Craft brew­ers fall­ing flat amid COVID-19 clo­sures

Orlando Sentinel - - Wall Street Report - By Lisa Rathke

MARSHFIELD, Vt. — Sales of wine, spir­its and other al­co­holic bev­er­ages have risen during the coro­n­avirus pan­demic like foam in a freshly poured glass of beer.

Just not for some brew­ers.

Craft beer, par­tic­u­larly brews made by small, ar­ti­san pro­duc­ers, is of­ten con­sumed in bars, restau­rants, tap rooms and brew pubs — all of which have closed in many com­mu­ni­ties across the coun­try. While those brew­ers may sell some pack­aged brews or kegs, they rely on such venues to get by.

As a re­sult, small, in­de­pen­dent craft brew­ers have been forced to lay off workers and dump large quan­ti­ties of their prized bev­er­age. They’ve tried turn­ing to curb­side pickup and de­liv­ery of their prod­uct, but those won’t make up for the losses.

“COVID-19 has been dev­as­tat­ing for small and in­de­pen­dent craft brew­ers around the coun­try,” said Bob Pease, pres­i­dent and CEO of the Brew­ers As­so­ci­a­tion,

craft

which he said has heard of dozens of brew­eries that have gone out of busi­ness.

Roughly half the brew­ers ques­tioned in an as­so­ci­a­tion sur­vey said they would have to close if the quar­an­tine lasts more than three months, Pease said.

Some larger in­de­pen­dent brew­ers whose beer is dis­trib­uted to gro­cery and liquor stores have seen a bump in such “off-premise” sales during the pan­demic, but they’re still los­ing ground with­out their tap rooms in use and bars and restau­rants open.

Off-premise sales of in­de­pen­dent craft beer are up 17% in the nine-week pe­riod that ended May 2 com­pared to the same time last year, but larger, com­mer­cial brands are grow­ing at a faster pace, said Danelle Kos­mal, vice pres­i­dent of bev­er­age al­co­hol for the Nielsen Com­pany.

To­tal beer sales — which in­clude fla­vored malt bev­er­ages, hard seltzer, and cider — rose 20%. That com­pares to wine sales, which are up 30% and spir­its ,which jumped by 34% in that time frame, ac­cord­ing to Nielsen.

At Jack’s Abby in Fram­ing­ham, Mas­sachusetts, known for its lagers, coowner Sam Hendler said the com­pany may have to dump 100,000 gal­lons of beer — even though it’s among the craft brew­eries who sell to gro­ceries and liquor stores. It also has laid off about half of its staff of 150 with sales down well over 50% for April com­pared to that month last year.

“It will be a chal­lenge to sur­vive as one of the brew­ers that does dis­tri­bu­tion,” said Hendler, who is pres­i­dent of the Mas­sachusetts Brew­ers Guild. And for “the brew­ers that don’t do dis­tri­bu­tion, it’s just a time game. When does busi­ness come back? And do they run out of cash be­fore that hap­pens?”

Many of the roughly 8,100 small in­de­pen­dent brew­eries, which ac­count for a 14% mar­ket share of all do­mes­tic beer by vol­ume and 25% mar­ket share by dol­lars, rely on their own tap rooms or brew pubs to sell beer “on-premise” to cus­tomers.

They are not equipped to pro­duce beer for off-premise sales, Pease said.

MICHAEL DWYER/AP

Andrew Kel­ley of Jack’s Abby brings a cus­tomer his or­der this month in Mas­sachusetts.

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