Brewery Employees Are Being Laid Off En Masse, Thanks to Coronavirus

The novel coronavirus known as COVID-19 has devastated countless U.S. and global industries already, but one especially near and dear to Paste’s heart has been feeling the pinch with particular acuity: Craft breweries.

Put simply, the pandemic has stolen the very lifeblood of these small breweries, especially those young and modern brewing operations that depend largely upon on-premise, taproom draft beer sales to make ends meet. And unfortunately, those on-premise sales had increasingly been key to the business model of newer breweries, giving them a niche to fill in local communities if they couldn’t compete against larger, regional breweries in the supermarket aisle. It was a good system … until all the taprooms were shut down by the coronavirus. Now, those breweries are all hanging in limbo, trying to make it to the distant light at the end of the tunnel by falling back on to-go sales and beer delivery.

Even with generous patrons doing their best to chip in, though—my wife and I have been trying to support all our favorite Richmond, VA breweries this way—these to-go sales can never really match what breweries are able to sell through their normal distribution channels or ful-time taprooms. And thus, a wave of terminations and layoffs has been cascading through the craft beer industry, and it’s been brutal to watch. From the smallest, newest breweries, all the way up to some of the largest regionals in the game, everyone seems to be feeling the pain. The entries below represent only a tiny example of the many reported stories of industry layoffs right now.

— Deschutes became one of the largest major regionals to resort of mass layoffs so far, laying off approximately 60% of its workforce—around 250 to 300 workers—across the breadth of the company, including taproom employees, packaging/bottling employees and even brewers. And for some employees, layoffs actually represented a better option than vastly reduced hours, as it allows them to file for unemployment. Despite that, Deschutes founder Gary Fish still referred to the decision as “gut wrenching.”

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“It’s extremely difficult, particularly when it’s not of our own making,” Fish said Wednesday. “We have to remain safe and take care of our community and make sure our business remains at the end of this. We’re still producing beer.”

— Santa Rosa’s beloved Russian River likewise was forced to close down its taprooms for on-site business and has ultimately furloughed a whopping 90% of its staff—about 175 employees—according to co-founder Natalie Cilurzo. Those furloughed workers will be eligible for unemployment benefits, and Russian River’s health benefits plan will continue to cover them through April regardless of whether they’ve worked … but what happens afterward isn’t clear. That uncertainty is a universal aspect of the viral pandemic.

“These are the hardest decisions and conversations we have ever had to make,” Cilurzo said. “The situation changes every day, and each day we have to add to the list of furloughed employees. The financial impact from all of this will be absolutely devastating to not only the craft beer industry but our local, national and global economies. This is unbelievably bad on so many levels.”

— McMenamins, a large chain that operates 55 brewpubs and hotels across Washington and Oregon, is shuttering all but ONE of those locations, and in the process laid off almost 3,000 employees. The only location remaining open is the 23rd Avenue Bottle Shop in Portland, Oregon.

“It is with great sadness that we have to stop the music and close … for now,” the company announced online. “But we will return, revive, and be reborn to weave the tale of how music never really stops and stories continue to be told.”

— Oceanside, CA’s Bagby Beer Co. closed completely the day before St. Patrick’s Day, saying they wouldn’t contribute to the possible spread of the virus by remaining open in any capacity. They likewise appealed directly to the federal government in their closure message, asking for legislation that would help save their business, and the businesses of other craft breweries.

— Green Flash Brewing Co., which has been through a tumultuous few years that saw them expand to national status and then collapse almost completely (including a 2018 bankruptcy) as the growth rate of the industry slowed, was reported to have laid off a number of key figures by The Full Pint, including famed Alpine Beer Co. head brewer Shawn Mcilhenney. The Full Pint goes on to report that they spoke to several laid off employees from the San Diego brewery, who claimed Green Flash had told brewing teams to stop brewing all future batches of beer and sell through existing inventory. Green Flash representatives then denied certain aspects of the validity of The Full Pint’s report, saying they had furloughed rather than terminated staff members, but one has to wonder if this is the last gasp for a craft brewery that was once considered among the most iconic on the West Coast … and if it’s indicative of many last gasps to come.

“On Monday, in light of the unprecedented impact that the COVID-19 crisis has had on most facets of the economy, Green Flash was forced to make the very difficult decision to terminate or reduce employee work hours through furloughs,” said vice preseident of marketing Ben Widseth. “This impacted a meaningful portion of our staff. We are continuing to produce our beers and fill orders for our customers, and will reopen our tasting rooms when it is safe and appropriate to do so.”

It remains to be seen how many of the “we will reopen” brewery statements ultimately come to pass, but there’s no denying at this point that the coronavirus pandemic is the most frightening challenge the industry has faced in the last few decades.