Here’s some bad news that you probably already knew instinctively but now get see illustrated by data: COVID-19 totally knocked craft beer on its ass in 2020.
Two reports released this week, which were commissioned by the Brewers Association and the University of Minnesota Extension, respectively, paint a dire picture of the economic fallout stemming from the pandemic within the craft beer industry on a national and local level. From overall production to market share to job creation, breweries around the state and around the country found themselves increasingly strapped and struggling in the face of the pandemic.
A Low Tide, Nationwide
According to the Brewers Association’s craft brewing production report for 2020, small and independent craft breweries saw a 9% decrease in overall production volume from 26.3 million barrels produced in 2019 to just 23.1 million barrels in 2020, which is a whole 6% more than the overall beer market lost in last year. This took craft beer’s overall market share down from 13.6% to just 12.3% in 2020. Perhaps even worse, craft beer’s retail dollar value dropped 22% in 2020 and the industry also suffered in the job market, providing 14% fewer jobs than it did in 2019. While the number of operating craft breweries hit a record high of 8,764 with 716 new breweries opening in 2020, that’s still 30% less than opened in 2019.
One small glimmer of home (depending on your perspective): seltzers and fermented malt beverages proved themselves to be pandemic-proof. When included into consideration as part of the beer industry, that overall beer market production jumps from -3% volume against 2019 to a 1% increase. Go figure.
A Similar Story at Home
The statistics in the national report were born out here in Minnesota in 2020. The Minnesota Craft Brewers Guild partnered with the University of Minnesota Extension to create a survey-based study that analyzed the economic significance of our state’s craft beer industry, and the toll taken upon it by the coronavirus in 2020. According to the study, local breweries saw an 18% drop in overall sales. As the effects of sluggish sales began to ripple outward, 1,058 jobs were affected, resulting in a 10% decrease in overall employment by the industry. Plagued by uncertainty and limited cash flow, a whopping 37% of Minnesota breweries declined to make capital expenditures (major investments in their business) in 2020, and the overwhelming majority of breweries that made a capital expenditure did so in response to COVID-19. When all of these declining numbers are stirred together like a wort of misery, the University of Minnesota Extension estimates that Minnesota lost a staggering $186.6 million in economic activity from breweries in 2020.
To make matters worse, some of the breweries that responded to the survey also reported issues in receiving funding from the various state and federal aid programs set up in response to COVID-19 because of a variety of factors unique to the brewing industry. Additionally, breweries that had previously used their revenue to support local charities and community organizations found themselves unable to do so in 2020, dropping the total number of supported organizations by 75% and cratering the total value of donations by more than 50%.
Yeesh, that was a bummer. Can I watch something cute to make myself feel better?
Ask, and ye shall receive. Here are some dogs delivering beer.
Alright, that’s better, I’m ready to act now! What can I do to help?
There are several legislative bills breweries are pushing currently for in Minnesota, which you can read about here. Five of the state’s six largest breweries are heading the Free The Growler campaign that would eliminate the annual production cap for breweries to be able to sell growlers and Crowlers out of their taprooms. The Small Craft Brewers Coalition is advocating to change the law to allow small brewers making under 7,500 barrels of beer a year to be able to sell 12- and 16-ounce cans out of brewery taprooms. The Minnesota Craft Brewers Guild is working in partnership with other hospitality industry groups on a wide-ranging bill known as the Drink Local Economic Recovery Act, which would address both the growler cap and the ability to sell cans out of taprooms among several other key reforms for the state’s cideries, distilleries, and wineries. If you support one or more of these measures, breweries are encouraging you to contact your congresspersons and to spread the word on social media.
After you’ve done that, go out and buy a 12-pack from your favorite brewery and support them one beer at a time.