Tuesday, March 30, 2021

2020 Beer Production in Oshkosh and Vicinity

Each March for the past five years I've written a post about beer production in Oshkosh and the surrounding area. And each year those production numbers have told a story of growth. Not this year. COVID-19 has changed the trajectory.

The Wisconsin Department of Revenue has now issued its full set of beer production reports for 2020. The DOR reports production in terms of barrels. Here are the results for 2020 (red bar graph) compared to 2019 (blue).
Click the graph to enlarge it.

A barrel of beer contains 31gallons. That’s the equivalent of 13.7 cases. Or 248 pints. No matter how you slice it, beer production in Oshkosh has fallen for the first time since 2011.

All the breweries in Oshkosh are down. Overall volume is down by a full 18 percent. Production at Fox River – Oshkosh, the largest brewery here, fell by 23 percent. Bare Bones is down 18 percent. Fifth Ward's production decreased eight percent.

The story becomes more of a mixed bag when you take a wider view that brings in other breweries in the area.

Area beer production in barrels.

Cick to enlarge.

Fox River, with its two brewpub breweries, continues to be the most productive brewery in our area. Fox River – Appleton, with its bottling line, was able to make up for most of the lost ground that occurred at Fox River – Oshkosh. Yet this was the first time in a decade that Fox River has not seen its production grow. That said, the brewery's overall decline of nine percent is at least somewhat encouraging in comparison to what’s occurred at other large brewpubs around the state.

Last year was unprecedented. But there are some patterns here worth making note of.

There were three area breweries with production of more than 300 barrels that saw significant growth last year: Barrel 41, Lion's Tail, and McFleshman's. Those three breweries share a set of traits that distinguishes them.

First, each of them has a canning line. That became a major advantage. In comparison to bottled beer, it’s easier, faster, and cheaper to release a new brand if you can put it in a can. When draft beer sales tanked at the start of the shutdown, these three breweries moved their new releases into cans and continued selling beer in a format embraced by drinkers who otherwise would have been in their taprooms. All three breweries made the most of that capability. It seems to have made all the difference.

Second, each of these breweries self-distribute. So they never found themselves at the mercy of a distributor who – when the sale of draft beer dried up – was incentivized to displace them by pushing the retail product of much larger breweries. The retail presence of these three breweries grew continually during 2020.

Finally, all three of these breweries employed their social media channels for all they were worth. Their customers were no longer in their taproom, but they still managed to keep those customers engaged. That effort will only continue to pay dividends.

Lion’s Tail is the exemplar here. The taproom at Lion’s Tail was closed for a full year. Yet the brewery didn’t miss a beat. When the shutdown began, the focus there immediately shifted to selling canned beer directly to customers and on expanding its retail distribution footprint. I doubt the folks at Lion’s Tail could have handled the predicament of 2020 any better.

I suspect Fifth Ward might have been part of this group had their canning line come in earlier in the year. Fifth Ward certainly had the other pieces in place. But the brewery wasn't able to begin selling its most sought after beers in cans until late December.

The breweries hit hardest in 2020 were the small breweries without the ability to redirect their output into retail packaging. After their taproom business fell off there was no alternate sales channel for them to resort to. The apparent outlier among that group is Emprize. But Emprize didn't begin reporting its production until July of 2019, so the year-to-year comparison isn't entirely valid.

A final note… as I mentioned at the top of this post, these production numbers are supplied by the Wisconsin Department of Revenue. The DOR’s figures are sometimes a point of contention. They don't always jibe with a brewery’s internal metrics. The DOR has the final say, but I’d be happy to add an addendum to this post for any brewery mentioned here that would like to provide additional information or context.

Here's some additional context related to Fox River. This comes from Drew Roth, head brewer at Fox River: I do have one additional piece of information to add to FRBCs numbers. One transition we made was to pull all production from Hinterland and bring it in house in 2020, which included the mobile canning. This meant that although we did see a drop in production, the 10% you reported seems on point, we felt the pain of this loss a lot less than others in our position as we saw an increase in margins on our packaged beer. We were also able to keep our staff fully employeed, which was important. One odd fact that came out of last year was that although production overall was down, we had our best month on record that year. July of 2020 saw 401bbls produced between both locations, the old record was around 280bbls. Im really interested in totals for this year. There is a solid chance a lot of those losses will be erased.

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