Forget Bud Light, popular beer brand files for bankruptcy
It's a dark period for beer drinkers as a number of well-known brewers have struggled or failed.
You would think that the problems facing Bud Light due to the fallout from its marketing deal with transgender social media influencer Dylan Mulvaney would be good for smaller brewers. The once top-selling beer brand in the United States has lost over 25% of its sales and you have to assume that those customers did not stop drinking beer.
The reality is that the struggles of the Anheuser-Busch In-Bev (BUD) - Get Free Report brand seem to be good for other mass-market beer makers. Brands like Modelo, the new top-selling beer in the world, as well as Coors Light, and Miller Lite have seen their shares grow.
Related: Classic retailer files Chapter 11 a third time, could liquidate
Craft brewers, which have been struggling since the Covid pandemic have been failing as it appears the craft beer boom has peaked. This has already claimed Anchor Brewing Company, a San Francisco icon that has been operating since 1896.
That famed brand had a quick demise in July when it first announced plans to limit distribution to California and followed that nearly immediately with a notice that it would close and liquidate. Anchor's situation is not unique, A Google search for "craft brewery closing" brings up numerous headlines listing local names that have shut down.
An Oregon Public Radio story with the headline "Is peak craft beer over?" shares what's happening locally that mirrors the national scene.
"Within the last month, seven breweries and taprooms in Portland have closed or announced their upcoming closure. Rising costs of operation, changes in consumer drinking habits, and the lingering effects of the pandemic have all affected the market," the website reported.
It's a growing trend that has now claimed another name. Image source: Shutterstock
Craft brewery files for Chapter 11 bankruptcy protection
You can partially blame the Covid pandemic for why regional breweries have struggled. While many of these brands sell their beers in stores regionally, they support their operations by having taprooms. When they lost the revenue from making in-house sales, their wholesale operations were not big enough to pay the rent.
Metropolitan Brewing, one of Chicago's oldest craft breweries (it opened in 2008-2009) has filed filed Chapter 11 bankruptcy largely because it cannot afford to pay the back rent it owes its lenders.
The brewery, which shows about a dozen unique beers on its website, posted about the filing on its Facebook page.
"Yeah, it’s true. Earlier this week, we filed for Chapter 11 bankruptcy protection. This is the 'reorganization' type of bankruptcy, meant to help us right our ship. The details are super boring. Importantly…We are still open, and we have no current plans to change that status," the company's owners shared.
The company's Chapter 11 filing blames its struggles on its rent. The brewer moved to a new, more expensive, location in 2017.
"The bankruptcy is being filed because while (Metropolitan) can pay market rent for the brewery space going forward . . . there is no way the (brewery) can ever repay the amount of back rent the landlord is seeking,” the Chicago Tribune reported the company shared in its filing.
Brewers are struggling in general
Metropolitan's owners have put on a brave public face, even though their filing makes it clear that the company needs a new owner or a comprehensive restructuring to survive.
"We still have plenty of fight in us. And we still believe in the beer we brew. We’ll get through this. It will just be easier — and way more fun — if you join us," the company shared in a post reminding customers that it's open year-round.
The problem is that rent may not be Metropolitan's only issue. Larry Clouser, who has owned multiple breweries in Oregon laid out the issues facing the industry in an interview with KGW8.
“Honestly, it’s not just Portland, brewery sales are down nationwide,” Clouser said.
Brewers are seeing changing trends hurt their business.
“Wine is hot, spirits are hot, beer is hot, craft beer is hot, craft beer is cooling down, craft beer is hot again," Alan Taylor, co-owner of Zoiglhaus Brewing Company told the news station.
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