Brewing beer has always been a challenging business. Margins are low, competition is intense, and demand has always fluctuated.
The period before the Covid pandemic was a golden time for craft breweries. Consumer interest in non-mass-produced beers seemed to be at an all-tome high and many cities had enough local breweries to support tours and pub crawls.
Related: Another popular restaurant chain shares Chapter 11 bankruptcy plan
In reality, however, breweries are a bit like those self-serve frozen yogurt places that were all the rage in the 2010s. When one opened in a community, it was a novelty and people were willing to wait in long lines to get to customize their own frozen treat.
Once a second chain opened, however, supply would quickly outpace demand. What was a good idea for a single business was not a business model that could support multiple players competing for the same pool of customers.
It may seem like a boom when your community gets a bunch of breweries, and for a time they may all support each other, but once demand falls — and it has for beer — then too many players makes it hard for any brewery to surive.
Add in that many regional breweries lost their in-person sales during the Covid lockdown period, and you have breweries dacing higher debt, lowered demand, and rising operating costs.
Covid-related debt has been a drag on many regional breweries.
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Another brewery, winery, and distillery falls victim
SpringGate Vineyard began as a winery, but expanded to become a destination that also brews craft beer and many special events.
“SpringGate Vineyard is a special place. Our indoor social spaces from Champagne Bar, to the Haha and Covered Patios, Adirondack Room, and Brewery Lounge are unique. Come for a visit, and enjoy a unique experience with us, for a bottle of cider or wine, tastings, food, music, or a pint or growler of our artisan beers,” the company shares on its website.
In its 10-year history, SprinGate has grown rapidly.
“Starting with a test acre in 2010, six acres of vineyards planted through 2013, and an additional four acres planted in the Spring of 2014, there are a lot of grape vines being maintained! Our goal is to manage the vineyard in the most sustainable fashion. In the particular terroir that the estate exists, we can create wines that the region drinks. This reflects many of the grape choices we have made: Noiret, Cornell’s Riesling Hybrid, Vidal, Cornell’s Hybrid Muscato, Cabernet Franc, Marquette, etc.,” the company added.
Now, Schoffstall Farms, LLC, the owner of SpringGate has filed for Chapter 11 bankruptcy protection in the Middle District of Pennsylvania U.S. Bankruptcy Court. In the May 14 filing, the company shared that it had between 1 and 49 creditors along with debts and assets between $1 million and $10 million.
Winery and brewery hopes to continue
No financial plan has been submitted to the court, but the company did share a message on its Facebook page.
“SpringGate is open and will remain open operating as it has been, and we thank our many customers, partners, and supporters from the past, present, and for the future,” according to the post.
The post did make it clear that the company hopes to find a path forward in order to continue operations.
“SpringGate has filed for financial reorganization which entails a sale. This is a necessary action for an orderly transition to what we believe will be a better future. We ask for you to continue to visit us, bringing friends and family, and enjoying our products and unique gathering places which will help support us during this transition,” the company shared.
Owner Marty Schoffstall did not respond to a request for comment from PennLive.com.
In addition to its on-site activities, SpringGate distributes wine and beer to a number of grocery and convenience stores across Pennsylvania.
