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More Tough Times for Craft Beer

#1

Arcadia is facing foreclosure after taking out too big of a loan to expand (same old story). Shouldn’t be a surprise for any beer geek since Arcadia has not been relevant for a very long time.

Great Waters, oldest brewpub in St. Paul, has closed. This one is particularly surprising since expansion and increased debt should not have been the culprit.

Descutes cuts labor force and sees a reduction in sales.

Schlafly in StL just fired their CEO for doing some shady shit including anonymously bad mouthing another brewery in town. Their sales have been dropping recently. They sold to a private equity a few years ago, so their owners were smart.

The St. Louis Brewery, which makes Schlafly beer, issued a joint press release with 4 Hands acknowledging that an unnamed Schlafly “senior executive” had “caused negative and misleading information to be circulated about 4 Hands” via an anonymous newsletter. The company added that the executive had since resigned.

The newsletter in question, called Brew IQ in the Lou, claimed 4 Hands was named after a sex act performed at massage parlors.

“The ladies are becoming woke and are starting to ask questions,” the newsletter said. “We’d like to give them a hand, but think the four are proving to be too many.”

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#2

For everyone of these closures haven’t there been 10 new breweries opening? It’s just business as usual.

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#3

You can look at numerous factors to assess the health of the craft beer market. I would say that eventually there will be a downturn. Whether this recent news is an indicator of that is yet to be decided. When new brewery openings stop, that’s already too late.

#4

For every decent-sized brewery that closes, yes, there’re probably ten tiddlers that have appeared. However, there may have been ten tiddlers that disappear too who don’t make the news.

I’d love to sniff around the accounts of some of these companies. It seems as if the simplest basics of economics are understood. And yes, I say that as a part-owner of companies with non-negligible debt/ebidta, who’s done the maths…

#5

Also seems like there is a limit to how much you can grow for some guys. In the case of Deschuttes and Green Flash, neither are bad breweries. In fact they are better than 80% of the new nanobreweries that open. But drinking hyper local is just the scene now. Kind of a pity actually that even good breweries like those ones won’t be able to expand to Miller Lite level. I’d certainly rather seeing Le Freak or an Black Butte around as much as a bud or guinness.