Vista brewery Iron Fist Brewing sits quiet and empty, the first brewery to close permanently during the pandemic.
Drink local. This has long been a rallying cry of San Diego’s beer industry. But nearly a month into California’s covid-19 shutdown, the overture has more urgency than ever. Particularly for breweries that rely on taproom sales and keg distribution, rather than grocery store sales, the shutdown of public drinking spaces is an existential threat.
Last week’s national survey of breweries by craft beer trade group the Brewers Association reports that, if current social distancing measures continue for three months, 46.4 percent of brewery owners in the U.S. expect to go out of business. Of those, 12.7 percent doubt they will last another month.
The county experienced its first covid-era closing at the end of March, when ten-year-old Vista beermaker Iron Fist Brewing Company closed its doors permanently. The family-owned and -operated business had been waging a stiff battle against rising competition in recent years, and in a press release, cited a “lack of traction” with its distributor as a contributing factor to its closing. However, it was also clear that, “With… the final catalyst, the forced shutdown due to the Coronavirus, we just couldn’t sustain any longer.”
The craft beer industry operates on notoriously slim margins, and in recent years we’ve grown accustomed to seeing between 10 and 20 breweries close, annually, according to the an industry tracker maintained by the blog Craft Beer in San Diego). Roughly 142 distinct beer companies operate in San Diego, so if the Brewers Association survey prediction proves out in San Diego, we could see 18 breweries could close by May. By July, that number could rise to 66.
I hope those numbers will be tempered by the maturity of San Diego’s beer market, relative to other parts of the country, and the promise of state, federal, and local relief efforts, including moratoriums on evictions through May. The Brewers Association survey shows about half of breweries are counting on disaster loans and delayed payroll tax payments to get by. Nearly 56 percent are counting on $10,000 grants, such as being offered by the city of San Diego. And nearly 85 percent are hoping to survive with help from the forgivable small business loans established by the coronavirus stimulus relief bill enacted by Congress.
However, uncertain loan amounts and a botched rollout in the federal program has already forced businesses to re-apply for the program and sown confusion as to whether federal aid will be too little too late for breweries experiencing, per the survey, a 66 percent drop in sales on average since the pandemic began.
In 30 years, San Diego’s beer industry grew from a single downtown brewpub into an economic engine that pumped some $1.2 billion annually into the local economy. As of one year ago, it also employed 6,480 people.
In a single month, by the Brewers Association’s count, an estimate two-thirds are out of work. Most still employed continue with reduced income, as taprooms have cut hours for to-go beer sales, typically employing one or two persons per shift in otherwise empty venues.
And while the status of this industry may not appear a pressing concerning to non-beer drinkers, consider this: San Diego’s economic development department has estimated the craft beer business creates a relatively high employment multiplier of 5.7. This means for every job directly created by the craft beer industry, 4.7 other jobs are indirectly created in the local economy.
So as your fridge empties of the beer you purchased last month while panic buying ahead of the pandemic, don’t replenish with out-of-town beer at the grocery store. Contact your local brewery about ordering beer for curbside pick-up, home delivery, or shipping by mail. In these ways, many of our breweries are still selling beer. Many continue to make fresh beer, and new can releases are being announced weekly.