The Coronavirus Diaries: March 20, 2020
As the world deals with the unfolding crisis of the COVID-19 coronavirus, we are all working through our own experiences. Over the coming weeks and months, I will post the reflections of different brewers as they try to save their businesses while balancing the safety and financial well-being of their employees.
In this first installment of the series, I offer four stories. Van Havig is the co-founder of Gigantic, a 4,500-barrel brewery in Southeast Portland that relies mainly on packaged beer, but does have a small taproom. Lisa Allen is Head Brewer at Heater Allen, a 1,400-barrel brewery in McMinnville (an hour west of Portland in wine country) specializing in lagers. Heater Allen has a small tasting room but sells most of their beer in kegs and cans. Matt Van Wyk is a co-founder of Alesong, a brewery near Eugene that specializes in barrel-aged beer and relies heavily on its bottle club. Alesong produced 300 barrels in 2019 and was looking to double that this year—before the virus. Finally, Ben Parsons is a co-founder of Baerlic, a 1,900-barrel brewery with a taproom in SE Portland and a second taproom at a cart pod in NE Portland; Baerlic also sells in cans. Adam Milne is the owner of Old Town Pizza/Brewery in NE Portland and the Old Town neighborhood, which relies largely on restaurant sales, though they do bottle and can and distribute kegs to city accounts.
This is the longest article I’ve ever posted on Beervana, but it is powerful and I encourage you to read it all.
The timeline of viral spread in Oregon was slightly less severe than our neighbors north and south. The state had its first case on Feb 29, and its first death on March 15. Governor Kate Brown shut the schools a week ago (Thursday 3/13), and ordered bars and restaurants closed on Monday (3/16), along with gatherings of 25 people or more. She has ruled out a statewide shelter-in-place order for now, but Portland Mayor Ted Wheeler is expected to issue one for the city, possibly as early as today.
The Dawning Crisis
The learning curve of the outbreak was sharp, and I asked people to go back in time and describe how they reacted and adapted as time progressed. The following narrative follows the chronology of each brewery’s actions. Ben and Van were alive to the dangers very early and speak a lot at the start.
Van Havig: “I'm a weirdo and have been obsessed with the societal results of infectious disease for at least 20 years, mainly surrounding plague. So when something started stirring in Wuhan, China, I instantly paid attention. As that situation got worse, and as soon as there was a case in South Korea (if my memory serves, that was the second country to see a case), I knew that it was coming. The question was how severe would things get. As soon as Italy had a known ‘cell’ I knew that it was going to be a pandemic. With the cases and subsequent deaths in Washington, I knew it was a matter of time before Oregon would be greatly affected.”
Ben Parsons: “Being able to see this spread globally in the news, I assumed it was going to land here at some point. The moment I learned of the first case in Washington [Jan 21] I immediately went into triage mode and started preparing for the inevitable outcome that we were about to become the next Italy. I stopped paying any vendor that wasn’t local and independent, I halted all purchasing that wasn’t directly tied to revenue, I ordered pallets of cans, malt and other supplies knowing that the best chance of surviving something like this was to focus on our holistic ability as a business. Because we self-distribute and own a canning line, we are fortunate in that we can produce, package, and distribute without (hopefully) skipping a beat.”
Van Havig: “To give you an accurate time line of events, I can start with Friday Feb 29. My wife and I had already stocked up on some essentials. We went out to dinner that night at a new restaurant in its pre-opening phase. Even at that time we thought we might not be doing that much anymore. At work I had already put a halt on any kind of unnecessary spending. You know, the taking-people-out-for-beers or dinner kind of spending. I don’t think I even knew about the first case in Oregon yet.”
“On March 2nd, I had a meeting with one of my investors regarding our planned second tap room. That project had been delayed, and at the time had a projected opening date in mid-April. We were still hopeful and planning to move ahead with that project. On Wednesday, March 11th we had a meeting at the new tap room. Everything still looked like a go on that project at that time. Portland was slightly quieter, but that was good. This social distancing and working from home was going to work. Things were still OK.”
Lisa and Rick Allen (PHOTO: HEATER ALLEN)
Lisa Allen: “Early on, after the first case was announced, I remember being concerned about them having to cancel SheBrew [a beer festival showcase women] and was happy they didn't. Although now, looking back, maybe it should have been canceled. They did take a number of precautions to limit human to human contact, though. The week following that event we went on with business as usual, it was a bit of a slow week for draft sales in Portland for us, but people were still ordering, we even made a delivery up to Seattle on Friday (a couple of restaurant accounts canceled orders on us, but most of the beer that was ordered was still delivered). On Thursday, when the shit kind of hit the fan, with all of the things being canceled, we made the decision to close the tap room for the next month. We made this decision early on because our tap room has never been a huge source of revenue for us and my parents, who are in the brewery and tap room frequently, are both in their mid to late sixties and we wanted to take the necessary precautions to protect them from contracting the virus.”
Adam Milne
Adam Milne: “When I look back on when I first realized life might forever change it was Friday, February 28. My wife Tia and I were having dinner with our new friends from Brazil. We decided to support one of the Old Town’s customers that recently purchased their second keg of our IPA. In the middle of drinks at Bar Mingo, my wife’s phone began to buzz; she was on a 6-month contract at Nike. The phone of a friend of hers, Silene, also vibrated. Nike had just announced it was closing for the weekend for a deep clean. Another person sitting at the bar got the same message. In that instant, the Coronavirus we were all hearing about in the news was for real. The next day I was at Costco reordering contact lenses and getting a few household essentials, when I witnessed complete mayhem. A line quickly formed all the way to the back of the store and wrapped around the side. When I returned home I contacted the Old Town managers and told them to prepare for potential changes. Something in the world felt different.”
Matt Van Wyk/Source: Alesong
Matt Van Wyk: “What a crazy, and ever-evolving situation we are navigating! When this whole thing began worldwide in the first couple of months of 2020, I hardly took notice, as was typical with other outbreaks in different parts of the world. It wasn't in my backyard. But, as it quickly became a ‘U.S. problem,’ I quite frankly was thinking only selfishly. I had a Spring break trip planned to Mexico, and I certainly didn't want that cancelled. In fact, I hoped that others would cancel and I’d have an entire row to myself! Add to that the April Craft Brewers Conference and The Brewers Associations' SAVOR and Capitol Hill climb in May, I had three travel plans booked, and I didn’t want any little world health issue to get in the way of my plans. Well, the escalation and spread of this unprecedented virus has certainly changed my selfish way of thinking and ours at Alesong.”
Ben Parsons: “The Saturday after the first Oregon case was reported, I got my wife in a panic telling her that I believed we were going to be shut down as a business and then eventually mandated to shelter in place. I do very much believe that it's not only going to happen, but that it's going to happen days later than it should have. Will I still be able to operate for to-go and delivery? No idea. If I can is it safe to do so? No idea. I have struggled deeply between the moral obligation to keep my family, employees and customers safe versus doing anything that I can to stay open. I'm not a panicky person at all. I just honestly saw this coming.”
Adam Milne: “On Wednesday, March 11 it seemed everything was changing by the hour. I sent a text to the Old Town Management Team. There's no need to be an alarmist, but we should at least be prepared for all scenarios. I have been hearing food delivery could be a likely shift. Any thoughts? Soon after that text it was announced the NBA season and NCAA March Madness was shutdown. At that point a wave of fear seemed to be building in America.“
Van Havig
Van Havig: “On Thursday, March 12th, we heard a rumor that schools might get shut down. It was the day that we installed a hand sanitizer dispenser on the bar at work. We didn’t want to put them out too early, but with increased public awareness, we felt it would make people feel comfortable in the tap room. We encouraged people to spread out. We were having a great week in the tap room. Sunny spring days are our biggest sales days. That day was a great sales day. We would probably have a slowdown once this thing really hit, but so far, everyone was cool.”
Active Phase, Friday March 13 Onward
Van Havig: “Then the next day (Friday the 13th of course) the Governor closed the schools. Another great sales day in the tap room. Apex [a bar in Portland] announced they were closing, and we thought they were being a little too cautious. But with the school closure, signs were beginning to point to the fact that the Governor was looking North and South for direction. Washington and California were closing down bars and restaurants. Crap.”
Adam Milne: “On Friday, March 13, we decided to act quickly and post our Coronavirus Action Plan online. This was a message out to the community on what Old Town was doing to watch out for our employees and customers to keep them safe.Both locations had recently received 100% from the health department during our last inspections. We wanted to communicate that we had procedure for deep cleaning surfaces, sanitizing dishes, and offering touchless curbside pickup and delivery. That evening a number of people in the community were stopping by to show support. My natural reaction was to thank these people with hugs. [Note: I was one of them! —JA] I left the brewery on Friday touched and optimistic by the incredible words and actions of those that stopped in. There were people out there making sure we all made it through this.”
Matt Van Wyk: “At Alesong we operate a fairly robust club and the timing of our current release was just barely on time for all the mandates, but we were certainly sweating it last weekend. Our Blenders Circle club releases beer four times per year, and this year we pushed back our Feb release to March 14 and 15 as we waited on one beer to finish. While the governor was closing schools, and bars and restaurants were yet to be affected, we debated whether it was prudent to cancel the event altogether. The beer was pre-paid, so that wasn't the issue. Frankly, we felt bad charging credit cards and then telling people they couldn't come get their beer that they would be necessary when they need to go into isolation.”
“So we soldiered on and took extra measures to ensure safety. We moved to single use plastic cups for tasting rather than our usual Teku glasses, we used fest tickets rather than our normal check off card for flights, and we had extra sanitizing volunteers to keep surfaces wiped down. We even rented a large tent to provide more indoor space for distancing. Finally, people were given the option of taking their bottles to go right away and we even included the chocolate pairing in a to-go box. All of these things, at the time, seemed ok to do, as these were things we were being told by our national and local government.”
“Should we have made the call to cancel the event? Maybe. Hindsight changes all of those thoughts. But I can tell you the joy in peoples' eyes, and the appreciation they had because they could get out of the house and attend an event that was being carried out with careful details, warmed my heart. Had the event been scheduled any later, we would have surely cancelled.In fact we would have been forced to.”
Ben Parsons: “Sunday prior to the shutdown, we decided that we had to furlough our entire FOH staff in the hopes of getting them into the unemployment queue before the shit really hit the fan in the hopes of getting them money faster. That was the most difficult thing I've ever done in my life. Then I had to do the same with my brew team. Then I had to do it with some very key employees. My strategy was that I needed a completely halt to the business to even see what my options were. I have some cash in the bank. How long will that last? Can I get deferments on my leases, loans, utilities. Can I defer everything. I applied for lines of credit, credit cards, and pleaded with my banks and my landlords. And I and the team remaining are hustling as hard and fast as we can to bring money in the building.”
Lisa Allen: “After keeping an eye on the news all weekend, and with California and Washington closing all restaurants and bars, I thought it would be inevitable that Oregon would be next. When governor Brown made the call Monday morning to keep everything open for the time being I was shocked (as I think was the rest of the state) and thus was not surprised when hours later she changed her decision. My actions have changed as the week has gone on and I feel like they continue to change. At first we were going to go about our production schedule as usual, then I decided to cut production to Monday through Wednesday.”
Van Havig: “I spent the weekend thinking about minimizing our expenditures at work, and what actions we'd need to take to weather a possible shut down. We scheduled a meeting for Monday morning with all of our key people. At Gigantic, that's five of us—me, Ben [Love, co-founder], Scott [Guckel] our head brewer, Wade our sales manager, and Ashley and Emily who do all of our communication and web site stuff. We were sitting on plenty of draft so we changed the brewing schedule to only be brewing our standard beers so that we could have bottles to sell. We went through the books line by line and decided what we could eliminate or stop payment on. We thought up ways to generate revenue. We made the decision to close the tap room on Tuesday, so that we could personally tell our regulars (our people we like to call them) that we were going to be closed. We basically tried to come up with a survival plan. Please note how fast that escalated. Five days before, we were trying to figure out exactly where the taps were going to be in our new tap room. Now we were putting a complete spending freeze on that project and closing our most profitable source of revenue.”
Current Activities and Thoughts
Lisa Allen: “The Heater Allen staff includes myself, our sales/delivery guy, and my cellar guy. I've had to cut my cellar guy's hours, but am hoping I can keep him on through this ordeal. Right now we are still brewing, though much less. We typically brew 2 batches a week on our 15 barrel system--one of which is almost always Pils. I've changed the schedule so we are now brewing once a week and I took all of the Pils batches off of the schedule (we'll be brewing Schwarz, Das Bier (our kolsch-style), and Bobtoberfest). Most weeks we keg a 15bbl batch of Pils for our draft accounts, without those accounts I am going to have a lot of Pils piled up. We had a canning already on the schedule for March 31st, so we are just canning a lot more than we were planning to and we even got a "special beer" label printed so we will be able to can a draft only beer we had coming out next week. We will also be sending a bunch of canned product down to our California distributor.”
Adam Milne: “On March 16, I went and opened our company Quickbooks accounting program to do some fast math. We needed to immediately know our monthly fixed costs and payroll expenses without any revenue to calculate our potential losses. The result was staggering. Our line-of-credit would only last 1 month without any drastic changes before we were out of business. The next day the Governor mandated that all bars and restaurants close for dining in. Such operational, changes would make it impossible to fill everyone’s normal hours. I barely slept that night and felt awful. Some of the great people that make Old Town a fantastic business were soon not going to have a job. And it just sucked."
“I decided to lay off half of the staff rather that give everyone just a few hours. We provided affected the team $100 gift cards so they could come in and eat if they needed food. My hope was customers would keep us really busy with to-go business and we’d hire them back on right soon. I was completely shocked by their kindness. In the face of the layoff our downtown staff told me THEY felt bad! That it was okay and for me to not feel bad. I was holding back the tears. I was going to do whatever I could to bring them back.”
Van Havig: “On Wednesday, I talked with all my brewers about what I was going to have to do. I would keep people through the week for sure. We had brewing to do (oddly), and there would be plenty of work in the office with shutting down auto-pays, communication, setting up delivery options, etc. But it was the day that everyone got the news that this was the last full week of work for who knows how long. I'll pay them all vacation pay and sick pay before they have to file for unemployment, and I will pay for their health care with my last dollar, but that's really all I can do. I'll probably lose $50,000 or more that first month of vacation and sick pays. At this point, we have to run a skeleton crew to keep this place running so they have jobs to come back to. With some luck, we may be able to generate enough revenue that we only lose maybe $10,000 or $15,000 per month, not counting if we need to buy malt or something. We're lucky, we have half a silo full of malt, and are in a very good cash position. If we can manage to only lose $10k or $15k a month, we can make it for a while. In that situation, I think 6 months is ok. I could maybe even stretch it to 8 or 10 if we can keep up that kind of revenue and afford malt, hops, chemicals for cleaning, etc. If we get some kind of "shelter in place" order for more than a few weeks, and can't offer to go sales or delivery sales, then we're in real trouble. At that point I may be losing $30,000 per month or more. All I can do is try to hold on at that point.”
Ben Parsons: “We just launched a Touchless Transaction for prepay and delivery. And we're figuring that out as we go. Yesterday's sales were promising, but I have absolutely no idea what to expect. It is beyond my comprehension how fast this has happened. We are a very healthy business. We grew 30% last year with a profit of 12%. We planned to take advantage of organic growth of about 20% in the off-premise package and lean into expanding our self distribution capacity by adding a second driver and a warehouse employee to better manage logistics. Not anymore. Every day feels like weeks at this point and we are all just taking this day by day. “
Lisa Allen: “I feel like the fact that I make lager beer and that we don't have a restaurant makes Heater Allen a bit safer than some other breweries, especially those that rely on their brew pubs, but I'm still really scared about what the beer landscape will look like after this is over. I believed the closing of bars and restaurants to be for the best, and I still do, but I don't think I realized the extent of the effect it would have, which was a little naive to be honest. I have a number of friends that are now without jobs and hope they can be rehired when this whole mess is over, but I think there is a lot up in the air right now and no one has any idea on low long it will last and the everlasting effects on the beer industry.”
Matt Van Wyk: “Where do we go from here? With only three full-time employees and two part time (other than the three founders) we are going to do all that we can to keep our people employed. That is the number one goal. Fortunately for us, we also have to package beer 2-3 months ahead as it bottle conditions. How do we know how much we should be packaging to be sold 2-6 months in the future when we won't be selling as much beer right now. Beer in package will continue to sell well, as long as people have access, but as we all watch the stock market crumble, we might be less willing to stock our cellars with the highest-dollar beers. How does that affect Alesong's sales?”
Van Havig: “What I didn't expect in all of this was people's reactions. We've had a huge outpouring of support from people, both in terms of words and purchases. My employees have been amazing. I think they're handling this better than I am, even though they are about to lose their jobs temporarily. And I do mean temporarily.”
“Let me be very clear about something. We are a small brewery that is profitable and successful. We are extremely fortunate to turn the profit we do and we have access to capital that many breweries do not. I feel very hopeful that we will make it through this. But I know that we have more resources than many breweries. This is going to be devastating to the small brewing industry, particularly nationally.”
Adam Milne: “The scary part of the Coronavirus is not really about lost jobs, revenue and businesses. It’s the loss of lives we don’t fully see yet. It’s easy to get caught up in what’s in front of you. The pain and sadness we are feeling about of the jobs we need to temporarily say goodbye to. But as every day goes by, I feel selfish and guilty for those past financial concerns when I realize the loss of life that lies ahead. The coming weeks and months will be incredibly challenging, however I am inspired by the actions of the great people I’ve seen from our industry. Their stories above give me hope. Cheers to these wonderful and thoughtful people. I’d hug them… if I could.” [Note, Adam wrote a wonderfully long, detailed post, and I’m going to add a lengthy portion I couldn’t quote here into the comments below.]