Another brewery closes and files for Chapter 7 bankruptcy

The brewery’s business has suffered because profit margins are thin and costs are high.

Most players got into the industry more for love than money. Most craft brewers are people who enjoy brewing and immersing themselves in this community.

That business model was always shocking, but it worked during the years when craft beer was a popular trend. Many communities had several breweries and in a way they supported each other.

Related: Popular fast-food chain surprisingly closes more restaurants

Tourists and locals alike went on pub crawls and brewery tours, where they patronized several establishments in one night,

This trend was destroyed by the Covid pandemic.

While many of these beer brands were distributed through local liquor and grocery stores, most of their profits came from selling beer at their brewpubs. When that disappeared during the pandemic, craft brewers saw their income dry up, while expenses like rent did not.

Once the pandemic ended, these companies were left with additional debt. Combine that with young people drinking less beer and higher labor and raw material costs, and you have the perfect storm that has caused dozens of breweries to file for bankruptcy. Many of them ended up in Chapter 7 bankruptcy proceedings.

Now, the so-called beerpocalypse has claimed another victim.

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Breweries suffered from additional debt and lower demand.

Image source: Getty Images

Regional brewery closes due to rent and debt

Steam Bell Beer Works has operated out of the same location in Midlothian, Virginia, half an hour southwest of Richmond, for nearly a decade. It was a community gathering place that catered to families, not just people over the legal drinking age.

It closed unexpectedly at the end of August. Its owner, Brad Cooper, posted a message on the brewery’s Instagram page explaining what happened.

“Dear friends, it is with a heavy heart that we share with you some difficult news: Steam Bell will be closing its doors for the last time on Sunday,” he wrote. “Nearly a decade ago, my family and I set out to open the first brewery in Chesterfield County. As a lifelong Chesterfield native, I felt immense pride in breaking new ground in my home town.”

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 quickly became a place where families could gather, parents felt comfortable bringing their children and the community thrived” , he added.

This story ended because Steam Bell lost its lease and could not afford to move to another location.

“A few months ago, we were informed by the landlord of our building that they would not be renewing our lease. Since then, we have been looking for a way to move forward, but unfortunately with the resources we have, we have found ourselves at a dead end,” he said.

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Steam Bell files for Chapter 7 bankruptcy

Cooper added finality to the closing of Steam Bell Beer Works by filing for Chapter 7 bankruptcy. That means the company’s remaining assets will be auctioned off to pay off its debts.

The company filed for Chapter 7 bankruptcy in the US Bankruptcy Court for the Eastern District of Virginia.

In the bankruptcy filing, Cooper says the business has assets of $403,000 and debts of $824,000 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 US Small Business Administration,” according to Richmond BizSense.

More bankruptcy stories:

• Another popular ice cream brand files for Chapter 11 bankruptcy
• The popular burger chain is facing possible Chapter 11 bankruptcy
• A major shipping company files for Chapter 11 bankruptcy for liquidation

Cooper made it clear that he valued his clients, but was ready to give up.

“While this business has brought us incredible joy, it has not come without its challenges,” he wrote on Instagram. “The stress and sleepless nights took their toll, affecting both my mental and physical health.

“And while the past few years have been particularly difficult for the craft beer industry — marked by declining sales and shrinking grocery store shelf space — I am deeply grateful for the experiences we’ve shared together.”

In theory, a buyer could still emerge for the name and other assets to reopen elsewhere. No date has been set for the auction.