Many Craft Taprooms Shuttered, for now, Amid COVID 19

Dear Client:

Your editor reached out to the majority of top 50 craft brewers this morning on their production readiness and more amid the spread of COVID-19, which is starting to paralyze on premise businesses, and workforces everywhere. 

We’ve gotten just a few responses back so far from this usually candid group. It’s likely that producers are still trying to figure out solid ground, as the situation changes daily. And they’re busy. Really busy. 

Indeed, it’s become pretty apparent that, despite scores of states — including New York, New Jersey, Connecticut, California, Ohio, Illinois, Kentucky, Maryland, Massachusetts, Washington, Louisiana, Pennsylvania, and Indiana — having already relegated bars and restaurants to basically takeout and delivery, restrictions on gatherings will only continue to mount. Just within the last couple hours, the San Francisco Chronicle reported a “shelter in place” order expected to go into effect at midnight tonight for six counties (San Francisco, Santa Clara, San Mateo, Marin, Contra Costa and Alameda), which would see local residents (more than 6.7 million people) directed “to stay inside their homes and away from others as much as possible for the next three weeks.” The SF Chronicle calls it “the strictest measure of its kind in the country.”

Also breaking, The Trump administration is asking people to avoid gathering in groups of more than 10, and to stay away from bars and restaurants for at least the next two weeks, but it’s not mandatory — at least, not yet.

WHAT’S A BREWERY TO DO? In the midst of these developments, many brewers are just trying to adapt. 

For example, Houston-based Saint Arnold Brewing Co. founder Brock Wagner said they’re setting up their Beer Garden kitchen for “to go” food orders, and have also established a “drive through” setup for patrons seeking beer to go. 

“We are being flexible and adapting,” Brock told CBD. “Off premise sales are good while on premise sales are down a little.  Obviously on premise sales could plummet if bars and restaurants are ordered to close (Texas hasn’t taken such measures yet).  … We have many of our team working from home and coming to work intermittently.” 

Beyond that, last Friday, Sierra Nevada’s Joe Whitney told CBD that their sales trends are tracking twice that of the YTD rate so far in March. As for production capabilities in the face of virus sanctions (note, this was before mandated on-premise closures), he’d told CBD they’re “not impacted yet but the coming weeks will certainly be challenging and knowing how to prepare is a a bit of a moving target changing daily, sometimes hourly,” noting they have seen a bit of international slowdown. 

Today, Joe updated us that Sierra “took the precautionary measure Sunday of announcing the temporary closing of our restaurants, tasting room, tours and gift shops in California and North Carolina.” Other brewers are doing the same (see below).

For more on how breweries are handling the crisis, Forbes has a roundup of craft brewer taproom closings. But rest assured, we’d be surprised if the majority of brewery on-premise operations weren’t halted in the coming days. Already, the nation’s largest state for them has imposed the most extreme measures. 

SITUATION IN CALIFORNIA “VERY CHAOTIC.” California Craft Brewers Association executive director Tom McCormick said the situation is dire for his members. 

As BBD reported this morning, California Governor Gavin Newsom seemed to just sorta ask for the closure of all bars, nightclubs, brewpubs, and wineries over the weekend, and that restaurants stay at 50% capacity. But LA mayor Eric Garcetti took a harder line, issuing an emergency order Sunday night requiring bars and nightclubs that do not serve food to close until at least March 31; (foodservice could continue through takeout/delivery). And as we reported up top, the state’s Bay Area has mandated a “shelter in place” order, what is essentially a stay at home directive. 

Tom says they’ve gotten some conflicting info in the wake of the Governor’s on-premise restrictions. 

“One staffer said it was mandatory. Another said it was suggested. Another policymaker said it would be up to the individual county health department. One brewery reported the city police coming by last night and ordered them to close. Conflicting info. Our top priority today is to get a written statement from the Gov office,” he said. (No update on whether that’s come through, at this time.) 

To wit, Hayward, California brewpub Buffalo Bill’s Brewery (which is shuttering for now) noted on Facebook how the Governor “has not provided guidance for ‘social distance’ for the employees who work shoulder to shoulder.” 

One thing is certain: California has the most craft breweries of any state in the nation, by far. So you can be sure this is hitting them hard.  

“It is very chaotic right now,” said Tom. “There is extreme concern among the CCBA membership. As you know, most of the 1050 breweries in the state rely on on-prem tap room sales for a significant amount of their revenue. It will be a struggle, and we hope the state and federal government step up soon to provide relief.”

SOME TAP ROOMS CLOSING PRE-EMPTIVELY. Other brewers are closing their taproom doors even before it’s mandated by the state, likely as it’s unprofitable to remain open with waning demand amid tough labor costs. 

Colorado-based Avery Brewing (majority owned by Founders and Mahou) sent note to customers today that they would close their taproom and restaurant through early April.

 “Our first priority is the health and safety of our visitors, co-workers, and community. We have been carefully monitoring the recent developments with coronavirus (COVID-19) in Colorado. Out of an abundance of caution, we have agreed as a team that we will temporarily close our Tap Room and Restaurant. We plan to reopen on April 5,” they said, and added that they’ll pay those employees during the closure, “and beer production will continue as usual while we’re closed to the public. 

“We will continue to take the utmost care in all our cleaning and sanitization procedures,” the statement said. 

PREMISES BLURRING. Finally, as sister publication Wine & Spirits Daily reported earlier today, the Distilled Spirits Council is also “working with states to explore creative solutions for on and off-premise establishments, such as easing regulations in states to permit curbside pick-up and home delivery to adults of legal purchase age,” per a statement from the group. For instance, New York, New Jersey and Connecticut will provide a waiver for carry-out alcohol, effective 8pm tonight, per the governor’s office.

Until tomorrow,

Jenn, Jordan, and Harry 

“One of the greatest pains to human nature is the pain of a new idea.”

– Walter Bagehot

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