Last week, BA economist Bart Watson said that one thing that's keeping him up at night is question of how small craft brewers will adapt to off-premise changes wrought by pandemic. He noted some SKU reductions already occurring and wondered what fall shelf sets will look like. It ain't beer, but announcement out of Utah that it intends to purge 923 of 5,655 wine and liquor labels from its state stores supports Bart's concerns. "The state," one anonymous broker told Salt Lake Trib, "is now moving to the Walmart model." Turns out state uses software program tied to cash registers that provides key metrics: sales per store per day, $$ sales over 12 mos, current sales/category trends and, of course, profits. "Even though sales are booming," sales purchasing specialist told the paper, "there are many items that are not selling, and we need to replace them with new items that potentially could generate more revenue for the DABC [Dept of Alc Bev Control]." Brands to be delisted reportedly include well-regarded Hendrick's Gin and a "boutique" $12 Pinot Noir. What they have in common: "minimal sales, which shows that our customers are not very interested in those products or categories." Craft producers up in arms, natch, given (very) limited outlets for their brands in a tight control state. (A version of this article also appeared in sibling pub INSIGHTS Express.)

In NC, there are plenty of consumers still planning on using curbside pickup and delivery even as on-prem re-opens, BA's Bart Watson highlighted using recent NC Brewers Guild survey data from more than 4K 21+ adults. Overall, 36% of respondents there already anticipated they would visit a taproom or restaurant. "Possibly a bit higher due to selection effects, as this non-random sample was likely to sweep in a few more beer enthusiasts than the general population," Bart noted. Of those ready to go back to taprooms and brewpubs now, still 15% are "very likely" and 30+% "somewhat likely" to use pickup or delivery. Nearly 30% of those ready to go back to on-prem "sometime in May-June" are "very likely" to use pickup/delivery, and near 45% "somewhat likely." Perhaps unsurprisingly, % of consumers "very likely" to use these services increases greatly for those who are not ready to consider returning to on-premise. But Bart's key points: results suggest "breweries will be able to keep up some of their to-go and delivery sales even as customers return," and in terms of regulations, survey "suggests that state regulators need to keep flexibility in any temporary rules if they want to help customers and businesses through the rest of 2020" (our emphasis).

Even as other (smaller) local NYC brewers are open for biz in various ways, in some cases even allowing folks to consume draft beers nearby on the sidewalk, Brooklyn Brewery taproom remains shut down heading toward Memorial Day, CEO Eric Ottaway told CBN. Indeed, while NY State has temporarily relaxed certain rules for alc bev producers, Brooklyn Brewery continues to take extra caution while operating within one of the most heavily affected areas. Taproom has been closed since mid-March, co shared on its blog earlier this mo. And like many craft brewers, especially those within cities most effected by COVID-19, Brooklyn furloughed "much of our team," to allow them "to retain health insurance and file for unemployment while we work to bring them back," co noted.

Shortly after MI's Gov Gretchen Whitmer cleared the reopening of bars/restaurants while following social distancing restrictions "in some parts of northern Michigan," Founders reopened Grand Rapids taproom on Monday and announced plans to reopen Detroit outlet this Thursday for curbside pickup, reported Crain's Detroit. Co will limit hours to between 1-7pm on Thursdays thru Saturdays. Recall, taprooms had been closed since mid-March and Founders eventually made tuff decision to furlough 163 retail employees effective May 3 (see Apr 23 issue). Detroit taproom in particular has gone thru "shaky time," after "closing for six months to handle the fallout from a racial discrimination lawsuit" that ultimately settled, reopening in Feb 2020 only to close again one mo later due to COVID-19, paper recapped. Grand Rapids was not included in Gov Whitmer's order, it added.

After Boston Beer's keg biz fell to "damn near zero," it's now starting to ship kegs to wholesalers again as on-premise begins to open up in different parts of the country, Boston's Jim Koch, Dave Burwick and Frank Smalla shared with Goldman Sachs analyst Bonnie Herzog during virtual investor update. Yet in anticipation of "lower demand," co will only sell 1/6 bbls of draft, "at least initially," Bonnie wrote. Of those bars and restaurants that are re-opening, many will look to sell more bottles/cans vs kegs "given heightened hygiene concerns," execs pointed out. Overall, Boston believes "it's not unrealistic to assume 20-30% of restaurants/bars never re-open (vs 10-20% normal turnover)."

Just as IN ok'd re-opening of on-premise, Three Floyds made tuff call to close its Munster brewpub "indefinitely," furloughing its staff on Monday, co announced on Facebook following reports by Guys Drinking Beer and Chi Tribune. Founder Nick Floyd cited safety concerns as key reason, adding that "I would die for a beer and probably will, but I'm not going to make people endanger themselves," he texted Chi Trib. So even after COVID-19 restrictions are lifted, brewpub will remain closed with hopes of re-opening in 2021 or 2022, he told Guys Drinking Beer. The production brewery and distillery continue to run and co will continue to offer curbside pickup at the brewery, co stated on Facebook. Meanwhile, no word on status of Three Floyds' sizable expansion announced in Feb 2018, transforming the facility into a 114K sq-ft brewing campus. Three Floyds grew low-double-digits and finished just shy of 100K bbls in 2019, we estimate, moving up 8 ranks to #31 BA-defined craft brewer in the country.

For 1st time in Oregon-based co's history, McMenamins will sell shares in the company itself as it looks to recover from impacts of coronavirus pandemic. It launched $20-mil Preferred Stock Offering this week, allowing accredited investors with $1 mil in net worth or $200K annual income to purchase $1,000 Series A shares. Minimum share purchase set at $100K, with 5-, 8- and 10-yr terms. Initially, McMenamins plans to use funds to pay off bank debt taken on to cover costs during COVID-19 shutdown. But it also aims to invest in its PacNW properties, including adding hotels to its Cornelius Pass Roadhouse and larger Edgefield brewery and winery, among other "long-planned" projects.

"Lifting of stay-at-home orders will only have a partial effect" on short-term recovery for breweries, Brewers Assn chief economist Bart Watson highlighted in latest blog post. One key finding: Google searches for "brewery near me" declined at very similar (if not worse) steep double-digit pace as leisure and hospitality small biz revenue, Bart shows, citing Opportunity Insights consumer data. Leisure and hospitality revs were down 60+% each day since mid-March compared to flattish in early Jan 2020, and remained down more than 60% on May 11. This further indicates how "some" consumers "will likely stay at home after [stay-at-home orders] are lifted," in Bart's view, including not seeking out breweries near them.