Sonoma County craft brewers scramble to survive coronavirus pandemic
In five years, small Santa Rosa craft brewer Plow Brewing was able to withstand two wildfires and carve a niche by offering a flagship pilsner and a friendly taproom near the Coffey Park neighborhood.
But the coronavirus pandemic forced an ownership change to better position the brewer to survive.
“I was able to shoulder all of those,” Plow owner Kevin Robinson said of the infernos. “They all took some of a hit, but with this, it was too much. It’s adapt or die.”
Robinson previously honed his beer trade at Lagunitas Brewing and Russian River Brewing of Windsor, before pouring his life savings into the neighborhood craft brewery.
Recently he sold his majority stake to his sales manager, Vince Ferracuti, and other outside investors in order to bring in fresh capital to navigate these turbulent times. The new ownership group changed the name earlier this month to Iron Ox Brewing and has focused on a strategy of more canned beers. The switch was necessary since up to 80% of Plow’s beer sales were kegs sold to taprooms and restaurants. But those customers have been largely closed since early March and there’s no telling how much of that business will come back.
“We wanted to go in a different direction, so that’s why we changed the name,” Robinson said. “We are now a new brewery going in a new direction.”
The Plow-Iron Ox example is the most severe virus-related damage so far in the North Coast brewing sector - including the estimated 30 breweries in Sonoma County - as it attempts to survive and transition in a world where on-site drinking mostly disappeared when COVID-19 arrived nearly three months ago. Area breweries have been forced to survive on online and curbside to-go sales. Last weekend, county health officials allowed them a limited reopening for outdoor drinking if they serve food, too. The sector has begun a slow resumption of taproom business.
An April U.S. survey by the Brewer’s Association, a trade group representing independent craft breweries, showed a majority of them didn’t think they could last three more months under current conditions, raising the possibility of thousands of taps running dry. There were 8,386 breweries in the country at the end of 2019.
“It’s going to be brutal for bars and restaurants. It’s going to be brutal for breweries, too,” said Brian Hunt, founder of Moonlight Brewing Co. in Santa Rosa and a craft beer pioneer who started his brewery in 1992 and has lived through many booms and busts in the business.
With people largely staying home, breweries here have pivoted to delivery of cases and kegs and curbside sales of four-packs and crowlers. The larger craft players in the market are also ramping up retail beer sales.
The Nielsen research firm reported beer sales over the past year at supermarkets, liquor stores and large warehouse clubs through May 16 are up 16%.
Some of that has been driven by consumers buying large packs. For example, Nielsen found sales of 30 packs of beer were up 33.1% annually through May and 24-packs increased by 32.5%, while sales of traditional six-packs grew at 13.1% year-over-year clip.
“People are doing bigger shops. They are not lingering in store aisles,” said Bart Watson, economist for the Brewers Association. “That has been beneficial in general for more established regional craft breweries.”
One of them is Bear Republic Brewing of Cloverdale, the 49th-largest craft brewer in the country, which has seen its off-site sales led by flagship Racer 5 IPA jump by 18%, CEO Richard G. Norgrove said.
That bump has not been enough though to make up for the loss of Bear Republic’s sales - mostly in kegs - to taprooms and restaurants. Overall revenue has fallen 15% to 20% since mid-March, Norgrove said. Its brewpub in Rohnert Park that includes a large outdoor section remains closed but he hopes to reopen for patio service in June.
“I got my distributors telling me that they think they are going to lose close to 40% of their draft business,” Norgrove said. “There is going to be a fight for those who are getting those customers.”
That was the plight Moonlight faced with 80% of its business sold from the tap, much of it flagship Death and Taxes black lager. Its saving grace was that Moonlight bought and installed a canning line in December and it has been ramping up production for retail accounts.
While its canned beer sold to supermarkets has kept the lights on, Moonlight also has gotten a bounce through curbside pickup orders and is now shipping overnight to drinkers throughout the state of California - much like their brethren in the wine business.
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