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While alcohol consumption is on the rise as people stay at home during the coronavirus pandemic, America’s craft brewers could be on the verge of a crisis that may well devastate the industry.
Because people are largely unable to visit taprooms, the small- and medium-size brewers that run them have lost a primary source of income—and many may not be able to weather an extended lack of customers.
The numbers might be best illustrated in a recent study by the South Carolina Brewers Guild. On average, sales from breweries and brewpubs throughout the state are down 70%, and nearly 45% are seeing sales declines of more than 80%. And 80% of the breweries that responded said they would be unable to remain open after three months; 15% said they might not last another month.
While the results are limited in scope, they do reflect a growing problem that many brewers throughout the country are experiencing.
There were 8,386 breweries operating across the U.S. in 2019. And most of those don’t have significant packaging operations. Instead they rely on on-premise sales for the majority of their income. And many states (including South Carolina) ban small brewers from shipping or delivering beers in-state. (Shipments throughout the country are regulated by federal law.)
“Releasing the data wasn’t done to scare, but it was done to show that we need further relief to aid these small businesses, as we have no idea how long this will last or when anyone will be able to move back to an on-premises model, or when we do, how limited that will be,” said Brook Bristow, executive director of the South Carolina Brewers Guild, on Twitter.
The year 2020 was already threatening to be a rougher one than the past several in terms of brewery closures. Bart Watson, chief economist at Brewers Association, said in a recent State of the Industry presentation that he expected, pre-pandemic, to see 400 breweries close this year (vs. 294 in 2019).
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