COVID bruised Colorado breweries

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DENVER (KDVR) — COVID laid low Colorado’s beloved breweries and brewpubs, and the future still looks like a hill to climb.

Like restaurants, the pandemic’s business and social restrictions had an especially hard impact on breweries. Jill Preston, spokeswoman for Left Hand Brewing Company, said COVID-19 all but reversed a decade of growth.

“There were 10,000 breweries opening. And now that’s retracting,” said Preston. “The industry was expanding before COVID. It’s been this kind of halt.”

Alongside the Colorado Brewers Guild, Left Hand is spearheading the Colorado Strong Fund, which aims to boost both charity and brewery-related economic impact through donations and a new beer, the Colorado Strong Pale Ale. Twenty percent of the proceeds from each pint sold “provide assistance to healthcare, hospitality, service industry, and gig economy workers across the state.”

Colorado’s craft sector could certainly use it.

In Colorado, 2020 claimed 33 breweries as casualties -about 7% of the state’s brewpubs and breweries, with or without taprooms. The Colorado Brewers Guild reports a 30-40% decline in production throughout the pandemic. All told, these breweries experienced a $470 million sales decline and a $1.6 billion loss of economic output.

Nearly 1 in 10 brewery workers lost work in 2020.

Restrictions took a heavy toll with 13,755 jobs lost, or a little over 8% of direct employment at Colorado breweries and brewpubs, according to Washington, D.C.-based industry association the Beer Institute. Those employees lost half a billion dollars in wages.

People did not stop drinking in 2020. They simply did it at home instead of the tavern.

Colorado alcohol sale patterns

Coloradans drank a little more than the year before, in fact, though not enough to meet the normal trend, according to Colorado Department of Revenue data. They bought about 1.5 million gallons more alcohol in 2020 than 2019. Other years they bought about 3 million gallons more than the previous year.

There are four types of alcohol categories: malt beverages, wine, spirits and hard cider. Beer falls into the malt beverages category. They sell about the same quantities each year, and 2020 was no exception.

Annually, 77-79% of annual alcohol gallons sold are malt beverages, followed by wine at 11-12%, spirits at 8-10% and hard ciders at 1%.

Coloradans also kept on the same drinking schedule.

Alcohol purchases go in waves in Colorado. Sales go up in the months between Easter and Labor Day, then dip in the fall moving into winter. They generally bottom out in January or February before rising again moving into spring.

The pandemic did not interrupt this pattern. In 2020, malt beverage sales a actually avoided a mid-summer decline in July, helping to push 2020 alcohol sales to a new annual high.

Brewing troubles

Breweries pay the price for both the pandemic’s restrictions and cultural changes.

Left Hand Brewery makes a third of its revenue from drafts. When the tap business dried up, even alcohol deliveries and to-go orders couldn’t make the business break even and it ended the year 10% below 2019’s revenue.

Left Hand is one of the lucky ones. As an established brewery, its national distribution went up as more drinkers brought their business into the home. Smaller and newer breweries don’t have those packaged sales to absorb the impacts of empty taprooms.

Lockdowns, social distancing requirements, furloughs and work-from-home requirements triggered a nationwide space race. Housing markets in suburbs and exurbs exploded as city dwellers questioned their cramped lifestyle and headed for more spacious areas.

Features that made breweries work during their 2010s heyday rub against pandemic habits. The open-spaced taprooms with picnic bench seating, the urban locations and the live music events may give way to more table service and larger, more expensive spaces.  

“We used to have people three rows deep at the bars,” Preston said. “It wasn’t unusual to be packed. We know that’s not going to be a thing for a long time – maybe ever.”

Left Hand Brewing is opening a new brewery in RiNo with a 7,500 square foot profile and installing a new outdoors beer garden at its Longmont location. Preston said the pandemic has made Left Hand put space at a premium.

As one of the larger breweries, Left Hand has the capital, but smaller breweries may find the emerging spread-out post-pandemic landscape harder.

“We can appropriately fit 36 people in our tasting room,” she said. “Our capacity is 250. We have to space people out. A lot of those breweries and tasting rooms, they’re just not huge spaces.”

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