Inflation, Pandemic Woes Force Renowned Craft Brewery to Cease Operations

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The world of craft brewing has fallen under the weight of escalating inflation, changing consumer trends, and the residual blow of the global health crisis. A palpable testament to this reality is the recent closure of Rhythm and Brews, a notable craft brewery in Cambridge, after five years of sustained operation.

Andrew Byer, the brewery owner, confirms the convergence of detrimental factors as the root cause of this unfortunate event. He paints a grim picture of the struggles they’ve endured: “Reality kept intensifying. We had no choice but to draw the curtains,” says Byer. “Despite seeing fruitful returns in the previous year, we had to remortgage twice during the COVID-19 period just to keep ourselves afloat. We went all out, literally, until we were bled dry.”

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The choices before Byer were far from easy. Following the worldwide lockdowns in response to the pandemic, there was a brief surge in business, but the year of 2023 proved to be daunting. Mounting costs and declining profit margins sealed the fate of the establishment.

“With the cost of beer ingredients virtually doubling over the past five years, there remains to be a ceiling when it comes to the pricing of our pints,” Byer rationalized. “Moreover, consumer habits have notably evolved, causing a dip in alcohol consumption. Craft breweries worldwide now stand at the precipice, and the ensuing closures, disconcerting as they are, seem inevitable.”

As more young adults veer away from alcohol consumption, Byer acknowledges other factors that might have contributed to this significant shift, such as the rising popularity of cannabis shops, merely stating, “It’s their prerogative, what matters is that it’s affecting more than just the beer industry.”

In light of the closure of Rhythm and Brews, those who continue their patronage seem to exhibit a preference for seltzers and cocktail mixes. This trend is duly recognized and embraced by other breweries, such as Kitchener’s Counterpoint Brewing Company, as they grapple with surging operational costs.

“While craft beer remains a vibrant industry, it has become imperative not only for us but for other peers in our circle to modernize and remain true to evolving beer styles,” notes Graeme Kobayashi, owner of Counterpoint Brewing Company. “We’re redefining our offer by delivering healthier and lighter options with less alcohol content and lower-caloric value, all the while introducing unconventional ingredients to keep our brands exciting and market-competitive.”

Amid soaring prices for ingredients, shipping, and packaging, not to mention staffing costs, Kobayashi mentions the necessary strategic choices they’ve had to make which includes cost and staff adjustments.

Navigating this difficult time requires inventive collaboration, involving partnerships with other breweries and planning co-hosted events, all duly supported by their loyal patrons who’ve consistently favored supporting local businesses.

On the provincial level, despite these adversities, a certain level of demand for beer remains firmly in place across the province, according to Scott Simmons, president of the Ontario Craft Brewers Association.

Simmons delivers a mixed assessment: “This sector accounts for a substantial slice of Ontario’s industry. It notably expanded from 2010 to 2019 and now encompasses 342 small businesses. Predicting another surge in the sector is plausible, but presently, many are grappling with tough circumstances.”

Expectedly, the association hasn’t noted significant brewery closures yet, but industry professionals like Simmons believe that without increased government intervention, it’s only a matter of time. “The mounting prices of essential items like aluminum, barley, and cardboard sideliners are intensifying the financial burden. In addition, looming payments for emergency business loans are casting dark shadows over these establishments,” he said.

The association fervently hopes for continuous consumer support, alongside tax relief, as they confront the future. Simmons concludes: “Price hikes for craft beers are currently off the table, so we need to reduce costs in any way possible. In this regard, taxes represent the heaviest load.”