Expansion and hurdles within the craft brewery sector
The rise of craft beer over the last decade has resulted in a notable surge in the establishment of breweries and taprooms throughout the United States. The number of craft brewers increased from approximately 4,803 in 2015 to roughly 9,761 in 2023, as reported by the Brewers Association.
However, the U.S. craft brewery landscape has faced a growing number of business closures during this time. The count of craft breweries shutting down escalated from 97 in 2016 to 418 in 2023, culminating in a total of around 2,036 closures across the eight-year span.
Often, the closure of a craft brewery aligned with a Chapter 7 or Chapter 11 bankruptcy filing. Among those that filed for Chapter 11 this year to restructure and continue operations was Roth Brewing Co. based in Raleigh, N.C., which submitted its filing in March. SpringGate Vineyard, a craft brewer from Harrisburg, Pa., filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Middle District of Pennsylvania to reorganize its business.
Company Brewing, a craft brewery in Milwaukee, ceased its operations and began liquidating its remaining stock online after its owner, George Bregar, filed for Chapter 7 bankruptcy liquidation on May 31.
This January, Zydeco Brew Works in Ybor City, Florida, submitted a Chapter 11 filing in U.S. Bankruptcy Court for the Middle District of Florida and closed its primary brewery and restaurant on 7th Avenue in Tampa, Florida.
In February, Tampa’s King State filed for Chapter 11 following financial challenges linked to city infrastructure projects that interfered with its operations.
Additionally, some bankruptcy filings stem from less conventional circumstances.
A beer is poured from a tap.
Significant bankruptcy cases in the craft brewing industry
The well-known craft brewery Griffin Claw Brewing Co. filed for Chapter 11 bankruptcy protection on July 26 for an atypical reason. The brewery is reportedly not experiencing financial difficulties and is not looking to liquidate or restructure its finances.
A reorganization, however, seems imminent for the Michigan-based company as the owners of Griffin Claw Brewing submitted their petition to avert litigation among the partners, according to the Detroit News.
“We’re a thriving company,” stated Griffin Claw co-owner Scott LePage. “We’ve consistently turned a profit; this situation arose due to a disagreement among ownership.”
LePage assured that the Chapter 11 filing would not disrupt Griffin Claw’s operations or impact employees at its locations in Birmingham and Rochester Hills, Michigan. The brewery, dining establishments, and taprooms will function as normal, he affirmed.
“Nothing is changing. We’re open, the patios are bustling, and we’re geared up for a lively Friday night. This is simply an ownership conflict,” LePage remarked. Employees and suppliers will be compensated, he confirmed.
Founded in 2011 by Scott LePage’s father, Norman LePage, alongside his partner Ray Nicholson, Griffin Claw experienced a dispute following Nicholson’s passing in 2019.
The unresolved matter, according to the LePage family, revolves around both parties allegedly being unable to agree on financial obligations stemming from the sale of Clubhouse BFD in Rochester Hills to Griffin Claw Brewing. The Rochester establishment has been rebranded as Griffin Claw Brewing.
The brewery provides 18 distinct brews, including one of its initial award-winning creations, Norm’s Raggedy IPA. Griffin Claw also produces its hard cider and distills various spirits, such as vodka, bourbon, whiskey, gin, and rum.
The LePage family additionally owns the Lumen Detroit restaurant situated in Beacon Park, which is excluded from the bankruptcy proceedings.
