Craft breweries in Minnesota say they need the state's help to stay afloat.
Many have tried what they can to keep their businesses going during the state's stay-at-home order. But more than half said they could be forced to close in three months if the stay-at-home order is extended beyond May 13, according to a Minnesota Craft Brewers Guild survey of 77 members.
Owners and analysts said the business is precarious, with a national Brewers Association survey producing similar results. Many have heavy debt loads, and state laws impede some revenue streams.
"Breweries typically have one to three months of expenses on hand. But when revenues drop 60 to 70 percent, you can't sustain that beyond eight weeks," said Matt Schwandt, co-owner and head brewer at Bauhaus Brew Labs in Minneapolis. "Unless they can get really creative for capitalization, government help is not a long-term option. I'm glad the SBA loan is forgivable, but the option to take on additional loans is not good."
Most brewers get about 70% of revenue from their taprooms or brew pubs. Larger craft breweries are closer to 40 or 50%.
With those closed by state law, smaller breweries have resorted to pickup and delivery orders. For many, that's a lifeline, especially for breweries that don't yet sell in liquor stores or have limited distribution.
Foxhole Brewhouse in Willmar temporarily stopped selling to liquor stores as a way to boost profits.
"We can keep more profit selling by walk-ins or deliveries than selling wholesale to liquor stores," said Ryan Fuchs, co-owner of Foxhole. "We don't want to snub liquor stores, but they're booming and we're not."