In a span of about two months in early 2024, three Raleigh breweries within a half-mile radius closed their doors for good. Little City Brewing and Provisions was the first to go in mid-February; New Anthem Beer Project announced sudden statewide closures throughout March; and on April 6, Clouds Brewing left its West Street storefront.
“Certain businesses were positioned in the right place at the right time,” Little City owner Jon Seelbinder says. “Others didn’t have the exact mechanics of location and brand recognition.”
It isn’t just dumb luck that has allowed some brewpubs to survive—and thrive—over others. According to census data, Raleigh’s population increased by 1.9 percent between 2022 and 2023, making it one of the fastest-growing cities in the nation. The city’s downtown often sees new construction, whether the new high-rise and accompanying café off Hillsborough Street or the West Street Extension Project.
Operating a local watering hole for the city’s influx of new residents seems like a no-brainer. Unfortunately, the food and drink industry is never quite that simple.
Little City and Clouds Brewing, which operated two blocks from each other, can trace the beginning of their troubles to a March 2017 fire that destroyed a nearby apartment complex and damaged several other buildings.
“There was always supposed to be a phase 2 of Little City,” Seelbinder says. “There was always a kitchen mapped out, but it never got completed. When the fire hit, I said, ‘What the hell do we do now? If we build this kitchen, are we going to make it through this?’”
When it opened in late 2016, Little City operated solely as a brewpub, doling out local beers and some small provisions. Seelbinder says that his intention had always been to introduce a kitchen, but the fire slowed foot traffic around Glenwood South considerably and made the whole operation near impossible. Little City continued to keep its doors open through early 2024, but the road was often bumpy.
Clouds, on the other hand, has a larger-scale operation. Its North Raleigh taproom opened in 2015, and a full-scale brewpub with German food offerings opened in Durham’s Brightleaf Square in 2016. The downtown Raleigh location was smaller but nevertheless experienced a steady stream of customers since opening in 2014. The fire made things difficult for primary owner Matt MacNeil’s enterprise, but Clouds managed to stay open with help from its two other locations. By 2019, downtown stabilized and Glenwood South was back to normal, the blaze a distant memory.
Then, in March 2020, the country shut down. The food and drink industry was forced to pivot.
“Hosting our own events—drag brunches, trivia—really added to our revenue, showing that people would much rather go out for an experience and pay for that than pay for a meal,” MacNeil says.
Everyone knows that the pandemic hit small businesses hard. But the pain points persisted long after the World Health Organization declared it over in May 2023: rising loan rates, inflation, elevated expectations for an out-of-home dining experience, and landlords have impacted Raleigh’s brewpubs.
MacNeil sees a wider trend in breweries at large: smaller operations, like Flour & Barrel, are more likely to thrive in a hyperlocal community, boosted by word of mouth for residents living within walking distance. Bigger brewing operations—think Highland Brewing Company or Red Oak Brewery, two North Carolina–based craft brewers—also fare better, since they sell their products across the state and bleed into neighboring states. Clouds straddles an awkward middle ground—too large for a hyperlocal community but too small for statewide recognition.
“You’ll see the small brewpubs … something where they’re brewing beer just for themselves,” MacNeil says. “That makes sense. But companies like ours—they’ll only do well if they grow. That’s what we’re working on right now. How do we become a regional brewery? We need to be able to distribute in Charlotte and Wilmington, but also into Tennessee, South Carolina, and Virginia. If we can’t make it there within two to three years, then it’s just not a viable operation.”
It’s difficult to grow when commercial rent prices shoot up and force small businesses out of storefronts they’ve occupied for years. According to MacNeil, Clouds’ move out of its West Street location came as a result of the discrepancies in rent between new builds and older properties—even if they’re only a few blocks away from one another. A newly constructed unit in Smoky Hollow might cost thousands of dollars less than a site on Hillsborough Street that’s sat vacant for years.
Flour & Barrel, “a catalyst for community, relaxation, and escape,” now sits where Little City operated for eight years. Seelbinder partnered with local restaurateur Anthony Rapillo to open the spot, which features Italian small plates and craft cocktails. Speaking positively about Raleigh at large, Seelbinder stresses that he put a lot of faith into Rapillo, Flour & Barrel, and the community.
“I believe wholeheartedly that when you have something designed a certain way, you have to see it through to make sure it does what it needs to do,” Seelbinder says. “It made sense for me to take a step back, partner with somebody, then make a move. I’m still involved, but the brand really took a beating and I needed a concept change. That’s what we’ve done.”
In Clouds’ former location on West Street, La Mala—a Durham cocktail bar serving up Mexican specials—has already staked its claim, with a large “coming soon” sign below where Clouds’ brick-mounted logo used to be. MacNeil is looking into opening up another location in Raleigh, but the taproom isn’t going anywhere. Neither, they say, is Raleigh’s craft brewery scene.
“We’re doubling down on Raleigh. We’re gonna make it happen,” Seelbinder says. “But we’re going up against challenges that we wouldn’t have imagined we would face. It’s gonna take all of us leading it together and grabbing hands to really see success from the community as a whole.”
Comment on this story at food@indyweek.com.
