State Breweries Seeing Changes in Patron's Habits

Tuesday, January 31st, 2023 -- 10:00 AM

(By Hope Kirwan, Wisconsin Public Radio) In recent months, Henry Schwartz from MobCraft Beer said it feels like brewery customers have hit a "hard reset" on their pre-pandemic habits, according to Hope Kirwan with Wisconsin Public Radio.

"We've seen a lot of new customers that have shown up, maybe because their old watering hole went out of business or they just thought, 'Well, let's try something new.' So we've definitely seen a big shift in consumer habits," Schwartz said.

He said they've seen a strong turnout at their taproom in Milwaukee, but they're still selling more packaged beer at grocery stores than at bars. It's a trend that started during the height of the pandemic and has continued nationally.

But Schwartz said the success has been dampened some by increased prices for everything from packaging to barley and hops. "We have seen cost increases kind of across the board on all of our raw materials," he said.

Like most industries, craft breweries across the country have had to figure out how to deal with the impacts of inflation and a supply chain still working through the ripple effects of pandemic-related changes.

Bart Watson, chief economist for the Brewers Association, said breweries are still seeing supply disruptions in the products that they rely on, like carbon dioxide. Last summer, CO2 prices spiked in part because there was a limited supply available.

"We didn't necessarily need more CO2, but we had shortages of truck drivers, we had shortages of the parts to service the CO2 plants," he said. "We had kind of a set of disruptions that really raised costs and made availability less."

Watson said breweries are also feeling impacts from climate change on the crops that make up beer. He said drought in the U.S. and Canada led to a poor barley crop in 2021, which caused the price of malt to increase. Grain markets have also been impacted in 2022 by the war in Ukraine.

"We had a better '22 crop, more kind of in line with 10-year averages," he said. "So we're in no worry of running out of barley or malt anytime soon. But we're still not in the place where we've moved back into surplus."

Given these disruptions, Watson said it's a challenging time for the craft beer industry and the future of the market is still uncertain. He expects many brewers will continue to struggle for another year or two.

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