Brewing industry fights to survive amid coronavirus pandemic

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INDIANAPOLIS — Brewers are trying to figure out what’s next for them amid this pandemic. While dozens of restaurants have shifted their focus to carry-out orders, a lot of taprooms have not had the same luxury. 

The National Brewer’s Association asked breweries across the country how they were doing during the health crisis and shut down and if owners thought they would be able to weather the storm. Forty-six percent of the respondents said they have taken such a financial hit, they may be forced to close within the next three months. Twelve percent said they would barely make it the next four weeks. 

“That was pretty scary,” Ray Kamstra, owner of Indiana City Brewing, said. “I would hope were in that 40 percent that survives.” 

CBS4 asked Indiana breweries how their business was faring locally. Kamstra said within a week, he ramped up his e-commerce and started offering carry-out beer sales and delivery within 15 miles in any direction. 

“That’s all the way up to Carmel and Fishers and all the way down to Southport and the Greenwood area,” he said. “It’s kind of cool. We’re making new fans.” 

Kamstra had to furlough about 13 employees. He is currently working on about a quarter of his regular revenue. 

A lot of breweries had to throw out their product before it spoiled. When the state shut down in March, restaurants stopped ordering beverages. Kamstra said they had a slew of orders that ended up cancelled within a week’s time. 

“That’s a big chunk of our revenue,” he pointed out. 

Scarlet Lane Brewing turned to carry-out as well, but then decided to seize operations altogether on April 8th. The owner, Nick Servies, had to lay off 27 people. 

Now, he is trying to figure out what’s next. 

“It’s terrifying,” he told CBS4. 

Servies is concerned about what his business model will look like once the service industry is allowed to open. 

“We’re not able to pay 100 percent of our bills if we’re not allowed to have 100 percent of our capacity,” he pointed out. “It could cost more to even open.” 

Servies said right now, a lot of breweries are trying to get extensions on their permits because they don’t have the money for it. He explained the process of what it will take for him to open, describing it as a ‘logistical nightmare.’ 

“The brewery has a ton of operating costs depending on your size,” he said. “It’s going to take us six to eight weeks to brew some of the beers and that involves a ton of upfront costs for materials, a good $40 to $50,000 up front when there is no revenue coming in.” 

Servies said he is at least $150,000 in the hole. He projects about $350,000 in losses. 

“Is it survivable if you walk into a restaurant and everyone has masks on and gloves and their table is separated eight feet apart? Who wants to go to that?” he asked. “I don’t think that’s sustainable for the service industry.” 

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