Coronavirus Diaries (5/4): Heater Allen, Alesong, and Baerlic
In this ongoing series, I have been posting the reflections of brewers and cidermakers as they deal with the unfolding COVID-19 coronavirus. In today’s post (part one of two), we have the reflections of Lisa Allen (Heater Allen, a small McMinnville-based packaging brewery specializing in lagers), Matt Van Wyk (Alesong, a small Eugene-based barrel-aging brewery selling in bottles), and Ben Parsons (Baerlic, a Portland-based packaging brewery with two taprooms).
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In past editions of Coronavirus Diaries, I’ve broken the responses up into categories. For this edition, I’m posting the stories as they came to me. Each brewery’s experience has gone from a more universal response to individual ones, and reading the full reports intact makes them more coherent. If you have any interest in the beer industry (or any industry), I strongly urge you to read these. They are detailed and full of insightful information I honestly haven’t seen reported anywhere in the traditional press. Thanks again to Lisa, Ben, and Matt for taking the time.
Lisa Allen, Heater Allen
We’re doing pretty well. Canning more and adjusting our brewing schedule to do so. As I’ve mentioned in previous updates, I think we are lucky that we are a well known brand that has a lot of outlets to sell our beer and that we have never relied on our taproom to generate a lot of income. However, it is a bummer we can’t have the taproom open, as we were finally seeing more traffic and definitely had a group of regulars. We have been talking about how to adjust the layout and such of the taproom to accommodate the phase 1 relaxing of social distancing, but haven't discussed when we will feel comfortable with opening back up (pending the governor’s orders, of course).
We didn't get in on the first round of the PPP loans but remain optimistic that there will be another roll-out of more loans soon. The loan amount we would get would help us significantly, especially since we are still keeping all of us three employees employed. I'm glad to hear that a number of area breweries did get loans.
It's been a tough week for me personally. I don't deal well with uncertainty and have been feeling pretty anxious and a little depressed this week. I miss people, I miss going places.
Ben Parsons, Baerlic
Can you believe it's been 6 weeks…unbelievable. Baerlic continues to see incremental stability in our overall sales—both wholesale and residential—as our operational systems have improved. Hopefully that is a sign that we can work off of (these last six weeks of) historical data in terms of revenue and sales. That will help with the uncertainty. The brewery is back on—albeit in a very different way. All the time we used to spend cleaning, filling and warehousing kegs is now spent on filling cans—which I'm sure is a welcome respite from the lonely purgatory of the keg washer for our brewery team. What used to be about 33% of our production output is now nearly 100% of our output, so our supply chain demands have shifted heavily. Hopefully our suppliers can keep up with that demand. I often wonder how we will pivot back the other way once the new normal settles in, but I guess we'll figure it out when we get there.
As the cooler is now full of cans, cans and more cans, all of our empty keg shells are tucked quietly in our newly acquired expansion space—along with some new tanks that will sit empty for who knows how long. Part of a plan hatched last fall to grow our capacity and our self-distribution program, we were in the execution phase of a rather large (for us) expansion when this thing landed in Seattle. The ink was barely dry on the lease and loan docs as the world slowly came to a halt. Luckily, we have had some support from our lenders and our landlord and will hopefully be able to buy enough time until we can re-launch these growth plans, albeit a bit less ambitious I would assume. Not an ideal time to have excess square footage and stainless to pay for, but what are you going to do…
I am happy to report that we were approved for the Paycheck Protection Program (PPP)—there's nothing quite like signing and closing on a loan when the terms aren't even solidified yet. The earlier versions of the PPP were of little use to our business model, but fortunately some things have been massaged enough for me to (hopefully) take advantage of the ability to keep people working. With the ambiguity of the program, I do run the risk of all or some of it converting into a loan, but we're all operating on 'gametime decisions' right now so I'll have figure it out when we get there.
For those who are unaware, for a business to have the potential of forgiveness from the PPP, they must match their Full Time Equivalent (FTE) employee count from (2) pre-COVID time periods—1) FTE count from this time last year and 2) FTE count from earlier this calendar year. For businesses to meet this criteria, that means that they have to ask their employees to come off of their Unemployment (in fact if offered work, I believe they are REQUIRED to) come back on for 8 weeks for the program to work and for employers to have their loans forgiven. The pickle is that since the feds added $600/wk to Oregon's weekly allotment, business owners are asking their employees to not only come back on to make less money than they are currently making on unemployment, but also to come back on for 8 weeks knowing that there is a real possibility they are re-furloughed after the 8 weeks is up. So on the one hand you have the feds stepping up by boosting unemployment payouts for those furloughed employees while on the other hand they are requiring employers to offer these same furloughed employees less money to have their PPP loan be forgiven. A damn absurd rock and a hard place for small businesses and employees, for sure.
Luckily for Baerlic, I think I have a solution that keeps some of my front-of-house employees on unemployment—while satisfying all the FTE requirements of the loan—and being able to keep most of my staff on payroll. But I won't really know til all the rules are written. So who the hell knows? What I do know is that the sun is shining (as I write this) and the amount of support we've had from our customers has been incredible. For that I am ever so grateful. At this point all we've got is day by day.
Matt Van Wyk, Alesong
We’re doing just fine at Alesong. Still delivering beer and offering free shipping in Oregon, which is bringing in some revenue. Hopefully our efforts in increased e-commerce will continue beyond the pandemic. We’ve always hoped to sell more beer direct to consumer and this has forced us to focus on best practices in this arena.
Our biggest challenge right now is in the wholesale sector, trying to get in front of our distributor to promote new beers and help get proper placements. Without personal contact, selling beer the traditional way is difficult.
We’re waiting to hear on dollar amounts for a government backed loan, but have been approved. That, along with the PPP, allows us to pay the bills and keep employees working. This has always been very important to us and we’re fortunate to be able to.
Lastly, some much needed construction and cleaning projects have been accomplished during the slower time at our tasting room. We’re ready for summer! Now we are just sorting through the proposed regulations for opening up and how that will look when we are allowed to open.