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CoStar News
The former parent firm of Stone Brewing plans to lay off 220 workers as it closes three headquarters and production facilities in Escondido, California, reflecting effects of the nationwide consolidation and slowing craft beer sales in regions like San Diego.
Sapporo USA, a division of the Tokyo-based beermaker that acquired the Stone Brewing brand in 2022, will eventually exit three locations housing office, warehouse, quality assurance, logistics, brewing and bistro workers, according to a state notification filing. The first phase of 58 job cuts will occur on Oct. 19, Kristin Perales, a senior vice president with Stone Brewing, said in the filing.
Announced cuts come four months after Sapporo sold the Stone Brewing brand to Paso Robles, California-based beermaker Firestone Walker Brewing Co. for an undisclosed price. Firestone Walker will eventually move Stone Brewing production to Paso Robles and Kansas City, Missouri, according to plans announced prior to the layoff notice.
The state filing said job cuts will occur in several phases and will affect Sapporo employees at three Escondido locations that were not part of the brand sale to Firestone Walker. Totaling about 150,000 square feet, the buildings are at 1999 Citracado Parkway, the Stone Brewing headquarters address since 2005; 2865 Executive Place; and 2005 Harmony Grove Road.
Regional commercial broker Todd Davis, who has long worked with industrial clients in the brewing industry, said there is a “short list” of San Diego and out-of-state companies that will likely be interested in the Escondido spaces. Davis, a senior vice president and San Diego regional managing director at Kidder Mathews, is not directly involved with the Stone Brewing properties.
Nationwide shakeout
Several U.S. craft brands have maintained loyal followings and are seeking to expand their production and sales facilities. Still, industry momentum has slowed from the peak growth years of the late 1990s and early 2000s, as smaller brewers in particular face rising cost pressures for materials, transportation and labor.
“There has been less demand lately for brewing and support space,” Davis told CoStar News.
There were 481 U.S. craft brewery closings in 2025, compared with 300 openings, according to the Brewers Association, an industry trade group. Slowing sales in 2025 contributed to a 2.9% annual drop in the number of U.S. craft beer locations, totaling 9,578 at the end of 2025, the trade group reported.
San Diego Beer News, a regional site tracking the industry, reported 12 local brewery closures during 2025, citing factors such as rising costs for real estate, supplies and labor along with slowing demand for craft beer.
Closures and consolidations have occurred over the past two years in other traditionally strong craft beer hubs like San Francisco, Seattle, Philadelphia, Denver and Portland, Oregon. According to regional reports, Colorado alone lost more than 100 breweries over the past two years, including companies like Trve Brewing and Funkwerks.
Starting in the mid-1990s, independent craft brewers posted significant sales growth that lasted nearly two decades as U.S. consumers downed beers in neighborhood breweries, brewpubs and taprooms. This also accelerated demand for industrial and retail spaces, as operators repurposed older commercial buildings on a massive scale.
Brewers remain significant users of industrial and retail real estate. But industry consolidation and shifting tastes, especially among younger consumers avoiding alcoholic beverages, brought drops in sales and rising property vacancies over the past four years.
Stone Brewing was founded in 1996 in nearby San Marcos and moved its headquarters and main brewing operations in 2005 to Escondido, about 30 miles northeast of downtown San Diego.
Known for its bold, California-style takes on India pale ales, Stone Brewing for nearly 30 years was the San Diego region’s largest independent craft brewer and among the nation’s 10 largest based on production volume. Sapporo USA closed on its $165 million purchase of Stone Brewing in August 2022.
Independent brewers face headwinds
San Diego remains among the nation’s most active regions for businesses centered on locally made craft beer, with more than 200 breweries, brewpub restaurants and smaller taprooms still operating. But it has not been immune to national consolidation and sales trends.
According to the Boulder, Colorado-based Brewers Association, U.S. craft beer barrel sales posted a 3.8% annual decline in 2025, part of a 5.7% decline in overall beer sales at the wholesale level. Craft beer dollar sales — reflected in restaurant, bar and store sales to consumers — reached $28 billion in 2025, down 2.8% from a year earlier.
“The industry outlook points toward cautious optimism, as shifting trends offer hope for a more stable path forward after several challenging years,” Matt Gacioch, staff economist at the Brewers Association, said in a statement from April. “While it’s probably premature to say the industry has settled into a ‘new normal,’ there are many indications that we are moving in that direction.”
Davis, the San Diego broker with Kidder Mathews, said consolidation, moves to reduce overhead, and shifting tastes and purchase decisions among cash-strapped consumers will likely drive continued change in the craft beer industry. Those include shakeouts in previously oversaturated neighborhoods as brewers are forced to make adjustments to their business model, including real estate take-ups.
“You’re probably going to see some brewers looking to focus less on operating their own facilities and maybe look more at contract brewing,” Davis said. He noted smaller brewers increasingly hire third-party companies to handle their production, distribution and other functions that would otherwise entail high overhead expenses.
