COVID 19 has disrupted everybody’s world. The best way that I have heard it described, is that we are living out a movie… it is surreal. There has been much written about the general impact it is having on our world, about the science behind the virus and it’s spread, and how to stay safe. While the most important thing is public safety, COVID 19 is having a profound effect on our economy, with small businesses being hit the hardest. Small businesses may lack the resources to weather the storm of temporary closure or even a significant drop in sales (even if only temporary). One of the most obvious sectors directly affected is the bars and restaurant industry, which indirectly has a significant impact on craft brewers.
As in most offices, COVID 19 is a frequent topic of conversation at Brew Ninja. So we have spent a lot of time discussing the impact on brewers, and what they can do to persevere. While our concern is for all people affected (regardless of industry), we have established many relationships in the brewing industry (a truly fantastic group of people) and so the effect on brewers has been at the forefront of our thoughts. Yes, we sell into this industry, but the concern is genuinely in the form of friendship and kinship in also being a small business. So I hope this article is helpful to craft brewers and helps beer lovers understand the situation craft brewers are facing.
Craft brewers have fought hard for distribution; domestic brands have long dominated retail shelf space. Retail channels often require a brewery to apply for a listing number for each product, which requires effort, and the application process can be lengthy. On-site (taproom) sales are relatively barrier-free, have the best margins, provide the freshest beer, and offer a great customer experience which in-turn creates brand-loyalty. However, on-site is a single, and limited channel, and unlikely to provide the cash-flow required for a brewery to thrive long-term. On-premise (bars and restaurants) sales are the key for early and long-term success for craft breweries.
The on-premise model offers good margins, and fewer barriers than retail and the relationship with the licensee is symbiotic; local bars and restaurants get to boast about the number of local taps they have, and craft brewers benefit because the margins on distributing kegs are much higher than packaged products through retail outlets. As previously mentioned, bars and restaurants are some of the hardest hit by the COVID 19 measures, but I would like to focus on the impact that will be felt by craft breweries who distribute through those outlets, and what craft beer lovers can do to help.
We know that the entertainment industry (from video-games to alcohol) tends to be fairly recession-proof. So while beer sales may see a lesser impact than other goods, people will be spending less at bars and restaurants, in-turn affecting craft breweries. If you consider yourself a lover of good beer, or even just someone who takes pride in buying local, the most important thing you can do to support your favourite craft breweries is to make an extra effort to find a source for that craft beer. It may not be as easy as going to your local convenience store, government liquor outlet, or liquor retail chain, but it is worth the effort if you want your favourite malty beverage to continue to be available long-term. So within the limits of being safe, and obeying social-distancing guidelines, get to your local brewery and fill a few growlers (and buy a t-shirt), or to a retail outlet that does stock craft beer.
As a craft brewer, it is important to let your fans know that they can still get your product, and let them know where. Obviously, craft breweries don’t have the marketing budget to sponsor Monday Night Football or Hockey Night in Canada but there are things a small brewery can do on a limited budget. Offer delivery, or use a service to offer delivery (e.g., deliverr.ca, or tavour.com). Phone your local news media outlet and offer to be interviewed about how COVID 19 is affecting local breweries. Talk to your local/regional brewers association about doing a ‘drink local’ campaign.
There is merit to this. In 2003 the mad cow scare was the topic of headlines. Despite just a single animal in northern Alberta being diagnosed, the US, China and 40 other countries shut the border to Canadian beef having a massive impact on the industry. The Canadian Beef Association started an ‘eat Canadian beef’ campaign and Canadians rallied behind the industry; with restaurants proclaiming in windows that they served Canadian Beef… even McDonald’s got in on the action. The beef industry suffered greatly, but the support within Canadian borders kept the industry afloat. While there are massive differences between the two situations, there is a lesson to be learned.
So let’s band together in this time of uncertainty and support our local breweries. Stay safe, and be kind to one another.