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Another Brewery Closes And Files Chapter 7 Bankruptcy Liquidation
The brewery business has suffered because profit margins are thin and costs are high.
Most players have entered the industry more for love than for money. Most craft-beer makers are people who love to brew and to immerse themselves in that community.
That business model was always shaky but it worked during the years when craft beer was a popular trend. Many communities had multiple breweries and, in some ways, they supported each other.
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Tourists and locals alike would go on pub crawls and brewery tours, where they patronized multiple establishments in one night,
That trend was smashed by the Covid pandemic.
While many of these brewery brands distributed through local liquor and grocery stores, most of their profits came from selling beer at their breweries. When that disappeared during the pandemic, craft brewers saw their revenue dry up while expenses like rent did not go away.
Once the pandemic ended, these companies were left with added debt. Couple that with younger people drinking less beer and the costs of labor and raw materials higher, and you have the perfect storm that has driven dozens of breweries to file for bankruptcy. Many of them have ended up in Chapter 7 bankruptcy liquidation proceedings.
Now, the so-called beerpocalypse has claimed another victim.
Breweries have suffered due to added debt and lower demand.Image source: Getty Images
Regional brewery closing over rent and debt
Steam Bell Beer Works operated from the same location in Midlothian, Va., half an hour southwest of Richmond, for nearly a decade. It was a community gathering spot that served families, not just people over the legal drinking age.
It closed unexpectedly in late August. Its owner, Brad Cooper, posted a message on the brewery's Instagram page explaining what had happened.
"Dear friends, It is with a heavy heart that we share some difficult news: Steam Bell will be closing its doors for the final time this Sunday," he wrote. "Nearly a decade ago, my family and I set out to open Chesterfield County’s first production brewery. As a lifelong Chesterfield native, I felt immense pride in breaking new ground in my hometown."
Cooper shared his pride in how his company offered more than just beer,.
"Over the years, Steam Bell became known for its creative and innovative craft beer, and it quickly grew into a place where families could gather, parents felt at ease bringing their kids, and community thrived," he added.
That story has ended because Steam Bell lost its lease and couldn't afford to move to another location.
"A few months ago, we were informed by our building’s owner that they would not be renewing our lease. Since then, we’ve been searching for a way to move forward, but unfortunately, with the resources available to us, we’ve found ourselves at a dead end," he said.
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Steam Bell files Chapter 7 bankruptcy
Cooper added finality to the closure of Steam Bell Beer Works by filing for a Chapter 7 bankruptcy liquidation. That means the company's remaining assets will be auctioned off to settle its debts.
The company filed its Chapter 7 bankruptcy petition in U.S. Bankruptcy Court for the Eastern District of Virginia.
In the bankruptcy filing, Cooper says the business has $403,000 in assets and $824,000 in liabilities owed to 20 creditors.
"The brewery’s assets include seven brewing tanks, a canning line, 10,000 aluminum cans, and a food trailer. Steam Bell’s largest debt is $720,000 owed to the U.S. Small Business Administration," according to Richmond BizSense.
More bankruptcy stories:
- Another popular ice cream brand files for Chapter 11 bankruptcy
- Popular burger chain faces likely Chapter 11 bankruptcy
- Huge shipping company files Chapter 11 bankruptcy to liquidate
Cooper made clear that he appreciated his customers but was ready to give up.
"While this business has brought us incredible joy, it has not come without its fair share of challenges," he wrote on Instagram. "The stress and sleepless nights have taken their toll, affecting both my mental and physical health.
"And while the past few years have been particularly tough for the craft beer industry — marked by declining sales and shrinking shelf space in grocery stores — I am deeply grateful for the experiences we’ve shared together."
In theory, a buyer for the name and other assets to reopen elsewhere could still emerge. No date for the auction has been set.
