The shock and awe of the COVID-19 pandemic has rippled across the Denton economy with few businesses left unscathed.
For Denton’s craft brewers, the novel coronavirus outbreak has created a volatile environment for business as stay-at-home orders have closed taprooms and sent revenue streams into a tailspin. Without an end in sight to the extent of the fallout, many local independent brewers and their retail counterparts are facing a bleak economic outlook.
“There was a huge amount of support from the community at the beginning of the shutdown but gradually over time, we began selling less and less beer each day,” said Bobby Mullins, owner of Armadillo Ale Works, a Denton craft brewery and taproom. “There’s a lot of people out of work and overall people are getting a little more conservative with their spending.”
Texas craft breweries have sustained a significant overall loss in revenue — about 71%, according to Caroline Wallace, deputy director of the Texas Craft Brewers Guild. Meanwhile, with uncertainty mounting, 63% of craft breweries have been forced to either lay off or furlough staff.
Mullins, who is a TCBG board member, said his brewery is an interconnected operation that relies on three main components: the brewery, its taproom and its partnership with Cryptozoology, a coffee shop that operates in the same space. However, with Armadillo limited to to-go orders and the coffee shop closed, he said revenue is down about 75%.
Of TCBG’s more than 300 members, roughly 67% of craft breweries have reduced beer production and 27% have temporarily halted production altogether. About 14% of craft brewers have temporarily closed their facilities.
Mullins said that if the pandemic and restrictions continue, Armadillo Ale Works might follow.
“There’s a good number of breweries that have shut down or slowed down quite a bit,” Mullins said, adding that overall production has tapered. “We will definitely be stopping beer production if things don’t improve in the next few weeks, but we will still sell beer to-go as long as we can.”
For Denton’s craft retailers, such as the Bearded Monk, a craft-centric beer shop, the effects of the outbreak have been similar.
Ben Esely, owner of the Bearded Monk, said the craft beer community has had a strong relationship in Denton; however, with downtown barren of foot traffic and drastically reduced revenue, many are unsure about the future.
“These independent craft breweries are running sale to sale to buy their next batch of cans or their next batch of grain, whereas these larger corporate breweries have more cushion,” he said of how breweries might fare. “Even the larger craft breweries in North Texas are a drop in the bucket compared to the multinational breweries, such as MillerCoors.”
Currently, while three employees have been hired in the meantime, Esely said there have not been any discussions about temporarily or permanently closing the Bearded Monk. However, he said he expects some businesses will close shop.
At Denton County Brewing Co., an independent brewery next to the Bearded Monk on McKinney Street, the pandemic has led to an operational slowdown as difficult decisions and adjustments have been made. Owner Seth Morgan said that since COVID-19 restrictions were rolled out, overall sales have plummeted as traffic near his storefront cratered.
“The pandemic has completely taken away what we thrive on, which is our community,” Morgan said. “To-go sales make up an extremely small portion of our business, so we have had to rethink to stay alive since the shutdown began in late March.”
In the meantime, Morgan said his business has transitioned from a draft-style approach to their products and have started packaging their products in house. Although brewery production has been halted since late March, and while his business has adapted, he said overall sales are down 87% to 90%.
For DCBC, March, April and May are typically higher revenue months because of warmer weather and nearby events in downtown, including the now-canceled Denton Arts & Jazz Festival; however, with pandemic restrictions expected to persist in some capacity into next month and beyond, he said a significant change is expected in Denton.
He said the most abrupt change has been reduced cash reserves, while most of his employees have been furloughed. What keeps his outlook positive, he said, is the support he’s had from the community.
“So many people are coming out and they are supporting local and they are putting their money where their mouth is,” Morgan said. “It’ll be painful for all of us, but what makes Denton different is the people in our community. If [DCBC] was in different town that didn’t have the sense of community that we have, I probably would have already been out of business.”