaked Napa Valley and even ventured into Europe, opening a full-scale brewery in Berlin - an ambitious move that would later prove disastrous.
Yet, as Stone’s empire grew, so did its vulnerabilities. The company’s European venture failed to gain traction and was sold in 2019 after bleeding millions of dollars. Meanwhile, increased competition from other craft breweries and larger beer corporations pressured Stone’s bottom line. By 2022, Stone was carrying nearly half a billion dollars in debt, and despite Greg Koch's repeated claims that Stone would "never sell out," the company was sold to Sapporo USA for $168 million.
Stone’s sale marked the end of an era for San Diego's autonomous brewing scene, which had prided itself on defying corporate beer. The acquisition by Sapporo, while preserving Stone's brand and brewing operations, was a significant departure from its arrogantly independent roots.
Ballast Point: The Billion-Dollar Boom and Bust
Another pillar of San Diego's craft beer ascent was Ballast Point Brewing Company, founded in 1996 by Jack White and Yuseff Cherney. Ballast Point quickly gained national attention with its innovative and balanced beers, particularly its Sculpin IPA, which won multiple awards and became a flagship product.
In 2015, Ballast Point shocked the craft beer world when it was sold to beverage behemoth Constellation Brands for an astronomical $1 billion. The sale was hailed as a watershed moment for craft beer, proof that independent breweries could command sky-high valuations. However, the move also sparked controversy, as many craft beer purists saw it as a sellout to corporate interests.
Ballast Point's rapid expansion under Constellation proved unsustainable. The company opened a series of lavish brewpubs, including a 107,000-square-foot facility in San Diego's Miramar district, a taproom and retail location in Virginia, and invested heavily in its production capabilities. But consumer enthusiasm waned, and sales stagnated. By 2019, Constellation was eager to offload Ballast Point, selling it to the small Chicago-based Kings & Convicts Brewing for a huge loss - reportedly less than $100 million.
Under Kings & Convicts, Ballast Point’s fortunes continued to decline. In 2024, the company announced it would cease brewing operations at its Miramar facility, outsourcing production to an undisclosed contract-brewer and turning over the property to Athletic Brewing, a nearby non-alcoholic beer producer. With its flagship brewery closed and its iconic Home Brew Mart in Linda Vista sold to new ownership, Ballast Point’s presence in San Diego had all but evaporated, but for two restaurant locations and several more taprooms outside America's Finest City. What was once a billion-dollar craft beer juggernaut had been reduced to a shell of its former self, struggling to maintain relevance in an increasingly crowded market.
Modern Times: The Rise and Collapse of an Innovator
Modern Times Beer entered the San Diego craft scene in 2013, positioning itself as an innovative, boundary-pushing brewery that embraced a quirky aesthetic and a commitment to employee ownership. With its distinctive branding and creative beer styles - ranging from hazy IPAs to barrel-aged stouts -Modern Times quickly built a dedicated following. The brewery expanded aggressively, opening locations across California and even in Oregon, with the ambitious goal of becoming a national powerhouse.
However, Modern Times' rapid growth was unsustainable. By 2021, the brewery was facing mounting debt and financial instability. In 2022, after closing more than half of its many locations, Modern Times was placed into receivership and sold to Maui Brewing Company for $15.3 million. The sale marked the end of Modern Times as an independent brewery and the beginning of a major downsizing.
In 2024, Modern Times announced the closure of its original brewery in San Diego’s Point Loma neighborhood, where it had operated since its inception. Moving forward, Modern Times will brew its beers on a contract basis with AleSmith Brewing, maintaining a limited presence in San Diego with just two remaining taprooms.
Green Flash Brewing: A Cautionary Tale of Overexpansion
Among the casualties of San Diego’s craft beer collapse is Green Flash Brewing, a once-prominent player in the city’s brewing scene. Founded in 2002 by Mike and Lisa Hinkley, Green Flash quickly gained a following for its bold, hop-heavy beers like West Coast IPA, which helped define the San Diego hop-forward style. By 2010, Green Flash was one of the more respected names in craft beer.
However, like many of its peers, Green Flash fell victim to overexpansion. In an ambitious attempt to grow its national footprint, the brewery opened a second production facility in Virginia Beach, VA, in 2016. The new facility, along with the acquisition of Alpine Beer Company, strained the company’s finances and resources. By 2018, Green Flash's debt had spiraled out of control, leading to a foreclosure by its primary lender.
In an effort to save the brand, Green Flash was sold to a group of investors, but the damage had been done. The Virginia facility was closed, and the brewery's presence in the national market dwindled. Today, Green Flash operates on a much smaller scale, a stark contrast to its once-dominant position in the industry. Its story serves as yet another cautionary example of how rapid expansion, coupled with financial mismanagement, can bring even the most beloved craft breweries to the brink of collapse.
Green Flash is now owned by Tilray Brands, Inc. an American pharmaceutical, cannabis-lifestyle and consumer packaged goods company, and their beer is brewed at a Fort Collins, Colorado-based production facility.
Among the casualties of San Diego’s craft beer collapse is Green Flash Brewing, a once-prominent player in the city’s brewing scene. Founded in 2002 by Mike and Lisa Hinkley, Green Flash quickly gained a following for its bold, hop-heavy beers like West Coast IPA, which helped define the San Diego hop-forward style. By 2010, Green Flash was one of the more respected names in craft beer.
However, like many of its peers, Green Flash fell victim to overexpansion. In an ambitious attempt to grow its national footprint, the brewery opened a second production facility in Virginia Beach, VA, in 2016. The new facility, along with the acquisition of Alpine Beer Company, strained the company’s finances and resources. By 2018, Green Flash's debt had spiraled out of control, leading to a foreclosure by its primary lender.
In an effort to save the brand, Green Flash was sold to a group of investors, but the damage had been done. The Virginia facility was closed, and the brewery's presence in the national market dwindled. Today, Green Flash operates on a much smaller scale, a stark contrast to its once-dominant position in the industry. Its story serves as yet another cautionary example of how rapid expansion, coupled with financial mismanagement, can bring even the most beloved craft breweries to the brink of collapse.
Green Flash is now owned by Tilray Brands, Inc. an American pharmaceutical, cannabis-lifestyle and consumer packaged goods company, and their beer is brewed at a Fort Collins, Colorado-based production facility.
The Boom, the Bust, and the Future of San Diego Craft Beer
The rise and fall of San Diego's craft beer empire is a microcosm of the broader challenges facing the industry. Consumers are by and large drinking less alcohol, and those that do partake are choosing other types of alcoholic beverages, like hard seltzers, ciders, kombuchas, and more.
While smaller, hyper-local breweries continue to thrive, including standouts like Pure Project Brewing and North Park Beer, the collapse of major players like Stone, Ballast Point, Modern Times and Green Flash has fundamentally changed the landscape. What was once a fiercely independent, community-driven scene is now characterized by corporate ownership, consolidation, and an increasingly saturated market.
San Diego still remains a hub for craft beer innovation, with longstanding breweries like Karl Strauss, AleSmith, and Pizza Port continuing to carry the torch. But the era of big, bold expansions and billion-dollar buyouts seems to have passed. As craft beer becomes more mainstream and competitive, San Diego’s brewers will need to navigate a changing market while staying true to the artisanal roots that first made the city famous.
In the end, the story of San Diego’s craft beer rise and fall is a cautionary tale about the risks of growth and the shifting nature of industry. While the city will always have a place in craft beer history, the future of its brewing scene will depend on a return to the fundamentals that first made San Diego beer so beloved - creativity, community, and above all, quality.
Originally published on October 5, 2024.