BIG NEWS: Another popular brewery, beer brand files Chapter 11 bankruptcy
In the past decade, craft beer has surged in popularity, leading to a remarkable increase in the number of breweries and taprooms across the United States. According to the Brewers Association, the number of craft brewers jumped from approximately 4,803 in 2015 to around 9,761 in 2023. However, this boom has been accompanied by a troubling trend: a significant rise in craft brewery closings.
A Brewing Crisis
The number of craft brewery closures has escalated dramatically, rising from 97 in 2016 to 418 in 2023, totaling about 2,036 closures over an eight-year span. In many cases, these closures have coincided with either Chapter 7 or Chapter 11 bankruptcy filings.
Notable breweries filing for Chapter 11 this year include Roth Brewing Co. of Raleigh, N.C., which filed in March, and SpringGate Vineyard in Harrisburg, Pa., which sought protection to reorganize its business. Milwaukee’s Company Brewing has also shut down operations after filing for Chapter 7 bankruptcy liquidation on May 31.
Specific Cases of Bankruptcy
Other breweries have faced unique challenges leading to their bankruptcy filings. Zydeco Brew Works in Ybor City, Florida, filed for Chapter 11 protection in January and subsequently closed its main brewery and restaurant location in Tampa. King State, also based in Tampa, filed for Chapter 11 in February, citing financial distress caused by city infrastructure work disrupting its business.
Unconventional Causes: A Partnership Dispute
One of the more unusual bankruptcy filings this year came from Griffin Claw Brewing Co. in Michigan, which filed for Chapter 11 on July 26 not due to financial distress, but to resolve an ownership dispute. Co-owner Scott LePage stated, “We’re a profitable company… it’s just that we got put into this position and ownership can’t agree.”
Despite the filing, Griffin Claw’s operations remain unaffected, with both its Birmingham and Rochester Hills locations continuing to serve customers as usual. The dispute stems from complications after the death of co-founder Ray Nicholson in 2019, leading to disagreements between the LePage family and Nicholson’s heirs regarding financial matters linked to the sale of Clubhouse BFD in Rochester Hills.
The Future of Craft Breweries
Griffin Claw Brewing, established in 2011, offers a diverse selection of 18 brews, including its award-winning Norm’s Raggedy IPA, along with hard cider and distilled spirits. While the company navigates its ownership issues, it stands as a testament to the complexities that can arise in the evolving craft beer industry.
As craft breweries continue to face both growth and challenges, their ability to adapt to the market landscape will determine their longevity in a competitive and changing environment.
