Breweries Face Financial Strains Amid Coronavirus Pandemic

May 13, 2020

Little Brother Brewing is a small, boutique brewery owned by the Collie and McCoy families. Located in downtown Greensboro since 2017, the brewery has a regular menu of about nine beers, including "Jim's Lunch" - a stout American brew - and "The Big Slow" - a smoke bacon porter.

The Collies and the McCoys run Little Brother Brewing in downtown Greensboro. It opened in 2017.
Credit Little Brother Brewing

Since the pandemic hit, Little Brother Brewing is just one of many local taprooms adjusting to the new normal and trying to find a way to stay afloat.

They still have guests stop by to pick up their favorite beer, but for co-owner and head brewer Stephen Monahan, it's not enough.

"We make our money on beers at the bar," he said. "When you have all these additional packaging costs, like buying all these cans and labels and a new canning machine, and you can combine that with lower margins because they're getting more beer and paying less for it on top of cutting costs. So we're 30 percent of our normal sales."

Since the coronavirus pandemic hit, liquor sales across the state have increased by 21 percent, but that hasn't necessarily translated to profit increases among producers.

survey by the national Brewer's Association shows a typical brewery's on-site beer sales have declined by 65 percent since states put stay-at-home orders in place. And according to the same survey, of the more than 8,000 breweries nationwide, as many as 5,000 may go out of business if the shutdown continues through mid-June.

Elsewhere in Greensboro, The Pig Pounder Brewery is lucky it prepared ahead of time.

The tap room, brewery and pavilion at Pig Pounder has had a 90 percent drop in business since the pandemic. However, officials are optimistic since the beers they've already brewed have a shelf life of about six months.Credit Pig Pounder BreweryEdit | Remove

"We have not yet run a brew since we've shut down because we had such a ramp up of production in March to get ready for a traditionally busy April, May and June, usually the biggest months of the year for us here in Greensboro," said Head Brewer Khalif Matthews. "But of course, that all changed and so we have a solid stock of inventory of all these different types of beers. So we haven't had a need to brew another batch in our past month."

Pig Pounder says it has seen a 90 percent drop in business in its taproom. Matthews remains positive, though, since the beers they've already brewed have a shelf life of about six months.

For Hi-Wire Brewing, it's a different, and more positive, story.

The mid-sized brewery is based in Asheville and has taprooms in Durham and Knoxville, Tennessee. Hi-Wire also derives revenue from selling to retail outlets from Ohio to Georgia, as well as an online shop.

"We're definitely thankful to sell the beer we can," said Javier Bolea, Creative Director for the North Carolina locations. "There are a lot of breweries that don't have the resources. Just the team it takes to fulfill the processing of an online shop. The team it takes to get the beer out the door and the support form the community is a whole other thing that Hi-Wire is always had. So we're in the best-case scenario."

They've also received a loan with the Paycheck Protection Program that is designed to keep workers employed during the pandemic. Hi-Wire Brewing's taproom locations also offer curbside pick-up and delivery, something smaller brewers are also attempting. And manufacturing has not taken a huge hit; mid-sized brewing facilities were already operating in a way that made "social distancing" guidelines easier to implement.

"Most people work in groups of one person at a time," Bolea said. "Everyone's obviously wearing masks and gloves and sanitizing stations all over the brewery. In a cellar, there's one or two people working but they're kind of working on separate projects. On the packaging line we have people spread out quite a bit, so it's one person at the cans and cans get filled. It's another person putting them into boxes."

Hi-Wire Brewing is also helping during the pandemic by releasing a beer, the Hoppy Session IPA, to benefit service industry workers. A portion of the proceeds from every six pack of this beer will be donated to the USBG National Charity Foundation and the North Carolina Restaurant Workers Relief Fund