May 8, 2020 – Remember that blast you had on St. Patrick’s Day on March 17? Not in 2020. The day before, state Governors started locking down their states closing bars and restaurants, sports events, concerts and travel, all places and events where people congregate and drink. I remember thinking how awful the timing was for so many businesses that count on St. Patrick’s Day for a good chunk of revenue and all the food and drink inventory they would have purchased for the celebration.
The Irish whiskey stocks are safe as are other spirits and wine, but beer is going stale. Especially beer in kegs. According to The Wall Street Journal about 10 million gallons or almost one million kegs are sitting abandoned in bars, restaurants and other venues around the country. And that’s not all. There’s beer sitting unsold in distributor warehouses and at breweries. The National Beer Wholesalers Association (NBWA) estimates losses could total $1 billion.
Two other dilemmas are facing the industry: What to do with the old beer and how to get the kegs back to the breweries for refilling when all this is over. Disposing of the old beer is an environmental headache but before that can happen the full kegs have to be retrieved and the distribution industry is not set up for this. Often they are stored in basements, are heavy and require more trucks to move them than the empty ones.
There’s also the question of cost. Bars and restaurants are already on the brink of disaster but The WSJ reports that some major brewers including Diageo (Guinness), Anheuser Busch-InBev and Constellation Brands (Corona and Modelo) together with their distributors, are stepping up to absorb the cost of expired beer returns.
The repercussions are just starting to become apparent and it is certain there will be a shaking up in the brewing industry, especially among craft brewers in the months to come.