USA, CO: An estimated 33 Colorado-based breweries shut down in 2020

Almost a year ago, on March 16, 2020, Kevin Gearhardt was shutting the doors of Maxline Brewing, the Coloradoan reported on March 13.

Gearhardt and his wife, Cathy Morgan, opened the brewery — an unlikely oasis set off of Midtown's hustle and bustle in a squat former post office annex at 2724 McClelland Drive — in 2016. In 2018, they expanded into a next-door space, doubling their taproom capacity and production.

With COVID-19 cases growing, Gov. Jared Polis had ordered all restaurants, bars and breweries to close for on-premise sales.

"It was scary in a word, right?" Gearhardt told the Coloradoan recently. The taproom-focused brewery, which was known to fill up with regulars — especially on its uber popular Monday bingo nights — was suddenly thrust, like the hundreds of other Colorado breweries, into the unknown.

In 2020, an estimated 33 Colorado-based breweries — of the state's roughly 425 — shuttered for good, according to the Colorado Brewers Guild, which advocates for the state's independent craft breweries and represents about two-thirds of them as guild members.

Of those 33 shuttered breweries, only one Fort Collins brewery made the list. C.B. & Potts closed all but one Colorado location, including two of its Fort Collins spots and its East Mulberry Street brewing operations in July. Its Collindale Golf Course restaurant remains open under new ownership.

Brewery closures in Colorado were up about 45% in 2020 compared with the estimated closures of 18 breweries in each of the years 2019 and 2018. In 2017, the state saw 16 breweries shutter permanently, according to the Colorado Brewers Guild. Of the 33 brewery closures in Colorado last year, about eight shuttered before the pandemic hit.

Colorado breweries closed at a lesser rate than initially projected last spring. In April 2020, almost 12% of craft brewery owners surveyed across the country estimated they would have to permanently close their business by the end of the month, and another 45% said they would have to consider closing within the next three, according to the Boulder-based Brewers Association.

In total, just less than 8% of Colorado breweries closed in 2020 — owed mainly to their quick moves to different revenue streams, Colorado Brewers Guild Executive Director Shawnee Adelson said.

"This past year has been a year of uncertainty and, I hate to use this overused word, but a year of pivoting," Adelson told the Coloradoan on Thursday. Breweries that had always been taproom focused suddenly moved to canning, even setting up mobile canning lines in their breweries to ensure their bars were stocked for to-go sales.

"And sometimes it was daily, sometimes it was weekly, sometimes monthly, but there were always new regulations coming out about how they had to operate their businesses," Adelson said, referencing the evolving statewide restrictions placed on breweries that reopened to on-premise sales.

Maxline Brewing, which had historically focused on taproom beer sales — pre-pandemic they made up roughly 80% of the brewery's revenue — had to immediately pivot to to-go crowler sales. Gearhardt and Morgan hit the brewery's year-old canning operations in earnest, scrambling to pump out more product on its in-house canning line.

"It's changed Maxline in that we have become much more of a distribution brewery," Gearhardt said, adding that before COVID-19 it wasn't uncommon for the brewery to be packed with regulars.

Monday bingo nights brought in upwards of 150 people. They hosted their last one on March 9, 2020 and cancelled their next planned bingo event the following week — March 16. The next day, Maxline Brewing would close for more than 10 weeks.

Despite these challenges, Maxline Brewing increased its beer production 15% in 2020, according to Gearhardt. Early last month, the brewery was also able to expand further into a neighboring space in its Midtown building, giving it more warehouse and storage space as well as room to expand its patio.

While the initial 10-week closure that kicked off March, 17, 2020, was scary, it forced Maxline Brewing to fast forward its long-term plans of increasing distribution, Gearhardt said. Now, 40% of the brewery's revenue comes from can sales.

When asked if he or Morgan ever thought Maxline Brewing would close permanently due to the challenges of 2020, he replied with a succinct, "no."

"We knew we were going to get through this one way or another," he added.

For Brad Lincoln, owner of Fort Collins' Funkwerks brewery, the answer was less clear.

Like Maxline Brewing, Funkwerks was operating under a taproom-focused model before the pandemic hit. In fact, in early March 2020, Funkwerks had just announced it had moved its canning operations and packaged sales operations to its northern California partner brewery, 21st Amendment Brewing.

Lincoln scrambled to bring canning and packaging back to the Fort Collins brewery and did so fully by mid-June. In the spring and summer of 2020, Lincoln said he couldn't exactly say how much draft beer revenue Funkwerks lost — "it's gotta be enormous," he added.

When the mandated closure started March 17, Lincoln said he had to temporarily let all of his staff go. He said he stayed up all night crunching the numbers of Funkwerks' financials.

"I thought there was a good chance that we would never open again," he said.

Because of the sudden stop in draft sales last spring, and the scramble to return Funkwerks to a production and distribution facility, Lincoln said he missed out on a lot of business.

Shipping prices went through the roof because the brewery was only able to produce and ship smaller quantities, and with less product to provide, relationships between the brewery and its distributors changed.

"They've moved on and we've moved on," Lincoln said. "We had all these plans, and the plans changed."

Had the COVID-19 pandemic not happened, Lincoln said Funkwerks was expected to sell 7,000 to 8,000 barrels of beer. Instead, it sold 3,000 and is on pace to do the same in 2021, which Lincoln said he is considering a "recovery year."

They ultimately made it through 2020 due to support from the community, their landlord and a mix of Paycheck Protection Program funds and state tax breaks, Lincoln said.

And despite things not going according to plan in 2020, Lincoln said it forced the brewery to retool its goals.

Instead of producing huge quantities of the same beers, Funkwerks will now have some room to play with its offerings and focus on its taproom again, where Lincoln said he expects to see rebounding sales in the coming months.

"I think that there is, in some ways for the first time in a long time, more opportunity to experiment than what we've had in the past," Lincoln said. "We're doing things we've wanted to do but haven't been able to do."

"I see us as being a very different brewery, but a stronger brewery," Lincoln said. "And I'm actually happy with the outcome."

With COVID-19 cases in Larimer County plateauing after a significant early 2021 decline, indoor and outdoor capacities at breweries like Funkwerks and Maxline Brewing have eased up.

Maxline Brewing, part of Larimer County's Level Up program, can officially operate under Level Blue on the state's COVID-19 restriction dial. Currently, it's operating socially distanced and at 50% capacity indoors and with 6-foot spacing on its outdoor patio.

On Thursday evening, despite dipping temperatures and the promise of some late-spring snow, the Midtown brewery was dotted with customers both inside its glowing taproom and out on its string-light-lit patio.

Some stood in line at a taco truck parked nearby as others queued outside the brewery's' front door to place a beer order.

And on Monday, March 15 — two days shy of the year anniversary of Colorado's March 2020 closure of bars, restaurants and breweries — Gearhardt said the brewery is planning something reminiscent of the old days.

A small bingo night.

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