Alcohol sales in Wyoming increased in 2020
GILLETTE — The COVID-19 pandemic has stretched on for more than a year now, greatly disrupting lives everywhere.
One byproduct of the pandemic is that Americans are drinking more. Alcohol sales are up across the country and in Wyoming.
The Wyoming Survey and Analysis Center at the University of Wyoming has an ongoing survey that has examined alcohol consumption during the pandemic.
WYSAC’s early results look at the first months of the state of emergency declaration in Wyoming and show that increased sales correlated with increased use of alcohol in those early months of the pandemic.
“After governments and employers put into place COVID-19 mitigation efforts, 17 percent of people reported increased alcohol consumption,” the group’s findings said.
Of those respondents who indicated an increase in alcohol consumption, the leading reason, at 60 percent, was boredom, followed by isolation and stress. Last March saw the largest increase in sales from the previous year’s monthly comparison, where it jumped to $10.8 million from the 2019 total of $8.7 million.
Because bars and restaurants were shut down, Dan Noble, the director of Wyoming’s Department of Revenue, was expecting to see 2020 as the year that would break the seemingly endless climb of alcohol sales for the state.
He was wrong, though. Noble said the past year’s numbers dashed expectations.
“I think that everyone expected with the closures of restaurants and those types of places and everyone telecommuting and working from home there would probably be a drop-off in the sales and that just has not been the case,” he said.
Wyoming is one of 17 states that operates on what’s called the “control” model of alcohol sales, where the state controls the distribution of alcohol to vendors.
Noble’s Department of Revenue strives to maximize revenue to the state. In 2020, the department reported statewide net sales of $124.5 million, which generated $18.5 million for the state’s general fund.
In 2019, the department reported $115.8 million in net sales and more than $16.6 million generated for the general fund.
Campbell County bought more than 41,600 gallons of wine and more than 78,100 gallons of liquor through nine months to mid-September of 2020, compared to more than 57,300 gallons of wine and more than 102,200 gallons of liquor over the 12 months of 2019, according to the department’s most-recent county-level data.
Through mid-September of 2020, wine sales in Campbell County totaled more than $1.2 million, and liquor sales were more than $4.4 million. In 2019, the county purchased more than $1.6 million in wine and $5.8 million in liquor. Those sales amounts ranked 10th- and seventh-highest in the state, respectively.
Statewide, Wyomingites bought more than 12.4 million gallons of malt beverages, like beer and flavored malt beverages. That number was slightly down from Wyoming’s 2019’s total of $12.7 million.
While COVID-19 strained businesses during the past year, it exacerbated staffing shortages at the Department of Revenue, Noble said.
“The sales increase was so pronounced in a short period of time, and we were noticing on almost a daily basis that we weren’t getting all of the orders out and that became problematic,” Noble said. “That’s a direct result from a profound increase in sales volume during COVID.”
Many businesses had to reduce staffing during the pandemic; the Liquor Division had to hire more people to fulfill its orders.
The calendar year 2020 saw Wyomingites buying alcohol much the same as they had in previous years. A year of the pandemic didn’t necessarily affect how much alcohol people bought, but it definitely affected where they could drink it, which affected where and how they bought it.
There is a distinction in the alcohol industry between on-premises and off-premises sales. On-premises sales are the drinks bought by people out at restaurants or bars, most often sold by the drink and intended to be consumed in the establishment. Off-premises is the opposite. It’s a liquor store that expects people to buy drinks to be consumed at home. Some businesses operate as both.
The brunt of the pain felt by the alcohol industry fell onto the on-premises establishments because the essence of their business model was upended by the pandemic. The decline in alcohol sales for bars and restaurants corresponded with an increase in business at off-premises locations.
Penny DeBerg, co-owner of TLC Liquor, saw that firsthand.
“Our business really picked up,” DeBerg said. “We’re not a bar, so when those were shut down, we saw a lot more business.”
Mike Moser, executive director of the Wyoming State Liquor Association in Cheyenne, said that shouldn’t be misconstrued to imply that package liquor stores were necessarily raking in the money.
The trends for alcohol sales in Wyoming during 2020 are “an exaggerated version of what we see in an average bust cycle,” Moser said. An example of that would be sales remain steady, but the buyers tend to favor cheaper alcohols.
“They just drink cheaper,” Moser said. “They don’t drink more necessarily, they just drink cheaper because you become price-sensitive.”
For Wyoming, the pandemic represents only half of what made 2020 a difficult year.
Moser called last year a “double-whammy” because, in addition to the pandemic, there was a significant decline in the energy sector, which itself was exacerbated by the pandemic.
Nate Hardy lived the reality of that double-whammy from both sides. In addition to his coal mine job, Hardy also owns Gillette Brewing Co.
“Yeah, the last year hasn’t been the greatest,” he said on Tuesday, the day after his last night in business. As Gillette’s first brewery, the company he ran with his wife, Dawn, was the epitome of an on-premises establishment.
“It really affected us in the first few months when we were locked down,” Hardy said. “It decimated our sales. In the next six months, it got back to normal somewhat. After it opened up a little bit, our regulars started coming back, slowly. There was still hesitation on people’s parts.”
He lived with the daily fear that the business wouldn’t make it through the pandemic’s most restrictive period.
“During the worst times, this place was a ghost town,” Hardy said. “We didn’t run anything if we didn’t have to. Because we couldn’t have anybody in, we could only do delivery and curbside, and while we had people who really tried to help and did that for us, it was not sustainable. It cost me a lot of money just to keep the doors open.”
He was talking about the period of time between late March and mid-May when indoor dining wasn’t allowed by state public health orders.
There were efforts from the state to help businesses that relied on alcohol sales. Near the end of March last year, the governor passed executive orders that allowed for closed restaurants and bars to also sell alcohol through delivery and curbside orders.
The alcohol component of such orders had to account for 49 percent or less of the overall order, so it didn’t fully transform on-premises businesses into off-premises businesses. It helped, though. Local restaurants that served on-premises were thankful for the help.
But Hardy said he didn’t do much business from beer sales then.
“I honestly didn’t brew for three to four months because I didn’t know what was going to happen,” he said.
Although he was able to make it through a year of COVID-19, the end of this month marks the end of the road for the Gillette Brewing Co. Hardy doesn’t blame the pandemic solely for the business closing.
“If it was a perfect year, I’d probably still be either looking for a new place or shutting down, just because of the business and the location,” Hardy said. “We’ve had great customers and lot of loyal patrons, but it comes down to the endgame of, ‘Do we want to continue struggling through all of this or pack our bags and step back for a little bit and see what we want to do later?’”
The past year also has been difficult for Lakeside Liquors and Lounge, said Bruce Brown, one of the co-owners of Lakeside Liquor and Lounge and Pat’s Drive-thru Liquor.
“When we were mandated to just selling out the window and not having the bar open, our revenues at Lakeside dropped by 90%,” Brown said. “So that put us in a hole that we’re fighting to get back out of.”
Brown pointed out that the pandemic not only complicated matters for bars and restaurants in terms of customers who could walk through the door, the pandemic also messed up supply chains for alcohol much in the same way it did for numerous household products.
“With the COVID, it became difficult to get product in,” Brown said. “When we were able to get liquor, a lot of times it was in pints or half-pints and that’s way more expensive than liters. Beer was the same.”
He offered specific examples of Crown Royal and Coors Light. DeBerg at TLC said the same thing about delays and supply-chain issues.
Brown also pointed to the downturn in coal as a source of the bar’s woes.
“The biggest thing that’s hurting us overall is the downward spiral of coal,” he said.
The bar opens at 6 a.m. to catch those workers coming off the night shift. “We’d have a very busy happy hour (at 6 a.m.). You couldn’t hardly tell the difference between that and a night happy hour. But then the mines started cutting back on hours and that really dried up the happy hours in the morning. … That’s had a big impact on us.”
Lakeside is one of those establishments that is licensed for both on- and off-premises alcohol sales, and Brown said there was a noticeable uptick in the off-premises side of the business during the pandemic.
“Lakeside’s never been really known as a drive-thru liquor store, but we also own Pat’s,” Brown said. “Pat’s, on the other hand, started off as a liquor store, and we do about 50/50 drive-thru liquor sales there. So Pat’s held its own during COVID.”
The difference between the two businesses, selling the same products but on slightly different business models, became apparent to Brown when Lakeside qualified for a Second Draw Paycheck Protection Program (PPP) loan from the federal government but Pat’s did not. To qualify for the second round of PPP loans, a business had to demonstrate, among other things, at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
“Our revenues (at Pat’s) were within spitting distance of 2020 compared to 2019,” Brown said.
The pandemic represents two realities for off- and on-premises establishments. Both saw difficult times over the past year, but one much more than the other.
“People just aren’t going out as much,” Moser said, pointing out that people’s habits had been modified by the pandemic and that lower foot traffic in bars wasn’t purely the result of government restrictions.
Brown said he saw the altered mindset even in his customers who continued to frequent the bars over the past year.
“When people first started coming out, they were cautious, I would say,” Brown said. “Just uncomfortable, (thinking) ‘I wish this thing would go away.’ A lot of speculation, a lot of uncertainty. The overall mood has definitely improved.”
“We’re somewhere between 75-90-percent back to normal,” Hardy said of the final months of business for the brewery.
Even though spring represents the beginning of a second a year of the pandemic, it also brings hope of turning the corner on some tough times, especially for on-premises businesses. There are three vaccines available to residents of Campbell County now, and active case counts of the virus are relatively low and stabilized, according to statewide data.
“I think the trend will reverse, not just because of the vaccine, but as the weather warms up we’re able to utilize outside seating spaces,” Moser said.
Despite all the pain felt by local businesses, there is awareness that things could have been much worse over the past year.
“In terms of business operations, Wyoming was less affected than most states because we didn’t shut down as long or severely with the on-premises,” Moser said.
Brown said basically the same thing.
“Overall, I think Wyoming did a good job,” Brown said. “The joke is that we’ve been practicing social distancing since 1868. There’s not a lot of us. And law enforcement in the county and the city were awesome. They didn’t come in and harass people if they weren’t wearing masks. We pretty much just rely on ourselves out here.”