Minnesota breweries exhausted by pandemic as on-site sales dry up

DULUTH – On the first Monday that Hoops Brewing had opened for many months, owner Dave Hoops was paying bills and watching the Twins game while taking stock of the past year.

The Canal Park brewery was “one of the first to close and one of the last to reopen” and saw auction house sales drop by more than half in 2020, he said.

“We depend on the people who come here,” he said. “In order to survive, we increased retail, curbside sales and donated a lot of beer. “

Minnesota breweries, which rely heavily on taproom sales, have been ravaged by the pandemic and state restrictions intended to combat the spread of COVID-19. Nearly 600 jobs have been lost among the state’s more than 180 breweries, according to a University of Minnesota extension report released Monday. The industry’s economic impact on the state’s economy has grown from $ 1 billion in 2019 to $ 813 million last year.

“For an industry still in high growth mode, the impact rippled through communities where canceled investments in the brewery meant work, including construction, had not taken place,” the report said. “The newer brewers in the business have also found it difficult to qualify for government aid or private loans.”

The study was based on a Minnesota Craft Brewers Guild survey to which about half of the state’s breweries responded in December, representing a mix of the biggest, smallest, newest and oldest players in the world. Marlet. The number of breweries in the state increased from 39 in 2012 to 183 in 2019.

About 73% of sales at Minnesota breweries are on-site, while 12% are wholesale and only 8% are from liquor stores, according to the report. The move to more growler and crowler sales has helped breweries stay afloat, as has the ability to serve drinkers outside – although some breweries, like Castle Danger at Two Harbors, are not able to sell from their taprooms due to their size, and not all breweries have a terrace.

“In some ways, the pandemic has brought out the strengths of craft brewing,” Brigid Tuck, senior economic impact analyst for the U’s Extension office, said in a statement. “Brewers were able to move their operations to focus on greater production for retail, but it was still difficult for an industry that relies heavily on on-site sales, as well as tourism.”

Bent Paddle Brewing Co. has launched a “box-in-hand” campaign to increase off-premises sales, with auction house sales dropping nearly 50%.

“The gross cost of COVID to us was really substantial,” said Pepin Young, sales room and retail operations manager at Duluth Brewery, highlighting nearly $ 100,000 in new equipment for expanded distribution and adjusting the auction room to state restrictions.

Not all breweries were able to keep their doors open after the restrictions were lifted. Duluth’s Canal Park Brewing Co. has been closed since the second state shutdown in November, but plans to reopen this spring; The giant Surly Brewery in Minneapolis is reopen in June.

Federal and state coronavirus relief has greatly benefited those who qualified. The results of the U Extension survey and analysis showed that sales fell about 22% across all breweries in 2020 – a loss of $ 95 million.

The worst should be over for the state’s brewing industry, as capacity limits and expanded schedules mean more pints are poured and sold on-site.

“I’ve been saying for months that by July 4 we’re going to be looking at a new normal, and we’ll have 300 people in the brewery and 150 outside,” Hoops said. “I’m so grateful for this.”

Brooks Johnson • 218-491-6496

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