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The impending end of 21st Amendment, as it currently operates, says as much about the challenges facing craft beer, beer and alc bevs broadly as it does about the co's singular trajectory. From brewpub to canned craft pioneer, from contract brand to co-packer, 21A enjoyed local, regional and national reach at various points in its 25-yr history. But it's struggled to be profitable since the pandemic, founder Nico Freccia explained to Craft Brew News. And now it's "time to wind this down." The co took on "a new financial partner" a few yrs ago that supported its efforts to "pivot" its large facility in San Leandro, CA "to a co-packing facility." But this yr, "most of our co-pack customers&hellip;backed way off their projections," Nico said. The partner then hatched a plan to change gears again and use the facility and the brand as the base "to build a platform" of beer brands, he explained. It didn't come together, tho. And in just the last wk or so, the co's financial partner told Nico and co-founder/biz partner Shaun O'Sullivan that "we just can't keep funding this." They still hope "someone will step in and buy the brand," Nico said, and he's already fielded a number of calls since late last wk (when news of 21A winding down biz was first reported by Brewbound)."Unique" Rise and Fall Amid Special Confluence of Covid "Wrecking Ball" and Distrib Shifts Reflecting on "the big arc that got us where we are today," Nico sees "a lot that's really unique about our situation," both "our growth" and "our downfall," he told us. Launched as a brewpub in San Francisco, 21A was an early entrant into craft cans, contract brewing out of Cold Spring's facility in Minnesota and soon selling much of it in the East where folks connected with the co's American history heavy branding, he recalled. Growing past 100K bbls and seeing potential to reach 250K bbls in 5 yrs, co "decided to build a facility," Nico said, citing some "hubris involved" in that choice.Delays and related inefficiencies challenged 21A's finances. So when Reyes bought co's longtime home mkt distrib DBI in 2019, co opted to move to AB network as it was "able to monetize" its distrib rights. "We needed that money to function," Nico said. "Any time you change your home market network, there's disruption," he acknowledged. And of course, the deal for DBI was far from the end of changes in CA distribution.Yet plenty of the pressure the co felt wasn't unique at all, Nico noted. The Covid-19 pandemic "was just for us the death knell, the wrecking ball," as he sees it. Co's downtown SF brewpub is "still only at about 40%" capacity yrs later and other on-premise bizzes in its home mkt were hit at least as hard. That made co's joint sales platform and partnership with Brooklyn Brewery, designed to leverage shared on-premise sales oppys, basically moot. Half its biz was still out east, tho, and selling beer farther afield proved as challenging for 21A as for other regional players.With new partner, co invested in its facility to be able to attract contract partners for non-alc and RTDs. Capabilities like its tunnel pasteurizer helped 21A "onboard like twenty customers in the last year," Nico reported. But "most of them were small." A bigger partner was set to do 140K cases per mo starting June (a huge 60+K bbls in back-half of yr), but "by May they had backed that off to half that amount once a quarter." With reduced consumption across categories and cost pressures exacerbated by tariffs, co-pack biz felt the pinch. When plan to bring in a new operating partner that would allow Nico and Shaun to step away and for 21A to help anchor a new brand platform fell thru in last couple wks, it represented another in a "long series of disappointments" for co's lender, as Nico put it.Down to 20K Bbls, 21A Brand Plans in Place, Hoping to Avoid "Anchor Effect" The last 5 yrs haven't been easy for 21A. It finished last yr around 23K bbls, Nico confirmed. But that was less than 1/4 the 100K bbls or so it sold in 2019, which was already off its peak of well over 110K bbls the yr prior. It lost a big chunk of volume in 2020, but couldn't stem the tide, declining close to 30% each yr from 2022-2024.This yr, 21A is still down, but "better than it has been," Nico reports. Off in the high teens, co's strength remains in "fan favorite" Hell or High Watermelon wheat brand, which is "even or a little bit up," depending on the mkt this yr. Blood orange variant of co's Brew Free or Die IPA continues to decline but is still a top brand. Co's 2026 plans revolved around investing in those core brands plus newer 21A lager, which is "doing well and growing." It's also got an RTD brand and was prepping to get non-alc versions of core brands in mkt ahead of Dry Jan.So tho they're winding down at the sizable 120K sq-ft plant in San Leandro and co's taproom and brewpub, Nico and Shaun "don't want to see production stop" so they can keep supplying at least co's home mkt, if possible, hoping a buyer will pick up the brand. "If someone could plug and play this brand into their existing facility," they would work to "make that happen as fast as possible." Because "if you're a known brand, once you exit the market," it's "like driving a car off the lot" and you're "losing a big chunk of your value immediately." He's seen it close up, calling it "the Anchor Effect." That brand may have been acquired, but it's not on shelves and getting it back on shelves could be a tough road, he suggested. Separately, the San Leandro facility 21A built is also a strong asset for a partner that can fill it, tho if co's lender can't sell it in whole, he expects a "liquidation process."Craft a Different World from a Decade Ago Some craft brewers may be "putting good faces, happy faces" on, but if "you survive by selling your beer in the grocery stores," Nico suspects you're "suffering," he said. "Retail is a different animal" and "distribution is a different animal," these days. Once upon a time, distribs would "pay brand value to take you on" and "they wanted to sell beer." But "they're focused on a lot of things that aren't beer now, because beer's not paying the rent," he acknowledged. Similarly, "retailers are giving shelf space to the products that have velocity." So he "wouldn't want to be a beer brand trying to get on the shelf today."

21st Amendment to End Ops as Financial Partner Backs Off; Brand Sale Could Keep Beer on Shelves

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