Americans are buying more alcohol during the coronavirus pandemic, but craft brewers are struggling to stay in business
Alcohol beverage industry analyst Bump Williams said store sales are up because customers are stocking up on economy-size cases from the biggest brands, such as Budweiser and Coors.
But experts say most of the 8,000-plus craft brewers nationwide don’t sell in grocery stores and can’t afford to produce large cases. Their revenue comes from sales of kegs to bars and restaurants or from their own tasting rooms and brewery sales.
“Before this all started, 85 percent of our sales were in kegs sent to bars and restaurants,” Dantzler said. “That has gone completely to zero.”
According to industry trade group Brewers Association, craft beer makers represent about 1 out of 3 beers poured in the country. With that gone, brewers are in trouble.
A Brewers Association poll of more than 500 breweries found that more than half believed they would close within three months if social distancing guidelines remained in effect, and a survey by the California Craft Brewers Association found that breweries in California have seen sales fall by almost half since social distancing measures went into effect in the state.
“It’s the smallest breweries that are in the most trouble,” said Brewers Association chief economist Bart Watson. “They’ve got the fewest places to pivot.”
Larger brewers aren’t immune to the fallout. Larry Bell, founder of Bell’s Brewery in Michigan, said that two-fifths of its business was from restaurants and bars. And though the company has seen an increase in sales through stores, it still has to figure out what to do with the 50,000 kegs — about 6.2 million pints — of its Oberon summer beer that were shipped to bars and restaurants around the country and must now be either returned or disposed of.
“No one’s ever had to deal with this before,” he said. The company has survived by ramping up production of 12-pack bottles. But even if he wanted to produce the value packs that are currently selling, Bell said it’s difficult to compete against larger companies to acquire aluminum.
“You can’t get extra cans at the drop of a hat,” he said.
But it’s not just the shutdowns that brewers say they’ll have to contend with. California Craft Brewers Association Executive Director Leia Bailey said that even after social distancing ends, brewers will have to contend with a future in which customers are nervous about going to restaurants and gathering in large crowds.
“There isn’t a magic bullet of if you do this, you will survive,” Bailey said. “There’s a lot of pain right now in this industry. It’s likely going to continue past the lifting of stay-at-home orders.”