The craft beer industry has faced a difficult time coming back from the financial distress caused by the Covid-19 pandemic. The Brewers Association's mid-year report in 2023 projected that craft brewer production would be down for the year for the first time since the 2020 pandemic year.
Craft breweries have been hit hard since the pandemic with 346 breweries closing in 2020, 178 in 2021 and another 319 closing in 2022. Statista did not have a statistic for 2023 yet, but judging from the steady volume of Chapter 11 bankruptcies filed last year, the number of closings might match or surpass 2023.
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In 2023, San Francisco's Anchor Brewing, one of the best known and highly regarded independent craft breweries since its founding in 1896, filed Chapter 11 in July 2023 and shut down operations. Since then, a steady stream of smaller craft brewers have marched to federal court to file for bankruptcy protection. Some of the names have included Flying Fish Brewing of Pennsylvania, Guanella Pass Brewing of Colorado, Zydeco Brew Werks of Florida and Forgotten Boardwalk Brewing of New Jersey, just to name a few.
Spirits sales increased in 2023 over previous year
Off-premise beer sales in 2023 slightly increased by 1.4%, but wine sales didn't fare as well, declining by 1.4% for the year, according to research from NIQ. Spirits sales, however did better than beer and wine, rising by 2.7% year over year.
The craft distillery industry has been in a boom era, however, over the past 20 years with the industry expanding from 75 companies in 2006 to 2,283 in 2022, according to the American Distilling Institute.
Despite favorable annual sales as the craft distillery industry has expanded, some liquor distillers haven't reaped the benefits of the industry's good fortune.
Colorado-based Lee Spirits Co., a distiller of premium gin, vodka and liqueurs, on March 8 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Colorado after shutting down all operations four days earlier, including its Colorado Springs tasting room, Brooklyn's on Boulder Street.
Lee Spirits shuts down operations after 10 years in business
The Monument, Colo.-based distiller on March 4 revealed on social media that it had ceased operations as it could not overcome the prolonged impact of the Covid-19 pandemic and "the ever-changing industry landscape." The company did not specify whether it was seeking a buyer for its assets or would liquidate.
"It is with heavy hearts that we share some difficult news. After a decade of dedicated service to the Colorado community, Lee Spirits Company, alongside our beloved tasting room, Brooklyn's on Boulder Street, will be ceasing operations effectively immediately," Lee Spirits said in a statement on social media.
"Founded over 10 years ago, Lee Spirits Company has been an incredible source of pride. We've poured our passion into crafting premium gin, vodka, and liqueurs, aiming to elevate your gatherings and celebrations," the statement continued.
"Brooklyn's on Boulder Street, once a beacon of Colorado Springs' cocktail scene, stood as a testament to our commitment to creating memorable experiences," the company said. "However, despite our best efforts, the prolonged impact of the COVID-19 pandemic and the ever-changing industry landscape presented challenges we simply couldn't overcome."
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Lee Spirits, which launched operations in 2013, reported $616,552 in assets and $1.38 million in liabilities in its petition. The company's annual gross revenue had fallen from $997,221 in 2022 to $832,035 in 2023, according to court papers.
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The spirits distiller specialized in manufacturing its Lee Spirits six times distilled vodka and several gin varieties, including Dry Gin, Lavender Gin, Strawberry Ginger Gin and Ginfuego. It also featured several liqueurs, including Forbidden Fruit, Creme de Violette, Creme de Cacao, Creme de Rose, Alpine Liqueur, Vanilla Liqueur and Peppermint Schnapps.
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