The difficulties Bud Light is currently facing as a result of the repercussions from its marketing agreement with transgender social media celebrity Dylan Mulvaney might seem to be advantageous for smaller brewers. Over 25% of sales have been lost by the once-dominant American beer brand, and it’s safe to infer that those consumers did not quit drinking beer.
The truth is that other mass-market beer producers appear to benefit from Anheuser-Busch In-Bev’s (BUD) brand’s troubles. Modelo, the newest top-selling beer globally, as well as Coors Light and Miller Lite have all seen an increase in market share.
As it seems that the craft beer boom has peaked, craft brewers who have been suffering since the Covid outbreak have been failing. An institution in San Francisco that has been in business since 1896, Anchor Brewing Company, has already fallen victim to this.
When that renowned brand originally disclosed plans to restrict distribution to California in July, it quickly perished afterward by announcing that it would close and liquidate. There are several headlines citing regional names that have closed down when you search for “craft brewery closing” on Google. Therefore, Anchor’s condition is not unusual.
An Oregon Public Radio report titled “Is peak craft beer over?” discusses local developments that reflect the national landscape.
“Seven breweries and taprooms in Portland have shut down recently or have made closing announcements. The market has been impacted by rising operating expenses, shifting consumer drinking patterns, and the pandemic’s residual effects, according to the website.
Growing in popularity, it now goes by a different name.
Chapter 11 bankruptcy protection is sought by a craft brewery
The Covid epidemic is partially to blame for the difficulties faced by local breweries. Although several of these brands have taprooms, they nevertheless sell their products at local stores to promote their businesses. Their wholesale activities were too little to cover the rent when they stopped producing in-house sales.
One of Chicago’s oldest craft brewers, Metropolitan Brewing (established in 2008-2009), has filed for Chapter 11 bankruptcy, primarily due to its inability to pay the back rent it owes its lenders.
The brewery released information about the filing on its Facebook page. The brewery’s website lists approximately a dozen distinctive beers.
“Yes, that’s correct. We applied for Chapter 11 bankruptcy protection earlier this week. This bankruptcy is a reorganization’ type that is designed to help us right the ship. The specifics are quite dull. Importantly…We are still operating, and we don’t currently have any intentions to do otherwise, the business’s proprietors said.
In its Chapter 11 filing, the company attributes its problems to its rent. In 2017, the brewer relocated to a new, more pricey premises.
There is no way the brewery can ever pay back the amount of back rent the landlord is asking, the firm claimed in its bankruptcy declaration, even if Metropolitan can pay the market rate for the brewery space going ahead.
Brewers generally have difficulties
Even if their file makes it plain that the company requires a new owner or a significant reorganization to survive, Metropolitan’s founders have maintained a brave public persona.
“There is still a lot of fight left in us. And we continue to have faith in our beer. We’ll overcome this. If you join us, it will just be simpler and a lot more fun,” the business wrote in a statement reminding consumers that it is open all year long.
The concern is that Metropolitan’s problems could not be limited to its rent. In an interview with KGW8, Larry Clouser, who has owned several breweries in Oregon, outlined the challenges facing the sector.
Brewery sales are down countrywide, not just in Portland, according to Clouser.
Brewers recognize how shifting trends are detrimental to their industry.
Beer is hot, craft beer is hot, craft beer is cooling down, then craft beer is hot again, according to Alan Taylor, co-owner of Zoiglhaus Brewing Company. “Wine is hot, spirits are hot, beer is hot, craft beer is hot, cooling down, then craft beer is hot again,” Taylor said to the TV station.