The Good, The Bad, and The Ugly of Indiana Craft Beer in 2020

The Good, The Bad, and The Ugly of Indiana Craft Beer in 2020

by Mark E. Lasbury for Indiana On Tap

I don’t really want to write about this, but I do suppose 2020 deserves a swift kick out the door. A review of Indiana craft breweries in 2020 isn’t exactly like trying to put lipstick on a pig – some good things did happen, but it doesn’t evoke new puppy adoption emotions either. Let’s spend some time looking for the delightful while still acknowledging the dreadful.

THE GOOD NEWS. We’ll start with the best news – Indiana saw 13 brewery openings in 2020, and even better, none of those 13 have had to close their doors. These are places that had the least revenue to play with, the most to pay (carry costs before opening, etc.), and had to try to build a customer base when people where either told they couldn’t go out or chose not to go out.

openings – The breweries that opened in 2020 were: Gosport Café & Brewhouse in Gosport, 5 Arch Brewing in Centerville, Lakeville Brew Crew in Lakeville, Fish Moon Brewing in Rushville, Nigh Brewpub in Plainfield, Escape Velocity Brewing in Lafayette, Black Dog Brewing in Mooresville, Parlor City Brewing in Bluffton, Dot & Line Brewing in Fort Wayne, The Landing Beer Co. in Fort Wayne, Feed Store Beer Co. in Bloomfield, Lighthouse Brewing in Jasper, and Yard Goat Artisan Ales in Huntingburg.

image credit: Fish Moon Brewing

adaptation – Just as great as openings, Indiana breweries found ways to be resilient in the face of adversity and to pivot toward new mechanisms for revenue. It was a palpable example of adapt or die in 2020, and all the breweries, wineries, and distilleries moved quickly to help their bottom lines as well as their staffs. Delivery, curbside service, adding food to overcome regulations, virtual events, expanded forms of outdoor seating, fundraisers, new products (like hand sanitizer) – there was no limit to their ingenuity.

canning – Increased packaging of product was a large portion of the adaptation, selling more beer in distribution or from the taproom for off-site consumption. Many breweries purchased their own canning lines in order to meet the need for home consumption, while others brought in mobile canning companies to do the job. Mobile canning grew and changed a great deal in Indiana in 2020.

Ideal Canning was purchased by Millcraft Beverage Solutions, but Del Goins is still running the canning operation just as he did when he owned iCan Solutions. Their business exploded this year and they are looking to expand soon. Likewise, Michigan/Indiana Mobile Canning was purchased by IronHeart Canning, one of the largest mobile canning companies in the country. However, that deal came about before the pandemic in February, so not every change in Indiana in 2020 could be attributed to Covid, as we’ll see below.

image credit: Millcraft

handling – Less visible or earth shaking but just as important, breweries adjusted their practices to make things safer. Upland Brewing FSQ started using carts to deliver food so that server’s held the plates less and had them further from their face – and perhaps more important, they were SEEN as changing something for the customers’ sake. I like this idea and might wish to see it carried on after the pandemic. Several breweries put in new air filtering systems to combat transmission. This isn’t something many people would know about unless they follow the breweries’ social media accounts closely, but they should be congratulated for taking that step in relative anonymity.

THE BAD NEWS. On the dreadful end, Indiana saw 14 brewery closings in 2020. Some were definitely due to the pandemic, but others had little or nothing to do with Covid. Wayne and Kathy Norris in Liberty had a five-year plan when it came to the Norris English Pub, and it just so happened that the five years were up at the end of 2020. Likewise, Figure Eight Brewing in Valparaiso closed in January, before the pandemic hit the US, so Tom Uban’s reason for closing wasn’t virus related either.

closings – There definitely were breweries that closed because their revenue dried up due to the shut down and the tendency of people not to go out or spend money early in the pandemic response. Redemption Alewerks in Indy is a good example of that fact. They were getting along, but not blowing up when the March shutdown came along; they just couldn’t manage their costs without having their full open hours and 100% capacity.

The other breweries that closed in 2020 were Rock Bottom, Ram, and Brugge Brasserie in Indy, Cognito Brewery in Merrillville, Basket Case Brewing in Jasper, Plat 35 Brewery in Chesterton, Riverfront Taproom in Shelbyville, TwoDEEP in Indianapolis, Back Road Brewery in LaPorte, and the Foreign.Local brand in Dyer.

Indiana brewery openings and closing. Click for a bigger image. image credit: Indiana On Tap

trends – With 13 openings and 14 closings, Indiana in 2020 was under water for only the third time in the craft beer era. The other years Indiana was upside down in openings/closings were 2001 and 2004, but the numbers were much smaller at that time (four closings and one opening in 2001, three closings and two openings in 2004). On the up side, the 14 closings are still fewer than we had last year (17).

festivals – While we’re talking about downers for the year, we might as well mention the paucity of festivals. By my count, there were only 13 traditional beer festivals in Indiana in 2020 (weird, eh – 13 openings, 13 closings until the very last day of the year, 13 festivals – seems like 2020 had a morbid sense of humor). As we wrote recently, it looks like 2021 will be a heck of a rebound year for festivals (read here) – an avid craft beer fan is going to have a very full schedule after March or April.

The Surprising News. I was approached by a newspaper reporter in mid-December to talk about how weird it might be for a brewery to contemplate an expansion during the pandemic. But after thinking about it for a while, I came up with several examples. Heck, several isn’t even the right word, it was more than a dozen examples – things like from moving from production only to opening a first taproom, to increasing size of a kitchen or taproom, increasing brewhouse, or increasing their number of taprooms.

expansions – It’s an impressive list, including the following: St. Benedict’s Brew Works opening two taprooms – in Jasper and Rockport; Daredevil Brewing is opening their third location at Bottleworks in Indy; Black Circle Brewing in Indy opened their production brewery and taproom (called LOOM); Big Woods/Quaff On! opened three new restaurants; Wedgewood Brewing is moving to a greatly expanded taproom and kitchen, as is South Bend Brew Werks.

Bad Dad in Fairmount is one of the breweries that went through a large expansion in 2020. image credit: Bad Dad Brewery

The list goes on – Mad Paddle Brewstillery in Madison added to their footprint and added a distillery, Fenwick Farms Brewing in Rennselaer is increased the size of their brewhouse, 10-56 Brewing in Knox is expanding their kitchen and then their brewhouse, Bad Dad Brewery in Fairmount more than doubled their brewhouse and increased their kitchen and seating, Monnik Beer Co. and Goodwood Brewing in Louisville are both in the process of expanding to southern Indiana, and The Chesterton Brewery is working on their distillery now.

other growth – But it wasn’t just the expansions that were good in 2020.  Creek Bottom Brewery and Viking Artisan Ales opened their first taprooms and Wildrose Brewing and Myriad Brewing were just a couple of the breweries that added in-house canning lines in 2020. These moves represent a significant outlay in capital when they don’t know what the return may be, so they should be applauded for making the investment.

From this list of expansions, it might seem that things were really looking up in Indiana craft beer. Unfortunately, I think this might give an overly rosy overall picture. Many of these expansions had been years in the making (and funding), while others were based at least in part on crowdfunding campaigns. It’s not like every brewery has the ability to add sq. footage or additional sites right now – quite the opposite, there are probably more breweries that are MUCH closer to closing than they are expanding. I would suspect that there are several dead men walking when it comes to Indiana breweries surviving Covid – they just haven’t realized it yet….. or at least they haven’t told us.

THE NATIONAL NEWS. It will be a while before Brewers Association (BA) comes out with final openings and closing numbers for 2020, but I’m guessing that it won’t be as ugly as once predicted. The late 2020 prediction from BA called for a big drop in openings (about 700, down 30% from 2019), but for closings to be about the same as in 2019, about 300. I think this relates to the “dead man walking” analogy I made for Indiana directly above.

Both BA and BIG cut positions in 2020, leaving brewers more on their own than at any time in the past couple of decades. image credit: Brewers Association

OnTapTix.com – At Indiana On Tap, we rolled out a national craft beverage event ticketing platform, OnTapTix.com, in late 2020 (believe me, with the rebound coming in 2021, this actually is a good time to roll this out). In developing a national list of brewery contacts to approach about OnTapTix.com, it’s been amazing to see the number of Google searches that come back “Permanently Closed.” I think Indiana has fared better than many states, perhaps because of the policies more amenable to keeping breweries and restaurants open during this time.

predicted decline – BA does predict a 7-8% decline in sales by small brewers in 2020, IF December sales didn’t fall off a cliff. The loss was 10% in the first half of the year, but those adaptations we talked about above did start to have an impact in Q3 (only a 5% decrease). Don’t take those number too much to heart, since they are averages – the effects on individual breweries ranged from good growth to huge losses, with smaller breweries seeming to be hit the hardest. Bart Watson from BA predicts that it will take until 2022 to regain production levels of 2019, and even longer to return to a steady growth pattern.

CBMTRA – One thing that has been a blessing nationally is the passage and signing of the Craft Beverage Modernization and Tax Reform Act (CBMTRA, signed on Dec. 27), geared not just toward craft beer but to all artisan craft beverages. Excise taxes (sin taxes) are major concern for artisan beverage makers; thy make up a huge portion of the cost of making product. Two years ago the CBMTRA was passed on a temporary basis, but it was scheduled to sunset on Dec. 31st of 2020.

image credit: Washington Beer Blog

If CBMTRA had not been passed, the excise tax per barrel of beer would have increased 100% on January 1. For a brewery like Sun King, that would amount to something like $200,000 for 2021 alone! Add in Covid and there are ridiculously few breweries that could absorb that kind of double hit. Indiana distilleries will keep the benefit from CBMTRA as well, avoiding what would have been a 400% increase in Federal Excise Tax.

 

distillery surprise – Not surprisingly, a $14,000 fee from the FDA for distillers who made hand sanitizers to combat the pandemic was announced early on NYE. Imagine that, the government springing a massive fee on those who tried to help. This fee would bankrupt many small distilleries. The only way to avoid the fee for 2021 (nobody could avoid it for 2020) was to file all paperwork saying you would not be producing sanitizer after Dec. 31, 2020 – but you had to file it by Dec. 31! Rightfully, HHS Chief of Staff Bryan Harrison announced in the late afternoon of the 31st that distilleries should not be punished for trying to help, and that the fee would be waived. Who says 2020 didn’t have its good points?

Welcome 2021! Let’s hope it’s a great new year and not just a continuation of the same, showing twenty twenty won.

 

banner image credit: The Japan Times

2 Comments
  • Rob Wilson
    Posted at 10:18h, 03 January Reply

    FYI – Mind Over Mash (Brownsburg) decided to close for reasons unrelated to covid. They’re missing from your list and closed late March.

  • Dereck
    Posted at 10:31h, 03 January Reply

    Don’t forget New Abany’s Fistful of Ale!

    https://www.fistfuloftacos.com/fistful-of-ale

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