Hospitality Goes into Hibernation; Beer Industry Braces for Impact

As people stay home, social practices meant to save lives will take a toll on businesses that rely on public life. Where possible, breweries are adapting to stay afloat.

Joe Stange Mar 17, 2020 - 5 min read

Hospitality Goes into Hibernation; Beer Industry Braces for Impact Primary Image

As the United States hunkers down in the face of a global pandemic, the brewing industry is preparing for devastating knock-on effects, with no one knowing how long it will take for people to once again be able to fill up bars, restaurants, taprooms, and festivals.

In an effort to blunt the impact of the novel coronavirus disease, or COVID-19, health experts and public officials across the country are strongly recommending practices of social distancing—staying home as much as possible, avoiding crowds, keeping distance from others. In cities and states hit harder and earlier by the virus, governments are ordering the closure of bars and restaurants. The goal is to “flatten the curve” of infections, so that the country’s health-care system is not severely overloaded during the crisis—a situation that would lead to more deaths.

Inevitably, the sudden changes in public behavior—even a week ago, this was difficult for most Americans to imagine—are already damaging the hospitality industry, including breweries large and small. Here and there are reports of staff layoffs, likely to grow in frequency in the weeks to come. Many breweries are looking for ways to adapt, hoping to keep their businesses afloat until the crisis passes—a matter of weeks or months, nobody is certain.

Trying to get a clearer picture of the obstacles faced by breweries, the Brewers Association is encouraging them to participate in an online survey on the impact of the virus. Bart Watson, economist for the industry group, says that the information gathered will help them to communicate the industry’s needs to policymakers.

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The association has published some preliminary guidance on the challenges to come, but Watson is careful to say that there are too many unknowns—including the impact of what is likely to be a broad-based recession, which some economists were predicting even before the pandemic. “What’s going on right now is unprecedented in recent history, and so it’s hard to model what the effects will be,” he says.

Across the country, breweries with taprooms have been announcing indefinite closures. In many cases, businesses are adjusting on the fly, promoting more to-go sales of packaged beer or growlers. Many are dabbling in or expanding online sales, sometimes via email and mobile payment services such as Square. Many are encouraging sales of gift cards or vouchers to generate immediate cash flow.

“Right now we have one day of to-go sales under our belt, and the response was good,” says Jason Sahler of Strong Rope Brewery in Brooklyn, New York. “The community is doing what they can to help us out, and we really appreciate it. At this point we are going to keep up with this model as long as we can.”

Sahler says they have not had to let go any employees, “and we are currently in a financial position so that we don't have to. We are looking to support them as much as possible through this crazy time. We also have a small staff so it's a little easier for us at the moment.”

Here and there, breweries are trying more creative approaches. In Garland, Texas, Lakewood Brewing was offering a free roll of toilet paper—in short supply in stores across the country, as people stock up for long stays at home—with every order of to-go beer.

With people staying home, ecommerce and direct-to-consumer delivery are growing almost overnight. The alcohol delivery app Drizly says that last week its sales grew at double the rate that they did last year—and in the past four days, it’s grown more than triple the rate. On average, people are spending 30 percent more on the app.

“We expect continued acceleration as more people stay home and bars/restaurants curtail activities,” says Sam Melcher, spokesman for Drizly. “Almost every store in [the Drizly] network, across 180 markets, remains open, and our retail partners [are] working day and night to satisfy the massive influx or orders.”

Joe Stange is Managing Editor of Craft Beer & Brewing Magazine® and the Brewing Industry Guide®. Have story tips or suggestions? Contact him at [email protected].

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