This isn’t the first time in his 26 years in the craft beer industry that Eric Wallace, Cofounder and President of Left Hand Brewing Co. (https://www.lefthandbrewing.com) and former Chairman of the Brewers Association Board of Directors, has had to deal with adverse business conditions. The late 90’s and early 00’s were a period of net contraction for craft beer, as tepid consumer reaction failed to deliver the growth that many over-leveraged breweries expected. Today, the pandemic poses a different sort of challenge—a widely felt social, health, and economic event that was as unexpected as it has been severe—but lessons learned from craft beer’s early period are still apropos.
In this special industry-focused episode, Wallace weaves through the granular operations issues facing the brewery, from the challenge and necessity in furloughing employees (“furlough is not a moral issue—it’s surviving; It’s a requirement; If you’re going to survive, you have to cut your expenses to match whatever you’re lucky enough to have coming in”) to the utter collapse in sales (“In March, [draft beer] sales dropped to $1700, from six figures [last year]. We’re a stout brewery, and we ended up getting shut down on the… day before St. Patrick’s Day”). Wallace discusses the government tools they’ve been able to secure, such as a loan through the PPP program, and the challenge in any kind of long-term planning. IRI data may suggest that craft beer sales are up in the grocery channel, but that’s a small consolation at best for breweries like Left Hand.
“I’ve read the IRI data, and I’m like ‘Really? That’s what’s happening? Because it doesn’t feel like it,’” says Wallace.
The conversation also turns toward a macro view, with Wallace discussing the shared responsibility of all craft brewers, and all in the hospitality world, to ensure the safety of customers and staff.
“To take the short-term view, right now with all the largesse that the government is raining on our heads, just because philosophically you disagree and your freedom is being imposed upon… that’s bullshit,” says Wallace. “I want to open as bad as anybody, but I also feel an obligation to be a responsible citizen, business owner, member of society.”
What will the future look like? Wallace and Left Hand are planning on two years of severely limited business, as the world grapples with the disease while working to find a vaccine. But that won’t be the end of it. Expect 3-5 years after that to “dig out,” pay off debt incurred in the survival process, and get back on any sort of sound economic footing. There is no quick bounce-back from this pandemic and the ripple effect it is having throughout the economy. This episode is a sobering and honest look at the reality facing the world’s craft brewers.
This episode is brought to you by:
G&D Chillers (https://gdchillers.com): Nearly 2,000 breweries across the US, Canada & Mexico partner with G&D Chillers. Innovative, Modular Designs and no proprietary parts propel G&D ahead as the premier choice for your glycol chilling needs. Breweries you recognize—Russian River, Ninkasi, Jack's Abby, Samuel Adams and more—trust G&D to chill the beer you love! Call G&D Chillers to discuss your project today or reach out directly at GDChillers.com. (https://gdchillers.com)
Old Orchard (https://www.oldorchard.com/brewer): Old Orchard supplies craft juice blends from the heart of Beer City USA. As the industry blending experts, they supply major national brands and growing breweries alike. They've been the best-kept juicy secret in craft beverage for years, but now the secret's out. Breweries across the board are experiencing a seamless transition to Old Orchard as their new juice supplier. So hop aboard the Old Orchard fruit train; their sample kit starter pack is waiting for you at www.oldorchard.com/brewer. (https://www.oldorchard.com/brewer)
Hopsteiner (https://www.hopsteiner.com): This episode is brought to you by Hopsteiner–your premium hop supplier dedicat