Craft beer volumes decline ~10% during first half of 2020, according to Brewers Association survey

Discussion in 'Beer News & Releases' started by Todd, Jul 30, 2020.

  1. Todd

    Todd Founder (6,120) Aug 23, 1996 California
    Staff Moderator Fest Crew Society

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  2. donspublic

    donspublic Poo-Bah (1,916) Aug 4, 2014 Texas
    Society Trader

    Man not sure how representative that is over the whole industry (based on sample size) but if that is all, then I am pretty impressed. That showed that people got out that second quarter and supported their breweries along with breweries taking the initiative and getting beer out the door any way possible. I can only hope that things are better for the second half.
     
  3. JackHorzempa

    JackHorzempa Poo-Bah (4,609) Dec 15, 2005 Pennsylvania
    Society

    From the Brewbound article:

    “Through June, the BA counted 112 closings, which is a 4% increase compared to the same six-month period in 2019.”

    Brewery closings going forward will be an interesting aspect to monitor. I know in my area the pandemic has wreaked havoc for on premise sales which is very important for many of the small, local breweries since they realize greater profits from selling their draft beer at their taprooms.

    “Finally, the BA asked survey respondents to predict their second half of 2020. The aggregate of those responses averaged 4% growth compared to the same time in 2019. Smaller breweries, he added, are the most optimistic, predicting 12% volume growth, while regional craft brewers predicted just below 4% growth for the remainder of 2020.

    Watson called that bit of optimism “encouraging, and either suggests that the changes to the business models have worked, and brewers are more optimistic giving forward than they were a few months ago, or that these respondents are simply wearing rose colored glasses.”

    The challenge here is that the operations of the breweries, particularly taproom operations, is not just dependent on market conditions but by edicts of the Governors. Right now the Governor of Pennsylvania (Gov. Wolf) has pulled back from prior opening conditions and the current rules in place make taproom operations less tenable; I personally refuse to go to brewery taprooms under the existing operating structure from his latest Executive Order. And the fact that some customers are unwilling to return for their own personal reasons beyond state government mandates creates more economic pressure for the taproom business model.

    While tracking overall sales is important what is even more important for the small, local breweries is profit. With their taprooms either totally closed or partially open due to state rules there are very serious financial impacts here.

    Cheers!
     
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  4. Shanex

    Shanex Poo-Bah (1,605) Dec 10, 2015 France
    Moderator Society Trader

    Well thank you Covid-19...
     
  5. eldoctorador

    eldoctorador Crusader (767) Dec 12, 2014 Chile

    That doesn't sound as bad, all things considered
     
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  6. SadMachine

    SadMachine Poo-Bah (2,026) Mar 14, 2011 New Jersey
    Society Trader

    Impossible! I have drank FAR MORE beer in the first half of this year than any other! hahaha!
     
  7. ManBearPat

    ManBearPat Devotee (491) Dec 2, 2014 Colorado

    Same.. these statistics really make my efforts seem insignificant and that’s really sad
     
  8. donspublic

    donspublic Poo-Bah (1,916) Aug 4, 2014 Texas
    Society Trader

    I guess I look at it as if it is only said 10% that is tremendous because most of the small breweries I a thinking of have little to no store presence, only taproom and keg sales. They have scrambled and gotten stuff out in mobile canning, crowlers and growlers to keep their heads above water. I think the telling thing will be that they might be 10% down in revenue, but their cost are probably much higher. Selling a pint in the taproom is way different than selling a crowler
     
  9. JackHorzempa

    JackHorzempa Poo-Bah (4,609) Dec 15, 2005 Pennsylvania
    Society

    Do you have price experience here? Is the typical price for a crowler (32 ounces) double the price for a draft pint?

    Cheers!
     
  10. unlikelyspiderperson

    unlikelyspiderperson Meyvn (1,424) Mar 12, 2013 California
    Society Trader

    Locally, the one brewer who does crowlers is 5.50 for an imperial pint, 8 for a crowler, 20 for 3 crowlers (used to be a Sunday only deal but now all the time since they're obviously leaning on to go sales more). So there is a slight decrease in income when talking crowlers and I'd imagine a slight increase in cost in croaker v. washing a glass but I would still imagine that the biggest revenue loss has more to do with changed consumption habits with the social aspect removed
     
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  11. donspublic

    donspublic Poo-Bah (1,916) Aug 4, 2014 Texas
    Society Trader

    Actually most places are charging what they would for a pint in the taproom. So where I have been buying a crowler is about $5 a pint $10 a quart. It may be a buck less than the taproom, but they have the cost of the crowler, the cost of labor and labels to fill the crowler, so there is less profit on it. And if they are bringing in a mobile canning line and selling a 4 pack of pounders for $20 the those 4 beers would have cost about the same more more in the taproom, without the cost of cans and labor charge for the canning line. So yes they may sell the same amount of beer, but it doesn't have the same markup
     
  12. CB_Michigan

    CB_Michigan Initiate (174) Sep 4, 2014 Illinois

    One place near me prices their standard pints at $6-7 (higher ABV beers come in 10 oz servings). Their crowlers are $10. That was the pre-COVID price and they've held that steady. So they're taking a hit as off-premise is now a much larger percentage of sales. Where they've really been hurt is on the mobile canning, but six-packs sell faster than crowlers and they need to have cash coming in consistently. Canning has allowed them to get onto store shelves, so there is some benefit from scaling but not enough to offset the loss of on-premise revenue.

    Draft - $7 - 0.43/oz
    Crowler - $10 - 0.31/oz (costs: 1 crowler, 1 lid, 1 label, minimal labor expense)
    Cans - $12 - 0.16/oz (costs: 6 cans, 6 lids, 1 plastic holder, 6 labels, service charges)
    Self-distro (best case estimate) - $9 - $0.13/oz (costs: 6 cans, 6 lids, 1 plastic holder, 6 labels, service charges, gas & vehicle upkeep)
     
  13. QuakeAttack

    QuakeAttack Zealot (551) Mar 19, 2012 California

    I was expecting a larger decline. Not bad all things considering. However, since the recovery has been, well shall we state, gone poorly, it will be interesting to see whether the reduction will remain or become worse.