Much has been written about the circumstances craft breweries currently find themselves in. The scariest of news includes the Brewers Association (BA) survey which found that some 60 percent of small U.S. breweries believe they will be forced out of business by mid-July if current social distancing measures remain in place. Among the more optimistic outlooks are Jim Koch’s observations from a recent Fortune Magazine story. In it, he tells writer Chris Furnari that having been in craft brewing for over 30 years, it’s never been easy: “I would not underestimate the resilience and general scrappiness of craft brewers, and our ability to innovate, improvise, make do and survive. That’s the DNA of a craft brewer. I think more people are going to reopen, and I think craft brewers will surprise people with their determination and grit.”
Now more than a month into the pandemic, we wanted to check in with a cross section of the state’s breweries to see what they were thinking about their future, as well as the future of the craft brewing industry in general. We reached out to well over a dozen of them to see if they would be willing to share their views and outlooks. Not all of them responded, perhaps as a result of personal or business hardships they may be dealing with. With that in mind, here’s what 12 of them told us. We caution readers, however, not to draw too many conclusions on what other breweries may be experiencing, or the fate of the industry as a whole, based on this sampling. It’s simply a series of snapshots that reveal what some in the local industry are currently dealing with.
We also recently appeared on the Brew Roots podcast, a new partnership we’ve forged, to do a Round Table discussion with four of the brewers we quoted in the blog post. It was an in-depth conversation that’s well worth a listen.
A month ago there were a lot of unknowns and we had to adjust on the fly; it was as if we were re-building and driving a bus at the same time. However, we are more optimistic today than we were then. We made some short term adjustments to our sales and distribution team, but we expect many if not all to be back on board in the next several weeks. We continue to service accounts that are re-ordering and making at-home deliveries. The new brewery/taproom space in downtown Springfield remains a work in progress. Buildout has slowed but has not stopped. We should be ready to brew and pour pints in the latter part of Spring – fingers crossed.
True North Ales was on a steep ramp, more than doubling our business in our second full year versus year one. We planned to do that again in 2020. Unfortunately, that won’t happen. In the long term, we will work to leverage the short-term emphasis we are placing on store business, retaining and expanding the gains we make there while aggressively pursuing bars and restaurants to regain the strong position we had prior to Covid-19. We will likely expand our sales force to accomplish this. However, big questions remain for all of us. When does the longer term begin? How long will it take for bars, restaurants, and taprooms to get back up to speed? Will it be a gradual thing over many months? When will people feel comfortable holding large events at our brewery? It’s too early to say. We at True North Ales will remain flexible and do what it takes to live long and prosper.
I think that we are now living in a new era where social distancing will become the new norm, at least for the foreseeable future. Even after businesses start to open up, I think people will be wary to be in close proximity to one another. Being predominately a small taproom, we will likely look at limiting occupancy when we initially reopen. I think our long term plan of organic growth will still be a valid model, although I think there will be slower growth until the pandemic is under control and the economy and people’s discretionary spending start to rebound. I know that I very much miss seeing and talking to our beer loving friends in our brewery and look forward to opening the tap room again.
We are powering through during this mess. In the short term we’ve had to completely change our business model. Before the shut down we were a very heavy on-premise taproom business. Post shut down, we’ve had to shift our model to exclusively beer packaged in cans. We’re selling beer to go from the brewery in larger quantities now and we’ve seen an uptick from off-premise retail accounts since the shut down. Fortunately, we had our own canning line, so we were positioned to make the transition to packaged beer. From a staffing standpoint we’ve had a few employees choose to stay home in light of the virus, but otherwise, we’re keeping everyone on that wants to continue to work. Long term I think one of the silver linings to the pandemic has been online ordering. We will likely continue to offer it once things open back up. It’s more convenient for our customers, and pretty cool for them to walk right in and have their order ready to go ahead of time.
CraftRoots Brewing will weather this and we will absolutely open back up when it is safe for us to host our community again. Robin [co-founder] and I, and our amazing staff, have worked very hard to build a business that’s firmly rooted in our neighborhood, something we see so clearly every day now that we are delivering growlers direct to our customers. We’re working hard to evolve and we’re fine-tuning our version of beer home delivery service. It has been WONDERFUL and such a HUGE POSITIVE to get out to see our fans and customers in our area. We are so fortunate to have delivery as an option now, not just for the cash flow but because we are learning so much about our community, our customers, and our purpose and mission as a business. It’s like looking in the mirror, but with a new angle – better lighting – to see how we are doing as a brewery and taproom. Silver linings!
While this is obviously an unexpected and less than ideal situation, we’re confident that we will survive this, and we are optimistic that we will come out of it even stronger. We do recognize that there will be some protracted impacts on the way that we and others operate – the taproom and our on-premise accounts will likely reopen slowly, not all at once – but we’re not expecting any dramatic shifts in business model or team structure. We have always been a wholesale-first brewery, so we’ve built our model around strong partnerships with our distributors and retailers, and this experience has reinforced the importance of those relationships. When things do start to slowly return to business as we know it, it’s those connections that we expect will help us rebound. We’re also taking this as an opportunity to look deep into the way that we operate. This is the once-in-a-lifetime chance to pause, take stock of the way things have been, and chart a course for how we want things to be going forward. We’re still navigating what those changes might be, but we’re excited about the ability to convert this experience into something positive and transformative.
We don’t have a crystal ball, therefore long-term planning is difficult right now. Everything we are focused on is short term and near term with the hope that these decisions will put us in the best position to further evaluate our business’ long-term needs. What we DO know is that Wormtown is more dependent on the on-premise business than traditional craft, with around 65% of our business in the form of draught, including our two taprooms. Therefore we do know that for the duration of the shut down we have focused on our off-premise and beer to go models. As we come out of the shut down, we anticipate that there is going to be a lag in the on-premise build up that may permanently become the ‘new normal’. For us, that means we need to pivot our business model to include an off-premise focus that might include multi-pack formats (9, 12 or 15), floor displays for certain brands (MassWhole, Seasonals) and possibly mixed packs. For our taprooms, we need to use our Patriot Place location to drive small-batch, innovative beers for to-go sales as we see taproom consumption falling off.
Long term, I don’t think it will change our plans regarding products, customers or territory. We’ll continue to sell a portfolio of year-round and limited edition beers, and to distribute to both on-premise and off-premise customers through our wholesale partners and to consumers through our tap room and seasonal beer garden. And we’ll continue to focus our efforts in the Northeast region, which currently includes New England and NYC. Short term, it’s challenging, but we’re doing ok. We’re offsetting the sharp decline in on-premise business with stronger sales to off-premise customers. And we’re providing on-site curbside pickup of beer-to-go to minimize the loss of on-premise tap room sales. The net effect is that we’re no longer growing as fast as we had been, but we’re still flat to up slightly, and most importantly, we’re keeping all of our full-time people fully employed – brewers, sales and drivers. I’m committed to maintaining that full employment as long as we can, and I believe we will succeed in navigating the next couple months until things improve.
Obviously the impact has been devastating to so many of us. I think we are all wondering what the “new normal” will look like? When bars and restaurants reopen how will people respond to going out? We see a long, slow, gradual journey for the majority of consumers to feel comfortable being out again, especially in crowded environments. We also may be seeing a permanent shift in consumer behavior. Craft brewers have always over-indexed in the on-premise compared to the domestic and import beer categories, but with volume shifting to the at-home occasion how can craft brewers compete effectively? I don’t think any of us have the answers right now. For the first two weeks, everyone was “pantry loading” and the more established brands in the larger pack sizes were making large gains at retail. How do we now engage the craft beer shopper who used to spend a lot of time in stores looking for new styles to try and who made their decisions while at the point of purchase to what is going on now? At this point we are focused on keeping our WBC family together as much as we possibly can, providing a safe environment for them to work, and supporting our community the best way possible. That’s what really matters to us right now.
We will definitely be reopening our restaurant when the state gives us the “all clear,” but we are continuously adjusting as the time frame for a safe reopening remains unclear. I believe that our customers will be excited to enjoy our warm pub atmosphere, food, and beer after not being able to for over a month and we’re hopeful to get back to business as usual as soon as possible, but we may not see that right away. The Pint family of employees has continued to be in touch, helping each other out in these difficult times and are ready to get back to work as soon as we are allowed. We will continue to deliver our cans to our package store partners across the region and we are so grateful for their continued support. We also have the utmost gratitude for our customers who are helping ease the financial impact of our restaurant closure by continuing to purchase our beer. Over our 20-plus years in business we have been a committed member of our community and we plan on continuing that now and in the future. There may be some short term changes when we are able to reopen our restaurant, but we’ll do our best to bring the loved community pub that is The People’s Pint back to normal. We miss our customers and look forward to seeing them again soon.
This is tough to answer as the whole thing is currently open ended, so I don’t know. We’re promoting our dockside pick up and customers have been great about ordering beer to go, but it’s not the same as having our taproom open, which had really just started to reach the “busy” level I wanted and had planned. Taking advantage of the state’s advisories, we’re planning to launch a local delivery service this week as a way to boost sales and be connected to our customers in a very safe way. We’ve tailored our recipes so we can brew half batches to keep a good variety and maintain product freshness, and we’re about to bring on a new sales rep.That being said, I knew we were not opening back up in April and I really don’t see May 4 as the reopening. Or if it is, it will be a restricted scenario. So, we’re in the queue to get PPP funding (assuming congress allocates more funding). On the bleaker side, this is a bit like playing Texas Hold’em and not knowing how many blinds you have before you’re out of chips . . .
Along with our focus on beer quality and variety, our energy had been geared toward creating a taproom experience that brought people together with beer, food, live music, local art, and special events. 96% of our revenue came from the taproom, and we had only recently begun to lean into limited self distribution. In light of the current situation, we are adapting our business model to provide our beer to go and to position ourselves as we can once things begin to reopen. We’ve ramped up production to keep up with increased demand for cans and created a safe and enjoyable experience with our drive through can sale. Customers order from their car at a kiosk with minimal contact, drive through the brewery’s production area, and we load their trunk. As far as we know, it’s the only brewery in the world you can buy cans while you tour of the brewery— from the comfort and safety of your car!Before this crisis, we had expanded our capacity and pouring permit to several acres of outdoor space. This outdoor area, along with our large taproom, will offer a good opportunity to create a space for people to gather, while still maintaining social distancing, once things begin to ease up a bit.We are adapting as best we can in the short term and really looking forward to a time when the taproom can, once again, be the heart and soul of the brewery, full of joy, togetherness, live music, and smiling faces.
Our business community will look and operate very differently once we are on the other side of this. We will see some closures for sure. The loans being offered by the state and federal government are only going to get businesses so far, and the repayment and forgiveness structures being put forth are not clearly defined. There are still a lot of unknowns out there – but our guess is that businesses will be forced to open slowly and some sort of social distancing measures will remain in place for some time. This could mean reducing capacity at restaurants and taprooms, removing tables, etc. The ripple effect of those measures means fewer customers, narrower margins and reduced keg and can orders. Breweries with business models that relied heavily on on-premise sales are already pivoting and getting a crash course in canning and how to run an online retail and delivery business. Those with the capital will likely increase their sales force for self-distribution to off-premise accounts in the future. Ultimately we will see leaner staffs, fewer days/hours of operation, and a service industry that will take a bit to get back on its feet as consumer spending habits return to a new normal.