A statewide survey of craft breweries paints a bleak picture of COVID-19’s effects on the industry.
The South Carolina Brewers Guild released a collection of survey results on April 14 that showed COVID-19 was leading many breweries to question if they could stay open for more than one to three months, as the pandemic has forced the closure of taprooms, led to canning supply shortages and created a lack of avenues to sell products.
In a Free Times story earlier this month, a handful of Columbia brewers applauded the community for supporting them with to-go orders, but acknowledged, without taprooms sales and other revenue streams, profits were still down considerably.
The survey’s results are ominous:
- On average, sales from breweries and brewpubs are down by 70 percent. With about 45 percent showing sales declines of more than 80 percent.
- 35 percent of all breweries ceased production entirely, with 60 percent slowing it.
- About 70 percent of breweries have laid off or furloughed employees.
- 80 percent of respondents won’t remain open after three months. 15 percent say they won’t be able to stay open another one to four weeks and 65 percent say they likely will only be able to stay open between one and three months.
Throughout the city, breweries have taken different approaches to tackling the pandemic. Hunter-Gatherer Brewery, the city’s oldest craft-brewing brand, closed its operation entirely, River Rat Brewery closed its takeout retail offerings on March 29 (but recently launched a can sale) and Columbia Craft Brewing Company is seeking increased canning to adapt.
“We’ve only been on the off-premise market for six months … thank god it happened, because that’s, to say it quite frankly, the majority of our revenue right now,” says Andrew Strauss, co-owner of Columbia Craft.
He says the guild’s survey data is “scary” and emphasizes its particularly so for breweries that brew less than 1,000 barrels. Strauss explains that those breweries may not be as well positioned from a financial standing.
“These breweries are going to be the ones affected the most. It’s just the law of small numbers versus large numbers. You brew less than a thousand barrels and take away a couple months, that’s a major blow,” Strauss reasons. “I didn’t know it would be this bad.”
Strauss details that he hasn’t had a full month to assess the exact impact the pandemic has had on his brewery’s sales, but it was down about 40 percent in a partially affected March. He estimates that, under the current conditions, Columbia Craft could keep running for six months to a year.
The brewery is now trying to plan out its future goals for distribution — about a third of which is still intact. Keg sales are almost zero as restaurants and bars have been forced to close for on-site consumption, so Strauss says increasing canning is a safer path.
He wonders if that might stay the course, even after things return to normal.
“I don’t know how many restaurants are going to open back up,” Strauss says. “Are they going to be buying as much? Probably not, so what is that going to do?”
Kevin Varner, owner of Hunter-Gatherer, shut down the brewery in March in an effort to ensure re-opening after the pandemic passes. He says he’s uncertain breweries will fold before June or July, but after that, if taprooms are still forced to be closed, it could spell trouble.
He points to the differing federal programs (Varner was interviewed on April 14, before one of the federal coronavirus relief programs, the Paycheck Protection Program, ran out cash on April 16. Congress had yet to allocate more funding as of Monday morning.) as a reason why, and hopes that landlords and banks will be understanding of the difficulties. He points to his own landlord, which has given him a two-month deferment on his rent.
“The longer it goes on, the more difficult it is,” Varner posits.
In its release, the state brewer’s guild advocated for home delivery and direct shipment restrictions to be removed to aid breweries, citing that “at least 26 other states have eased those restrictions.”
“Allowing these practices would ease the strain on the economy while promoting proper social distancing, self-isolation, and quarantine protocols by providing one more way to keep people at home with their families while allowing the hospitality industry to better take care of theirs,” guild executive director Brook Bristow says in the release.
Varner called that a “generous, great idea,” but was uncertain it would shift much for breweries like his, that rely mostly on on-premise sales, or sales at the taproom. He mentions the obvious health worries, as well.
“I think for some, the home delivery might make sense, but personally I’m trying to have the least amount of contact with as few amount of people as possible,” he says.
Scott Burgess owns Bierkeller Columbia, a local German-style brewing operation, and says that he’s facing a “major reduction in revenues.” Bierkeller doesn’t have a brick-and-mortar location, and instead runs a series of pop-ups, such as its popular spring and fall biergartens at Columbia’s Riverfront Park, which does insulate it from some of the pressing financial concerns of other breweries.
Still, the popups have been postponed for the foreseeable future. In the interim, Burgess and his team are slinging beer in crowlers and growlers from a to-go window at Swamp Cabbage Brewing, where he brews the beer, twice a week.
“It’s not a revenue stream we ever thought we’d be using, but it’s a lifeline,” he says.
Burgess posits that while home delivery will benefit breweries, he points to other initiatives that could be helpful, too. He says tax reprieves — explaining that breweries face steep taxes of 77 cents per gallon of beer produced — would be a boon, along with ensuring a smooth transition for breweries to re-open to the public.
“If we want the future to be a bright one still, despite all the darkness that’s currently still around, then everyone — public, private, distributors — has to work together to get things moving more easily,” he concludes.