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he craft beer industry, like many industries, has been reeling from the effects of the Covid-19 pandemic
while struggling to adapt to new restrictions and laws. Breweries of all sizes are feeling the pain but smaller
breweries are especially hit hard. Not that long ago, regional breweries were struggling to see sales-growth as
small, hyper-local breweries were soaring. The larger regional breweries were losing sales because they
weren’t able to compete with the new and cool beers coming out from hyper-local breweries that have been
popping up in neighborhoods. They were also struggling because of the competition from Big Beer on the
other end which dominates in the high-volume on and off-premise chain business. In fact, it was a general
industry consensus before the pandemic that breweries should put their money into opening up satellite
tasting rooms and build their fan base through these neighborhood spots rather than opening big
production facilities and jumping into heavy distribution of kegs, bottles, and cans.

Now, post-Covid19, having a distinct distribution print, a production facility to can or bottle, and having
accounts already up and running is what’s allowing some breweries, including these bigger regional
breweries, to be able to produce and sell beer during this time.

Smaller breweries who don’t can or bottle are in the toughest position right now. The CCBA released a
survey last month where they found that responding breweries sold an average of 50% of their beer
through tasting rooms. Additionally, they sold another 20% through local restaurants and bars. If they
rely mostly on draft sales there is no money coming in. Many have been completely closed down, even
ceasing beer production over the last few months. Others are creating walk-up windows, beer drive-thrus
to and offering curbside pick-up. Some are hiring mobile canning companies to can their beer so they
can continue brewing, offer can releases, and utilize one of the newest options that the ABC has
allowed for breweries which is beer delivery, direct to consumer. Previously, in most states it was illegal
to deliver beer directly to a consumer. After Covid-19 hit things had to change and they did.

Many local craft breweries have taken advantage of loosened restrictions, most notably offering a beer
delivery service as soon as they were able to. For most, it’s been a great success. People are drinking beer
while stuck at home, they enjoy getting it delivered right to their door, they know it's fresh, and they also
like to support their local breweries. It's a win win for all concerned.

Obviously, breweries' overall sales have taken a significant hit with the closing of  tasting rooms and on-
premise sales (bars and restaurants) dropping to nearly zero, but the ability of many places to utilize these
loosened rules has allowed them to keep a steady stream of revenue into the brewery.

Many breweries have transitioned to 100% of theirr beer going into cans vs. kegs. It’s also allowed them
to keep some of their staff employed and safe,. Working in a the brewhouse, most brewers have been
incredibly successful in being able to socially distance while still keeping our tanks filled. Brewhouses are
generally clean spaces anyway so adding on extra sanitizing  and cleaning policies has been quite seamless.

Many breweries are working to create a craft beer experience for their consumers at home through Virtual
Beer Fests, tastings, and lectures. Some have live bands  celebrity cameos and more. It's innovation by
necessity and it seems to be working though it will obviously never replace the real thing.

While the craft beer community has definitely taken a hit from the shutdown due to Covid-19, it is going to
survive. Unfortunately, some of your favorite breweries might not return when they are allowed to open
tasting rooms again, but so many others are hanging on and doing the best they can to keep brewing
the beers you love.

One thing is certain, things will change as we move through this next phase of reopening. Even when
tasting rooms open back up they are unlikely to be able to function at the degree they were as revenue-
generators for breweries. When most places get the green light from their state to open tasting rooms it
will be in a  modified way. The big question is when the pandemic is over will state allow these create
revenue during these uncertain times.
How Covid 19 Is Changing Craft Beer
By Lenny McGuire
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