Craft brewers struggle to cope with pandemic

Breweries launch home delivery services while the industry raises money to help those struggling with a milkshake beer

Saskatchewan’s craft brewing industry is looking for creative ways to minimize the impacts of COVID-19.

But with the abrupt closure of taprooms last month and craft beer sales through restaurants suspended indefinitely, some beer makers face an uncertain future, according to the Saskatchewan Craft Brewers Association.

“Some breweries are still able to sell beer in cans, bottles and growlers, but the widespread closure of restaurants and taprooms has all but shuttered smaller brewers who aren’t able to package beer,” the SCBA said in a statement recently.

COVID-19 has created turbulent waters for small businesses across the province, the association added. Small brewers are no exception.

Glen Valgardson, general manager at Pile O’ Bones Brewing in Regina, said members of the Saskatchewan craft brewing industry are looking for ways to maintain sales and help each other stay afloat.

At least two craft brewers — including Pile O’ Bones Brewing — have launched home beer delivery services. The delivery services distribute their own beers, as well as products made by other craft brewers in Saskatchewan.

The SCBA is also raising funds through the sale of a new milkshake IPA. The beer, part of SCBA’s annual collaboration beer fundraising project, is made with local ingredients including haskap berries, saskatoon berries and sour cherries produced by Saskatchewan fruit growers.

The ale has creamy mouth feel, and a combination of sweet, juicy and tart flavours, SCBA says.

The product was brewed at Pile O’ Bones Brewing in Regina but proceeds from its sale will be shared among SCBA micro-brewers that don’t have canning capabilities and are no longer able to sell their own beers in taprooms and restaurants.

“Saskatchewan brewers have a long history of collaboration. Whether its sharing ingredients, recipes or equipment, we know we can accomplish more when we work together,” said Valgardson.

“We don’t want to see anyone close their doors.”

Despite collaborative and creative approaches to marketing and distributing, the craft beer industry has been greatly impacted by COVID-19.

If current restrictions stay in place much longer, it will be difficult for some craft brewers to keep the lights on and the fermenting vessels running, Valgardson said.

“Breweries that invested in packaging, like canning or bottling lines… seem to be doing OK because the demand for alcohol during COVID-19 has been fairly consistent …,” he said.

“The ones that are in direct trouble right now are the very small micro-breweries that don’t have the ability to package their beer, or weren’t able to afford those very expensive canning machines and packaging infrastructure.

“Their revenues were based on taproom sales and essentially, their taprooms were closed overnight. They make beer and they sell it in house or they sell it in kegs to bars or restaurants that have also been forced to close due to COVID-19.

“They’re in real trouble right now.”

Mark Heise, president of SCBA, said business closures affecting the brewing and restaurant industries have had a huge impact.

Craft sales to restaurants and bars have almost dried up. Larger craft brewers such as Regina’s Rebellion Brewing — where Heise serves as president and chief executive officer — have packaging capabilities and distribution arrangements with licensed retailers in Saskatchewan, including Sobey’s and the Saskatchewan Liquor and Gaming Authority.

But for smaller brewers, the closure of taprooms took away their source of revenue.

“Some of our small brewers can’t even distribute their beers,” said Heise.

“They only have their taprooms to rely on, so their sales are essentially at zero.”

When asked if permanent closures of small Saskatchewan micro-breweries were likely to occur, Heise did not rule out the possibility.

“I think that’s definitely a very real concern.”

Concerns for the well-being of the craft brewing industry are being felt across the country and throughout North America.

The American-based Brewers Association recently surveyed 500 of its craft brewer members to gauge the financial impacts of the COVID-19 pandemic.

The survey suggested “a sharp drop in craft category sales, massive furloughs or layoffs, and the high likelihood of large numbers of brewery closings without a swift end to social distancing measures… or rapid government support….”

Average sales among survey respondents were down 65 percent, according to the survey. Nearly 60 percent of respondents said that if current conditions persist, they would be forced to close permanently within one to three months.

“That’s a pretty shocking and alarming result,” said Heise.

The Canadian Craft Brewers Association (CCBA) is conducting its own survey, Heise added. Preliminary results suggest a similar situation in Canada.

Despite a grim outlook for the industry, there have been some positive developments.

Although beer sales through bars, taprooms and restaurants are virtually non-existent, demand for alcohol in general has been reasonably stable — down slightly in some cases but up in others.

Valgardson’s home delivery service — which is offered in Sask-atoon and Regina — has fared well.

Pile O’ Bones employees who used to work behind the bar in the company’s Regina taproom have been converted to delivery drivers. The service — which has four to six vehicles on the road every day — is delivering six to 10 pallets of craft beer per week and filling about 150 orders every shift.

“We’re moving a lot of product,” but profit margins are much lower, Valgardson said.

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