On Friday afternoon we received an email from Dave Morales of Subdued Brewing Company announcing that the team will be halting efforts to open the brewery in the Gifford Grocery on Elm St. Subdued Brewing would have added to the incredible number of breweries that have opened up in Bellingham and the surrounding area over the past two years.
The team couldn’t justify moving forward with the project in the Gifford’s space because the finances didn’t add up. While they aren’t opening in the Gifford’s space the team is open to any opportunities that may present themselves. For the time being, the effort is on hold.
Subdued Brewing began as a team effort between Dave Morales and Chris Chris McClanahan in the spring of 2015. They then brought on Patrick McEvoy, owner of Elizabeth Station, as an investor and adviser. Even the mere discussion of opening the brewery shook up the quiet Columbia Neighborhood. The proposed brewery would have been right next to houses and the neighbors questioned whether they wanted an establishment that served alcohol right next door.
Subdued Brewing public meeting – April 2015
Many of these concerns were voiced – and quelled – at the public meeting Subdued Brewing held a few months later. The community and neighborhood showed that most supported the project and looked forward to it bringing life and culture to their doorstep. But some were concerned about late night noise and disturbing the neighborhood. Both Dave and Chris live very close to the proposed location and were excite to add something positive to their neighborhoods.
Chris and Dave are well known in the community and both excel at home brewing. Dave had commercial brewing experience with jobs at Pike Brewing, Pyramid and finally at Boundary Bay. Dave also opened up The Bottle Shoppe on Holly St. in 2005. Bellingham’s first craft beer bottle shop. In our interview last year, Chris had this to say about Subdued’s place in the community…
We want our taproom space to be a relaxing place for locals to meet up with their families and neighbors to enjoy a pint and perhaps take home a growler. Lots of bike parking…children welcome…community-centered. – Chris McClanahan, Subdued Brewing
Dave Morales on the left and Chris McClanahan on the right.
Dave always told us and the community that the brewery was a long way from opening when the whole thing started. With so many popping up it was generally assumed by the community that it was a foregone conclusion. The question was just, “When?” They knew what to expect and Bellingham was all too excited to watch them progress and add to Bellingham’s growing craft brewery scene.
With Subdued Brewing closing, Bellingham still has new breweries planned, including Illuminati Brewing, that hopes to open sometime this winter.
With the stratospheric growth of craft beer in Bellingham it is sometimes forgotten that opening a brewery is actually
very difficult and fraught with hurdles and unknowns. Many of these hurdles revolve around funding. Some reports were that the financing needed to fund Subdued were hovering around the $1 million mark. As you’ll see below in their press release, these were the very reasons the project didn’t move forward.
The national craft brewery market has slowed and there have been layoffs at Stone Brewing. The craft market is moving towards a more hyperlocal model, where distribution is less important. More money is made in the taproom, where margins are much higher. But this is also a model that is less attractive to investors as it takes a longer time to capture the principal investment.
While it may be harder to capture investors, hyperlocal breweries support communities, are instilled in our local stories and provide character to our neighborhoods. Subdued Brewing would have been a welcome addition to all of these and the Bellingham. We thank them for bringing excitement and intrigue to our craft community and we wish them luck on their next ventures.
Subdued Brewing Press Release
Hello Subdued fans,
After taking a cold, hard look at all of the numbers, our financial situation, and all of the options available to us to gather the needed funding, we have decided that the risk is just too great to responsibly open Subdued Brewing Co in the Gifford’s space. Even with our conservative numbers, the hole of debt that we would create just to open the doors meant there would be a high likelihood of failure.
Combining the enormous construction costs (both specific to the brewery and city requirements) and the time frame needed for securing any debt-based funds to add to the investor dollars we had, it was just too much. The margin of error became nearly zero. It all came down to a basic and unavoidable fact: the build-out costs to create a brewery in that space were too high to warrant moving forward given our means.
There was pressure on us to just “go for it” and see where things landed. If it had only been our money and the gaps in funding smaller, we may have done just that. While we understand that risks are inherent with start-ups, we also understand that when the risks are too great, it’s better to just cut your losses and move on. There were so many people who helped us along the way both professionally and via casual chats, and we never would have gotten as far as we did, or learned as much as we did, without them. We humbly thank all of you.
While it was a gut-wrenching and emotional decision, we feel it is the right one. Too many people’s time, money, and potential futures were being put at too high a risk. We still own the trademark, have a functioning LLC, our killer logo, and vetted boilerplate documents for any potential future attempt at making Subdued Brewing Co happen. While we do not have another plan at the moment, there is no scenario or model too crazy to ponder. We are open to and will approach any new ideas the same way this idea got started, “Let’s just keep talking about it until it doesn’t make sense to.”
Hopefully we’ll see you over a pint soon.
Cheers,
The Subdued Brewing Crew:
Chris McClanahan
Dave Morales
Patrick McEvoy
