Corona crisis status ’mosaic’ – unedited interviews

1, June 2020

 

By: Anders Kissmeyer

(see the edited article in Scandinavian Brewers Review, issue 2020/02)

 

At this time it’s likely that you, dear reader is not just totally fed up with all the restrictions, the fear and the uncertainty that has been caused by the corona crisis. You’re probably also almost as fed up by reading and hearing about virtually nothing else for more than two months now. So seen in that light, you might be tempted to feel that at least the couple of hours I hope you’ve set aside to read this issue of the SBR ought to be a well-earned break from all things corona and –crisis. But, as you’ve probably already guessed, you’re not that lucky! As our industries and all those around them have been hit extraordinarily hard by the crisis and its consequences – unquestionably to an extend that these industries will be significantly changed and different when the whole thing is over – there’s absolutely no way that a magazine like the SBR could neglect the topic. So, in order to find a relevant way to address the effects of the crisis, I, as your technical editor, some weeks back decided to do this simply by asking a few key questions to as many players in and around the industries as possible and then collect and edit the replies in a way that intends to form a mosaic – I obviously have no illusions of being able to paint a comprehensive and complete picture – of how the status of our industries is as broadly as possible. At breweries, large and small, in our own region as well as beyond, with suppliers and costumers in the horeca segments of the markets, etc. The result of my endeavors is shown below – without any adherence to our normal guidelines as far as the length of articles. This is simply to important…

 

Before starting to quote the voices from near and far, a few words about how I tackled the task at hand: First, I formulated the following questions:

 

  • How has the corona crisis affected your brewery/business and market?
  • How has your brewery/business adapted to the radically changed circumstances?
  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?
  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

 

Next, I dug up my latest list of contacts for people in around our industries and then in mid-April March shot about 400 of them a short e-mail asking them to take a few minutes to answer my questions however short or long they felt like. My hope that many of the recipients due to the crisis would have more time on their hands than normally. So I was hoping for a reasonable reply rate, but I was possibly somewhat disappointed by only receiving 30 some answers. However, I’m very happy to note that the spread of answers as regards geography – there are answers from our own region, other European countries, North America, Asia and Africa. And as regards backgrounds/roles of those responding: These come from breweries large and small, from suppliers, restaurateurs, service providers, consultants, beer writers and organizations.

As bringing you all the answers in full would take up about half of the issue of the SBR, I’ve taken my editorial liberty of selecting the most representative and interesting answers, both reflecting what you may call the ‘majority point of view as well as some of those that differ significantly from this majority view. The edited version is brought in the SBR No. 2/2020, but here the complete set of answers are documented.

  

Philip Hulgaard, Bryggeriet Åben, DK

 

  • How has the crisis affected your brewery/business market?

 

Our market has changed from being 90% kegs and 10% bottles to 10% kegs and 90% bottles.

 

  • How has your brewery/business adapted to the radically changed circumstances?

 

We have switched to webshop sales, direct-to-customer sales (free delivery) and pick-up at the brewery, plus reached out to local companies to offer a 6-pack gift to employees.

 

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

 

No, not at the moment, we have been able to keep revenue up and all employees at work but I am not sure how long it is possible to keep revenue up with the new initiatives.

 

  • What are the outlooks for the longer-term effects of the crisis onyour brewery/business?

 

A reduction of liquidity for investments in brewery equipment.

 

Best regards
Philip Hulgaard

 


 

Rune Andreassen, Mack’s Ølbryggeri, Tromsø, Norway

 

  • How has the corona crisis affected your brewery/business and market?

At Mack we have temporary laid off 45 of 100 employees on a 3 day notice ( all sales/marketing and Horeca related positions)

Restaurants and pubs have mainly been totally closed since 13 March, with next to nothing beer liters sold. In supermarkets we see a slightly increased volume, but far from compensating the losses from restaurants , pubs and hotels. Brewery guiding’s and tourist visits totally stopped, included our own shop and pub ( anno 1928)

  • How has your brewery/business adapted to the radically changed circumstances?

Prioritized continued brewing and filling on cans and bottles. No filling on Keykeg and Bulkbeer

Focus on supermarket sales follow up

Created our own local government approved Webshop for beer in cooperation with two local high quality fish and meat producers: https://nettbutikk.mack.no/

 

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

We hope so, with the final guidelines/qualifications for support being set from the government today

  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

Difficult to say

All Music and Beer festivals in 2020 most probably cancelled

Tourist Industry/travel behavior will most probably be affected for years to come, maybe never reach the former levels?  ( high peak in Tromsø before the lock down)

Hopefully the Norwegian people will prioritize local beer, food and shops in the future, and use more of their vacation time and money in their own country, supporting the norwegian tourist industry that have made great investments recent years.

 

Short as well as long answers are very welcome, as are answers previously used in other contexts. Also, in case you have anything in writing already addressing all or some of my questions, this would be greatly appreciated.

 

I can’t help taking this opportunity to encourage you to also submit material not related to the corona crisis. And let me also remind you that we also post shorter pieces of news, press releases, etc. on our website, so we’re always very interested in such material that would not qualify as full articles.

 

A final reminder on a service working for you from us: We still offer free subscriptions (for a limited time period) for anyone interested. Just go to: www.scandbrewrev.dk/subscribe and register! Please spread the word as widely as you can!

 


 

Alex Barlow, Triple Point Beer Co., Sheffield, UK

Hi Anders.

It’s a a great relief to find you are well. When I didn’t get a response to text or email I feared that you’d succumbed to the dreaded Covid-19 lurgy!!!

I will happily respond to the questions below when I have time to come up for air.

My situation is that my contract in India is terminated. Not surprising and hopefully for only a 6m period as they didn’t really have anything for me to do whilst they search for a new site to relocate the brewery.

As for Triple Point, we have the bar closed and all staff on ‘furlough’ (this strange, hitherto unknown, American word) at 80% salary, paid by HM Government. That leaves George & I the only operational employees. We’re working full time trying to grow the off trade business, which we previously only dabbled in, into something worthwhile. We have introduced 5L and 10L Bag-In-Boxes and have increased the size (from 330 to 440ml) and range of beers we have in cans. We now have a functioning web-shop which offers next day delivery anywhere in the UK. So we hope we can spread the word and the orders far and wide. As such I’m rather busy!

I look forward to the day when we can face each other, chink glasses and say ‘Cheers!’ but in the meantime, maybe we should organise a virtual pint over FaceTime?

In the meantime I have endeavoured to answer your questions below:

 

Q1. How has the corona crisis affected your brewery/business and market?

  1. Dramatically. Our business, which had just celebrated it’s first year trading when the UK lockdown was announced, was almost entirely focussed on direct and indirect wholesale of draft cask and keg beers to pubs and bars as well as though our own taproom bar. With the enforced closure of all bars and restaurants, all UK brewers were faced with a stark choice. Many breweries much more well-established than our own elected to close for the duration of the lockdown. Those which had a substantial portion of their trade in off-trade sales, principally with supermarkets have carried on, switching keg volume into cans and bottles as the demand for these packages via supermarkets and other established routes to market surged.

 

Q2. How has your brewery/business adapted to the radically changed circumstances?

  1. Knowing that our business was under-represented in the growing can beer market we elected to continue operating with a skeleton staff of 2, myself (Head Brewer) and our Sales Manager. Seeing the writing on the wall we had decided to fill all our FV’s before the impending lockdown. Once it became clear that breweries were classed as food and drink producers and seen as ‘key workers’ we made a quick change in strategy. We rapidly sourced 5 and 10L ‘Bag-in-Box’ packages to fill from the casks that we could no longer sell to pubs. We also doubled the usual amount of beer we were preparing to can. We set to work on an online store and sourcing a courier offering National deliveries.

 

Just 2 weeks from our first canning run we have sold 50% of the beer we canned! Suffice to say we have now booked contract canning (which was previously sporadic) on a monthly basis for the remainder of the year. We are very much focused on driving awareness of our offer as we are so new to this market, but we are delighted with the rate of increase in demand.

 

Q3. Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

  1. Yes. We have received a grant which was offered to all hospitality businesses with a rateable value of <£52,000 per annum.  We are also able to furlough our bar team on 80% of their normal salary with the cost met by the state. Our ability to survive will largely be determined by how successfully we can continue to grow our can and BIB sales. As I write we are hopeful that we will be able to carry on until the Autumn.

 

Q4. What are the outlooks for the longer term effects of the crisis on your brewery/business?

  1. Undoubtedly the severity of this crisis Worldwide and locally, together with the extended period of social distancing will mean that peoples attitudes and habits will change. Coupling this with Government advice, as yet unknown and not entirely predictable, will make the future shape and structure of our market uncertain. The longer the lockdown keeps people out of pubs and bars the less likely many are to re-open. The on-premise market may well constrict, limiting opportunities for draft taps, however this may be at least partially off-set by greater consumption at home. Either way we need to listen to our customers and consumers and be ready to act and react appropriately. For now, we concentrate on direct sales and relationship building hoping this will stand us in good stead for the post-Coronavirus future, whatever that holds

 


 

Urbain Coutteau, De Struise Brouwers, Oostvleteren, Belgium

Hey Anders,

Above Industry, business, breweries and markets, health these days is not to be neglected. So I hope you and your family are all safe.

 

  • How has the corona crisis affected your brewery/business and market?

 

Years of cutbacks by our governments in the healthcare sector are pretty much the main cause in what we are now experiencing. Strategic stocks of protective masks have been reduced to 0 in the past, the same for protective clothing and, on top of that, virtually no test capacity to keep such epidemics under control.

 

As a result, fearful of collapsing hospital networks, one is obliged to implement lockdowns in almost every country in the world.  So I don’t have to draw a picture to illustrate that such a strategy is particularly disastrous for any kind of economy.

 

Given that 5/6 of the victims are all people over the age of 50, it would have been much more appropriate to put this group in lockdown in order to protect them and make those young people who notice little or no symptoms of this virus work and thrive.

 

Such a situation means that the turnover at Struise has evaporated very much in the last quarter of the year, due to cancellation of orders by our customers, or placing orders on hold. However, we are not alone, just about everyone is in the same situation. Our economy has been hit pretty hard and what follows could be very disastrous for the whole world economy.

 

Our governments are feeling wet and waving huge amounts of helicopter money and support measures, this in itself will put even more pressure on every taxpayer in the future. In my opinion, a recession is inevitable. However, if one does not pay attention, we will get an erosion on top of it.

 

The question we are allowed to ask ourselves today is:

 

Can we as people, economy and democracy still leave it to a bunch of populists, power-hungry politicians, to safeguard a fragile future from this kind of crisis and worse?

 

  • How has your brewery/business adapted to the radically changed circumstances?

 

When you encounter such a situation, trimming is the big message and outcome. At every level of our company there are heavy cutbacks. Ongoing and/or planned investments have been stopped. The majority of our staff is at home in temporary unemployment due to force majeure. Since physical contact is currently impossible, we are trying to get digital commerce going. Whether this will succeed remains to be seen. When this situation will last much longer, layoffs will follow, that much is clear today.

 

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

 

Support for small businesses like ours is minimal. Governments are ready to save the big companies, small risk companies like ours are a different story. Today we are lucky to have the support of our beer lovers, who are trying en masse to buy our beers so that we can continue to function.

 

  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

 

I don’t have a crystal ball, so I can’t see into the future. If we can stem the bleeding on the expense side and continue to produce our high quality beers, we have a chance of surviving this crisis.

 

Stay safe,

Urbain at Struise, Oostvleteren, Belgium

 


 

Quincey Fennelly, Managing Director, Wicklow Wolf, Moneycarroll,  Co. Wicklow, Ireland

 

Good afternoon Anders

Its great to hear from you . I hope you are safe & well in these strange times . We are still going here but like everyone else in our sector this will set us back quite a lot over the coming months .

As is the case almost everywhere now all pubs and restaurants are closed and will remain so for a long time to come. Our business here at Wicklow Wolf has been 50% on trade & 50% off trade approximately . Therefore half of our business disappeared overnight. The off trade sector as a result is booming and showing growth rates of 75 – 100% . Thankfully we have ramped up packaging to get more canned product out into the market . This is helpful in the short term , however the long term outlook is still very unclear .

I feel that the on-trade has now changed forever in this country , The “Irish Pub” has always been the focal point for socialising here but with stricter occupancy laws coming and the mental impact that social distancing will have on consumers I feel that it will change the pub dynamic for the worse . There are 7500 on trade premises in Ireland . According to Information from Heineken , they expect that only 4000 will re – open after the Covid emergency passes.

For Wicklow Wolf this is not good for the obvious reasons but also for the amount of bad debt that we will have to carry  . We are chasing payment wherever we can but Im sure I will get caught by quite a few who go out of business.

Our export markets are all suffering as we are here , so I don’t expect our export partners to be ordering a lot anytime soon . To grow our business I will be looking here at more listings in supermarkets that we currently don’t supply and possibly develop a second “Fighting” brand which might bring us lower margins but higher volumes.

 

Thankfully we are still afloat for now and fairly well financed . Hopefully that will see us through these very tough times.

When this is all over please come visit us !!! Id love to show you our new brewery and have some beer with you again.

Best wishes & stay safe

Quincey Fennelly, Managing Director

 


 

 

Sebastian Sauer, Bierkompass, Freigeist Bierkultur, Cologne, Germany

Hey Anders,

Thanks for the interest. Please see below for the answers. Enough like that?

 

Cheers, all the best and stay healthy in the meantime,

Mit freundlichen Grüßen / Best regards

Sebastian Sauer

Bierkompass
[Freigeist Bierkultur]

Thus, I’ve decided to send out this appeal to everyone I know in the industries (and surroundings…) all over the globe, asking them to answer a few simple questions, hopefully enabling me to create a ‘mosaic’ that illustrates the state of affairs, in our own region and beyond.

 

So, hoping that you can find a few minutes to answer, here are my questions:

 

  • How has the corona crisis affected your brewery/business and market? –> As nearly everywhere else in Europe, all gastronomy is closed and only supermarkets and some stores are open, so also craft beer stores are selling only a bit. So we can only sell only a small part of what we normally sell and export is completely down for the moment.
  • How has your brewery/business adapted to the radically changed circumstances? –> As I don’t have a physical brewery, I obviously have different disadvantges right now. But we have to check about the packaged goods (mostly KEGs) when we run back to normal situation and if we can still sell those. My sales are mostly far away from my home and from the breweries itselves, so I can’t come up with delivery services to personal homes etc., but just have to wait until stuff is over. In the meantime, we try to sell the actual stock. All other beers stay in tanks that long.•                           Are you receiving any financial support (from the government or others) and how long will this enable you to survive? –> We got an one-time payment from the government which is meant for three months time. Restaurants and pubs should hopefully open again in mid-May or at the latest in early June and then we could start again.
  • What are the outlooks for the longer term effects of the crisis on your brewery/business? –> As things will most likely open again at some point soon (like mentioned above), I hope we only paused the time between March and June and can pick up the pieces and continue again. But probably all gastronomy and maybe even the stores won’t be able to allow too many customers at the same time, so sales will be pretty slow much likely. I hope the doctors can test as many people in the upcoming months to be able to loosen the conditions even more to get back to normal if possible. But it looks like that all festivals and all bigger events are not happening this year and we have to see how we can equalize this. I like that people start making online tastings etc. and that they get a lot of attention and visitors for it.

 


 

Emile Amarotico, Standing Stone Brewing Co., Ashland, OR, USA

Dear Anders,

So sweet to hear from you, even in a mass email blast.

I am still a minority owner in Standing Stone Brewing Co. as are my brothers Mark and Alex. Though none of us are in operations at this time.  Alex and his wife Danielle launched and operate Common Block Brewing Co in neighboring Medford, Oregon.

I’d like to share what I can in regard to your questions:

  • How has the corona crisis affected your brewery/business and market?

Public assembly in Oregon has been curtailed for 3 or 4 weeks, so only pick-up and delivery from restaurants/breweries is permitted.

 

  • How has your brewery/business adapted to the radically changed circumstances?

We have shut down operations waiting for permission to resume business to the public.

 

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

Not yet.  Attempting to apply for loans and payroll support.

 

  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

The town of Ashland’s economy continues to rely on tourism, with the Oregon Shakespeare Festival at the core.  With public assembly curtailed, OSF has cancelled this summer season and is planning to open for a short Fall Season in September.  So even when the Stay Home /Save Lives order is lifted, we do not expect to rebound any time soon.  If 100 restaurants all reopen with little to no financial reserves, for a lackluster tourist season, many will close permanently.  It will purely be survival of the fittest.

 

Not pretty, Anders!

 

I have been blessed to be employed in an “essential business” for the last ten years or so.  I am General Manager of the $30MM Ashland Food Co-op with 160 employees, all still working to fee our community.  While I expect our relevance to continue, we also appreciate the bump in summer season sales brought in by tourism.  And with so many currently out of work, the discretionary dollars will not be there to eat as well.  With a primarily organic and local focus, our products are deemed discretionary for many.

 

I hope this finds you surviving if not Thriving, old friend.  Great to hear your “voice” this morning, and I hope that my input is helpful to you.  Please let me know if there is any nuance I can share to complete the picture.

 

With warm wishes & gratitude,

 

Emile

 


 

Randy Mosher, 5Rabbit Brewing/Forbidden Root Brewing, OH, USA

Hi Anders,

Hope you’re doing well. See answers below.

 

I am a partner in two brewing companies, one with two locations.

 

5 Rabbit Cervecería (5R below), in a Chicago suburb. 30-bbl brewery with a taproom. We do some contract production for a couple of other brands.

 

Forbidden Root (FR), a botanically-oriented brewery with two brewery-restaurants, one near downtown Chicago, and a second on the east side of Columbus, Ohio. Most of our market products are contract produced by a brewery in Wisconsin.

 

–Randy

http://randymosher.com

 

 

  • How has the corona crisis affected your brewery/business and market?
  • How has your brewery/business adapted to the radically changed circumstances?

 

5R + FR: this thing sucks.

 

FR: In Chicago, our business is between 1/3 and 1/2 of what it was when we were fully open, now just doing to-go sales. We’ve been intensively active on social media and trying lots of new things: cheese-and-beer plates, online beer dinners–anything to catch peoples’ attention and drive some sales. Online engagement is WAY up. Our neighborhood and other fans have been very supportive. Packaged beer sales in the market have generally been good, and we’ve actually been adding accounts.

 

We just missed the lockdown timing and packaged up a big order as a mix of draft and packaged, but distributors are absolutely not taking any draft beer, so we’ve been trying to find something to do with it. Some will come back to the restaurants to be sold as-is or repurposed into flavored special beers, but it’s a lot of beer.

 

FR Columbus: Similar story, but we are newer to the market there, and also located in a suburban shopping district that is now a bit of a ghost town, far from where our typical type of customer lives–so it is taking time to build the business. Operating with a handful of people (it’s a 250-seat restaurant) and business is growing steadily.

 

5R: The taproom was our major source of revenue, so that’s been a huge, scary problem. Running on a skeleton crew, but we were running pretty lean before. Hoping we survive. We have brewing to do to fill orders, and are keeping the taproom open for beer sales, but it’s not a lot.

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

Both breweries: We have applied, but AFAIK, we have not received any assistance yet.

  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

FR: It’s a stressor, but we do have some resources to help survive if this doesn’t go too long. Despite the losses, I think we will be a stronger team with more tools and a better relationship to the market than ever.

5R: We have been struggling with our home market distributor for years, so this was an additional blow, and without the taproom revenue, we’re not sure what is going to happen. We have been planning on opening a brewpub nearer to downtown in an iconically Latin neighborhood; not sure how this will affect those plans, but most certainly not a helpful development.

 

  • How has the corona crisis affected your brewery/business and market?

 

Our sales are typically 50/50% bottles (yes, we still bottle) and draught. Draught sales are now not just zero but negative as kegs we had sold are being returned. Bottle sales are slowed. Tourists aren’t coming here and people in general seem to be turning to hard liquor instead of beer.

 

Also, we are in a tourist town that is dependent on summer visitors. While it remains to be seen what summer business will look like, we aren’t as dependent on sales right now as many other breweries might be.

 


 

Chelsea Zaloumis, Marketing & Events Coordinator, Crooked Stave Brewing Co., Denver, CO, USA

 

Hi Anders,

Thank you for reaching out for our input. Our answers are below in blue:

 

  •                           How has the corona crisis affected your brewery/business and market?
    Sales out of our taprooms and outside sales have slowed. We are taking the biggest hit on outside sales however. Draft of course is hurting as well. We’ve had to slim our staff to essential workers.
    •                           How has your brewery/business adapted to the radically changed circumstances?
    We’ve opened online ordering platforms for pick-up and expanded local delivery to keep up with the times and make it easy, safe, and efficient for our customers to get our beer.
    •                           Are you receiving any financial support (from the government or others) and how long will this                                   enable you to survive?
    We received a PPP loan from the government and we estimate we could remain operating in our current situation for several months. After which we’d have to make further changes, mainly reduce staffing, to sustain.
  •                           What are the outlooks for the longer term effects of the crisis on your brewery/business?

We’re nervous of course that this will change the taproom experience that our patrons seek out. We feel many smaller breweries will close since competition has been high for a while now, and will get even harder with the current economic environment. On the bright side, it’s allowed us plenty of time to streamline our operations and plan for the future! We’re focusing on a patio space to increase how many customers can enjoy our Denver taproom while giving everyone enough space to be safe and comfortable.

 

Best,

Chelsea

 


 

Jon Hill, Brewery Manager, Atlantic Brewing Co, Bar Harbor, ME, USA

 

  • How has your brewery/business adapted to the radically changed circumstances?

 

We have curbside pick up which helps a bit with bottle (and some growlers) sales but is still pretty slow.

 

We have slowed production but are still brewing every week just in case the busy summer season does arrive. Normally we’d be brewing 120bbl per week by now but we are doing 30bbl/wk.

 

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

 

There are both loans we may be taking advantage of and a form of unemployment that makes up for the employees’ hours so they get full time pay while only working part time. There is also extended unemployment so that furloughed employees are (should be) doing alright.

 

  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

 

 

We should be ok in the long term. As an older brewery we carry less debt than some new breweries and haven’t over-extended ourselves with expansion or new equipment procurement. We also have a relatively low number of employees for our output, which makes us more efficient.

 

eat, drink and be merry,
Jon Hill, Brewery Manager

Atlantic Brewing Co

Bar Harbor,ME

207.288.BEER x113

 


 

Daniel C. Kenary, CEO & Co-Founder, Mass. Bay Brewing Company, Inc. (Harpoon),Boston MA & Windsor VT, USA

Hello Anders.  Nice to hear from you, especially during such crazy times.  I hope and trust that you are safe and healthy and I certainly hope you remain that way.  We were certainly never trained for an emergency like this.  I will take a quick cut at answering your questions.

 

  • How has the corona crisis affected your brewery/business and market?  We have seen a complete shutdown of the on-premise business which means that our revenues will decline between 30 and 40%, including the closing of our two on-premise locations at each of our breweries.
  • How has your brewery/business adapted to the radically changed circumstances?  We have put many employees on Workshare whereby they remain on our staff, receive benefits from us, but collect unemployment from the government thereby reducing our expenses.  Most of these employees are in our retail operation, administration, and some in production.  We continue to produce and package beer at both breweries, but on a reduced schedule.
  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?  Not yet, but we have filed for a loan via the new government program set up in response to the crisis.  I would have to say that the response by our government at both the state and federal level has been timely and impressive (not referring to the bullshit coming from the top!).  The extra unemployment being paid to many of our employees is very helpful.
  • What are the outlooks for the longer term effects of the crisis on your brewery/business?  A great deal of uncertainty, but we have great confidence that there will always be demand for great beer.

 

Cheers, Dan

 

 


 

Ben Howe, Otherlands Beer, Bellingham, WA, USA

Hey Anders,

Sorry for the late reply. This sounds like an interesting piece you’re putting together.

 

Here’s some answers to your questions:

 

-The corona-virus epidemic and the resulting shuttering of US society has, for our fledgling brewery and cafe, significantly delayed our opening and thrown our plans into disarray. While we feel somewhat lucky that we had not opened up yet we’re in this strange limbo zone of not having the last of our construction or final inspections complete, not knowing when we’ll be able to do so, and not knowing what to do once society opens back up. We have several batches of beer in the tank, both test batches and our ‘opening’ batches, that will most likely need to be dumped. If Washington State opens back up on May 4th, as was suggested several weeks ago, we are hoping to be able to get our construction and inspections finished by the end of May. That said we just don’t know what the wait time will be on our contractors and the city. In theory we could be open and selling beer by June but most likely we’re looking at July or August.

 

-There’s seemingly very little we can do to adapt to these changing circumstances. We’re trying to work with our landlord for some rent forgiveness or differ-ment. Unfortunately he’s in a similar position of needing to pay his mortgage and not being able to finalize his inspections so he can begin working. The big issue for us is that our operating capital is now going to paying rent while we have no revenue coming in. Because we aren’t able to finalize our inspections we don’t have our licensing for selling packaged beer and can’t switch to that model.

 

-While we’re still waiting to hear back from the Small Business Administration (SBA) about our disaster loan and grant application we’re pessimistic about our chances of getting this financial assistance. The programs are designed to help small businesses keep their employees on the payroll. As owners without any employees yet we’re thinking we will not be considered eligible. Our landlord is also applying for these programs with he hope of passing on those funds to us, his tenants, but he’s similarly self employed. The other issue is that the funds set aside for helping small businesses in the US have been near instantly depleted. The programs ran out of money right away. The good news is that our business loan is through the SBA. As such they are differing all of our principal loan payments for 6-12 months AND paying our current interest payments. Our bank is working with us to keep the loan off of our backs for as long as they can.

 

Leadership from the federal government of the US is essentially nonexistent. The programs meant to help small businesses are chaotic, underfunded, and thrown together by people who have no idea what they’re doing. This global event has laid bare how broken and corrupt US society is. To be honest, it’s almost more depressing than the death or the fearful uncertainty about the future of our dreams and work.

 

-In terms of our outlook, well, we’re going to make it one way of the other. Right now we have no idea (nor does anyone else) what the landscape will look like when everything opens back up. The ‘honeymoon period’ we built into our financial projections around our opening will most likely not exist. We’ll also be in a much higher cash on hand position. Depending on what the economy looks like we may open with just Karolina and myself staffing the cafe 100% of the time. Or maybe we’ll hire just 2-3 employees. Who knows? One way or another we’ll make it though. What will become of the prolific small restaurant and brewery landscape of the US is also very unknown. Most every small brewer/brewery owner I know here in the US is scared out of their minds and at the same time deeply hopeful.

 

Anyways, that’s my stream of consciousness response to your questions. I hope you can use some of it!

 

How are YOU doing, Anders?

 

Best,

Ben

 

P.S. Devil in Disguise just keeps getting better. What a wonderful beer.

 


 

Narihiro Suzuki, Ph.D., Ise Kadoya Brewery, Ise Mie, Japan

Dear Mr. Anders Kissmeyer,

 

Long time no see.

 

I hope you are fine.

 

  • How has the corona crisis affected your brewery/business and market?

 

Our company is very severely affected.
Because many of our customers are restaurants in Tokyo and tourists who come to Ise, our city.

 

  • How has your brewery/business adapted to the radically changed circumstances?

 

We are not yet fully adapted.
Until now, we have rarely done B to C business. Right now, we are approaching B to C because there is no way to sell beer other than B to C.

 

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

 

I want.

 

  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

 

Perhaps if we do nothing  we’ll lose 80% of sales this year. We want to stay 50% down by focusing on e-commerce.

 

Anyway, I hope you are fine. And I hope to see you again someday.

 

Best regards,

Narihiro Suzuki, Ph.D.

Ise Kadoya Brewery

Ise Mie Japan

 


 

Nguyen Van Cuong, C-Brewmaster Brewpubs, Hanoi Vietnam

 

We have two microbreweries, one in Hanoi, another one in Tien Giang -58km to HCMC. We run 4 taprooms, more than 100 outlets, restaurants, bars

… have been selling our beer and cider.

 

Dear Anders,

 

Please, we have some comments about your questions:

 

  1. Yes, big impact. All restaurants are closed. The sale volume is decreased by 80% due to the lock down. The beer market is dropped.

 

  1. We need to use “take away and delivery”

The sales team has worked online, digital marketing, webinars, cheers online…

Salary is reduced 25% for all staffs

No final support from government yet!

I think we will survive for 5-6 months by ourselves.

Due to covid 19, in my opinion, all the beer industry are reduced significantly including craft beer (maybe less impact)

 

We never have the same again, new time is coming with e-commerce, online, social distancing, homemade…

 

Craftbeer and cider volume will be recovered slowly.

 

Thank you and best regards,

 

Cuong

Hanoi Vietnam

0084903287895

 


 

Stephen Blake, Darley Wet Glue Labels, UK

Good Morning Anders

It was nice to hear from you and I am glad that you are keeping well.

Darley is classed as an essential supplier of labels into the food and drink markets, our employees are classed as key workers and we are operating normally.

Our factory is working 24 hours and office staff are providing flexibility by working evenings and weekends if they cannot work during the day due to family commitments .

  • How has the corona crisis affected your brewery/business and market?

We have seen large increases in volume from breweries that sell bottles through the off trade. Since the closure of pubs and restaurants in the UK, supermarket sales of bottled beer have risen for home consumption.

 

 

However, volumes from those breweries that rely more on the on trade have dropped considerably. Some UK breweries have ceased production or are operating reduced production focused on a small number of brands.

The demand for canned food and soup has massively increased our label volumes for these customers.

  • How has your brewery/business adapted to the radically changed circumstances?

We have introduced new working practices to meet the UK governments guidelines for operating during the Coronavirus.

Extra cleaning processes, additional hand washing and social distancing in production and rest areas have been introduced.

We have had to work a lot of overtime to cover staff absence through them self isolating. Employees identified as vulnerable with underlying health issues are off or working from home.

Staff are working from home where possible and all customer contact is via conference call.

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

Not at the moment.

  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

Our concern is that our brewing customers may struggle to return to their previous volumes and some may not survive.

Over 30% of our label business is export and some countries have banned alcohol sale during their lockdown – Bahamas, South Africa, Thailand, Panama, Botswana etc.

I hope that this information is useful.

Regards,

Steve

 


 

Dana Johnson, Birkocorp (Sanitation and Food Safety), CO, USA

 

HI Anders,

 

Here are my answers:

 

  • How has the corona crisis affected your brewery/business and market?

Answer: We are a chemical manufacturer and we cannot make hand sanitizer and quat sanitizers fast enough!

  • How has your brewery/business adapted to the radically changed circumstances?

Answer: We came up with two new alcohol based sanitizers in record time.

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

Answer: Personally, I received the stimulus check today but fortunately it is not needed to survive but will help in the event of a “rainy day”.

  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

Answer: With so many breweries projected to close in the coming months, it is not good.  If 46% of the breweries close in the US as forecasted recently, that will really hurt our sales.

 

Cheers!

 

Dana

 


 

Ralf Schuster, Head of Brewery, Keroche Breweries, Naivasha/Kenya

good morning Anders,

long time no see. The last time was in 2013 or 2017 in Burton u/T. Then I was in Ivory Coast (2013) and in China (2917) since one year I am with Keroche Breweries, a 100% provately owned Brewery in Naivasha/Kenya. In 2019 our output stooad at about 100’000 HL beers (all bottom fermented lagers of the SUMMIT and KB brands) plus about the same amout of RTDs, blended spirits and nottled water. 2020 started low because many Kenyans spent a fortune on Xmas and had to pay schhol fees too, so January and February the output was about half of a nomal month. March started well but then came restrictions of movement, closure of all pubs and restaurants and hotels, followed by a curfew and then the “lock down” of Nairobi and the coastal provinces. Tourism is since then on ZERO. Jere in Kenya the home consumption of alcoholic beverages is pretty low. As a result our output dropped by about 90%. For the spirits, RTDs and water the drop is less, about 50%. There is no government support for any industry in Kenya. Many workers are sent on unpaid leave, not knowing how to pay rent and feed their families.
The Micro Brewers in Kenya are worst hit, especially those who are selling in the pubs only. Zhose who sell bottled beer are faring better. DIAGEO has started home deliveries of all their products, They may have financial support from their HQs in Eire and UK.
Even after lifting the present restrictions it will take several months before Kenya will be “back to normality”. Kenya is bless with few COVID cases, about 200-300 and deaths, about 10. The population numbers about 50 million now. A comparable country, populationwise, is SPAIN, where figures of cases and deaths are almost 1000-times higher. It seems to be similar in other african countries who all, except South Africa, have relatively low infection rates. African politivcians apparently like to overreact and enjoy “screwing” their subjects.

best regards
Ralf Schuster
Head of Brewery, Keroche Breweries, Naivasha/Kenya

 


 

Ruth Evans, BFBI, UK

 

Hello Anders

 

I hope you are safe and well over there in Sweden.  We are well locked down as a country and starting to get well and truly fed up with it but, positives are that our wonderful NHS is being recognised and, hopefully, when this is all over and done with the NHS will get some well deserved Government funding.

 

You asked for information on how the crisis is affecting breweries and soft drinks producers.  I cannot speak for them but can speak for the supply chain, which is being affected in very different ways.

 

As you know, what affects breweries and soft drinks ultimately affects the supply chain and the worry is that consumer and drinks manufacturers will be a lot less confident after coronavirus; will have less confidence in investment and will be prone to procrastination (especially if the second wave theory continues).  The UK has suffered 3 years of Brexit and now has coronavirus so many businesses are not in the best place to confront yet another challenge.

 

Raw materials are probably at 20-30% of usual turnover, although hop growers are very concerned as they are worried that this year’s contracts will not be honoured if brewers scale down their previously projected levels of brewing.

 

Brewhouse builders and project managers are pretty much on stop and also concerned that orders placed before coronavirus will not be carried through due to a lack of confidence in future business and a need to scale down investment.

 

Packaging machinery and supplies companies are pretty busy – especially anybody providing small scale canning machines and cans/sleeves/outer packaging – reflecting the switch from large to small pack.

 

The longer this goes on the greater the disparities within the supply chain with the larger brewers now asking suppliers to further extend their already extended payment terms (90-180 days) by a further 30 to 60 days…..

 

Logistics companies are stretched to limit with the move to online sales.

 

Our dispense sector is the hardest hit.  Shutting the pubs shut the companies that install and maintain the equipment.  Government has provided financial support to pubs via business rate relief and access to loans.  Unfortunately, installation companies are not classed as retail, even though they are an integral part of a pub’s operation, so they cannot access business rate relief.  The Government loan scheme has been a disaster (giving money to banks to give out was never a good idea and success rate in achieving a loan is sitting at around 5%).  All installers can do is shut down and put their employees on the Government’s Job Retention Scheme.  However, many installers are small, local companies and are owner operators, who are not recognised within any of the Government’s financial packages.  We have a serious challenge in dispense.  There are only 1,500 people working in this very small, niche but vital sector.  If any of these companies close, pubs are at risk when reopening.

 

I spoke with BBPA (British Beer & Pub Association) yesterday and they believe that a four week plan is needed to get pubs back up and running so need notice from Government NOW, if they are going to be able to open from mid May onwards.

 

Funnily enough, although we are in a global crisis the likes of which has not been seen since the World Recession of the 1930’s, I am feeling pretty optimistic.  We will (hopefully) be coming out of coronavirus as we go into summer.  Human beings are essentially a social animal and we will want to party.  We will want our businesses to be successful.  There is evidence that many businesses are taking this down time to reevaluate their strategies, plans, learn better, more efficient operational strategies via the host of webinars available.  So, we will not be starting from stand still.  Those businesses that have shut and gone on holiday may not survive but, in the UK, the supply chain has been waiting for the expected “cull” in brewery numbers – 2,300 is too many.

 

Anyway, enough of my musings.

 

I will be starting up the 2021 International Brewing & Cider Awards soon.  May I send you press releases etc to be included in the Scandinavian Brewers’ Review?

 

Take care!

 

Best

Ruth

 


 

Ian Bearpark, Bearpark Brewery Consultants, UK

Hi Anders, hope you are well and not missing San Antonio too much.  Please see my answers below in red

 

I tried the free subscription but couldn’t get it to work

 

All the best

 

Ian

 

Bearpark Brewery Consultants

+447951757888

 


 

John Brauer, Brewers of Europe, Brussels

Hence my suggestion: I will send you a brief from Public Affairs, with links to press articles from around Europe. There is also a link I would like you to consider from my native country – South Africa – where the lockdown has brought good results, but (sorry to say) less good news for brewers – https://www.bbc.com/news/world-africa-52358268

 

Another good source is this press survey of how European countries are dealing with the crisis – or what effects are being noticed – this has been compiled by us. It’s in the public domain and attached at the end of this email. We – The Brewers of Europe – will also be holding an extraordinary Board meeting next week on the topic of how dwindling financial resources will have an impact on projects, but I have no knowledge of what will be discussed in detail, of course.

 

Anyway, here are some hopefully useful links for the SBR – if I have anything else I will share it with you.

 

Cheers, stay safe and have a good beer (preferably with your feet up!),

How has the corona crisis affected your brewery/business and market?

 

Brewing beer and selling / marketing beer implies either packaging for the end consumer directly, or via the on-trade, via bars, pubs, restaurants. This is the area most critically affected by the crisis, the so-called HORECA sector. We, as the Brewers of Europe, fear that they will be the last ones to gain relief from the opening up (de-confinement). It will change the landscape of the outlets, their composition, etc., for a long time. On the other hand, bottles / canned beer is not doing too badly in a lot of markets as alcohol sales via supermarkets and retail are generally up. This is good for the ones not having pubs and outlets (and concentrating on bottles or cans), and it is bad for those

 

  • How has your brewery/business adapted to the radically changed circumstances?

 

Some breweries we know are able to survive because they have reserves and have refrained from spending rude amounts of money on marketing and are keeping “their powder dry”. These tend to be the regional (wealthy) middle layer breweries, such as Duvel-Moortgat (BE) and the Bitburger Group (DE), who can command a balanced spread between on-trade and off-trade sales. Estimates are that they have already factored in a dip up between 30 and 40% loss of income for this year. However, their financial resilience will mean that they will survive, and possibly face a diminished pack of competitors later, ie. next year of in 2022. Small, ie. traditional or craft brewers generally don’t have this buffer and wiill be severely challenged with the business of survival. One Brussels craft brewers has told me that he’s lost 90% of his customer base (not supplying supermarkets but concentrating on the HORECA sector, and thus will face very difficult times ahead.

 

 

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

 

This is what we, as The Brewers of Europe, are batting for – delay of excise payments, VAT relief and also on technical level to enable publicans to make informed choices about beer quality both is keg and bottle, and to assess the “consumability / enjoyment” of beer even when flavour stability / shelf-life has been compromised by the crisis – or lack of sales, distribution problems or lack of customers, etc. To this end, we, the EBC, have issued guidelines to primarily the Brewers of Spain (“Cerveceros de España”) in order to make the on-trade aware that, ultimately, their judgement (ie. of publicans, bar staff, etc.) in ascertaining enjoyment of good beer, also is important and certainly counts. These guidelines have also been made available to other national brewing trade associations.

 

 

  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

 

People will always congregate to enjoy a beer – it’s a given and we count  on the fact that, in the long run, people will desire and cherish sharing a nice beer and a chat in a convivial environment. The sector will therefore survive but there will be feathers flying of those that have not made it. Seriously, though, the number of EU breweries (plus NO, CH, TR and now UK) of well over 10,000 was never really sustainable and I reckon will have to be drastically re-adjusted. Not only due to the departure of the UK from the EU (± 1750 breweries?) but mainly also because of small breweries going out of business even now and certainly with an increasing pace as the crisis bites into the tourism sector for the next 6-8 months.

 


 

Gary Spedding, Ph.D., Owner Manager, Brewing and Distilling Analytical Services, LLC., Denver, CO, USA

Anders, Sorry I did not respond to any earlier messages. I often miss many these days.

I have a couple answers and thoughts for you here.

 

  • How has the corona crisis affected your brewery/business and market?

 

Our Analytical Business and Courses have been affected a little. A little slowing down of regular samples but we had a big project going on and getting caught up on that. We employed a new person this year and will likely be OK keeping them on. We have been testing a lot of Seltzers – the new wave, pioneering newer methods to measure them and also doing a lot on nutritional work. That has not slowed down. We are concerned that some brewery and distillery clients won’t make it but will see how we can assist after this is returning to some sense of “normality”.  A big concern is that the Brewers Association have let go a third of their staff and I understand that is permanent in some situations.  That could bode ill for the industry as a whole. Do they see less need for their staff and services and outlook as breweries may go under? You article should address that.

 

Of course we have had cancellations and postponement of all major brewing and distilling meetings. And we had to postpone our own courses – One major one being an Irish Whiskey Course – to be taught by two Irish Whiskey Experts. They are not sure when they will feel comfortable travelling to present this course this year – no matter how it settles down. Partly because they don’t trust the current US government to tell us for sure if and when they think it safe to travel here. We are not sure about our famous Gin Course – set for September. Our British and our Australian Instructor’s suggesting we might do a live presentation with them so they don’ have to travel. This leads into the fact that many courses are now going to be on line with live and recorded courses – and this could be the new normal. Very few in-house courses maybe in the future?  Less travel altogether – technology at work and us becoming a more boxed-in and isolated citizenry?

 

  • How has your brewery/business adapted to the radically changed circumstances?

 

We have not needed to adapt too much and most business that survive such disasters usually tool up in readiness for the climate to change. So we have purchased new instruments to tackle more Seltzers and the distillations needed to test new products. Continuing to research and be sure we are ahead of the game. We have also been testing many example Sanitizers and the alcohol for sanitizer use. If the brewers/distillers are giving away sanitizer we are not charging for testing or if they are to make a return on it we are drastically reducing our charges – just to cover our expenses.  We are also learning that the regulatory agencies are woefully ignorant of understanding the products they regulate. Case in point. Potable alcohol – grain neutral spirit (GNS) from major suppliers usually comes with a USP/ACS Certification (US Pharmacopeia and American Chemical Society). Yet no one knows who tests these products to supply the “certificate’. There appear to be no official written methods to test the items on that list in the US. At this time I have been unable to reach out to the USP or ACS for answers and the US agency the TTB says they are not sure who regulates the production and release of GNS.  This could be a big issue as many fuel ethanol suppliers are trying to get into the potable alcohol game. Their product often not suitable as our business once found out for consumption (or possibly for use in sanitizers). There could be big legal troubles for brewers and distillers in this regard one the “relaxed rules and regulations” during this crisis simply evaporate. To your question many breweries and distilleries in the US have shifted to Sanitizer production while not understanding the product or implications if they get it wrong. The MBAA have presented rules and guidance in an open paper published recently and the University of KY and the new Beam Distilling initiative – the Beam Institute are researching and presenting advice on the matter to the industry.

 

  • Are you receiving any financial support (from the government or others) and how long will this enable you to survive?

 

We just learned today that we have received one of the Pay-loan protection grants which will help ensure we keep our Five full time and out Two part-time employees. With one of the two part timers hoping to go full time later this year. This loan is forgivable if used to cover 2.5 months of salary and rent etc. We had no intention of letting anyone go but this certainly helps and should be funding available to every small business. Unfortunately it will not benefit all deserving businesses. A better plan should have been in place or instituted in the US. We are grateful to have qualified and wish all well going forward.

 

 

  • What are the outlooks for the longer term effects of the crisis on your brewery/business?

 

Obviously we have no crystal ball but we thing we should continue quite well. Though we did open a second location in Denver CO last year that has just literally gotten up off its crawling legs and starting to make strides. A concern of course for any business expanding or starting up a new this past year/current year. As a premier testing lab in the US for alcoholic beverages we hope to keep going and trust many of our clients and other non-client breweries, Kombucha, Cider and Seltzer makers and Distillers will climb out of this recession. Our analytical work, courses (on and off-site and maybe now more on-line) will continue to be offered as long as there is a need for us. We will look to see if we can offer any support to those getting samples out for future QC analysis. Our way to help ensure the quality of craft beverages in the US and beyond. We assume our foreign clients will get easier access to shipping us samples again though a couple of countries have, so far, not ceased to send samples in from abroad. We also hope to have our team as judges again at the GABF in September (if it does not get cancelled) and are happy to provide our services there under the restrictions they impose that no travel/accommodation stipends are possible for judges this year. We were grateful to receive our expenses/registration fees and funds returned from the cancelled CBC and Tradeshow  and will apply to next year’s booth and registrations. We were to be sponsors of the Worldwide Distilled Spirits Conference in Edinburgh, Scotland this month. We will holdover those expenses and present and attend next year if possible.  We can only hope for all that all our respective businesses with the industries we serve (and all others) bounce back to some form of health and vibrancy.

 

ANDERS: Hopefully that gives you some ideas to explore for the next issue. If any of it is useful you may use it and quote and you see fit. I can assist further as needed. I HOPE IT GIVES YOU IDEAS TO EXPLORE WITH OTHER BREWERS AND DISTILLERS. Sorry I have not had time to write for you OF LATE – too busy running the business and Getting more into distilled spirits these days but could look to having Matt and I follow up in the next year or so with more significant pieces to the QUALITY SERIES WE RAN FOR A FEW YEARS or other articles of interest.

 

Respectfully,

 

Gary.

 


 

Sergey Loiko, Master Brewer, Ukraine

 

Dear Anders,

Hope you and your family and friends are doing good taking into accout this situation.

 

My name is Sergey and I was studing at SSB (module 1) on 2009. Also, you had some project in Ukraine (I shared your contacts), so hope you remember me 🙂

 

Last year I was working as Brewmaster in Estonia and at the end of last year I came back to Ukraine (unfortunatly, the owners decided to stop production) and had back to my prevoius position of Technologist (working with enzymes, raw and auxiliary materials for Brewing).

 

Conserning your questions I can say that this situation affected not so good brewing business.

 

Big brewing companies has production volumes lower than usually, but still at least they have sales in markets (glass-bottles, PET and cans), but all draught beer (KEG) business decreased really dramatically because all pubs are closed.

 

Really pitiful situation is with smaller local producers and micro-(craft-) breweries.

They do not have such budget posibilities sa big ones. The solvency of the population has fallen significantly, since many restrictions have been introduced and there is no state support at all.

Big Breweries can afford in such a situation to reduce the price of products through promotional offers for different brands. Other producers do not have such financial opportunities, so the situation is not the best for them.

There is absolutely no state support for the Breweries and the Brewing industry, so it is hoped that after lifting the quarantine restrictions, people will go to pubs and the situation will become more positive.

It is hard to make prognoses concerning your question, but I think (and really hope) that those small craft breweries that are located in pubs (or having places for drinking beer in place) will improve the reality after after lifting restrictions and when people will go to pubs. Those small breweries, that just started production and didn’t have enough enough time for recepies improvments taking into account  taste preferences of regional consumers (and at the same time do not have enough finansial possibilities) will definitely will not compete with those that appeared on the market earlier and already have an idea of preferences in the region. How many it would be – also hard to say, because last years huge amount of different craft-, micro-, home-breweries appeared in Ukraine and this item started to be more and more popular (but, to be honest, not all products were of the proper level and quality because of low level of brewmasters competencies: some of them even do not have necessary background).

 

But I always try to be positive, so hope that really good breweries will survive and all consumers will enjoy good beer after lifting restrictions 🙂

I’ll say from myself: I really missed draft beer and really would like to go somewhere for some beer 🙂

 

Hope that this information will be useful for you.

 

In case of any questions or comments please contact me.

 

Kind regards,

Sergey

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