Sreedhar Upendram et al., Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020 (2020)

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A University of Tennessee Extension publication, W 958, dated November 7, 2020, by Sreedhar Upendram, Kimberly L. Jensen, Alicia Rihn, Jackie Yenerall and undergraduate researcher Ethan Loveday of the Department of Agricultural and Resource Economics, on Paycheck Protection Program participation by Tennessee's food and beverage industry from April 3 to June 30, 2020. It opens with the WHO pandemic declaration of March 11, 2020 and the national emergency of March 13, 2020, then tabulates the Tennessee state and local orders that closed in-person restaurant service and imposed stay-at-home rules: Chattanooga's Executive Order 2 signed 3/19/2020, Davidson County, Knoxville and Shelby County orders of 3/20/2020, and statewide Executive Order 17 effective 3/23/2020. The study's purpose is to describe how the state's food and beverage businesses used the PPP.

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“Sreedhar Upendram et al., Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020 (2020).” Original at solutions.tennessee.edu. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/sreedhar-upendram-et-al-paycheck-protection-program-participation-by-t-cf490eef8b/, SHA-256 6c3b0fcf32776c64de9f1a07bb5ad52d418d662bf780a4de1a6f487e09deee21.

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W 958

Paycheck Protection Program Participation by Tennessee’s
Food and Beverage Industry, April 3-June 30, 2020

Sreedhar Upendram, Assistant Professor
Kimberly L. Jensen, Professor
Alicia Rihn, Assistant Professor
Jackie Yenerall, Assistant Professor
Ethan Loveday, Undergraduate student, research project
Department of Agricultural and Resource Economics

November 7, 2020

Photo by Louis Hansel @shotsoflouis onUnsplash
COVID-19 Pandemic and the Food and Beverage Industry
The World Health Organization declared the Novel Coronavirus Disease (COVID-19) a pandemic on
March 11, 2020, (CDC, 2020) and shortly after on March 13, 2020, President Trump declared that
the COVID-19 outbreak in the United States was a national emergency (White House, 2020a). The
Trump administration issued federal guidelines on March 16 recommending that Americans work
from home when possible, avoid groups of more than 10 people and avoid eating in restaurants
and bars (White House, 2020b). Many states adopted and adapted these federal guidelines into
executive orders (EO), which either suggested or required that citizens in those states follow the
guidelines. In response to the deleterious effects of the pandemic upon small businesses, Corona-
virus Aid, Relief and Economic Security (CARES) Act was passed by Congress (U.S. Department
of Treasury, 2020a). One of these small business assistance programs under the CARES Act is the
Paycheck Protection Program (PPP). This program is designed to assist small business owners with
maintaining payrolls and other business operating expenses during the pandemic (BEA, 2020).
The purpose of this study is to provide information about participation by Tennessee’s food and
beverage industry participants in the PPP.

State Level and Local Orders Impacting the Food and Beverage Industry
In Tennessee, both the state and local governments passed orders (i.e., executive orders, pub-
lic health orders or health directives) to restrict mass gatherings and business operations. Those
relevant to the beverage industry include stay-at-home (SAH) orders and the closure of bars and
restaurants to in-person operations. Table 1 captures the timeline of these orders in the state.

Table 1. Tennessee State and Local Orders Restricting Business Activity and Implementing Stay-
At-Home Orders
Date Date Effective Applies To: Details and Source
Signed
3/19/2020 at Closes in-person service in restaurants; allows
3/19/2020 Chattanooga
12:00 a.m. take-out and delivery. Executive Order 2
Closes in-person service in restaurants; allows
3/20/2020 at Davidson
3/20/2020 take-out and delivery.
8:00 p.m. County
Public Health Order 1 Amended
Closes in-person service in restaurants; allows
3/20/2020 at
3/20/2020 Knoxville take-out and delivery.
8:00 p.m.
Emergency Executive Order 1
Closes in-person service in restaurants; allows
3/22/2020 at Shelby
3/20/2020 take-out and delivery.
6:00 a.m. County
Executive Order
Closes in-person service in restaurants; allows
3/23/2020 at
3/22/2020 All of TN take-out and delivery.
12:01 a.m.
Executive Order 17
SAH Order: Citizens are urged to shelter at home,
Davidson
and all business not performing essential services
3/22/2020 3/23/2020 at County
must close.
12:01 a.m.
Public Health Order 3
SAH Order: Citizens are urged to shelter at home,
3/24/2020 at and all business not performing essential services
3/23/2020 Knox County
12:01 a.m. must close.
Public Health Order

2 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
Date Date Effective Applies To: Details and Source
Signed
SAH Order: Citizens are urged to shelter at home,
and all business not performing essential services
3/24/2020 3/24/2020 at Shelby
must close.
6:00p.m. County
Executive Order
Closes in-person service in restaurants; allows
3/23/2020 3/25/2020 Chattanooga take-out and delivery.
Executive Order 4
SAH Order: Requires individuals to stay at
3/25/2020 at
3/24/2020 Franklin their place of residence, and all business not
12:01 a.m.
performing essential services must close.
Executive Order 2
SAH Order: Directs individuals to shelter in place,
Shelby and closes all business not performing essential
3/25/2020 3/25/2020
County services.
Health Directive
SAH Order: Urges Tennesseans to stay home
3/31/2020 at and closes all business not performing essential
3/30/2020 All of TN
11:59 p.m. services.
Executive Order 22
SAH Order: Urges residents to shelter at home
and closes all business not performing essential
3/30/2020 4/1/2020 Knoxville
services.
Emergency Executive Order 4
SAH: Requires Tennesseans to stay home.
4/2/2020 4/2/2020 All of TN
Executive Order 23
SAH: Residents are ordered to shelter at their
4/4/2020 at place of residence and closes all business not
4/2/2020 Chattanooga
12:01 a.m. performing essential services.
Executive Order 6

Across the state, the closure of bars and restaurants began in late March, first at the city and coun-
ty level and then at the state level on March 22. Bar and restaurant closures at the state level began
on March 23 when Governor Lee issued Executive Order 17 (EO 17). This executive order prohibited
the on-site consumption of food and beverages at bars, restaurants and other similar establish-
ments but allowed for these businesses to continue pick-up, drive through and delivery services. It
also temporarily suspended laws, rules and ordinances to allow restaurants, limited service restau-
rants and wine-only restaurants to sell alcoholic beverages or beer through takeout and delivery
services, so long as the sale also included food, and the alcohol was packaged according to guide-
lines established in the executive order.

The restrictions on restaurant and bar operations were closely followed by the implementation of
SAH orders, which either urged or required individuals to limit activity outside of the home. Gen-
erally, individuals were allowed to leave their homes to obtain essential services, which included
purchasing food, either at grocery stores or takeout from restaurants, and beverages. Implemen-
tation of the SAH orders also required businesses to cease in-person operations, unless they qual-
ified as an essential business. At the state level, Governor Lee’s Executive Order No. 22 (EO 22)
implemented a statewide safer-at-home directive (State of Tennessee, 2020). Under EO 22, several
types of firms were deemed essential services which meant that they could remain open (State
of Tennessee, 2020). In the food and beverage industry, food and medicine stores (e.g., grocery
3 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
stores, farmers markets, produce stands, supermarkets, etc.), food and beverage production and
agricultural firms, restaurants for off-premises consumption and manufacturing/distribution/supply
chain firms were included in the essential services category.

Although bars and restaurants were allowed to continue take-out and delivery services and tempo-
rarily sell alcohol with take-out and delivery sales, nationally, sales at the retail level for away-from-
home markets were substantially impacted, resulting in business closures in some cases (Gross,
2020). Nationally, it can be noted that food retailing supplied $1.77 trillion of food in 2019, with
away-from-home eating options accounting for 54.8 percent of national food sales (USDA-ERS,
2020). The impacts from COVID-19 were particularly pronounced on the away-from-home seg-
ment of food retailing, which now comprises the largest proportion of food expenditures.

In addition to business closures or limitations on operations due to state and local directives, the
COVID-19 pandemic and associated economic downturn resulted in several other forces affecting
the food and beverages industry. In the early weeks of the pandemic, some food and beverage
facilities experienced outbreaks and related temporary closures (Soucheray, 2020). Also, the asso-
ciated economic downturn resulted in changes to household employment and incomes that likely
place downward pressure on the demands for food and beverages away from home (Jensen, et
al., 2020). Notably, Tennessee’s unemployment increased from 3.3 percent in January 2020 to 15.5
percent in April 2020 and 11.0 percent in May 2020 (Bureau of Labor Statistics, 2020). Even with
restaurant and bars reopening their in-person dining facilities on April 27 as part of Governor Lee’s
EO 29, several metropolitan counties, including Davidson, Shelby and Knox, were allowed to con-
tinue more restrictive measures, and many consumers may have concerns about dining or drinking
inside restaurants or bars (Jensen, et al., 2020). Given all of these forces which have placed sig-
nificant financial pressure and uncertainty on Tennessee’s food and beverage industry, particular-
ly among the food services segment of the industry, many of these firms participated in the PPP
program to obtain loans to cover their payroll and to retain as many jobs as possible through the
early weeks of the pandemic.

CARES Act and the PPP
In order to offset some of the pandemic’s impacts upon small businesses, the CARES Act was
passed by Congress and signed into law by President Trump on March 27, 2020 (U.S. Department
of Treasury, 2020a). The package included over $2 trillion in economic relief to help offset the
negative economic impacts of COVID-19. One of these small business assistance programs is the
PPP, which is administered by the Small Business Administration through local lending institutions.
The PPP is designed to assist small business owners with maintaining payrolls and other business
operating expenses during the pandemic and associated economic downturn by providing over
$660 billion in forgivable loans (BEA, 2020). The PPP was approved initially on April 3, 2020, and
was extended through the PPP and Health Care Enhancement Act on April 24, 2020, which also
added to the loan amount originally created under the CARES Act. While the original PPP loan
application deadline was June 30, 2020, the PPP resumed accepting applications on July 6, 2020,
in response to the President signing the program’s extension legislation. As of this report date, the
application deadline was extended to August 8, 2020. This study includes data from the first phase
of the PPP.

The PPP launched April 3, 2020. The PPP is a loan designed to provide a direct incentive for small
businesses to keep their workers on the payroll. The program offered forgivable loans of up to $10
million to help small businesses maintain payroll, hire back employees and cover rent and other
overhead. Under the PPP, small businesses could receive funds to pay up to eight weeks of payroll
costs including benefits. The loans are forgivable if 60 percent is used on payroll over a 24 weeks
span. Forgiveness is based on the employer maintaining or quickly rehiring employees and main-
taining salary levels. Loan forgiveness is reduced if full-time headcount declines or if salaries and
wages decrease.

4 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
Study Purpose
The purpose of this publication is to provide information about participation in the PPP by Tennes-
see’s food and beverages industry that includes food manufacturing (NAICS 311-); beverage man-
ufacturers (NAICS 312-); grocery wholesalers (NAICS 4244-); beer, wine and distilled beverages
wholesalers (NAICS 4248-); grocery and specialty food stores (NAICS 4451-, 4452-); beer, wine
and liquor stores (NAICS 4453-); specialty food services and restaurants (NAICS 7225-); and drink-
ing places (NAICS 7224-).1 Measures include the number of firms participating, loan amounts and
jobs retained using PPP loan funds. The data contained in this study are for PPP loans approved
from the initiation of the program on April 3, 2020, until June 30, 2020, and do not include the
later application period mentioned in the paragraph above.

Food and Beverage Industry in Tennessee
Table 2 displays the number of food and beverage establishments, payroll, employees and aver-
age wages for Tennessee’s food and beverage industry. This data is sourced from the 2018 County
Business Patterns (CBP) (U.S. Census Bureau, 2018).

Table 2. Tennessee’s Food and Beverage Industry Overview for 2018
Number of Annual Number of Average
Type of Firms
Establishments Payroll Employees Wages
Food Processors 366 $1,601,670,000 35,246 $45,000
Beverage Manufacturing 165 $220,513,000 4,542 $48,500
Grocery Wholesalers 436 $1,026,051,000 15,638 $65,000
Alcoholic Beverages Wholesalers 61 $219,326,000 3,762 $58,300
Grocery and Specialty Food Stores 1,678 $869,668,000 49,208 $17,000
Liquor, Beer and Wine Stores 643 $70,266,000 2,946 $23,800
Specialty Food Services and
11,719 $4,364,569,000 258,855 $16,800
Restaurants
Drinking Places 348 $114,862,000 4,888 $23,500
Total 15,416 $8,486,925,000 375,085 $22,600
Source: 2018 Tennessee CBP (U.S. Census Bureau 2018)

Data Description
The data for this report was sourced from the U.S. Department of Treasury on July 19, 2020 (U.S.
Department of Treasury, 2020b). Thus, the PPP loan information presented in this report is from
the date of inception (April 3, 2020) through June 30, 2020. The 2017 NAICS codes were used to
extract data for food and beverage manufacturers, food and beverage retail stores and restaurants
and bars for Tennessee. Several statistics are reported by firm type (NAICS) including:
• The number of PPP loans approved.
• The dollar value of PPP loans approved.
• The dollar value of PPP loans approved per firm.
• The jobs retained with PPP loans.
• The jobs retained with PPP loans per firm.
• The PPP loan dollars per job retained.

Tennessee Food and Beverage Industry Participation in PPP Loans and Loan Dollars
Approved
As shown in Table 3, in total, 7,834 food and beverage firms in Tennessee were approved for PPP
loans. The largest number of Tennessee food and beverage firms participating in the PPP are
restaurants and eating places. This was followed by food stores at 1,129 firms. The majority of loans,
1 NAICS is the abbreviation for the 2017 North American Industry Classification System codes.

5 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
about 82.6 percent, were under $150,000. Figure 1 shows the percentages of firms with loans by
type of food and beverage firm type. As can be seen in Figure 1, about 70 percent were restaurants
and specialty food services, followed by food stores (grocery and specialty) at 14 percent. Each
of the other type of firms constituted less than 10 percent of the firms with loans approved. In the
fifth column of Table 3, the number of firms participating is compared to the 2018 CBP number of
establishments. In some industry sectors, more than three-fourths of the businesses participated.
The largest number was restaurants and specialty food services at 5,548 firms, constituting about
47.3 percent of CBP firm numbers. Overall, more than half of food industry firms participated in the
PPP, illustrating the marked effect that the pandemic has had on the food and beverage industry in
Tennessee.

Table 3. Number of PPP Applicants Among Tennessee Food and Beverage Firms With Approved
Loans, by Firm Type, April 3-June 30, 2020*
Number of Firms with PPP
Firm Type
Approved Loans, by Firm Type
Percent of 2018
Under $150,000
Total CBP Number of
$150,000 and Over
Establishments*
Food Processors 232 49 281 76.8%
Beverage Manufacturers 112 26 138 83.6%
Grocery Wholesalers 101 40 141 32.3%
Alcoholic Beverages Wholesalers 31 19 50 82.0%
Grocery and Specialty Food
1,066 63 1,129 67.3%
Stores
Liquor, Beer and Wine Stores 373 7 380 59.1%
Specialty Food Services and
4,565 893 5,548 47.3%
Restaurants**
Drinking Places 215 42 257 73.9%
Total 6,695 1,139 7,834 50.8%
*CBP-number of establishments (U.S. Census Bureau, 2018)
** Specialty Food Services and Restaurants and Eating Places combined percent.

3% 3% 2% 2%
1%

14%

70%

Food Processors Beverage Manufacturing
Grocery Wholesalers Alcoholic Beverages Wholesalers
Grocery and Specialty Food Stores Liquor, Beer, and Wine Stores
Specialty Food S ervices and Restaurants Drinking Places

Figure 1. Percent of PPP Loan Applicants by Tennessee Food and Beverage Firms, by Firm Type,
April 3-June 30, 2020

6 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
Table 4 shows the PPP loan dollars approved by type of food and beverage firm. In total, $960.9
million in loans were approved for the food and beverage industry in Tennessee from April 3 to
June 30. Restaurants and eating places had the most PPP loan dollars approved at $741.9 million.
The fourth column compares the total PPP loan amounts with 2018 payroll. The 2018 payroll was
adjusted to 2020 values with the Southeast Consumer Price Index ratio for March 2020 and March
2018 (U.S. Census Bureau, 2020). As can be seen in that column, PPP loan dollars approved for
drinking places amounted to 26 percent of 2018 CBP annual payroll (adjusted to 2020 dollars).
The percentages for beverage wholesalers, specialty food services and restaurants, and beverage
stores were each respectively over 16 percent. PPP loan dollars for food processors and grocery
wholesalers were less than 3 percent of 2018 CBP payroll amounts. Shown in Figure 2, about 77
percent of the loan dollars approved for Tennessee’s food and beverage industry firms went to
specialty food services and restaurants.

The distribution of the food and beverage firms with approved PPP loans, April 3-June 30, 2020,
across counties in Tennessee is shown in Figure 3. Not surprisingly, many of the firms receiving
loan approval align with areas of denser populations (i.e., near urban areas). In particular, this is
highlighted around the metro areas of Memphis, Nashville, Chattanooga and Knoxville. The great-
est concentration of PPP loans for food and beverage firms occurred in Davidson county, followed
by Shelby, Knox and Hamilton counties. The distribution of loan dollars among Tennessee food
and beverage firms, by county, April 3- June 30, 2020, is shown in Figure 4. The greatest amount
of PPP loan dollars among food and beverage firms are in Davidson, Shelby and Knox counties.
The number of jobs retained with PPP loan dollars among Tennessee food and beverage firms by
county during April 3-June 30, 2020, is shown in Figure 5. Similar to the other maps, many of the
jobs in the food and beverage industry that were retained are largely saturated around Tennessee’s
major cities.

7 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
Table 4. PPP Loan Dollars Approved for Tennessee Food and Beverage Firms, by Firm Type, April 3-June 30, 2020
Percent of 2018 Inflation
Under $150,000 and PPP Dollars
Firm Type Total Adjusted Annual Payroll
$150,000 Over* Approved Per Firm
from CBP**
Food Processors $6,853,256 $34,975,000 $41,828,256 2.5% $148,855
Beverage Manufacturers $5,579,796 $6,500,000 $12,079,796 5.3% $87,535
Grocery Wholesalers $4,275,656 $23,325,000 $27,600,656 2.6% $195,749
Alcoholic Beverages Wholesalers $949,655 $35,050,000 $35,999,655 16.0% $719,993
Food Stores $27,762,236 $31,000,000 $58,762,236 6.6% $52,048
Beverage Stores $10,382,045 $1,750,000 $12,132,045 16.8% $31,926
Specialty Food Services and
$212,111,584 $529,750,000 $741,865,584 16.6% $135,923
Restaurants
Drinking Places $8,582,237 $22,050,000 $30,632,237 26.0% $119,192
All Firm Types $276,500,465 $684,400,000 $960,900,465 11.0% $122,658
*Data for loans valued at $150,000 and greater were provided as ranges. The midpoint of each range was used in calculating an estimate of loan dollar values.
**The ratio of March 2020 and March 2018 Consumer Price Indexes (CPI) for the Southeast region were used to adjust the data (248.1/241.6). The CPI values were obtained from the
U.S. Census Bureau.

3% 5% 1% 3%
4%

6% 1%

77%
Food Processors Beverage Manufacturing
Grocery Wholesalers Alcoholic Beverages Wholesalers
Grocery and Specialty Food Stores Liquor, Beer, and Wine Stores
Specialty Food S ervices and Restaurants Drinking Places

Figure 2. Percent of PPP Loan Dollars Among Tennessee Food and Beverage Firms, by Firm Type, April 3-June 30, 2020.

8 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
a) Food and Beverage Processing PPP Loans

b) Food and Beverage Wholesalers PPP Loans

c) Food and Beverage Stores PPP Loans

d) Restaurants, Food Services and Bars PPP Loans

Figure 3. Number of PPP Loan Applicants Among Tennessee Food and Beverage Firms, by
County and Market Channel Level, April 3-June 30, 2020.

9 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
a) Food and Beverage Processing PPP Loans Dollars Approved

b) Food and Beverage Wholesalers PPP Loans Dollars Approved

c) Food and Beverage Stores PPP Loans Dollars Approved

d) Restaurants, Food Services and Bars PPP Loans Dollars Approved

Figure 4. PPP Loan Dollars Among Tennessee Food and Beverage Firms, by County and Market
Channel Level, April 3-June 30, 2020.

10 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
a) Food and Beverage Processor Jobs Retained

b) Food and Beverage Wholesalers Jobs Retained

c) Food and Beverage Stores Jobs Retained

d) Restaurants, Food Services and Bars Jobs Retained

Figure 5. Jobs Retained With PPP Loan Dollars Among Tennessee Food and Beverage Firms, by
County and Market Channel Level, April 3-June 30, 2020.

11 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
Job Retention From PPP Loans Among Tennessee Food and Beverage Firms
A primary objective of the PPP was to assist firms in keeping employees on payroll during the
pandemic. Hence, the number of jobs retained is an important measure of the PPP outcomes. As
seen in Table 5 and Figure 6, firms indicated that 148,296 jobs were retained through the PPP. The
majority of these came from restaurants and specialty food services at 121,333 jobs, representing
82 percent of total jobs retained by the industry. Next, grocery and specialty food stores account-
ed for 6 percent of all jobs retained, and the remaining firms accounted for 5 percent or less of the
jobs retained. Just over 59 percent of the jobs retained were from loans equivalent to $150,000
and over. Regarding the total number of jobs retained by larger loans (≥$150,000) versus small-
er loans (<$150,000) varied by industry sector. Eat-in establishments (food services, restaurants,
drinking places), food processors and wholesalers (grocery and alcoholic beverage) had a larger
total number of jobs retained from large loans than small loans. Conversely, beverage stores and
manufacturers had a higher total number of jobs retained from small loans.

Table 5. Total Jobs Retained With PPP Loans for Tennessee Food and Beverage Firms, by Firm
Type, April 3-June 30, 2020
Total Jobs Retained With PPP Loans, by Firm Type
Firm Type Under $150,000 $150,000 and Over Total
Food Processors 1,155 3,498 4,653
Beverage Manufacturers 871 748 1,619
Grocery Wholesalers 494 1,720 2,518
Alcoholic Beverage Wholesalers 152 2,454 2,606
Food Stores 5,979 3,754 9,733
Beverage Stores 1,713 163 1,876
Specialty Food Services and
48,774 72,459 121,333
Restaurants
Drinking Places 1,621 2,741 4,362
All Firm Types 60,759 87,537 148,296

3% 3%
1%
2%
2%
6%
82% 1%

Food Processors Beverage Manufacturing
Grocery Wholesalers Alcoholic Beverages Wholesalers
Grocery and Specialty Food Stores Liquor, Beer, and Wine Stores
Sp ecialty Food S ervices and Restaurants Drinking Places

Figure 6. Percent of Jobs Retained With PPP Loans by Tennessee Food and Beverage Firms, by
Type, April 3-June 30, 2020.

12 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
Table 6 summarizes the average number of jobs retained per firm and PPP dollars per job retained
by firm type. On average, PPP loans resulted in 19 jobs retained per firm. The highest number per
firm was 52.1 for alcoholic beverage wholesalers and the smallest was for beverage stores at 4.9.

Table 6. Jobs Retained Per Firm With PPP Loans and PPP Dollars Per Job Retained for
Tennessee Food and Beverage Firms, by Firm Type, April 3-June 30, 2020
Firm Type Jobs
Food Processors 16.6
Beverage Manufacturers 11.7
Grocery Wholesalers 17.9
Alcoholic Beverage Wholesalers 52.1
Food Stores 8.6
Beverage Stores 4.9
Specialty Food Services and Restaurants 22.2
Drinking Places 17.0
All Firm Types 19.0

Illustrated in Figure 7, the PPP loan amounts were divided by the jobs retained for each food
and beverage industry type. The lowest PPP loan dollars per job retained were for food stores at
$6,037, followed by drinking places at $6,119. The highest PPP loan dollars per job retained were
for alcoholic beverages and food wholesalers. These ratios may, in part, reflect differences in wage
rates. For example, using county business patterns for 2018, alcoholic beverage wholesalers had
3,762 employees with a payroll of $219,326,000 or payroll per employee of $58,300. However, for
grocery stores, there were 41,203 employees with a payroll of $840,077,000 or a payroll per em-
ployee of $20,239.

$16,000
$13,814

PPP Loan Dollars per Job Retained
$14,000
$12,000 $10,961
$10,000 $8,990
$8,000 $7,461 $7,023
$6,037 $6,467 $6,119
$6,000
$4,000
$2,000
$0

Figure 7. PPP Dollars Per Jobs Retained by Tennessee Food and Beverage Firms, by Type,
April 3-June 30, 2020.

13 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
Conclusions and Implications
This analysis illustrates the importance of the PPP implemented under the CARES Act in fostering
job retention in the food and beverages industry in Tennessee during the COVID-19 pandemic.

As of 2018, Tennessee’s food and beverage industries constituted 15,416 establishments and em-
ployed more than 375,000 people. Combined, the payroll for these industries is more than $8.48
billion. Under the PPP, during the first three months of the pandemic (April to June, 2020), report-
ed loans helped retain more than 148,000 jobs in Tennessee’s food and beverage industry. If these
148,000 jobs are calculated as a percentage of all food and beverage employees, the jobs retained
with PPP dollars are just under 40 percent of all jobs in Tennessee’s food and beverage industry.
The restaurant industry, including specialty foods services, reported the largest number of jobs
retained at more than 121,000 jobs.

In terms of dollar amounts, the food and beverage industry had nearly $961 million in loans ap-
proved under the PPP during the April to June 2020 time period. This represents about 11 percent
of payroll as reported in the 2018 CBP. Restaurants and specialty food services were approved for
just under $742 million, constituting the largest share of PPP loan monies among the food and bev-
erage industries.

It should be noted that this report only contains the first wave of PPP loan funds administered.
Further analysis should include the second wave of PPP loans that began in July, as that data be-
comes available. This information could be helpful in seeing how requests for PPP loans progress
while the industry adapts their business practices during the pandemic and as business closures
and limitations are lifted.

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Gross, E. 2020. “Less Than Half of Americans Say They Will East at Restaurants Within a Month of
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within-a-month-of-the-coronavirus-curve-flattening/#b5c42c7429a2. Accessed 9/29/2020.

Jensen, K.L., R. J. Menard, J. Yenerall, and D.W. Hughes. “COVID-19 Impact on Tennessee Household
Food Sufficiency.” Available at: https://ag.tennessee.edu/arec/Documents/publications/AREC_
COVID_RR01.pdf. Accessed 7/28/2020.

Soucheray, S. 2020. “U.S. Food Processing Plants Become COVID-19 Hot Spots.” Center for Infec-
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ders-lee22.pdf. Accessed 7/28/2020.

14 Paycheck Protection Program Participation by Tennessee’s Food and Beverage Industry, April 3-June 30, 2020
U.S. Census Bureau. 2018. “2018 County Business Patterns.” Available at https://www.census.gov/
programs-surveys/cbp/data/tables.html. Acessed 7/28/2020.

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7/28/2020.

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cans.” Available at: https://home.treasury.gov/policy-issues/cares. Accessed 7/28/2020. Accessed
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sistance-for-small-businesses/sba-paycheck-protection-program-loan-level-data. Accessed
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at: https://www.who.int/news-room/detail/27-04-2020-who-timeline---covid-19. Accessed
7/28/2020.

W 958 11/20 Programs in agriculture and natural resources, 4-H youth development, family and consumer sciences, and resource development. University of Tennessee
Institute of Agriculture, U.S. Department of Agriculture and county governments cooperating. UT Extension provides equal opportunities in programs and employment.

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