COVID-19

Bars and restaurants are unlikely to welcome new customers soon, as the number of people who feel comfortable going out has hit its max.

When California Gov. Gavin Newsom issued a stay-at-home order and shut down on-premise bars and restaurants to stop the spread of the COVID-19 pandemic in mid-March, 92% of San Diego-based Societe Brewing’s business was draft beer. The shutdown stopped the 1,000 tap handles pouring Societe’s beer at 700 San Diego restaurants and bars from flowing. Societe, like so many other small craft breweries, was left scrambling to figure out how to continue on.

If Summer 2019 was the season hard seltzer found its footing, Summer 2020 was the year it blasted off. Off-premise dollar sales of hard seltzer between the Memorial Day and Labor Day weekends this year reached $1.75 billion — a full $1.1 billion more than the same period last year, according to market research firm Nielsen.

The ongoing economic pain points caused by the COVID-19 pandemic and subsequent shut downs of on-premise retailers have led to severe consequences for the beer industry and adjacent businesses.

Well, that didn’t go as expected. Heading into the Labor Day holiday weekend, off-premise dollar sales of beer, cider and FMBs increased 12.2%, and once again topped $1 billion, for the one-week period ending September 5, according to market research firm Nielsen.

For the first time since April, off-premise beer category dollar sales dipped below $1 billion, to $987 million, for the one-week ending August 29, according to market research firm Nielsen.

Both Sierra Nevada and New Glarus will keep their taprooms and tour operations shuttered until the end of the year at the earliest.

New Jersey restaurants are permitted to resume indoor dining at 25% capacity beginning today, Gov. Phil Murphy announced earlier this week. Last week, Iowa Gov. Kim Reynolds issued a proclamation forcing the closure of drinking establishments for on-premise service in six counties as the state combats a spike in cases of COVID-19.

The fundamental changes in everyday life brought on by the COVID-19 pandemic have affected the beer industry’s supply chain in ways both expected and unexpected. With bars and restaurants closed for on-site service for months, the evaporating demand for draft beer forced brewers to package more beer than ever before, creating a shortage of cans.

Two days after a majority of its hospitality employees announced their intention to unionize, Minneapolis-based Surly Brewing Company announced it will close its beer hall indefinitely beginning November 2.

So far, 2020 has defied definition for brewers. For many, the loss of sales inside their own taprooms and at bars and restaurants has been devastating. For others, pivoting to packaged beer sales has been successful but not enough to replace the lost on-premise revenue.

Craft brewers have availed themselves of several lifelines since the COVID-19 pandemic sent the beer industry into turmoil. They include the U.S. Small Business Administration’s Paycheck Protection Program, curbside beer-to-go sales and, in some cases, delivery to consumers’ homes.

In his fall legislative agenda, Pennsylvania Gov. Tom Wolf urged the state Legislature to legalize recreational marijuana and use proceeds from its sale to support business grants and restorative justice programs, as well as pass a six-month reduction or cancellation of the state’s alcohol tax on the hospitality industry.

The top selling eight beer brand families have all surpassed $1 billion in sales at multi-outlet chain and convenience stores year-to-date, according to data shared by market research firm IRI, which includes sales data through August 9.