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Beer fans again bellying up to bar

Craft brewers’ taprooms beginning to see customers return by John Magsam | April 25, 2021 at 2:11 a.m.

A little more than a year after the coronavirus pandemic closed Arkansas taprooms and many of the restaurants and bars that their breweries served, the state's craft-beer makers are seeing customers return for brew on tap as restrictions ease and vaccinated folks feel more free to return to their old watering holes.

Craft breweries in Arkansas have struggled over the past year, with many shifting their focus to canning, retail sales and curbside pickup and delivery to try to stay afloat. Others shifted to outdoor seating and patios during the spring and summer to help make up for revenue shortfalls and deal with occupancy restrictions.

Before the pandemic, many breweries relied on their taprooms as a vital part of their sales and also saw sales of kegs to restaurants as key to their business models.

Lacie Bray, co-owner of Ozark Beer Co. in Rogers said the brewery's taproom business is returning, with customers showing support even though extensive road work makes access and parking a challenge. That said, while the brewery is seeing a lot of returning customers, some clientele are still a little leery.

"I'm looking forward to getting back to normal, whatever that looks like now," she said.

Ozark Beer first began production in 2013 in Rogers, moving to its current spot, which serves as a production facility and taproom in downtown Rogers in 2017. The company is owned by Bray, Andy Coates and Jefferson Baldwin.

Bray said demand for kegs by restaurants and bars has picked up dramatically in recent weeks.

"It's been wild. March Madness and the Razorbacks doing so well really sped things up," she said, adding the company is building a deck for more outdoor seating.

According to the Craft Beer Production report released by IBIS World this month, craft brewers had revenue of $7.3 billion in 2020, its first revenue decline in nearly two decades, primarily because of the pandemic. Revenue is expected to rebound 4.4% this year as regulations are relaxed and breweries find it easier to reach their customers. The reports notes demand for craft beer remained high during the pandemic but the industry was hindered by taproom, bar and restaurant closures, a trend expected to reverse in 2021.

John Beachboard, a partner at Little Rock's Lost Forty Brewery said business is brisk at its taproom. He said some of his employees were skeptical when he predicted business would be good in the spring, but he turned out to be correct.

"Some of them thought I was crazy," he joked.

Lost Forty ranked as the state's largest beer producer in 2019, making 14,238 barrels, nearly 35% of the state's total, according to information provided by the Alcoholic Beverage Control Division of the Arkansas Department of Finance and Administration. Arkansas brewers produced 40,818 barrels of suds in 2019, 16% up from 35,193 barrels in 2018. A barrel of beer contains 31 gallons.

Beachboard said the addition of an outdoor patio that seats 75 has helped bridge the gap for a lot of patrons who want to come out but aren't quite ready to move inside. Other changes, including a kitchen redesign and a new menu, have helped now that business is back.

He said a real challenge is getting enough workers to keep up with demand. He said that despite a starting pay of $13 an hour and other benefits like health insurance and a 401(k), it's difficult to find enough employees.

Sylvia Blain, executive director of the Arkansas Brewers Guild, said the mood of the state's brewers is good but they remain wary.

"They are all cautiously beginning to plan events and open up seating a bit," she said in response to email questions. "The warmer temps bring out those that want to continue to gather outdoors and the vaccination rollout is bringing out those that are willing to sit indoors with more confidence. Everyone is happy to see more taproom traffic."

According to the guild, Arkansas has 39 breweries in operation, which include 10 with restaurant combos and three more with brewery/food truck or permanent kitchen contracts.

According to a covid-19 update by the state Health Department on April 21, in Arkansas there have been 1.58 million doses of vaccine administered so far. There have been 331,568 people partially vaccinated and 650,339 people fully vaccinated.

Blain said Arkansas breweries are implementing lessons learned during the past year including the permanent expansion of outdoor spaces, the addition of canning lines and a move away from taproom only distribution, and providing delivery options.

Over the next five years the craft-beer industry is expected to fully rebound from the pandemic setbacks, according to IBIS World, with industry revenue forecast to rise 2.4% per year to $8.2 billion in 2026.

Marty Shutter, marketing director at Ozark Beer, said the brewery is adding infrastructure to increase capacity and plans to continue to can its small batch offerings for retail sale, a move that helped the brewery stay afloat during the lean times last year.

He said a key challenge was preparing for the expected surge in demand as more and more people are vaccinated. He said that while many have returned, the taproom isn't at 100% just yet but numbers are getting back into the pre-pandemic range, particularly on the weekend.

"It's just now we're starting to see the more casual customer come in," he said. "It's starting to feel like we're getting back to where we were."

Bart Watson, chief economist for the Brewer's Association, a trade group for craft brewers across the U.S., said nationally things are improving for the industry as customers feel more confident. He said data on taproom sales indicate they're still about 25% lower than where they were in March through April period of 2019 but that the trend in almost every indicator is positive.

He said breweries that had relied primarily on taproom and keg sales that managed to survive the past year are rethinking things and looking at dipping their toes into canning and retail distribution, even on a small scale. Watson said many breweries invested in outdoor seating last year and that space will act as a steppingstone for customers wary of traditionally tight spaces inside taprooms. The key, he said, will be how many of those customers transition inside.

"We're not going to be fully normal for quite some time," Watson said.

Quentin Willard, one of the founders of Fort Smith Brewing Co. said his taproom business is at about 80% with customers more willing to venture out now that vaccines are more readily available and the state masking mandate has been lifted. He said his business is increasing each week. The brewery runs a taproom at 115th N. 10th St. and at 7500 Chaffee Blvd.

Willard said the brewery plans to continue to use and improve upon the touchless ordering and payment systems it relied on during the pandemic and it's exploring adding bottling small batches to its options, so it can deal with situations like the pandemic, or even other instances that hinder taproom sales -- like snowstorms and floods.

As things open back up, Willard said his returning customers seem eager to be back and are in search of the old, familiar, taproom experience.

"Nobody is expecting anything different," he said. "They're excited to sit at the bar, drink a beer, and have a conversation."

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