Mystery Brewing Company owner Erik Lars Myers confirmed this morning that his Hillsborough brewery and its popular pub will close on October 31, and its twenty-six employees will be laid off. 

Myers, who started Mystery—Hillsborough’s first microbrewery—in 2012, told the INDY that the decision has been a year in the making. A distribution change at the end of last year made his business model effectively untenable, he says. Coupled with storm outages and a “string of bad luck,” he says, Mystery “couldn’t make the numbers work.”

In short, it has too much debt and can’t afford to pay its bills. While the pub is profitable, it doesn’t bring in enough revenue to cover that debt and the brewery’s losses. “In the grand scheme of things, we were heavily leveraged,” Myers says. The pub “won’t make enough on its own to pay back what we owe.” 

The staff, he says, has known about the impending closure for “some time” and has been looking for work. 

Since its inception, Mystery has championed experimentation and been known for its innovative small-batch brews, which often use seasonal ingredients to develop new flavor combinations. In 2017, it added a kitchen with a menu of elevated, seasonal brewpub fare designed to complement the beers on tap, such as a beer-cheese topped hot brown sandwich paired with Evangeline, a Belgian ale that took home an honorable mention at this year’s N.C. Brewers’ Cup.

Myers, who served as president of the N.C. Craft Brewers’ Guild and co-authored two editions of North Carolina Craft Beer & Breweries with Sarah H. Ficke, has witnessed the ebb and flow of the craft beer industry boom in North Carolina. 

In, 2017 Myers reflected on the industry’s maturing market in response to a Brewers Association report that cited 97 breweries closed in 2016 and 68 closed in 2015, telling The News & Observer: “I don’t think it’s a bubble. I think it’s about being agile as an entrepreneur. And if you can change and roll with the punches and see how the market moves and move with it, then I think in the long term you are going to be successful.”

“It does suck,” Myers says. But he’s hopeful that someone will come along and do something cool with the brewpub’s space on South Nash Street. “Something’s gonna land on that spot, no problem. Will it be the same thing? Probably not.”

After speaking to the INDY this morning, Myers officially announced the closure on Mystery’s Facebook page: “This has been an incredibly difficult decision. We’ve always been undercapitalized, and it’s been a struggle to operate for some time now. We’ve suffered a string of pretty bad luck over the past couple of years: equipment failures, construction and permitting delays, storm-related outages and losses. The end result is that we can no longer afford to operate.”