As Drinkers Stay Home, Kansas City Breweries Struggle To Stay In Business
The shift away from local bars and taprooms could spell doom for small breweries, but Kansas City’s craft beer industry is fighting back.
Americans are still drinking lots of beer, but small breweries are facing a crisis as more people drinking at home rather than where the beer is made.
Craft beer makers come in lots of sizes, and Boulevard Brewing Company is one of the larger ones.
At its brewery on Southwest Boulevard, 850 cans and bottles per minute fly off the line.
“Staying pretty busy, yep,” says Boulevard President Jeff Krum over the noise of fast-moving bottles of beer. “Sales of bottled and canned beers are up.”
Across the industry, beer sales are up about 15%, but many brewers aren’t seeing any of that increase. Even large craft breweries with nationwide distribution, like Boulevard, rely heavily on sales to bars, restaurants and stadiums.
"And of course, almost overnight in mid-March that 36% of our business went to very nearly zero and remains there today,” adds Krum.
While that drop off wounded bigger craft breweries, it’s killing small ones.
Before the pandemic, Eric Martens, owner of Border Brewing in the Crossroads, made virtually all of his money selling beer by the glass to customers packed elbow to elbow into his small taproom.
“It was like one day we thought, well, maybe we'll have to close. The next day, we were ordering cans and pushing tables aside and closing,” says Martens leaning on the bar of his taproom, now crowded only by stacks of cans.
Now, with the taproom closed, Martens is canning his beer by hand. Not 850 cans per minute, but one can, every 50 seconds or so. He fills, seals and rinses a can before handing it over to taproom manager Jessica Bloom, who’s waiting with stickers and a Sharpie to label it.
This goes on for 12 hours at a stretch just to keep a trickle of revenue coming in.
“To be honest, the first week or so after we switched over to just doing carry out and delivery, I had some regulars coming in to pick up beer, and it made me cry,” says Bloom. “It was just so sweet. They still want to be here for us and support us.”
Small breweries practically bank on devotion, but these days devotion isn’t paying the bills.
The industry was primed for a bloodletting before the pandemic.
There are more than 8,000 breweries in the United States, and most of those have sprung up over the past five years. Many are tiny and rely on selling beer on-premises.
Breweries trying to expand into bar and restaurant sales or scale up further to can and bottle distribution found it hard to secure shelf space in a beer market saturated with so many brands and styles.
For nearly all of these breweries, their taprooms, where beer is sold in nearly bulk levels at retail prices, generate most of the profit.
Brewers Association economist Bart Watson says the pandemic has jeopardized that model.
“The six-foot economy is going to be something that on-premise hospitality businesses struggle with,” says Watson. “If social distancing measures extend or if, you know, after they're relaxed, consumers just don't come back to the on-premise right away, you could see a significant percentage of the nation's smallest brewers close.”
Breweries are getting creative to survive.
“I think a lot of people are having to look at what they've done before and maybe they've had a certain routine about doing something that now they're there and just say, okay, let's try it,” says Chris Meyers, vice president and co-founder of Crane Brewing Company
For instance, Meyers is using Crane’s equipment to can beer for Diametric, a competing brewery in Lee’s Summit. Diametric, in turn, is hosting Together We Can, a drive-through event with dozens of local beer makers offering fresh brews that aren’t for sale in stores.
Some brewers are looking beyond beer and making hand sanitizer.
Others, like Chris Beier at Strange Days Brewing in the River Market, are collaborating with other local merchants. Customers can get a four-pack of beer and a meal for two with options to add a pint of ice cream or a board game.
“Our customers love it,” says Beier.
Online ordering, bundles sales, package beer deliveries, bundled sales...
Many brewers hope online ordering, bundled sales and package beer deliveries will outlast the pandemic, but even with these new business models, many small breweries probably won’t.