Empty taprooms, full cans: How breweries are adjusting to the pandemic
FRISCO — Liquor sales are up across the country because of coronavirus-related stay-at-home orders. Yet the boost doesn’t translate to every facet of the alcohol industry, as a recent Brewers Association poll estimates 60% of breweries won’t make it until June.
Summit County breweries are optimistic they’ll last through the summer, but the road ahead is challenging and uncertain. They’ve pivoted to a to-go model of canned 16-ounce four-packs, 22-ounce bombers and 32-ounce glass growlers or aluminum crowlers in order to stay in business with closed taprooms. The packaged beer is mostly sold on-site, but the situation also has been an opportunity to expand into liquor stores. Frisco’s Outer Range Brewing Co. has been distributing around the state and beyond, even going as far as Japan.
However, without the traffic usually seen during slow days — let alone the busy spring break season — sales on food and beverage are extremely low. Breweries that rely on their kitchen for revenue are feeling the pinch in particular.
“We’re doing 10% a day of what we used to do (last April),” Dillon Dam Brewery General Manager Kim Nix said. “We’re down at least 90% a day, if not more.”
Similar to restaurants, breweries have reduced staff, trimmed menus and cut operating hours in an attempt to break even, which would be a good day. The Dam, the largest brewpub in the region, is down to 14 people after laying off 74. Aside from two part-time workers, all that’s left are management and brewers.
The lack of sales means more beer is sitting in tanks. The Dam has brewed only three times since the shutdown, and recent releases were brewed before the pandemic in anticipation of higher volume. The Dam and other breweries have adjusted their prices and run specials to get as much beer out the door as possible. For example, a crowler can be purchased at the Dam for $4 during happy hour, which means its available for the low cost of $2 a pint.
“It might have been $2 when (the Dam) opened, but it was $2.50 when I moved here and that was 20 years ago,” Nix said.
Likewise, Pug Ryan’s Brewery is giving away pints with food purchases on Saturdays, and The Bakers’ Brewery is doing the same for purchases over $10.
“It’s hard to judge, but it’s nothing compared to before,” said Pug Ryan’s Brewery co-owner and Brewmaster John Jordan, who estimates pint sales are 1% of what they used to be. “Our busiest day now wouldn’t even compare to our slowest day.”
Pug Ryan’s is open only Friday through Sunday and has laid off about 30 people. That leaves a head chef, a line cook, a manager and a Denver-based sales rep along with Jordan and his wife. The brewery previously would send about 30% of its beer to the Front Range, but Jordan said a rare recent order was roughly one-third of that.
According to co-owner Cory Forster, Bakers’ can sell 10 kegs of its Barking Dog Brown a week to local bars but has only sold three in six weeks to private parties.
Like the Dillon breweries, Bakers’ sees most of its revenue come from food. It’s open only four hours a day, but without the nearby Silverthorne hotels occupied, Forster said he is doing from $300 to $800 in sales daily when a weekend in March typically sees sales between $6,000 and $9,000 daily.
Though Angry James Brewing Co. doesn’t have a restaurant like the other three, it isn’t immune to the economic changes.
“We posted our first loss ever in March, and I think we’re going to break even in April,” A.J. Brinckerhoff, owner and head brewer said. “It would be nice if we could turn a profit, but during these times, what we are trying to do is protect our business.”
That means brewing only the popular beers twice a week on average instead of four times. Brinckerhoff laid off three and a half people out of seven and is working for free himself. Angry James received a grant from the town of Silverthorne and Brinckerhoff has applied for the Paycheck Protection Program but hasn’t gotten it yet.
Adjusting to the new way of business has Angry James canning with the help of Outer Range and sending 35% of those four-packs to four Summit County liquor stores and one in Denver. Yet the profit margins are smaller on canned beer due to the extra components and labor.
The brewery also has lowered its prices by 20% to 30% since Brinckerhoff understands customers also have been affected by the coronavirus.
“They don’t have as much money as they did two months ago,” he said.
While its too early to tell what each brewery will need to do in terms of socially distant seating when it comes time to reopen, operations likely will shift due to the pandemic.
Angry James will receive its own canning equipment in a couple of weeks and eventually hire two employees to package and distribute.
“We’re trying to gear up to come out of this thing healthier than we were before, even though right now it’s hard to see that because our numbers are so down,” Brinckerhoff said. “As much as it hurts right now, and we’re dipping into our cash reserves, it’s an opportunity to make our business model stronger in the future.”
Meanwhile, the Dam might make curbside takeout a permanent addition to supplement the restaurant.
Despite losing money, the breweries stay open to provide a sense of regularity for their patrons and to see a familiar face — even if it’s behind a mask — while striking up a much-needed conversation.
“It’s worth it to keep going in the hopes that it helps up prepare for reopening and to provide some normalcy for the community,” Nix said.
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