Another popular brewery files for Chapter 11 bankruptcy
The beerpocalypse continues as a well-known brewery and winery seeks court protection.
Brewing beer has always been a challenging business: Profit margins are thin, competition is intense, and demand has always fluctuated.
The period before the covid pandemic was a golden time for craft breweries. Consumer interest in non-mass-produced beers seemed to be at an all-time high and many cities had enough local breweries to support tours and pub crawls.
Related: Another popular restaurant chain shares Chapter 11 bankruptcy plan
In reality, however, breweries are a bit like those self-serve-frozen-yogurt places that were all the rage in the 2010s. When one opened in a community, it was a novelty and people were willing to wait in long lines to get to customize their own frozen treats.
Once a second chain opened, however, supply would quickly outpace demand. What was a good idea for a single business was not a business model that could support multiple players competing for the same pool of customers.
It may seem like a boom when your community gets a bunch of breweries, and for a time they might all support each other. But once demand falls — and it has for beer — then too many players make it hard for any one of them to survive.
Add in that many regional breweries lost their in-person sales during the covid lockdown and you have breweries facing higher debt, lower demand and rising operating costs. Image source: Shutterstock
Another brewery, winery and distillery falls victim
SpringGate Vineyard began as a winery, then expanded to become a destination that also brews craft beer and holds many special events.
"SpringGate Vineyard is a special place," the company says on its website. "Our indoor social spaces from Champagne Bar, to the Haha and Covered Patios, Adirondack Room, and Brewery Lounge are unique. Come for a visit, and enjoy a unique experience with us, for a bottle of cider or wine, tastings, food, music, or a pint or growler of our artisan beers."
In its 10-year history, SpringGate has grown rapidly.
"Starting with a test acre in 2010, six acres of vineyards planted through 2013, and an additional four acres planted in the spring of 2014, there are a lot of grape vines being maintained!" the company adds.
"Our goal is to manage the vineyard in the most sustainable fashion. In the particular terroir that the estate exists, we can create wines that the region drinks. This reflects many of the grape choices we have made: Noiret, Cornell's Riesling Hybrid, Vidal, Cornell's Hybrid Muscato, Cabernet Franc, Marquette, etc."
Now, Schoffstall Farm LLC, the Harrisburg. Pa., owner of SpringGate, has filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the Middle District of Pennsylvania. In the May 14 filing, the company disclosed that it had between 1 and 49 creditors, and debts and assets between $1 million and $10 million.
Winery and brewery hope to continue
No financial plan has been submitted to the court, but the company did post a message on its Facebook page.
"SpringGate is open and will remain open operating as it has been, and we thank our many customers, partners, and supporters from the past, present, and for the future," according to the post.
The post made clear that the company hopes to find a path forward to continued operations.
"SpringGate has filed for financial reorganization which entails a sale," it said. "This is a necessary action for an orderly transition to what we believe will be a better future. We ask for you to continue to visit us, bringing friends and family, and enjoying our products and unique gathering places which will help support us during this transition."
Owner Marty Schoffstall did not respond to a request for comment from PennLive.com.
In addition to its on-site activities, SpringGate distributes wine and beer to a number of grocery and convenience stores across Pennsylvania.
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