In the world of beer, one giant has stumbled. Bud Light, once the kingpin of American beer sales, has seen its empire crumble with a startling 25% decline in sales. You could think this is a win for small brewers, but the story runs deeper.
While Bud Light’s woes might appear like a golden opportunity for smaller breweries, the truth is a bit more complex. Brands like Modelo, now the world’s top-selling beer, along with Coors Light and Miller Lite, are indeed enjoying a boost in their fortunes.
However, it’s not all rosy for the craft beer industry, which has been grappling with challenges since the COVID-19 pandemic hit. This downturn has already claimed casualties like the iconic Anchor Brewing Company, a San Francisco staple since 1896.
Anchor’s fall was swift and harsh. The company initially had plans to limit distribution to California, but it quickly followed up with an announcement of closure and liquidation. Sadly, this isn’t an isolated incident; a long list of other local craft breweries are shutting their doors.
In Portland, a recent report by Oregon Public Radio poses the question, “Is peak craft beer over?” and it seems local breweries are echoing a national trend. In just one month, seven breweries and taprooms in Portland have either closed or announced their impending closure.
Rising operational costs, changing consumer drinking habits, and the lingering impacts of the pandemic are just a couple of reasons for this unfortunate trend.
The pandemic’s shadow looms large over regional breweries too. These breweries, which typically sell their beers regionally and rely heavily on taproom sales, have found themselves in dire straits when in-house sales plummeted. Metropolitan Brewing, one of Chicago’s oldest craft breweries, has now filed for Chapter 11 bankruptcy primarily due to unpaid rent.
Metropolitan’s Chapter 11 filing is a cry for help. It acknowledges that the brewery can cover future rent expenses but can never repay the mounting back rent the landlord seeks. Despite this setback, the company remains resilient. Their message to customers: “We are still open, and we have no current plans to change that status.”
Sadly, the brewing industry’s challenges go beyond just rent. Larry Clouser, a veteran brewery owner in Oregon, pointed out that the industry’s struggles are not confined to a single region. Sales are slumping nationwide, and brewers are grappling with shifting consumer preferences. “Honestly, it’s not just Portland, brewery sales are down nationwide,” Clouser said in an interview with KGW8.
“Wine is hot, spirits are hot, beer is hot, craft beer is hot, craft beer is cooling down, craft beer is hot again,” Alan Taylor, co-owner of Zoiglhaus Brewing Company, told the news station.
The future remains uncertain for breweries like Metropolitan, and the industry as a whole is at a crossroads. But one thing is clear: the craft beer world isn’t ready to throw in the towel just yet. Hopefully, the brewing industry will overcome all these challenges and get back to previous highs.
