As craft beer industry faces challenges, Morganton Brewery makes vital changes

For the first time in nearly two decades, more U.S. craft breweries are closing than opening — and Morganton’s Sidetracked Brewery is adapting fast to stay ahead.

Sitting outside of Morganton Station, the site of the only beer that’s brewed within the city limits, Joseph Ackerman reflects on last year’s business, noting it’s been the toughest since the COVID-19 pandemic.

Last year, Sidetracked’s revenue was down about $30,000, he said, while expenses went up about $20,000 from 2023.

The difficulties are nationwide. According to the national Brewers Association, craft brewery closures outpaced openings, 399 to 335, for the first time since 2005. The root of the issue is a combination of rising operating costs for ingredients and shipping, declining beer sales, shifting consumer preferences, and market saturation.

Ackerman knows the ins and outs of craft beer, having started his journey in college when he began homebrewing. He previously owned a brewery in Columbia, S.C., and trained through Chicago’s Siebel Institute of Technology, the nation’s oldest brewing school.

In 2012, when Ackerman started his first brewery in Columbia, there were around 2,300 craft breweries in the country, according to the Brewers Association. Now, there are nearly 10,000.

Sidetracked has been a staple in the Morganton community for eight years, from pouring award-winning craft beers to providing hot meals and supplies to local and surrounding residents after Hurricane Helene ravaged Western North Carolina.

Sidetracked’s beer has won nearly 40 medals throughout the years, most recently winning two gold medals in the NC Brewers Cup, which is the largest statewide craft beer competition.

“We make world-class beer. We win all kinds of awards in every competition we do,” Ackerman said. “That’s not enough anymore if consumer trends are shifting away from craft beer, period.”

With changes in the craft beer industry, Ackerman and General Manager Tyson Conner said that they have been forced to make changes at Sidetracked. For small breweries across the country, the decision comes down to “adapt or die.”

TAKING TO TRENDS

While Ackerman and Conner said they are still staying true to their craft beer, they have expanded their beverage selection at Sidetracked with mixed drinks, more non-alcoholic beverages, and a build-your-own seltzer option, where customers can pick from a variety of flavors to add to their beverage.

Adapting also means appealing to a younger crowd. Conner, who is in charge of marketing and events, has been working to incorporate Generation Z into the brewery scene. The generation is the youngest legally able to drink, and both Conner and Ackerman have noticed the younger crowd isn’t going out as much as the older clientele.

“Any time you are in this room, and you look around, 90% of the people are over 30, and probably 75% are over 40,” Ackerman said.

Gen Zers are more likely to be homebodies in general but have also grown up during the popularization of seltzers, hard kombucha, and THC beverages. Conner said sometimes it really comes down to introducing the generation to craft beer and its variety.

With hundreds of different malts, hops, and yeasts to choose from, Ackerman said there’s so much variety in the world of beer, which allows for adaptation as well. People have an idea of how beer tastes based on what they have tried from the shelves at their grocery store, Ackerman said, but there’s much more to it.

“Everybody likes beer. They just haven’t had the right one yet,” Ackerman said.

But Sidetracked is more than just a brewery for Morganton— it’s a community hub, a third space where locals gather on weekdays to unwind, with roughly 75% of weekday customers being regulars. Conner and Ackerman have incorporated Gen Z interests into their programming, recognizing that many in this generation are new to the workforce. From Taylor Swift to Gilmore Girls, Conner follows trends that resonate with younger audiences and organizes events like trivia nights and Plant Bingo in collaboration with Sprout & Bloom’s Courtney Sanchez.

On the eastern edge of the downtown core, Sidetracked doesn’t benefit as much from casual foot traffic. Events help compensate by encouraging people to visit the brewery intentionally rather than stumbling upon it. In addition to pouring at the TGIF Summer Concert Series downtown, the brewery also hosts pint nights and book clubs.

In the past couple of years, Sidetracked has added an arcade featuring eight pinball machines along with other classic games, from Skee-Ball to Pac-Man. Sidetracked hosts pinball tournaments every Monday night at 6:30 p.m.

Big changes are coming to Sidetracked on Sept. 10, thanks to the launch of the Downtown Morganton Social District. The new district will allow the brewery to take advantage of the spacious outdoor courtyard at Morganton Station. With a red oak live-edge bar on the way, lights strung up in the courtyard, outdoor seating, and plans for live music in the back, Ackerman and Conner have been working away to make the space more welcoming for people to gather outdoors.

While business has been tough in the past year, “beer is resilient,” Ackerman said. “It’s been through corrections before, and it’s been around forever.” For Sidetracked, resilience is more than just survival. It’s about adapting, innovating, and keeping Morganton’s glasses full and the energy positive, no matter how the market shifts.