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What Comes Next?……

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by Rick Laxague, a 20-year veteran of the Industry.

It has been  10 days since the BA release of “Brewery Sales Dropping Sharply, Many Set to Close” (because of COVID-19). By publishing results of a survey that shows 46% of American breweries will close if they have to stay closed for just one month, this article is rattling the industry and imposing fear, sadness, panic and truth to what has been the “elephant” in the industry.

The elephant is that we have TOO MANY breweries open today … and the BA survey proves the coronavirus may swiftly bring the shakeout we’ve feared. It goes without saying that you don’t want to fall into that 46% statistic. So, let’s discuss the reality of what the space is … and was … and what you need to do to live through it.

I turned 21 back in 1999 and that year there were 1,500 craft breweries, most of them brewpubs. Living in San Diego, Karl Strauss Amber Lager was my beer of choice. In 1999 AOL was THE .com, cell phones were just gaining traction, and no one could spell IPA let alone drink one. Fast forward 21 years and today there are 8,150 craft breweries in the US. This makes an average of 316 openings per year over the 21 years. 

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(Ska Brewing Co. Durango, CO. Photo Credit Ray Guerena)

Yes, consumer demand has increased and there are always new 21 yr. old who wants better beer, more flavor, or anything but what their parents had. Breweries are now socially accepted and have become a destination experience for consumers. The retail outlets have changed both on and off premise, wanting, yes, more variety and all trying to get your attention and dollars. 

But while beer has become a HUGE multi-billion-dollar industry, the average consumer who buys beer is not. This pandemic has magnified that, and consumers are experimenting less and buying trusted brands. The taproom sales model has been impacted more so than dine in restaurants.

IF you are over extended and praying to get the EIDL or PPP program from the government just to pay the next few months of lease, then you might be one of the 46% that close. This is a very sad realization and unfortunate to small business across the country.  The beer industry is hard, expensive, tiresome, competitive, fickle at times, and not for the here-today, happy-go-lucky free spirit. Survival and business thought process will change after this passes for many breweries.

Big beer does not have a free spirit, they have a business-oriented spirit. I am not referring to ABI, MolsonCoors I am talking about Boston Beer, Sierra Nevada and Boulevard-Duvel.          They have teams-divisions of smart talented people to run their business.

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Boulevard Brewing Co. Photo Credit Kat Laxague

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 (Dead Armadillo Brewing Co. Photo Credit Tony Peck)

Who will survive?

The breweries that have business as the foundation, quality as the most important wall and branding and good people — employees and partners — that make up the other walls of the business. 

What are you doing during these trying times to circle the wagons or review your business from top to bottom? For example, it can be expensive to have experienced people in your sales and marketing team. If you cannot pay the market price for these types of people, outsource them. The beer boom has produced a lot of smart, hardworking people who learned from big beer and can now teach you how to better operate in order to survive.

Here’s where consultants come in. Consultants can help your paradigm shift as a brewery owner — bringing insight to the foundation of the business and helping guide you through these times. Those of you who can weather this storm will need help with a relaunch plan. The history we are living in as a country and world will be benchmarked by how we respond and recover. 

Pivotal question: Can you afford not to seek out help to get your business back on track?

 I encourage you to seek out a consulting firm. We have a great team of individuals here at Craft Beverage Consultants. Myself, as a partner, know many other great consultants in the industry that like me got tired of working for big companies and want to help genuine, passionate people and not just be a bean or number to big business.

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Brewery Education Training at Yard House GM Conference. Photo Credit Rick Laxague

We're Here to Help

Dear friends in the alcoholic beverage industry,

As we as an industry, nation and planet collectively try to navigate this unprecedented period the coronavirus has brought us, We’d like you to know that we at Craft Beverage Consultants (the other CBC!) are here to answer any question you may have (or not know you have) about not just surviving this time but positioning yourself to thrive as soon as social distancing measures allow your business to function at full capacity again.

If you schedule a free 60-minute phone or video conferencing consultation with me or any of my 11 highly specialized colleagues, we’ll help you figure out any of your immediate and/or longterm business needs, or “everything but the staffing,” as we like to say. We’re not high-pressure sales kind of people, especially these days, so you don’t have to worry about fending off annoying pitches. Make an appointment on our website or Facebook page, or just call us the old-fashioned way at 314-768-0220.

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. 

For example, we can coach you through this season when chain accounts have canceled their spring, in some cases, fall resets and distributors have drastically cut orders. Our director of business strategy and compliance can save you money – now – on excise taxes, caution you to avoid naming your beers in ways that risk alienating your buyers (Wuhan Wheat? Coronavirus Cream Ale? Groan. No.), and secure TTB approval for the tastefully named beers you do make. Our creative director and web team can get your e-commerce site up and running and launch a social media campaign that keeps you top of mind for current and future customers. Our director of storytelling can put you in front of the press so you can tell your story to your community. 

Once you’re ready, we can look forward together. Now is the time to talk about post-virus. We all suspect the legal landscape to look different. But how? And how do you prepare yourself in a way that positions you to charge out of the gate ready to maximize the potential and profit of whatever the “new normal” turns out to be? Please get in touch so we can talk about it. 

CBC’s roster includes local and regional clients like Epic Brewing, Logboat Brewing, Piney River Brewing, SudWerk Brewing, Waves Cider and Common Cider Company, just to name a few.  The agency was founded in 2004 by Jacob and Beth Halls, formerly known as Convergence Consulting; Rick Laxague, joined as a partner in charge of sales, marketing and distribution consulting in 2019. 

Rick hase 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 Rick 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. 

Co-founder Jacob Halls 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 in Columbia, Missouri, Jacob helped lead his team to winning the 2016 Distributor of the Year award from New Belgium and to a nomination for the Brewers Association’s Distributor of the Year award. Jacob is also the founder and director of the South East Craft Beer Fest and several other industry specific charitable event marketing festivities. Beth Halls is Director of Business Operations and Coordinator of Charity Operations for the festivals and events run by CBC, such as the South East Craft Beer Fest, MO Bacon & Bourbon, and many more. 

Again, please reach out to us for anything.  CBC can be reached at (314) 768-0220 or at craftbeverageconsultants.com.

We look forward to meeting/talking soon.

Sincerely,

Rick Laxague, Jacob Halls, and Beth Halls