To say 2020 has been a turbulent year would be an understatement, but few could predict the dramatic effect COVID-19 would have. The pandemic has had huge far-reaching effects and the beer industry which was already in a somewhat weakened position has felt the brunt of it.
Breweries alongside pubs, bars, clubs, restaurants, and other common alcohol outlets were closed and as of the date of writing, they are still closed. At the moment under current plans, it is possible that they will be permitted to open in some capacity by July, but that could change.
The beer industry in the UK has been struggling for quite some time. Pubs simply aren’t as in-demand as they once were which means fewer people are going for a drink. The growth in non-alcoholic and alcohol-free beers also means that beer and other alcoholic beverages aren’t as popular.
Society at large seems to be turning away for excessive alcohol consumption especially when it comes to the younger age groups. All this combined with the COVID-19 pandemic has formed a big problem for the beer industry in the UK.
The COVID-19 Pandemic
The UK was one of the last countries to act when it comes to COVID-19 something that the government has been heavily criticised for. This late start to lockdown is why many shops, pubs, restaurants, and other outlets are still closed and won’t be reopened until later.
When the lockdown was announced the rules regarding breweries were also somewhat complicated and required further clarification. Eventually, it was decided that while breweries must close to the public but if they had onsite shops they themselves could be opened.
However, this was down to each individual brewery to decide and did come with significant risk. Pubs, restaurants, bars, and clubs all had close which meant that many breweries had no actual distribution network available for their beers.
However, off-licenses and other shops were allowed to open as long as they sold essential goods which did of course include food and drink. So, there was some distribution in place, but it was significantly downsized.
There was also some confusion over breweries operation during the pandemic as well. However, as part of the food and drink supply chain, they are actually designated as essential services. Which means brewers and other brewery workers are classed as key workers.
This might seem like a good thing for breweries as they could still open and operate during the pandemic. However, due to the main distribution network to things likes pubs being shut off many breweries didn’t open and decided to stop production altogether.
The Society of Independent Brewers (SIBA) surveyed 282 UK breweries and found that around 65% of those surveyed stopped production altogether. Because many breweries particularly smaller ones didn’t have the network in place to supply directly to shops and supermarkets even if they did open they would struggle to distribute their beer.
Many breweries have also been critical of the government's help and support schemes which they feel haven’t supported them enough. All this paints a somewhat gloomy picture for breweries in the UK but let’s look at exactly how they are operating and what the future may hold.
What Does The Future Hold?
Some breweries have turned to offering a takeaway-style service within their local communities. Smaller craft beer breweries in particular have found this delivery method to be somewhat successful. However, there have also been some issues with this has many breweries don’t have the needed licenses to sell directly to the consumer.
Breweries have also been calling on the government to offer more support and help to them during this time. It is currently unknown how exactly restaurants, pubs, bars, and other establishments will reopen although under current plans it is scheduled for July.
It’s highly likely that there will be strict rules in place regarding the number of people allowed in each establishment due to social distancing. However, even with a reduced capacity having some form of distribution will be a big help to breweries.
Interestingly during the lockdown sales on non-alcoholic and alcohol-free beers (and other beverages) continued to rise. Analysis by Nielsen uncovered some interesting data showing that on 11th April, low and non-alcohol beer sales grew by 14.8% for the previous 4 weeks.
So, it seems like many people didn’t want to get drunk or drink too much alcohol during the lockdown. After the lockdown has been sufficiently relaxed, we likely will see a boom in beers sales for a short time. Although I think it’s fair to say the impact of COVID-19 will be seen for quite some time yet.
The beer industry from breweries to pubs will be feeling the effects for years to come and it’s highly likely that not every business will survive. However, with the growth in popularity of low-alcohol and non-alcoholic beers, there could be a lifeline for the industry.