COVID-19 Impact on Breweries

Beer Talk
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For those living in areas that still can operate, how are things looking? I know things aren’t great, but are any of your local places still doing “okay” business?

I got thanked profusely when I did a pickup of beers at a local place about two weeks ago. I hope they’ll be able to make it because I think they just started hitting their stride with beers recently.

One relatively new brewery in my area (actually about 50 minutes away, but surrounded by a number of other breweries I go to semi-annually) threw in the towel pretty much the moment Virginia started instituting various social distancing practices. First casualty I had heard of. They may not have been doing well and just saw the writing on the wall, but I’m betting they won’t be the last.

On the flip side The Veil in Richmond Virginia had a release that was a disaster (from a social distancing perspective). People packed, standing in lines, waiting for a beer release. It’s the kind of thing that would definitely be a case for shutting down breweries as “non-essential” businesses in the Commonwealth:

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I don’t imagine they’re doing okay. 4 weeks ago only a few local breweries were making deliveries in New York. Now the number doing free deliveries has increased a lot. Some are still using GrubHub etc. The bottle shops might be in worse condition. Our local one has great support from the community, with virtual beer sharing online three times a week. They should survive since it’s not a very large scale business. But for example City Hops at Upper East Side could be well gone since they seemed to be in difficulties even before this.

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Seemingly a lot of UK breweries are doing OK thanks to mailorder, local deliveries, and click and collect. Some have been selling out of bottles, bottling/canning for the first time and introducing bag in boxes.

However one brewery commented that this did not make up for keg and cask sales dropping to pretty much nothing.

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Mikkeller NYC closed, apparently due to a lack of customers at their location…

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This is sad. I suppose they were very reliant on baseball fans. It is pretty far out to travel for beer otherwise.

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Mikkeller NYC was not open at all during quarantine. I am sure that there was some reason that they didn’t set up outdoor seating (they certainly had the space). But it is sad insofar as that area is now an even bigger beer desert.

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Not knowing any details, I would guess Mikkeller probably ran the numbers and realized they’d burn less money just staying closed than attempt any kind of partial reopening, especially if there was no event traffic since establishments build that kind of revenue generation into their location.

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A few local bars are starting to close around me. The closest one to my house that I really like was able to stay afloat due to additional neighborhood support. However, if these lock downs keep going on I don’t think it, or many others, will last past the new year.

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A handful of breweries have closed around here. Some early, some recently.

I did talk to a local brewpub (serves food). When they first started doing takeout in April, they said they were doing twice the business from before shutting down.

A lot of breweries around here have stopped doing tasters. One that still does, will onlybring out one at a time.

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Just to check - are they retired on RB? Feel free to shoot me a message to handle that if the locals didn’t get to it yet! :slight_smile:

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That said, it was a weird time for the breweries. When the lockdown in Dalmatia started last spring, and the microbreweries started doing deliveries - they couldn’t brew enough! Everyone was ordering beer, buying by the crate etc. etc. However, when everything opened again, with the lack of tourists, the summer profits were way down, they couldn’t get rid of the stock…

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Exactly the same here in Hungary. In May we sold more beer solely through our webshop than it’d been forecasted beforehand for all the channels combined. Unfortunately since then people run out of money/interest and webshop sales are pretty bad, and the same applies to basically every Budapest pub. Interestingly enough the countryside locations do pretty well, considering.

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I’d figured that Covid might hit regional / middle-sized breweries worst actually - and even some craft breweries are struggling, Croatia might have its first big casualty in that department.

Kaltenberg Adria in Kukuljanovo, near Rijeka, is going into receivership. Kaltenberg invested some 12 million Euros, maybe slightly more into the brewery. 2 years in, they were blocked because they owed 200 000 Euros of taxes, a paltry sum really in comparison, a debt which Croatia apparently refused to restructure for whatever reason. They also owe a similar sum to a bank, and owe around 660 000 to suppliers. They are also owed 400 000 from distributors. So, around 700 000 Euros in the red…

Kaltenberg has a long, storied history in Croatia, mainly linked to another region, Dalmatia - and my hometown of Split, where Kaltenberg was brewed for decades in the now-defunct Jadranska Pivovara, before Slovenian Laško, their owners, snuffed it entirely out of existence slightly more than a decade ago (likely in a bid to get more capital to purchased their rivals Union). Kaltenberg was beloved locally and linked in Croatian minds to Split and Dalmatia really. Its popularity dwindled and disappeared somewhat after the brewery closed, though it was still contract-brewed out of Laško on a sub-licence after Laško’s assassination of Jadranska - but it wasn’t local anymore so fewer and fewer people cared.

Fast forward back into 2017/2018 and it was announced that Kaltenberg would be building a brewery - but not in Dalmatia (wouldn’t be surprised if the corrupt local authorities “scared” them away), but to the north, in Rijeka. Which, perhaps, alienated and disappointed a portion of their former fanbase, and, it was opened, to much fanfare, targeting the local Rijeka market and the Kvarner region heavily with their Tars beer - pretty much the canned essence of “nothing special”. They marketed it as the “first beer from Rijeka” despite neither this being the first beer in Rijeka (there was already an active micro/brewpub in town, there was one before at least), nor was it brewed in Rijeka but in a village “behind the hill” from it… they changed their logo to say “first real beer from Rijeka”, because why not insult others. The brewery is, however, top notch, also with a spacious restaurant.

Half a year later Luitpold of Bavaria, Kaltenberg’s owner, visited Split and managed to alienate in his statements the entire Croatian craft beer scene. The brewery claimed they brewed "craft beer as well (a run of the mill nondescript hoppy(ish) lager), and, to quote, saying "That which makes us different us from other producers of craft beer is that we know how to make beer, unlike those who brew it according to recipes which they download from the internet.. :rofl: They also claimed, ironically they wanted to be a nexus of craft beer… which kinda never took off. Wonder why.

Later on, they further alienated the Dalmatian market by connecting their Tars brand with the Rijeka football club. They went all in trying to profile Tars as THE beer of Rijeka and the Kvarner region, while exporting Kaltenberg-brand beers as well to other regions and even some countries. They invested a huge amount of money in various marketing schemes around the town - the beer was sold for an insanely low price for Croatia - 60 cents for a 0.5l can, which is what we get the cheapest supermarket beers for, sometimes going even buy one get one free for as low as 65 cents! They were giving the stuff away in every way possible. But it somehow didn’t take. At least not enough.

Covid-19 arrived and, well… the market became pretty darn fucked up for everyone. It would appear that they massively struggled with liquidity, not coming anywhere near the numbers they envisioned.

And now… the future of the brewery is extremely uncertain.

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In the UK Brains have transferred their 150+ pubs to Marstons. So Covid-19 results in an oddity - usually the old macro breweries ditch the beers in favour of becoming food led pub cos.

And very few breweries have shut this year, whereas I seem to be adding a couple of new breweries a week. Basically you can rely on the British to buy beer if they can get hold of it - whether macro supermarket beers or via hatch it their local micro.

To an extent I suspect it the old macro breweries that will suffer the most. I get adverts from the likes of Badgers popping up on my Facebook. They are launching a new Milk Stout - the bitter bois were all moaning at the costs - less than £3 a bottle - and the £9 postage if you ordered less than £40. They are used to purchasing a devalued product and knock down supermarket prices.

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