Pa.'s craft beer industry helped save small towns. Now, can it save itself from pandemic losses? - Ellwood City Ledger

When an industry such as the craft beer sector — synonymous with small-town economic development in Pennsylvania — takes a hit, it's sobering.

When an industry such as the craft beer sector — synonymous with small-town economic development in Pennsylvania — takes a hit, it's sobering.

"It's going to be harmful," said Bart Watson. "Certainty breweries have played a role in economic revitalization."

Watson is the chief economist for the Brewer's Association. Pennsylvania ranked second in the nation in terms of craft beer produced and has 411 breweries statewide, fifth nationwide, according to Watson.

Craft beer has been one of Pennsylvania's fastest-growing industries, and for towns such as York it has helped spark a revitalization movement.

In 2010, Mudhook Brewing Co. opened at York's Central Market House. A year later, Liquid Hero opened a few blocks away. This past year, downtown York had six breweries within a mile radius of each other.

The group even combined twice this past calendar year for a speciality York City Six beer collaboration among the breweries.

Now, one closed before the coronavirus pandemic. The rest are navigating uncharted territory, including Collusion Tap Works, which has had to halt production on a second taproom in nearby Lititz in Lancaster County.

"It's a whole other ball game," said owner Jared Barnes. "It's too late in the game to change anything."

With social distancing concerns and potential changes in indoor seating, it's an added level of uncertainty for Barnes, who is currently operating the York location with a skeleton crew for pick-up beer service.

The potential loss of live entertainment at the Lititz location could be devastating, Barnes said.

"A lot of growth has been the experimental restaurants [side]," said Watson. "Taprooms have been what breweries are focused on, and (coronavirus is) hitting that part of the industry hardest."

In nearby Franklin County, Rough Edges Brewing opened in February, a few weeks before the pandemic began shutting down taprooms everywhere. The statewide shutdown postponed the brewery's grand opening, according to co-owner Casey Phebus.

The brewery's initial business plan assumed nearly 90 percent of revenue would come from on-site consumption and sales. Without dining service, the brewery has had to pivot to take-out and delivery.

“We're very fortunate the community has been behind us," said Phebus. "We will get by, and that is 100 percent because of the community and support we’ve received.”

"We wanted to give back, and we're thankful the community has rallied behind us," she said.

Lebanon Valley Craft Brewery was scheduled to open later this year inside the historic Lebanon Brewery. The building has been derelict for 61 years, but the much-needed revival of a hometown business has been put in limbo courtesy of the coronavirus.

"We are experiencing delays moving forward on the LVCB project due to local business operating restrictions directly connected with the COVID-19 pandemic. As state and local authorities permit we will continue to move forward with our renovation work and installation of the brewery equipment. At this point in time, it is difficult to predict when we will be operational, but we are still aiming for an opening to the public sometime late in 2020," co-owner David Koch said in an email.

Such an operation has allowed Tregs to offer self and guided-tours of their brewery and and manufacturing facility. The tours drew approximately 1,000 patrons monthly, and taproom sales make up about 25 percent of sales, according to co-founder Chris Trogner.

"There is still a lot of unknowns in the tourism side of what the impact is going to be," Trogner said. "Just from a customer connection standpoint, it is a very important part of our business. And not having that open is certainty disruptive."

Another quarter is direct sales to restaurants. In one fell swoop, the brewery saw its business cut in half. He expects to lose between $300,000 and $500,000 from unused kegs, intended for sale at restaurants and taprooms statewide, that the brewery will have to dispose of.

The problem isn't isolated. According to Watson, for small brewers a big part of their production is draft, approximately 40 percent of breweries is through restaurant and draft sales. With the cancellation of notable events such as March Madness and Opening Day of Major League Baseball, there are thousands of kegs statewide that will go unused.

Trogner has pivoted to direct consumer sales with curbside pickup and make-at-home food kits, with social media instruction from the restaurant's executive chef. Like most breweries, he's continuing to map out a short-term business plan, hoping the state and taprooms will open up sooner rather than later.

"I think craft brewers are particularly well equipped to transition right, but there's only so much you can do when your primary business model gets hit," Watson said.

Neil Strebig is a journalist for the USA Today Network. He can be reached at nstrebig@ydr.com, 717-825-6582 or via Twitter @neilStrebig.

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