Craft Beer Industry Faces Turmoil as Gen Z Prefers Cocktails, Files for Bankruptcy

There has been a serious crisis for craft beer breweries over the last five years as Gen Z prefers mocktails and cocktails, resulting in huge financial losses for companies, including Guanella Pass.

Brewing Industry Shock

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Guanella Pass Brewing has joined a long list of craft beer companies by filing for Chapter 11 bankruptcy.

Financial Struggles Unveiled

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The 7-year-old brewery revealed financial struggles with a staggering $2.3 million debt, overshadowing its $860,000 gross revenue for the year 2023.

Pandemic Impact on Craft Brewers

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COVID-19 disrupted the craft beer industry as breweries heavily reliant on in-person visits suffered financial strains due to lockdowns, pushing some to the brink of closure.

Moving Away From Beer

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During the pandemic, many went teetotal, and younger consumers shifted away from beer and alcoholic drinks.

Gen Z Drinking Less

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Research from Gallup showed that 60% of Gen Z (18-24 year-olds) consume alcohol, compared to 70% of the generation above that do.

Mocktails and Cocktails

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If they were going to drink on a night out, research shows that many Gen Zers would prefer a mocktail, cocktail or hard seltzer as opposed to a beer.

A Common Phenomenon

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Anchor Brewing, an iconic San Francisco brewery that was enjoyed across the country, shut down last summer, signaling the beginning of a crisis for craft beer.

Georgetown’s Craft Beer Pioneer

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Established in May 2017, Guanella Pass became Georgetown’s first brewery since Prohibition, marking a significant milestone for the tiny Clear Creek County town.

Strategic Brewery Locations

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With locations in Georgetown and Empire, Guanella Pass strategically positioned itself, adding a brewpub at the foot of Berthoud Pass in Empire in 2020.

Building Renovation Journey

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Steven Skalski’s 2016 purchase of 501 Rose St. cost $180,000 and transformed an antique shop into a modern brewery.

A Mountain Brewery

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Guanella Pass is a brewery that sits 8,530 feet above sea level, facing financial challenges, but continued to operate after filing for Chapter 11 bankruptcy.

Brewing Site Overhaul

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Skalski went through enormous challenges when building the site, “We’ve got this building, we had to build it all out. It was an old antique shop,” he said.

Community Impact

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Operating the SilverBrick Saloon, a restaurant in Georgetown, the brewery had an impact on the local community, making the closure even more upsetting.

Legal Battle and Debt

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On Dec. 7, the brewery faced a legal challenge from On Tap Credit Union, citing a $36,000 credit card debt further complicating its financial troubles.

Skalskis Facing Lawsuit

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The brewery and Skalski faced a lawsuit in Jefferson County, with On Tap Credit Union asserting an outstanding debt that remains unanswered in court.

Assets and Liabilities

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Guanella Pass disclosed $72,340 in assets, primarily consisting of brewing and restaurant equipment, while grappling with various debts.

Revenue History

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Reviewing its financial history, the brewery reported $792,000 in gross revenue in 2021, $1.1 million in 2022, and a decline to $860,000 in the challenging year of 2023.

Bankruptcy Filing Details

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The bankruptcy paperwork revealed $573,000 owed to First Savings Bank and $256,000 to the Clear Creek Economic Development Corp.

Other Breweries Faced the Same Fate

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Other breweries that faced a similar fate were Chicago’s Metropolitan Brewing, New Jersey’s Flying Fish, Denver’s Joyride Brewing, Tampa’s Zydeco Brew Werks, and Cleveland’s Terrestrial Brewing.

The Future of Craft Beer

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Adding Guanella Pass, a very popular craft beer, to this long list shows that the future looks very bleak for the industry.

The post Craft Beer Industry Faces Turmoil as Gen Z Prefers Cocktails, Files for Bankruptcy first appeared on Swift Feed.

Featured Image Credit: Shutterstock / Mladen Mitrinovic.

The content of this article is for informational purposes only and does not constitute or replace professional financial advice.

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