The Brewers Association (BA) is conducting an online survey asking breweries across the country questions about how the current shutdowns are impacting their businesses. While the survey continues, the other day the BA released a report on the initial results. The survey is open to all craft breweries nationwide.
I’m going to focus on one question and the report’s analysis of the responses to that question. My goal here is not to dwell on the negative or to spark fear. Just take this for what it is and carry on, doing what you do to stay safe and support local businesses in these discombobulated times.
Among other things, the survey asked: “Given current costs, revenues, and the current level of state and federal aid, how long do you project you can sustain your current business if social distance measures stay where they are now?”
Responding to that question, 45.8% said they could only last one to three months. Another 24.8% said they could only last three to six months.
That means over 70% of respondents said they could only last less than six months! (The remainder: 2.3% said they’re already planning to close, 11.8% said one to four weeks, 8.9% said six months to a year, 6.4% said longer than a year.)
Okay, now take a deep breath.
As of April 9th, there are 8,150 breweries in the USA. As of the same date, 525 breweries had taken the Brewers Association survey. That means the data we’re talking about here is based on about 6% of the nation’s breweries. Again, this info is based on responses from just 6% of all breweries.
By all accounts, the BA’s report says, the breweries facing extinction are primarily “very small,” as we will discuss below.
Given the nature of these shutdowns, breweries that package their beers (bottles and cans) and are established in distribution channels find themselves in a better position than breweries who rely largely, or entirely, on draft beer sales. As has been reported, beer sales at retail outlets like grocery stores have been okay, spiking upward as people stocked up and holding pretty much steady ever since. This is no help for the small breweries who do not package their beer or distribute through those kinds of channels.
As I posted a few days ago, a lot of breweries are hustling right now to get beer into cans and find their way into the distribution stream.
It’s great that you can buy really good, locally brewed beer at the grocery store these days, and you should definitely do that. At the same time, do not forget about the small, neighborhood brewery up the street that is currently selling growlers and crowlers in a desperate attempt to make up for weeks and weeks of lost taproom revenue.
Who You Callin’ Small?
In 2010 there were just over 100 breweries in Washington. Now, more than 400. Nationwide, in 2010 there were 1,800 breweries. Now more than 8,100. In general, it’s been small breweries fueling that growth. Not just small, but really small.
The report from the Brewers Association reminds us, “…most small breweries are really small. Approximately 75% of the breweries in the country make 1,000 barrels or less per year and the median craft brewer makes about 400 barrels.”
It holds true here at home. In Washington, about 75% of the state’s 400-plus breweries produce less than 1,000 barrels per year. Only 12 breweries in Washington produced more than 10,000 barrels in 2019.
According to the BA’s report, “Consequently, the breweries indicating they may need to close are by and large very small.”
Take that however you like, but recognize that if you want your small, neighborhood brewery to be there for you when we finally get back to normal, it needs your support until we do.
The Last Straw
Rewind the clock. Let’s go back to December 2019. Maybe we weren’t talking about a worldwide pandemic, but plenty of people in the world of craft beer were talking about things like market saturation, bursting bubbles, and an inevitable thinning of the herd.
For years, breweries have been opening at a remarkable pace in America, with more than one new brewery opening every day for years on end. A lot of thoughtful people were questioning the sustainability of the whole thing. Many of those thoughtful people would agree that a portion of America’s breweries were teetering on the brink of extinction before the pandemic became reality.
The survey asked breweries how long they could survive given these pandemic-related shutdowns. What if three months ago they’d asked, “Can your brewery survive for more than three months if it encounters any kind of major hardship?”
In a not-so-theoretical way, maybe that is exactly what they just asked.
I also wonder exactly who has responded to this survey. Who took the time, and had the inclination, to complete the survey?
Regardless of the current shutdowns, a lot of brewer owners have been going over their profit and loss sheets with worried minds, wondering how long they can carry on. Maybe they replied.
Regardless of the current shutdowns, there are a lot of brewer owners who have no idea what a profit and loss sheet is. (Good at beer but bad at business.) Maybe they replied.
So who did not reply? Who are the 96% that did not take the survey? I don’t know, but I do know that a lot of brewery owners are hustling right now, fighting for their survival. The military trains soldiers to not think about what comes next. In battle, you focus on what is in front of you right now. The task at hand. That’s how you survive and succeed. There’s a time for long-range planning, but a crisis like this is probably not it.
Here’s what I know for certain. Support your local brewery in whatever way you can. Whether that brewery is selling beer to go, delivering it to your doorstep, or conducting a GoFundMe campaign, support it however you can. Most of all, do what you’re supposed to do: be well and help us all be well. There will be brighter days ahead, and there will be beer.