NewsCoronavirus

Actions

Survey suggests majority of craft breweries could close nationwide

Brewers Association says 60% could close by July
Survey suggests majority of craft breweries will close nationwide
Posted at 8:40 PM, Apr 17, 2020
and last updated 2020-04-19 17:17:30-04

COLORADO SPRINGS — Craft breweries and Colorado go hand in hand, but a new national survey reports the majority of them could close by July because of COVID-19.

The survey, from the Brewers Association, got responses from around 500 breweries from all over the country. The report shows that sales at breweries are down around 65%, while distributed draught sales are down by around 95%. It also states that approximately 15% expect to close by May, while around 60% could close by July if these revenue trends continue. "I certainly think that there's the potential that we could see large scale closures here in Colorado. But, you know, that really depends on how long these things last and what the on-premise environment and people's beer purchasing looks like afterwards," said Bart Watson, the chief economist for the Brewers Association.

Watson told News5 there are more than 400 breweries in Colorado, and in 2018 the Brewers Association estimated they contributed around $3.3 billion to the state's economy. Also in 2018, breweries supplied around 25,000 full-time jobs. 2019 data should be coming out soon, and is expected to surpass 2018's numbers. But now, those numbers are in danger in 2020. "We haven't had any Colorado breweries announce that they would have to close yet, unlike nationally where we have seen some closures. So, it does suggest that maybe Colorado brewers are in a slightly better position given how much beer sales mean to this state and how passionate Colorado craft beer fans are about their breweries," said Watson.

Watson also said the competitive nature of Colorado's craft brewery industry could make it more challenging for those within the industry.

In Colorado Springs, Cerberus Brewing Company said both their food and beer sales are down by around 50%. However, they did say customers are still purchasing beer, but the dynamics of the business have changed entirely. "On a good weekend, we'll go through six or eight kegs of beer, and a good weekend now, we might hit three or four," said Josh Adamski, part-owner and head brewer at Cerberus.

News5 asked Adamski how long he thinks the brewery can survive with the Stay at Home order in effect. "I don't want to think about that. I'm hopeful that by the end of the month we get some leniency where we can have people come back now and then, but when it comes down to it, if next week we hear that we have to go through May, then we have to sit down and address it," said Adamski.

Adamski said they have had to lay off around ten employees. Cerberus is teaming up with Metric Brewing on Saturday to brew an "All Together IPA," where all of the money raised from that beer will be given to their employees. Breweries around the world are taking part in the effort. Adamski said to get through this pandemic, everyone needs to work together.

Meanwhile, Fieldhouse Brewing Company has been around for six years, and expanded to a second location in 2018. However, expansion is expensive, and they were about to get to the other side of that cash heavy process when they got shut down. They have started delivery service to help with the lack of taproom sales. "It's tough. We have been down about 80% as far as our taproom sales go, until we launched deliveries, which will take us to more of like, about a 50-60% loss in revenue... It's certainly a band-aid," said Owner Niki Fields.

Fields said of their 13 employees, three part-time people have been laid off. The remaining full-time employees are now doing delivery. "We survive by quantity, and the quantity is way low right now," said Fields.

In 2019, Fieldhouse said they generated around $70,000 in sales tax, and almost $30,000 of that was paid to the City of Colorado Springs. The brewery also paid around $250,000 in payroll taxes, in addition to roughly $3,000 in excise taxes to the state. "If you think, if they [breweries] weren't around, how many hundreds of thousands of dollars is that that's not being poured into our economy? And how many hundreds of jobs is that that those people now are not pouring into that economic cycle?" said Fields.

Those with the Brewers Association said there are 27 active breweries in Colorado Springs, and four in Pueblo.

Fields said their delivery service is supporting the business at this point. The pinned post on their Facebook page has all of the information on how to order, and this delivery map shows where they serve. After checking the delivery map, orders can be placed at this link.

Neither Cerberus or Fieldhouse have gotten any federal support money at this point.

News5 also spoke with Manitou Brewing Company, who said they operate on the more conservative side when it comes to their finances. Still, they said their brewery is months away from insolvency if this revenue trend continues. They are still selling beer and doing delivery orders.