Craft beer fans in the Old Pueblo certainly have noticed their local bottle shop is now sporting larger selections of 4-packs and 6-packs from a variety of local and national breweries these days. Independently owned beer and wine shops like Tucson Hop Shop, Arizona Beer House and Tap & Bottle are updating their beer selections on a weekly basis to keep up with the public's demand for new brews.
"We've been getting so many breweries that we never had access to before. They're all canning and packing more now that their taprooms are closed," said Tap & Bottle owner Rebecca Safford. "People are constantly wanting new releases and we're even seeing Pueblo Vida releasing new beers every few weeks.'"
Safford said both of her locations have been able to survive the pandemic by pivoting to online, to-go and delivery sales while their taprooms remain closed. While the unexpected renaissance of canned craft beer is keeping customers coming back, it still doesn't replace lost profits from draft beer sales, she said.
"Our bottle shops have kept us going and our sales numbers still look strong during the pandemic, but what's different is people are drinking at home," Safford said. "Profits from draft beer sales are a lot higher than what you make off a can of beer."
Closed taprooms, coupled with decreasing on-premise sales, have kept brewery owners coast-to-coast busy canning small-batch, limited-run beers typically reserved for their local clientele in an attempt to recover lost profits.
Finley Distributing's craft brand manager Matt McCullagh said many Tucson breweries are still experiencing huge declines in local on-premise beer sales, while having trouble keeping up with off-premise demand. His top-selling local craft brand, Dragoon Brewing Company, has suffered massive losses of on-premise sales during the pandemic, he said.
On-premise sales are adult beverage sales made through wholesale distribution to bars and restaurants. Off-premise sales are retail sales of canned or bottled adult beverages to be enjoyed at home.
"Dragoon has been hit pretty hard by the fact that their IPA was our No. 1 tap handle in the whole Tucson area. We had more Dragoon tap handles than we had Miller Light or Blue Moon handles," McCullagh said. "The biggest challenge that our local breweries have is that 50% to 70% of their sales come from on-premise sales. When you rely so much on your on-premise market, that loss has a huge impact."
McCullagh said while local beer off-premise sales at grocery stores have gone up since the pandemic, it doesn't balance out the loss local breweries have suffered by low on-premise sales.
"What we've seen this past year is that the hardcore craft beer drinker will go to the supermarket and buy a couple of six-packs of craft beer," McCullagh said. "But they're also buying a 30 pack of something cheap to drink it at home, whereas previously they would stop by the local bar a few times a week."
McCullagh said regional and national breweries are also feeling the sting of dwindling on-premise sales, but they're better equipped to adapt to changes brought on by the pandemic.
"The regional brands can pivot a lot easier and say, 'We're not going to send out kegs, but we'll send out more cans,' local breweries can't do that quite as easily," MacCullagh said. "[Local breweries] are really struggling to meet the demand in sales for packaged products. It's not easy for them to suddenly decide to take a batch of beer and throw it into cans. Especially now that there's a shortage."
The nation is facing an aluminum can shortage due to the number of quarantining Americans buying canned beer, canned wine, hard seltzer, seltzer water, soft drinks, energy drinks and even canned hard-alcohol mixed drinks throughout 2020. Aluminum cans of all sizes are on backorder at national supply companies like Ball Corp. and the Coca-Cola Company recently decided to hold off canning certain products such as Coke Zero in the face of the a shortage.
McCullagh has seen sales of hard seltzer brands like White Claw and True grow nearly 250% over the past year, he said.
"All the sudden we have an additional 50% demand on aluminum because everybody has to buy their products from supermarkets instead of getting from local bars," McCullagh said. "When you see an increase in sales like that, those supply companies can't just all the sudden find another two to three million cans."
Button Brew House Owner Erika Button said she saw the rush on aluminum early in the pandemic when the northwest side brewery quickly sold out of a pallet of 32-ounce aluminum crowler cans that would usually take 10 months to sell through.
"We actually finished a whole pallet in five weeks because we had support from our regular customers," Button said. "We used to get the crowlers within two weeks, but now I'm hearing it's more like five to six [weeks]."
Button said the company recently purchased a canning line last October with funds from their Economic Injury Disaster Loan and said the brewery is now using a lot more aluminum than it previously did. While it may take several weeks to get an order of 16-ounce aluminum cans, Button said they have plenty in stock to keep up with the brewery's self-distribution and it's helping stay afloat after losing 80% of their on-premise sales since the pandemic's start last March.
"We've been able to maintain the retail side as much as we can, but it still doesn't make up for the wholesale side," Button said. "It's a struggle."
Firetruck Brewing CEO Taylor Carter said his brewery was lucky to have purchased in bulk last February before the coronavirus and the aluminum shortage. His brewery's on-premise sales have taken a 40% percent hit from where they were last year, he said. But Carter said the recent opening of their Oro Valley location and off-premise sales have helped during the hard times.
"With restaurants and bars shutting down, it's taken a toll on our distribution," Carter said. "But we're slowly climbing out of the hole. It's starting to pick back up again, people are starting to go out again. Things are looking better."
