With bars, restaurants and their own taprooms closed across the state in an effort to stymie the spread of the coronavirus, Texas craft breweries are feeling the pinch in a major way. Taprooms — and the sale of their products at other on-premise venues — provide them significant revenue.
The Texas Craft Brewers Guild surveyed its member breweries last week to learn the extent of the financial effects of the pandemic on their businesses, and the numbers are stark. According to the poll, revenue has dropped, on average, about 71% for beer makers across the state. Additionally, 63% of responding breweries have had to lay off or furlough their employees, with an average of 65% of the workforce for those breweries let go.
Most of the Texas breweries polled — 90% — have decided to try and build up some revenue by selling beer to go through curbside pick-up, drive-thru or carryout. But 14% have temporarily closed, in some cases after rolling out to go programs. Pinthouse Pizza is among them, deciding a couple of weeks ago, despite steady to go sales, that the risk of exposure to the virus was too great for both employees and customers.
To help relieve breweries’ financial strains and to try to keep any of those closures from becoming permanent, the guild has been lobbying on their behalf. Last year, the organization was instrumental in getting a new state law passed that permits manufacturing breweries to sell their beer directly to consumers for off-site consumption.
Among the guild’s efforts now is a petition circulating via social media that would have Texas Governor Greg Abbott "exercise his emergency powers to grant several relief measures that could make a difference in many businesses’ survival," according to a news release. More than 16,000 people have now signed it.
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The proposed relief measures include temporarily suspending excise taxes, which all breweries in the state must pay, and temporarily allowing breweries to deliver and ship their beers directly to consumers. Shipments of beer would be a particular boon for producers like Jester King Brewery, which has been notably affected by pandemic closures because of its business model that put an emphasis on taproom sales.
A handful of other states, including New York and Illinois, have begun allowing craft brewers to deliver beer, ship it or do both as long as physical distancing measures are in place during the pandemic.
Before the coronavirus, wineries had already been able to ship their products to consumers in most states. They have been relying on shipments more than ever to offset significant losses from tasting room sales, particularly in the Texas Hill Country, which is second only to Napa Valley in U.S. wine tourism visits.
Craft breweries had also been in the midst of a heyday with taproom visitors. With competition fiercer than ever on store shelves and bar menus, many of them — like Jester King and Pinthouse — had focused on primarily drawing customers to their spaces, a once-sound strategy that is now making them more vulnerable.
"Giving these small businesses the tools they need to ensure they can protect their own and serve their community is our first priority," Texas Craft Brewers Guild executive director Charles Vallhonrat said in the news release. "We are certain Governor Abbott and the Texas Alcoholic Beverage Commission also want to ensure the health and economic safety of this vital Texas industry."