With little indication the COVID-19 pandemic is going to subside in the U.S. anytime soon, several cities and states have upped their restrictions on businesses and gatherings as the fall surge continues.
Governors in Illinois, Minnesota, New York, New Jersey and Connecticut have ramped up restrictions on bars and restaurants.
“If you look at where the cases are coming from, if you do the contact tracing, you’ll see they’re coming from three main areas: establishments where alcohol is served, gyms, and indoor gatherings at private homes,” New York Gov. Andrew Cuomo said in a press release.
New York bars and restaurants are required to end indoor service at 10 p.m. starting today (November 13). In neighboring New Jersey and Connecticut, on-premise establishments are also held to the same 10 p.m. cutoff time. Last month, Illinois Gov. J.B. Pritzker ordered that Chicago bars and restaurants halt indoor service, and Chicago Mayor Lori Lightfoot has issued a stay-home order for the city that is slated to go into effect at 6 a.m. on Monday, November 16. Minnesota Gov. Tim Walz set a 10 p.m. cutoff time for indoor service at restaurants and bars.
In other states, government leaders are enacting different measures to curb the spread of the novel coronavirus. Ohio Gov. Mike DeWine reupped the state’s mask mandate and added requirements that all retail establishments hang signs at their entrances informing patrons that masks are required. DeWine has also created a Retail Compliance Unit to inspect businesses’ compliance.
In Utah, Gov. Gary Herbert issued a statewide mask mandate that requires residents to wear masks in public and whenever they can’t be more than six feet from people outside their immediate household.
“Masks do not negatively affect our economy, and wearing them is the easiest way to slow the spread of the virus,” Herbert said in an address Sunday. “We cannot afford to debate this issue any longer. Individual freedom is certainly important, and it is our rule of law that protects that freedom.”
In addition to requiring Utahns to wear masks when outside their homes, Herbert asked people to refrain from private social gatherings until November 22.
Context: The U.S. has registered more than 10.4 million cases of COVID-19 since the pandemic arrived in the U.S. in January. Those numbers are climbing, with a 65.9% increase in positivity rates over the last two weeks, according to NPR. More than 240,000 Americans have died from COVID-19, which scientists say spreads among people in close contact and indoors.
What It Means: On-premise establishments, which provide a significant portion of craft brewers’ revenue, had begun to rebound after widespread shutdowns in the spring. Many relied on outdoor service during the summer, but as colder weather sets in, bars, restaurants and breweries are facing a long, hard winter.
Many breweries, including Chicago-headquartered Revolution Brewing and Massachusetts-based Trillium Brewing have opted to shut down on-site service during the winter. Other breweries opted to close indefinitely for on-premise service earlier in the pandemic, including Sierra Nevada, New Glarus, Flying Dog and Three Floyds.
Others, such as Minneapolis-based Indeed Brewing are embracing the winter and styling their taprooms and outdoor spaces for cold weather drinking. In Ohio, Fifty West Brewing announced today plans to open an ice skating rink, heated tents and fire pits to extend its season.
“We want Fifty West to be a place you can come and safely make memories throughout the holiday season,” founder Bobby Slattery said in a press release. “When we thought about winter and this pandemic, we wanted to give people a sense of normalcy, keep our staff employed, and provide a community hub to bridge the gap between fall and spring, with plenty of outdoor space for customers.”
What’s Happening: The percentage of establishments serving draft beer that are open for business declined for the first time since July, when the U.S had its second surge of COVID-19 cases, according to BeerBoard, which tracks on-premise sales at bars and restaurants. During the first weekend of November, 90% of draft pouring accounts were open, down 2% from the previous surveyed weekend.
Draft volume sales declined 8.7% nationwide compared to October 23-25. Nearly all states BeerBoard identified declined, but Illinois had the steepest drop by far, with a decline of 47.9%. Pritzker ordered restaurants in several regions to close for indoor service on October 30.
The only market where draft volume sales increased was Minnesota (+2.5%). Other states with double-digit declines included Florida (-11.2%), Texas (-14.4%) and Tennessee (-13.2%).
Nielsen CGA, the market research firm’s on-premise arm, reported that sales velocity in open bars and restaurants increased 233% during the week of November 7, compared to the week of March 28, when stricter lockdowns swept the country. However, sales velocity for the week of November 7 declined 26% compared to the same week in 2019.
In Illinois, which had the strictest restrictions in the survey period, on-premise sales velocity had the steepest decline for the week of November 7 compared to last year (-54%), but rebounded with a +1% gain over the week of October 31. Trends were much different in Chicago, where sales velocity declined for the fourth straight week and is down 37% compared to the week of October 10.
In other states monitored by Nielsen CGA, major cities are lagging behind other areas. Sales velocity in Los Angeles, San Diego and San Francisco is down 3%, whereas the rest of California is flat. New York City’s sales velocity is up 5%, but the rest of the state is up 14%.
Brewers Association chief economist Bart Watson believes that the data points to a long winter for the on-premise channel.
Another data point today from Nielsen CGA suggesting on-premise recovery took a step back the first week of Nov. BeerBoard, Open Table, & Google Trends all showing the same thing. Not just seasonal, these are YoY. Winter is going to be tough. Support places you want to survive. https://t.co/pFKbgYVn9m
— Bart Watson (@BrewersStats) November 12, 2020
Some Help on the Way: To help offset the financial losses during the pandemic, Lightfoot’s office created the $10 million Chicago Hospitality Grant Program, which allocates $10,000 grants to bars and restaurants in the city. Lightfoot plans to introduce legislation to cap fees that third party service providers, such as DoorDash and Uber Eats, charge restaurants for online orders and delivery.
The Pushback: Ahead of a potential bar and restaurant shutdown in that state, Ohio Craft Brewers Association executive director Mary MacDonald issued a statement that another shutdown would be catastrophic for her organization’s members.
“Make no mistake: a second shutdown would almost certainly devastate our industry and force many small businesses to close their doors for good,” MacDonald wrote. “Under current conditions, 37% of Ohio breweries report that they are likely to be forced to shut their doors within a year. A second shutdown would surely accelerate the permanent closure of those businesses and could place up to two-thirds of Ohio’s 359 breweries in peril.”
She pointed out that breweries were one of the first industries to pivot to contactless curbside pickup sales and donated surplus beer to be distilled into hand sanitizer.
Although bars and other drinking establishments were deemed “bad news” by Dr. Anthony Fauci, director of the National Institute for Allergy and Infectious Diseases, in June, the recent nationwide spike is caused by private gatherings, experts say. MacDonald urged that breweries not be forced to bear the brunt of policy changes.
“As we have been told repeatedly for the past few months, the rise in COVID-19 cases is directly attributable to unregulated, private gatherings,” she wrote. “Because of the exceptional public health measures we have put in place, contract tracing data does not suggest that breweries, bars and restaurants play a significant role in the current upward trends in COVID-19 diagnoses, hospitalizations and deaths.”
In Illinois, more than 20 Springfield-area restaurants have signed onto a lawsuit against Pritzker and the Illinois Department of Public Health over the governor’s increased restrictions.
For businesses that are following guidelines, they are too often met with anger from some customers. In Indiana, Mash Craft Brewing said it had to close one of its locations after a patron made threats to staff after being asked to wear a mask.
Alert: We are closing Greenwood tonight due to violent threats towards our staff from someone who didn’t want to wear a mask. After a bad exchange in our building and multiple threatening phone calls from the individual after leaving, we are closing to protect our staff.
— MashCraft Brewing (@MashCraftBrews) November 13, 2020
Last month, Massachusetts-based Notch Brewing shut down for on-premise service during Salem’s Halloween tourism surge, citing patrons’ unwillingness to follow COVID-safety compliance measures.