Report: 46% of Craft Breweries May Close Within Three Months

Coronavirus-fueled lockdowns across the country have squeezed economies to a near standstill. This includes America’s formerly growing craft beer industry, which now faces a grim future.

According to a recent survey conducted by Brewbound, a leading trade publication in the beer industry, 46% of craft producers may have to shutter permanently within three months, unless current lockdown conditions change.

The recent survey polled 455 industry members from 49 states and Washington, D.C. Other eye-popping numbers for American breweries included:

  • 12.7% said they could stay open only another one to four weeks under the lockdown
  • 2.5% were already planning to close
  • 8.3% could make it six months to a year
  • Only 5.1% believed they would still be in business a year from now, if nothing changes with COVID-19
  • Overall, the craft industry has declined 29% under the coronavirus crisis, with non-distributing breweries hit significantly harder.

Before the COVID-19 crisis, America contained more than 8,000 breweries, which employed about 13,500 workers, including part- and full-time jobs. Around 67% of respondents to the Brewbound survey reported laying off staff.

Respondents said that the federal stimulus package would help lessen their monetary woes, but worried that the relief funding would not be enough.

Complicating matters is the industry’s recent shift — pre-coronavirus — torwards the taproom model. As distribution channels clogged up with too many craft beer SKUs, many breweries invested heavily in building up their on-premise business. Taprooms became the primary source of revenue. With all those now shutdown, and after all that money pumped into parts of the business that cannot operate, breweries with already-thin margins face nightmarish financial situations.

It’s a tragic development for an industry that had seemingly found much more room to grow thanks to onsite sales. What happens next depends on how quickly life can return to some form of normal once COVID-19 releases its crippling grip on America. And that world looks like — post-coronavirus — remains unknown.

Photo by Evan Dvorkin on Unsplash.

Kyle Swartz is editor of Beverage Dynamics magazine. Reach him at kswartz@epgmediallc.com or on Twitter @kswartzz. Read his recent piece How Can Craft Distilling Survive The Coronavirus?

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