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Financial ruin could be brewing for U.S. craft breweries
Posted on 7/2/20 at 10:01 pm
Posted on 7/2/20 at 10:01 pm
LINK
WASHINGTON, D.C. (Nexstar) — Craft breweries around America were going gangbusters — until the pandemic hit.
Now, these small businesses are struggling to stay afloat.
The Brewers Association predicts almost half of their craft breweries will be forced to close because of coronavirus lockdowns.
Bob Pease, CEO of the Brewers Association, says many of the 8,000 small and independent craft breweries in the U.S. quickly shifted their businesses models to delivery and to-go sales.
WASHINGTON, D.C. (Nexstar) — Craft breweries around America were going gangbusters — until the pandemic hit.
Now, these small businesses are struggling to stay afloat.
The Brewers Association predicts almost half of their craft breweries will be forced to close because of coronavirus lockdowns.
Bob Pease, CEO of the Brewers Association, says many of the 8,000 small and independent craft breweries in the U.S. quickly shifted their businesses models to delivery and to-go sales.
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Posted on 7/2/20 at 10:04 pm to Paul Allen
Why? People are buying more alcohol than ever.
Posted on 7/2/20 at 10:11 pm to Cosmo
Overhead? I’m not sure. You’re right about the demand being there, but are we at a point of over saturation? Some mid to larger cities have over 25 breweries. I mean, how many can a city sustain in a good economy, let alone with millions unemployed during a pandemic?
Posted on 7/2/20 at 10:14 pm to Paul Allen
quote:
but are we at a point of over saturation?
Yes
Posted on 7/2/20 at 10:16 pm to Cosmo
quote:
but are we at a point of over saturation?
Yes
Wine industry, with 3-5 times as many producers, says hello
Posted on 7/2/20 at 10:21 pm to Paul Allen
I would think a lot of people are cutting back on this type stuff. Yes, alcohol sales are up, but if you list your job you are probably not buying a $15 four pack. Over saturation may be true, but thats not whats causing the real hurt right now, in my opinion.
Any small business can't take a 20% cut in sales and survive. Couple that with the fact that a lot to most of these breweries are relatively new so they are servicing debt and its a recipe for disaster.
Any small business can't take a 20% cut in sales and survive. Couple that with the fact that a lot to most of these breweries are relatively new so they are servicing debt and its a recipe for disaster.
Posted on 7/2/20 at 10:23 pm to Cosmo
Because the majority of craft brewers rely on on-premise sales to make money. Distribution is very low markup, especially if you're going through a distributor.
This post was edited on 7/2/20 at 10:24 pm
Posted on 7/2/20 at 10:44 pm to Paul Allen
quote:
Some mid to larger cities have over 25 breweries.
And over 25 McDonald’s. And over 25 Domino’s.
I have no data to offer, but why can’t breweries sustain in a populated city?
Posted on 7/2/20 at 10:47 pm to Cosmo
quote:
ut are we at a point of over saturation?
Yes
No
Posted on 7/2/20 at 11:55 pm to Paul Allen
Breweries either thrive by killing it with production or being a neighborhood spot. There’s pretty much a brewery or two for every neighborhood inside the Houston loop and all were crowded prior to covid.
Posted on 7/3/20 at 6:27 am to Paul Allen
Breweries that were struggling before the pandemic are either still struggling or shutting down. A lot adapted to smaller batches weekly that are selling out.
I look at Gilla, All Relation, Brieux Carre, Parleaux, and Urban South that have been pumping out new stuff every week and selling out. Now I don't know the books but they all seem to be thriving with the new model even though I'm sure they would all like to reopen.
I look at Gilla, All Relation, Brieux Carre, Parleaux, and Urban South that have been pumping out new stuff every week and selling out. Now I don't know the books but they all seem to be thriving with the new model even though I'm sure they would all like to reopen.
Posted on 7/3/20 at 6:39 am to Cosmo
quote:
Why? People are buying more alcohol than ever
I dont remember where, but I saw that the huge spike in beer sales was mostly BMC
Posted on 7/3/20 at 7:05 am to Cosmo
quote:
but are we at a point of over saturation?
In some places, maybe... but not overall.
Posted on 7/3/20 at 8:05 am to BottomlandBrew
quote:
Because the majority of craft brewers rely on on-premise sales to make money. Distribution is very low markup, especially if you're going through a distributor.
Exactly. This is really about the smaller places that rely on the weekend crowds.
This post was edited on 7/3/20 at 8:07 am
Posted on 7/3/20 at 8:49 am to Paul Allen
I'm drinking as much as I can.
Posted on 7/3/20 at 9:51 am to Twenty 49
Some will go under due to being in poor financial shape certainly. But there's no way the more popular ones should go under as said many are as popular as ever.
Posted on 7/3/20 at 11:01 am to Mingo Was His NameO
Two in our state switched over to making hand sanitizer. One managed to get picked up by Kroger.
Posted on 7/3/20 at 2:25 pm to bigberg2000
quote:
Exactly. This is really about the smaller places that rely on the weekend crowds.
taproom sales make the business profitable on a small scale.
it’s why there are so many craft breweries
it’s like video poker for a small bar. You need something really profitable to support a high overhead small business
Posted on 7/3/20 at 5:01 pm to Cosmo
A lot of them are basically tap room only.
Don’t think Urban South that has lots of distribution but like Parleaux and Brewe Carrie.
Don’t think Urban South that has lots of distribution but like Parleaux and Brewe Carrie.
Posted on 7/3/20 at 8:03 pm to Paul Allen
It’s amazing how everyone seems to get f$&ked by covid except for large multinational conglomerates. It’s almost as if the response to this virus is entirely orchestrated to crush small business competitors on mainstreet.
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