Worcester Business Journal

8 Worcester Business Journal | March 7, 2022 | wbjournal.com BY SLOANE M. PERRON WBJ Staff Writer W hen Kevin Jarvi opened Milk Room Brewing Co. in 2019, little did he know his new small business would only open its doors twice before being thrust into the chaos of the COVID lockdowns. rough quick adaptability and a rural outside business model, Milk Room not only survived its trial by fire, but the company is expanding with plans for a new taproom and disc golf course. Jarvi attributes the brewery's success to its beer pasture located on 30 acres at Alta Vista Farm in Rutland. e property made customers feel safe in an open, natural space and provided ample room for food trucks to meet the April 2020 food requirement signed by Gov. Charlie Baker, which stymied other breweries. "Our whole business model ended up being driven by the COVID guidelines in the beginning," Jarvi said. Milk Room was one of the lucky ones. For the other 47 Central Massachusetts breweries, especially those in urban areas, the lockdowns changed consumer behavior with people now accustomed to buying cra beers in convenience stores or ordering beer to-go. e lack of subsequent taproom sales combined with inflation on necessary brewing supplies has forced breweries to close their doors. The challenges ahead In 2021, 19 breweries throughout Massachusetts opened and 15 closed resulting in a statewide total of 214 breweries, according to Mass. Brew Bros., a blog working closely with the trade group Massachusetts Brewers Guild to analyze industry data. e net increase of four breweries is indicative of what those in the industry report seeing: slow but cautious recovery. "at is a complicated answer, but breweries have fared very well," said Katie Stinchon, executive director of Massachusetts Brewers Guild. One major hurdle breweries face is a change in consumer behavior resulting from the lockdowns. More remote work means less office workers stopping into a pub or brewery for a beer aer work. is particularly presents difficulties for urban locations who rely on work traffic to fill their taprooms, said Stinchon. Taprooms are the lifeblood of the brewery industry, Stinchon said. While pubs and breweries offer to-go options or canned products, it is the margins of taproom sales that allow breweries to make money. During the canning process, overhead costs are spent on brewing, tin cans, canning, packaging, and distribution, while taproom sales are simply liquids in glasses. Reducing overhead costs comes at a critical time for breweries as the prices of malt, tin for cans, and even cardboard for to-go containers escalate while supplies drop, said Stinchon. e Omicron wave, the social trend of Dry January, and customers being weary of close inside spaces are all matters recovering breweries must contend with in the winter months. "Spring can't come fast enough. e warmth can't come fast enough," Stinchon said. An optimistic outlook Although admittedly overly optimistic about the national brewery industry, Bart Watson, chief economist for the national trade group Brewers Association, echoed Stinchon's regional analysis. "e biggest effect from COVID, at least in 2020, was where Americans drank. We generally drank about the same amount of beer, but we drink it in radically different places. We stopped going to bars and restaurants, and we started buying a lot more in convenience stores," Watson said. e hardships of 2020 were reflected in beer production, which nationally decreased by 9% that year, said Watson. As COVID restrictions lessen and patrons start frequenting bars and breweries, the Brewers Association is seeing the tide turn. While 2021 numbers have yet to be finalized, Watson said most of the lost volume from 2020-2021 will be recouped in the coming year. While there was no overarching reason why certain breweries survived and others closed, the industry is analyzing certain trends. Location and business model played big roles in viability. Facilities with pre-existing production quickly adapted and canned their products to meet the new demand of to-go purchases. If 2020 was the year of the lockdowns, PHOTOS/COURTESY OF RAPSCALLION BREWERY & MILK ROOM BREWING CO. Katie Stinchon, Mass. Brewers Guild executive director Bart Watson, chief economist, Brewers Association Milk Room Brewing Co. in Rutland has quick- ly expanded its business operations during the pandemic. What's on tap? Taproom sales key to local breweries' survival

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