USA: Craft brewing industry on the verge of collapse due to COVID-19

The craft brewing industry is on the verge of collapse, a new survey reveals.

Most breweries that responded to the survey by the Brewers Association trade group say they don't think their business can last three months under current coronavirus-induced operating conditions.

If such conditions continue, thousands of the approximately 8,100 U.S. breweries may close, the association says.

Most of the 455 breweries that responded to the survey say sales have dropped more than 70%. Most breweries and bars are closed to customers, so breweries' "sharpest declines" have been in draught beer sales.

Some breweries have been able to ramp up business with takeout, drive-up and delivery sales to a level that exceeds their former on-site sales.

However, "this should not be viewed as feasible for all brewers, nor should it be seen as a total replacement for draught sales," the trade association says. "One hundred percent growth in taproom sales via drive-up only helps when your taproom was 5% of sales and distributed draught was 75% of sales."

A responsible business owner does scenario planning, the association says, "but few, if any, build plans for a near complete drop in revenue with no insurance protection and continued bills to pay."

Many survey respondents say that, under current conditions, they can only remain in business for a few more weeks.

Asked how long they can sustain their business with current costs, revenues and state and federal aid, 13% of the breweries say one to four weeks, and about 3% say they plan to close sooner.

About 46% of respondents say they can remain open for one to three months. One quarter of respondents say they can remain open three to six months; 8% of respondents believe the time interval is six months to a year, and 5% say they can remain open for longer than one year.

06 April, 2020