After a Decade of Explosive Growth, Small Breweries in Connecticut Take Stock

“Breweries are destinations, they are really experiences. But of even more pressing significance is to support local and drinking local. It’s easy to go to your grocery store and pick up a macro-brand beer but that’s not going to help anybody in Connecticut,” said Phil Pappas, executive director of the Connecticut Brewers Guild by phone on Wednesday. 

In less than 10 years, the craft brewing industry has grown exponentially to over 100 breweries and about 6,000 jobs across Connecticut. Prior to 2012, there were only about 12 to 15 breweries in the state, Pappas said. 

“These are all relatively new jobs in about the last five to seven years. Now we have 112 breweries, going on 130. Within eight years we’ve more than added 100 breweries, with a majority coming in during the last three to four years,” he said. 

In 2019, the craft beer industry in Connecticut had a $753 million economic impact, Pappas said. “We’re expecting $1 billion this year.” 

But with mandated social distancing during the COVID-19 pandemic temporarily shuttering craft brewery taprooms, Pappas said, the survival of the industry is at stake, and it has never been more important to support local breweries.

Brewery operations have been forced to pivot quickly from taproom sales –typically the largest source of revenue for microbreweries — to other revenue streams: beer-to-go retail sales and distribution through wholesalers and retailers. 

On January 1, these sales received a boost from Senate Bill No. 647, “An Act Streamlining the Liquor Control Act,” that increased allowed direct-to-consumer sales of craft beer from nine liters of beer to nine gallons.

“A lot of breweries sell in 16-ounce cans, which only allowed you to sell 19 of those so you couldn’t even fill up a case of beer,” Pappas said. “Now we can sell up to three cases of those 16-ounce cans.”

There are 9,000 craft breweries country-wide and most are transitioning to cans. Pappas said. Some breweries, especially smaller operations, sell beer in crowlers — 32-ounce cans that can be filled and sealed onsite without a canning operation. Customers can also buy glass growlers, which are resealable and refillable.

A rough transition

The changeover from the taproom to take-out beer has been difficult, said Heather Wilson, co-owner of Hop Culture Farms & Brew Company in Colchester.

“We had intentions of starting to do some crowlers and to-go sales on our normal business plan and we were probably three or four weeks out from operationalizing that when the coronavirus hit,” she said. “We just had it together enough to start doing can sales, so that’s how we’re making revenue now. [But], it’s a big hit to your revenue.”

The Wilsons started the brewery as a one-barrel operation and have increased capacity to a five-barrel system. They also grow their own hops on the property. 

Wilson said she has been forced to lay off her 10 part-time employees. She is the only full-time employee. 

“We’ve only done this for two weekends, it’s definitely still not as much revenue as when the taproom was open, but we’re grateful that a lot of local customers have been supportive of us through these trying times,” she said. “We do curbside delivery, bring the order to your car. We sanitize everything.” 

For Wilson, the crisis is doubly difficult because she is a nurse practitioner and her husband, Sam Wilson, is a firefighter. 

“We’re working on the front lines of COVID-19 right now because both of our jobs are essential,” she said. “It’s a feat in general to do both — to get Hop Culture up and off the ground and we were starting to see some real success from it. But to now be full-time teachers to our kids and to run a full-time business and our full-time jobs is tough.”

Social fabric

Jason Vincent, co-owner of Epicure Brewing in Norwich, said the brewery is selling its canned beer and growlers through online orders. Distribution is limited to cans given that restaurants — also impacted by the virus — are not ordering kegs. 

“Fortunately we started canning a year or so ago. We have five different beers in cans now. We do growler fills with certain beers through a direct transfer. It’s just trying to figure out how to adapt to these economic changes that are not within our control,” he said. 

The 15-barrel operation opened in 2017 as approximately the 25th registered small brewery in Connecticut. The staff includes three full-time and about 12 part-time employees. Vincent said that the taproom staff has been laid off and the brewery is cutting costs wherever possible. 

“We trimmed our hours down to try to limit utility consumption. We turned off the heat. It’s pretty chilly in there right now. It’s perfect for the beer,” he laughed. “The thing is that cash is king and you have to try to preserve it.”

Vincent said that the halt in tourism has been hurting sales and that local business is not enough to sustain the brewery.

“A percentage of our taproom sales is from out-of-state folks who are traveling to the casino or the shore. They are on a trip and they look for a brewery or a winery. They discover that we’re only eight minutes from the casino,” he said. “But when the casino is closed you lose all of that.” 

The brewery continues to communicate with its “mug club” members through private social media, he said. 

“This past week, we hosted a live Facebook event where a buddy of ours was playing live music. We invited mug club members in chat with each other via texting,” he said. “It was just trying to find some way to retain some social fabric — the mug club has become family. They are people who have selected you as a place they admire. You feel the love from them there, what a great group of people.” 

Surviving together

Precious Putnam, who co-owns Beer’d Brewing Company with her husband, Aaren Simoncini, said that their revenues have dropped at least 40 percent. The couple opened Beer’d in the Velvet Mill in Stonington eight years ago and a second location in Groton two months ago. 

“We’ve had to lay off 60 percent of our staff,” she said. “With distribution, we’re doing okay. We had to switch our model from a mixture of draft for on-premise at bars and restaurants to all off-premise, focusing on package stores and grocery stores. That is our saving grace right now but still not enough to have a full payroll.” 

The brewery normally employs 30 people including 18 full-time and 12 part-time workers. In the wake of the coronavirus, six full-time employees, and all of the part-timers, were laid off. 

The brewery’s permit registration was number 11 in the state — that longevity, Putnam said, has helped because a canning operation was already up and running. New breweries often cannot afford to purchase canning equipment. 

“Their 100 percent revenue — which is their taproom — is pretty much dead unless they’re getting by with a crowler system or the growlers,” she said. 

Trying to plan for the future has been frustrating, she said. 

“That’s the scariest part. Is this weeks, is this months?,” Putnam said. “In the end, we really want to keep our business afloat so we’re being very strategic. We’re kind of in our survival mode. We’ve applied to every grant and federal and state program we qualify for. As soon as we can get some financial relief, we want our crew back.”

“Craft beer is like a tribe, it’s a community that shares together. I know there’s not a brewery that wishes another brewery would go out of business,” she said. “The goal is to all survive together.”

Small and agile

Drew Rodgers, who owns Barley Head Brewery in Mystic, said the majority of his taproom business is in serving pints and tasting flights. His operation is a two-barrel brewhouse, or about 60 gallons at a time, and is considered a nano brewery. 

He opened in summer of 2017 and registered as number 53 in the state. 

“We’re doing online ordering through the store on our website,” he said. “We’re encouraging people to buy cans and we’re doing a lot of canning.” 

Barley Head is also available in a few local package stores.

“Our regulars are coming through and supporting us and we’re super-appreciative of that. But, in general, we’re making less of a profit margin and sales are down, unsurprisingly,” he said. “A lot of our customers are homebrewers too so they’re right there with us in terms of their connection to the beverage.” 

Rodgers said he was confident that when the restrictions are lifted and breweries can reopen, customers will return. 

“I think people are going to be excited to come back and sit down and have a pint with their friends in a social setting. I think people really miss that right now. The question is when will that happen and will it be too long of a time that we can’t make it work,” he said. “Some people are in a better position than others. We are very small, which is good. We are very agile, we don’t have any full-time employees that rely on us exclusively.” 

Finding more help

On top of the loss of revenue, many newer breweries are faced with paying off enormous startup costs — the building, the equipment and the taproom setup require precise plumbing and electrical work.

“It has been a really big concern. A few breweries have already taken out loans and to add another one is difficult,” Pappas said. “The SBA loan term is over 30 years and that puts some comfort in your mind. Whether those will get turned into grants, we’ll have to see.”

Pappas said he is looking for other legislative avenues that will increase revenue potential. 

“We’re also advocating now for home delivery because we’ve seen other states like New York and New Jersey allow that and it’s just another resource that breweries desperately need right now,” said Pappas. “That’s our number one, to ensure all of our breweries can weather this storm, so that when the world goes back to normal, breweries are still there.” 

But the best thing that consumers can do, he said, is to buy beer from a local brewer. 

“If you are going to go buy beers, go to a brewery and help them,” he said. 

Latest from Cate Hewitt