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Craft breweries forced to pivot (again) as COVID-19 threatens taprooms nationally

In February, craft breweries — which made up 98.5% of the country’s 8,341 breweries as of June 30 — were in the midst of an evolution. Then coronavirus hit.
Credit: Dallas Business Journal
Breweries are grappling with COVID-19. (Todd Kale for American City Business Journals)

In February, craft breweries — which made up 98.5% of the country’s 8,341 breweries as of June 30 — were in the midst of an evolution. After decades of emphasis around interstate distribution, many were pivoting to more profitable over-the-bar sales with new taprooms and local fare. Then coronavirus hit.

The timing couldn’t be tougher: An analysis by The Business Journals of Small Business Administration lending over the past decade found 3,184 loans totaling $1.57 billion to U.S. breweries. About half of those loans were originated during the SBA’s most recent three years.

With drinking establishments shuttered or limited in capacity, brewers able to afford it doubled down on distribution. Others added equipment to boost to-go sales; Bart Watson, chief economist for the Brewers Association trade group, noted that sales at Crowler Nation, a supplier of 32-ounce crowler-fill machines, were 12 times normal in April. And where few breweries offered delivery before coronavirus, 30% now do, Watson said.

The moves appear to have helped limit, but not offset, the carnage. Craft beer production dropped 10% year over year for the first six months of 2020, with a quarter of all breweries reporting a sales decline of at least 27%, the Brewers Association said.

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