E-Malt.com News article: USA: Survey by Brewers Association shows 99% of craft brewers feeling economic impact of COVID-19 pandemic

A survey by the Brewers Association takes a sobering look at how the COVID-19 outbreak is impacting craft breweries, many of which are seeing a curb in production or, worse still, have had to close their dining and tap rooms to customers until further notice — that's the situation in Ohio, the Crain’s Cleveland Business reported on March 20.

The BA survey is ongoing. All craft breweries are welcome to take part.

So far, just 1% of the 619 breweries that completed the survey said their businesses have not been impacted by the pandemic. Of all respondents, 90% said they're feeling impacts to onsite sales, 59% said they feel it on distributor orders, and 89% said they've had to cancel events.

Some of this is to be expected. But the numbers help bring context to the situation.

So far, more than 95% of all respondents say they anticipate year-over-year sales to be down over the next month, 64% have reported scaled back production and nearly 58% are anticipating layoffs (only 9.5% of respondents specifically said they anticipate no layoffs).

That "in no way implies that anywhere near half of small brewery jobs are in jeopardy," BA chief economist Bart Watson clarified for Brewbound. "That said, like other small businesses, every day being shutdown increases the pressure, and it is clear that this unexpected shock will lead to layoffs at a broad scale. Every day without relief will likely increase the cost in jobs."

Breweries are pivoting to other options where they can, including home delivery of beer and food (for those with restaurants) and curbside pickup. The Ohio Craft Brewers Association has its own running list online of its members offering carry out, delivery and direct shipping.

And the financial system is working to support affected borrowers. On March 19, for example, the Small Business Administration announced Ohio's approval for the Economic Injury Disaster Loan program. The SBA's Cleveland office is now able to accept and review requests for loans of up to $2 million at interest rates of 3.75% for small businesses and 2.75% for nonprofits.

But the losses in the craft beer sector widely populated by small, independent businesses will undoubtedly be steep. The odds of the nearly 7,500 breweries in operation at the start of the year making it through the outbreak scare without closing down for good are slim, especially considering the jury is out on how long this pandemic, which is very likely to plunge the country into a recession, will last. The BA apparently is working with Congress to carve out additional relief for the brewing sector, but time will tell what develops there.

Ohio had a record number of craft breweries coming into the year and was on track to reach 400: that's with nearly 330 in operation as of February and 70 more in planning stages. Those openings, of course, have been put on hold.

"We can't really see the future right now, this situation changes hour by hour. But as of right now, I think everybody is looking for the light at the end of the tunnel, including some relief from federal and state governments," said Justin Hemminger, a spokesman for the OCBA.


20 March, 2020