As the drinking and dining industry celebrates victories like better-than-anticipated sales and the July 1 full reopening of New York City’s leisure and hospitality businesses, most bar and restaurant owners are still struggling mightily to financially recover from the Covid-19 pandemic. Though they got direct relief from the Biden Administration’s American Rescue Plan Act of 2021 in March, they and their supplier partners continue to lobby for the Hospitality and Commerce Job Recovery Act of 2021, including a lesser-known provision that would cover losses for the food and beverages they had to throw away during successive lockdowns last year.
A dozen congressional representatives from both parties have signed on as co-sponsors of the bill in the last ten days, encouraging a newly formed advocacy group called the Perishable Food and Beverage Coalition, composed of 20 trade associations from the National Potato Council to the country’s three primary organizations that represent commercial beer interests.
I love books about alcohol so much that I’ve just finished writing my own — a history of women in beer that drops next September. Writing my annual roundup of new booze books makes for one of my favorite parts of the holiday. If you’re not stuffing stockings with gift cards to struggling independent restaurants or gifting charitably minded libations this year, consider supporting one of these authors who help turn drinking into learning.
WINE
Wine, Unfiltered: Buying, Drinking, and Sharing Natural Wine — This jaunty little hardback makes for a handy starting point for anyone who would ask the question, “What is natural wine?” Katherine Clary answers the five W’s and the FAQ’s directly and concisely enough to come away feeling confident enough to hold court at an office party or on a date, as long as the listener hasn't read anything more advanced.
Original article published on Forbes.com.
By: Tara Nurin
I’ve said it before and I’ll say it again: the pandemic is not causing most people to over consume alcohol. A recent study has led to another round of misleading and inaccurate headlines written for shock value that proclaim drinking has increased this year, especially among women.
The study, conducted by the apolitical RAND Corporation, published by the Journal of the American Medical Association (JAMA) and funded by the National Institute of Alcohol Abuse and Alcoholism, heard from 1540 American adults (18+) on how much and how often they drank over 30 days in May and/or June 2020, a few months after COVID started locking down parts of the country in March. Some of the data do indicate increased intake over the same time last year. But RAND and much of the media downplayed or overlooked the statistics that conclude otherwise.
It is not, in fact, accurate to announce, like the Boston Herald did, that, “Study says coronavirus pandemic drives women to drink.” And it is misrepresentative, in my opinion, to conclude, as RAND did, that, “Health systems may need to educate consumers through print or online media about increased alcohol use during the pandemic (italics mine).”
Here are the facts: Women did report drinking slightly more often during the 30 days prior to answering the survey questions. But they also reported drinking lower quantities of alcohol during those sessions, resulting in net negative total consumption. Though men and all adults between the ages of 30-59 did report drinking slightly more overall, the amount drunk by the day declined.
So while it’s accurate to say that women were drinking 17% more often, as the data show, it is inaccurate to say that women were drinking 17% more, as much of the media did. It is also accurate to say that 20% of women were partaking in higher rates of heavy drinking over the measured timespan but inaccurate to suggest that women overall were doing so.
By: Tara Nurin
Raise your hand if you believe the collective “we” are boozing it up big time during coronavirus.
If your arm’s up, lower it. You’re wrong, as are a lot of other people.
Practically every reporting agency—from the major data collection companies to the beer and mainstream media—has assumed too much knowledge on the part of the public and has failed to, at least initially, explain their methodology when they’ve presented alcohol sales trends over the course of coronavirus. And said public has naturally responded to the misleading headlines and too-fine-print by forming the incorrect conclusion that sales are soaring. So many friends, social media strangers and even my own boyfriend have argued with me when I’ve tried to correct them that I start to wonder whether my expert credentials as a business-of-beer writer matter to anyone anymore. (I see you, Dr. Fauci.)
Here’s the truth: For the most part, alcohol sales in the United States have only spiked in stores that sell it to-go. Though certain markets and vendors call themselves outliers, that is not generally enough to offset the fact that practically every business that serves alcohol to drink on-site has closed over the past three months.
Ergo, Americans are not buying more or spending more on alcohol. We’re simply moving our purchases to off-premises shops that let/force us to take it home, rather than staying to consume on-premises at a bar, taproom, brewpub, concert, festival, baseball game, barber shop, or anywhere other than our abodes. And though some stats suggest that the overall quantity of wine and spirits sold remains roughly even with pre-COVID levels, the amount of money spent to buy wine and spirits has dropped since this time in 2019, while beer sales, by any measure, are hitting the floor.
Don’t believe me?
Here’s Danny Brager, senior vice president of beverage alcohol at Nielsen: “Consumers are spending significantly less on alcohol because of the closures and restrictions to the on-premise space. People are just transferring their purchases, not buying more alcohol in total.”
Nielsen calculates that off-premise volume sales would need to grow by at least 22% over the same time period last year to make up for the temporary loss of the on-premise gathering space if the country remained in full lockdown but allowed to-go sales from bars and manufacturers. We have seen off-premise volume growth play out like that to some degree during the pandemic, particularly for spirits and wine, but not for the beer/flavored malt beverages/cider category, which has grown there, on average, just 17.5% for the 12-week period ending May 23.
By: Tracey L. Kelley
At press time, details about the future economic impact of the pandemic are in constant fluctuation. However, most forecasters are certain greater challenges loom large.
It’s not for a lack of effort. There were many expedient pivots in the craft beverage industry, from the much-lauded manufacturing of hand sanitizer and flipping stale beer into whiskey to crafting subscription boxes and extending off-premise sales.
So, now what? We asked business consultants to provide their perspectives, and they eagerly offered frank but encouraging relaunch and repositioning action steps we hope spark ideas. Our experts include:
Jacob Halls, partner, and Rick Laxague, partner, Craft Beverage Consultants in Columbia, Missouri. Halls advises in areas of business strategy, compliance and marketing and distribution. Laxague provides plans for distribution, operations and sales and marketing. Laxague said, “Our experts have a combined 150 years in the alcoholic beverage industry, with deep knowledge in everything from sales and distribution, production and regulatory compliance to marketing, package design, event planning, IT, (social) media, hospitality and even values-based executive coaching.”
Scott Schiller, managing director of Thoroughbred Spirits Group, which specializes in helping new and established spirit companies. Schiller said, “Since 2009, our Chicago-based company has helped launch more than 30 distilleries, designed over 50 spirits brands and facilitated three exits.”
Beverage Master Magazine (BM): Right now, there’s still considerable uncertainty in the beer, cider and spirits industries. Is this a time to wait and see what happens, or an opportunity to take proactive steps?
Jacob Halls (JH): Be proactive—successful companies see their environment and adapt to it. Waiting to see what happens to you takes you out of an element of control of the direction of your company. See the changes in the hospitality climate and take note of how they’re not going to be going back to how they were anytime soon and adapt accordingly.
Consider:
1. Were your on-premise sales 80% of your business? Find a way to team up with your prime on-premise accounts to set up partnered order pairs if the state allows curbside/delivery alcohol sales. For example, if you have 200 kegs, sell them directly from the taproom.
2. Slow down production in the areas where your sales drastically diminished, and shift to areas that have picked up.
3. Are you currently doing curbside sales at your taproom to supplement that revenue generation? Have you created a gift card program? Have you developed an online sales system and where legal, delivery/distribution program for your products and merchandise? Have you explored every option of new streams of sales? How have you maintained connection with your customer base?
Adapt—or Get Ready to Sell Your Equipment
Rick Laxague (RL): Be proactive now! If you’re not analyzing your business right now and what the new normal looks like for your brand post-COVID, chances are you won’t recover from this.
Scott Schiller (SS): The spirits business is recession resilient, not recession-proof. I’m not an economist, but at the time of writing this, I don’t foresee the economy recovering quickly. As such, there’s no better time for the well-prepared—whether existing or those in the wings to enter the industry.
I take no pride in writing this, but there are many distilleries, and companies in general, at risk before COVID. Unfortunately, COVID is forcing their hand. The knowledgeable, well-financed, nimble and diversified—such as those with a healthy combination of on- and off-premise ratios and affordable price points—have the potential to flourish. For the distiller in planning, there’s likely to be less competition and a healthy offering of used equipment.
BM: In your estimation, how much of a shift do you think the pandemic and its aftermath will make in the industry?
JH: I don’t want to sound grim, but the taprooms, bars and restaurants will take the largest hit, which passes to the alcohol producers for a decrease in on-premises sales. Walking around or dancing shoulder-to-shoulder in a club for three hours isn’t going to be viewed as normal for a while. If an establishment’s happy hour was its primary earnings time-of-day, and it could seat 200 people with the average space between seats being two feet, how many people concerned about this will want to sit that close to someone?
As businesses adapt, seating space becomes less per square foot. In order to earn the same dollars-per-hour, something has to change in the pricing or the amount of staff—both of which can drastically change customer flow and demographic of the restaurant. Service may go down with fewer staff, causing a less-positive experience and fewer return visits.
If the prices have to go up in order to maintain the same level of staffing, then some customers may now be priced out of the establishment, as they’re financially affected by the pandemic as well.
The brands of alcohol purchased by the establishment may also change: a package by the smaller craft producer that’s normally $45 per case or $200 per keg may be passed over for a cheaper $23 case and $60 keg in order for the establishment to maintain its customer service level of staffing and pricing.
Something will have to give. Bars, restaurants, wineries, breweries, cideries, meaderies and distilleries will suffer and, in many cases, cease doing enough business to survive their existing debt loads.
Industry Veterans Answer the Urgent Questions Owners of Breweries, Wineries and Distilleries May Not Know to Ask
COLUMBIA, MO, May 11, 2020 – With a combined 150 years of experience in the alcoholic beverage industry, the experts at Craft Beverage Consultants (CBC) are well-positioned to help the media cover the effect of the coronavirus on craft breweries, wineries and distilleries. With expertise in topics as far-ranging as how to set up a digital storefront to filing a federal Alcohol and Tobacco Tax and Trade Bureau (TTB) claim to avoid paying taxes on a lower-than-usual quantity of liquid produced, Craft Beverage Consultants’ 12-member team can clearly and articulately explain the basics to the nitty-gritty of how manufacturers and suppliers can not only survive this current period of closures and limited operations but position themselves to thrive as soon as the government lifts its safety restrictions.
“We tend not to know what we don’t know,” says CBC co-founder Jacob Halls, who manages and advises clients on issues of compliance, business strategy, marketing and distribution. “We’re here to handle everything but the staffing, including how to brand yourself appropriately for the times. For instance, we’d advise against brewing a beer and calling it Wuhan Wheat or COVID Cream Ale.”
The CBC team’s longtime-industry veterans and their affiliate partners can provide interviews on best practices to help readers, viewers and listeners make smart business decisions to maximize their profitability and longevity during this period of social distancing and the very uncertain “afterwards.”
They can address crucial topics like:
- Operations: production, business strategy, executive values-based coaching
- Sales: sales, distribution, lead generation, fulfillment
- Marketing: public relations, branding, graphic design, SEO
- Hospitality: front of house management, bar and restaurant consulting
- Technology: website design, e-commerce, mobile apps
- Legal: compliance, trademarks
“This is the time to talk about post-virus,” says partner Rick Laxague, who specializes in advising clients on sales, marketing and distribution. “They need to step their game up. Only the strong will survive this.”
About CBC: CBC’s roster includes local and regional clients like Epic Brewing, Logboat Brewing, Piney River Brewing, SudWerk Brewing and Common Cider Company. The agency was founded in 2014 by Jacob and Beth Halls; Rick Laxague joined as a partner in 2019.
Jacob brings 17 years of experience in regulatory compliance, business strategy, marketing and craft brand management to the company. In his former position as craft brand manager for the N.H. Scheppers Distributing Company, Jacob helped lead his team to winning the 2016 Distributor of the Year award from New Belgium Brewing and to a nomination for the Brewers Association’s Distributor of the Year award. Additionally, Jacob is also the founder and director of the South East Craft Beer Fest/Sampling & Educational Conference. Beth is Director of Business Operations and Coordinator of Charity Operations for the festivals and events run by Craft Beverage Consultants. Early mornings she co-hosts the radio talk show “The Tom Bradley Show,” on 93.1 JACKFM, home of the alcohol-based Food Fest Fridays.
Rick has close to 20 years of experience, a bulk of which was with Crescent Crown Distributing in Arizona. His last role there was Area Sales Manager for the dedicated craft beer division, coaching and leading a sales team to be nationally recognized. In early 2014 he helped take a regional brewery national as their Director of National Accounts and increase that segment of their business from 30,000 cases to almost 300,000 cases in two years, an increase that equates to $4.8 million in IRI dollar sales.
Craft Beverage Consultants offers free 60-minute phone/video conference consultations during which team members can answer a wide range of questions about immediate and long-term strategy in light of COVID-19.
CBC can be reached at (314) 768-0220 or info@craftbeverageconsultants.com. The website is craftbeverageconsultants.com