When the Faucets Stop


What the literal f*@k just happened?

Oktoberfest is cancelled. Taprooms and bars are closed the world over, some never to reopen. Our Asian neighbours in India, Thailand, and the Philippines are, or have at some point been, under complete alcohol sales bans. Many countries are under some form of lockdown, while most are practicing social distancing with varying degrees of enforcement and efficacy.

The pundits pontificate mightily about when things will restart and what the new normal will look like, the only thing for certain at this time is that things have changed inexorably for the worse. There will be a recovery, but it will not be tomorrow. Unemployment continues to set new records as world economic markets roil.

Times like these serve to clearly illustrate the elasticity of demand, as most of those who still have an actual income are not spending it on luxury items. This is not to say that there has been no silver lining. Online service providers like Zoom, content providers Disney+ and Netflix, as well as merchandizers such as Amazon have leveraged their online platforms to increase stock performance in these dark times. However, most hospitality operations have not faired nearly as well.

Small guys are getting pummelled, but that is not to say that established players are in any way immune. The Brewer’s Association estimates that nearly half of all US craft breweries would cease operations if shutdowns continue through July. Stop. Enough obsessing over what the future may hold. Inhale. Exhale. Now let us take collective stock and focus on what we can control.

Damage Report.

Coronavirus has particularly devastated the bricks and mortar operations who have been required to close their retail outlets to prevent its spread. This goes doubly for those that also have a production facility. Sadly, these protective measures eliminated the primary source of income for most craft brewers the world over.

Craft beverage everywhere have been scrambling to boost their e-commerce presence, as well as generate new revenue streams. As those that still have jobs are counting every dong, dollar, peso, bhat, or other form of currency they may have. Those without jobs are being forced to re-evaluate what even qualifies as essential in this time of global crisis.

As bad as things may seem, now is not the time to panic. Now is the time to focus on necessity, take stock of your respective situation and chart a course, or three, through the storm.

Just how bad is it?

Craft alcohol fermentarians the world over form a wonderfully dysfunctional family. The very nature of our products and their consumption promotes a widespread sense of camaraderie. The girls and boys that you spend 10+ hour days toiling next to can become even closer than family, as you may spend more waking hours with them than you do at home.

Although, this sense of unity makes tough financial decisions all the more personal. Even the business owners that are not paying themselves will eventually find it impossible to maintain their staff on reduced pay, much less full salary, so long as revenues remain depressed. Most brewers are already struggling. One place where this holds particularly true is in Manila, where the lockdown and the accompanying alcohol ban were recently expanded by more than two weeks.

Joe's Brew Taproom has sat empty since the Manila government imposed an alcohol ban

Marco and Joe Viray from Joe’s Brew in Manila are trying hard to keep as many of their staff on payroll as possible. Despite their best efforts, they have still had to furlough half of their staff as of this writing. Marco hopes that they will be able to bring back all of their staff because he says, “people in the Philippines live by the concept of no work, no pay.” You either have a job, or you don’t have money. The brothers are among many that question how long they can endure.

This is not meant to be a depressing article, shit is just bad right now. Hopefully, we can all acknowledge that is a fact. The road to recovery will not be an easy one, fact again. Fortunately, this nascent Asian craft brewing industry is comprised of some of the toughest people that I know, another fact. We have been lucky to have years of unfettered growth, now is the time to find out how we handle adversity.

What Now?

Even in Vietnam, where alcohol sales were never banned, sales volumes are down dramatically. The country breathed a collective, and properly masked, sigh of relief as retail businesses opened their doors again after weeks of delivery and take-away only.

Vu Phuong and team at AVA in Ho CHi MInh have taken pay reductions to avoid layoffs' during the downturn

“We were very happy to sign more than a dozen new accounts as the bars opened back up,” says Phuong Vu. She is the brewery manager for AVA Brewery in Saigon, where Phuong makes her own beer under the AVA name, as well as several popular VN brands under contract. “We are lucky that our staff is very close, they were all willing to take a temporary pay reduction so that we did not need to lay anyone off.”

As lockdowns begin to ease, on question on everyone’s mind remains. When will business return to whatever the new normal may be? As we work to redefine our reality, certain things are becoming more apparent. For instance, Darwin was on to something; those best adapted to their environments are more likely to thrive.

Producing hand sanitizer has helped Elias Wicked Ales strengthen their bonds to the local community

Now is the time to be innovative and experiment. Even if your government forbids you to sell your beer, find other products that you can make. Never made hot sauce? Give it a try. Soap? Why not. Back on 14 March, when Elias Wicked Ales & Spirits (Manila) was faced with not only an alcohol ban, but a regional shortage of disinfectant, they decided to make a new product. Raoul Masangcay turned his unsellable ethanol into hand sanitizer for local hospitals in a program that he calls “Spray for Manila”. He has manufactured and donated 1500 bottles to date. “The name,” Raoul says, “is a play on pray for Manila. We are fortunate to be licensed as a distillery to be able to help out like this.” Many others face difficult regulatory roadblocks in obtaining the license, even now, when it would allow people to contribute to the recovery.

Now you may be thinking, “How does helping those in greater need preserve capital reserves and reign in overhead?” Fact: it doesn’t. It just makes the world better in a not so easy to quantify way. The evolution that I am preaching involves becoming better people through adversity. The first step to adaptation is realizing that you can change for the better. Do not dwell on the negative and those things that you cannot change. The second step is charting a path to get to that next goal.

Do Not Overthink It.

You are human, and as such, you will make mistakes. In fact there is a very high likelihood you have already. The very second that you commit a plan to paper, it is wrong. Be flexible and always aim for 80%, the other 20% will come later. If you wait for perfection you will die waiting. It is a far better goal to endeavour always to make new mistakes and follow what you know to be right.Seek to continuously improve, not only as a business, but as a person. Plan, do, check, act, repeat. I think someone wrote a book or two about it.

Being a production guy at heart, the eerie silence that accompanies a shutdown can be dangerous. The machine noises and sounds of violent fermentation that once appeased the head voices have all but disappeared. Things are going to get weird.

In order to help you prepare your facility for the other side, I have compiled a list of shutdown commandments for your entertainment. Sit back, pop on some snake jazz, and work your way through the following list. If you have already completed these items or don’t know what snake jazz is you are beyond my assistance, congratulations.

The Shutdown Commandments:

I. Time To Lean, Time To Clean

A former boss of mine used to say that at every opportunity he could, no matter how forced the situation. It got old quick, but clearly still resonates with me today. What a glorious time to get obsessive over every square millimeter of brewery surface! Sort, set in order, shine, standardize and sustain.

If that does not sound familiar, then see commandment VII.

Down time is the perfect time for deep cleaning, a time to revitalize your soul through the catharsis that is physical agitation of unwanted proteins and organic matter. Move equipment, reorganize the walk-in, sort through that container that has been collecting assorted junk since you did your initial buildout. Foaming caustic is a wonderful tool for scrubbing the outside of tanks, just make sure that you use soft bristles to avoid scratching the now shiny tanks. Update the cleaning schedule, now is a great time to make new habits.

II. Acid Is Your Friend, Use It

Everything has been cleaned? Wonderful! That means that it is time to attack the inorganic through passivation. If you have not already, consult with your local chemical supplier for the best product to fit your application. Most CIP acid blends have some blend of phosphoric and nitric acids and dosage can vary widely.

Now for the caps: ACID IS DANGEROUS, PARTICULARLY AT HIGHER CONCENTRATIONS NEEDED FOR PASSIVATION. For most applications, I recommend using an ambient temperature loop run for at least a couple hours, again, consult the manufacturer for specifics about your product.

Depending on tank manufacture, product volume, and operating conditions, passivation is recommended every six months to a year at minimum. Don’t forget about your draught lines! Your beer is only as good as the last pipe it ran through. After all of your brewery equipment is passivated, do your taproom, then the warehouse, then the office, then anywhere else you have equipment that touches beer. Use acid go nuts.

III. Get Your (Quality) Priorities Straight

You have a quality system, right? You followed the strict developmental hierarchy: 1) GMP 2) HACCP 3) Standards 4) Process Control/Analysis 5) Product Stability 6)Special Projects/ Preventive Maintenance? It is critical that you complete each step in turn!

If you remember nothing else from this entire article, commit to memory the sequential order for developing a quality regime and stick to it. I’m serious here. If you jump to standards before you have Good Manufacturing Practices in place, your entire operation will spontaneously combust, starting with your cash reserves. Consider yourself warned. What’s that, you have no reserves? One less thing to worry about then. Queue sad noise of choice.

IV. Get Ahead of Failure

Let’s ignore what I just said about priorities and skip ahead to Preventative Maintenance. Go ahead and raise your hand if you have PM system in place. Anybody? Bueller? That’s what I thought.

Many people ignore it because in the short-term, it costs more money. This is why many breweries rely upon breakdown maintenance, or as it is know colloquially, “If it ain’t broke, don’t fix it.” As it is known in reality: “Fix it as quickly as you possibly can because we are paying people to stand there and watch you. Who cares how much it costs, that shipment needs to leave in 9 hours! Just pay them and get the super-ultra-high priority shipping.” Sound familiar?

Spend some time taking stock of the machines that you depend on. Does it use oil? Have you ever checked it, much less changed it? Start with a simple list of all the equipment that uses consumable elements or requires any other manner of maintenance. At a minimum, track service dates, length of service, cost of replacement, and supplier contact information.

Use this time to talk to your accounting team, so they can explain depreciation and you can jointly justify what backup parts and equipment you should have on hand. Even basic tracking can make a huge difference in deciding future purchases and controlling costs. Best of all, it costs almost nothing and can save you big in the long run.

V. Experiment to Inspire

You started a brewery for a reason, hopefully it was not for the fat stacks of cash. As the saying goes, the best way to make a small fortune in craft beer is to start with a large fortune.

Chances are that you are not moving the same volume that you were 6 months ago. Chances are even better that the volume is less. You may even be looking to dump beer that is aging out (see the next commandment). Now is a great time to play with smaller batches and new recipes, or tweaks to existing ones.

As taprooms begin to reopen, people will be much more wary of going out for both health and financial reasons. Inspire consumers to get back out there, give them something new. As we have established, times are tough for everyone. Show your resilience and character. Show them your innovative spirit and dedication to quality.

Do not push substandard product onto your consumers. As tempting as it may be to try and sell borderline goods, any short-term gain will be quickly lost to long-term repetitional damage. To anyone thinking of serving me a 6 month old session IPA pushed through a line that was not cleaned in 8+ weeks, f*@k off in advance. Show people the pride you have for what you do, or pack it in now and find a new career.

VI. Reduce, Reuse, Recycle, Rethink

Instead of running all of your old beer down the drain, attempt to salvage what you can. Try and do something more cost effective with it if possible.

This harkens back to Commandment V, but take that old beer and make soap, ice cream, dog biscuits or something else with your outdated product and ingredients. Should you have a still like Raoul, or a friend with a still, you can of course make spirits. To be saved for self-disinfectant, future sale, or conversion into sanitizer.

Those with a high-quality refrigeration system can try freeze-distillation. You will not likely be able to get product over 50% alcohol, but it would be fun to play with a historic means of beer production (Eisbock). For those operating wastewater treatment systems, please keep in mind the toll that dumping large amounts of beer will have on your system. Wort has high levels of BOD and TSS, particularly if yeast, hops, and other trub components are not separated. Dump slowly and dilute with water, ideally using spent caustic to help neutralize the pH.

VII. Exercise Your Thinky Parts

Pick up a book, watch a webcast, take a class, solve a Rubik’s cube, develop faster than light travel. The possibilities are endless when you actually have time on your hands. If social distancing has done one good thing, it has helped people develop useful online content. So many international and regional events have been cancelled. At least some of them have been able to successfully make the jump to an online platform.

With so many free virtual conferences to take advantage of, it would be a shame to miss out. You can watch presentations on all manner of topics at your leisure without having to pay the thousands usually associated with conference travel. To be clear, by leisure I mean in your underwear. Check out all of the great resources offered by craftbrewersconference.com, probrewer.com, brewersassociation.org, and SEA Brew, of course.

VIII. Get Real

Heart to heart with your sales team, even if that is just one guy, and get real about forecasted demand and how long your current inventory will last. How much more package product are you doing now and do you plan to do?

Adjust your planned purchases or contracts accordingly. Pre-order supplies for new plan cans, labels, one-way kegs, etc. Dealing with materials is much easier than dealing with people though. Now is also the time for some serious staffing decisions. What operating costs can you sustain and still break even? It can be hard to let people go, but now is the time to cut dead weight. Times of crisis do an extraordinary job of highlighting people’s character. Stress fuels the conflagration of contempt, conflict, and conceit in some people more than others. Simply put, bad times can bring out the worst in people. However it can also bring out the best.

If you have already talked to your staff about the mechanics of what to expect over the next few months, now is the time for a heart-to-heart. Something that I have always told staff is that the second that you no longer want to work for me, don’t. I want my employees to be happy and engaged with what they are doing, even if that means working for someone else or in a different field. Reward those who have applied themselves, and clear room on your roster for more like-minded people.

IX. Keep Calm, Take A Break From Routine

What better time to reset? If possible, dedicate a day to brainstorming with your team. Use the opportunity to engage with customers and invite them to a virtual town hall. Why not allow participants to vote for your next innovative small batch? People involved in the process, however small, have some ownership and will be far more likely to visit and drink “their” beer.

It can be painfully awkward to get your production team in front of a camera, but that is part of the fun. As it allows you to showcase the personalities that lurk behind the tanks. Most importantly though, you get feedback directly from the people who you will pull you through to the other side. At worst, you might stand up whilst forgetting to wear pants. At best, you could grow your following and generate some fresh ideas.

X. Support your friends

The craft industry is close-knit and know is the time to show it. If you are not able to visit a taproom then order some delivery or buy off-premise. This goes doubly for supporting the businesses that can no longer sell alcohol, if they do not sell food then get a t-shirt. Do what you can to help others. Every single can, bottle, and chicken wing helps.

While undoubtedly welcome, your support does not have to be monetary in nature. Cash can be hard to come by for us thousandaires at times. Fortunately, word of mouth continues to be one of the best marketing tools available and everyone can afford to do it. Tell people about the miraculous mead, celestial cider, or triple cheesecake passion fruit milkshake Tahitian vanilla West New England Brut quadruple dry-hopped DIPA, and where they can go to try it. Maybe you are not in a position to buy a round for the house, but you can help to sell it for free.

Dimitri Griboff hopes Brewerkz's move to canning will help them grow sales during and after Singapore's "Circuit Breaker" period

Where to from here?

No one interviewed for this article spoke with any amount of certainty about when their respective market would reach any manner of equilibrium. The man in charge of the beer at Brewerkz (Singapore) Dimitri Gribov summed it up succinctly, “The hardest part is yet to come. We have done our best to adapt and adjust to the situation like many, with new packaging and a new online sales portal. We are not certain what the future holds, but we are preparing for a long recovery.”

The craft market’s capricious nature can be difficult to deal with in the best of times. The product that you think will lead the market bombs horribly, while you cannot make enough durian seltzer to save your life. Shit happens. That is just part of the fun when it comes to cultivating a vibrant, young craft beverage market. It is all about the boundless opportunity.

Here we stand upon a precipice. On one side, a sheer drop into the abyss of failure. On the other side, a Sisyphean struggle for survival. You know, business as usual for our fledgling industry. I am glad to be standing figuratively shoulder-to-shoulder with some true heroes when it comes to this fight. Literally of course, it is more like shoulder to mid-bicep. Regardless of our differences, be they height or hazy IPAs, I hope people can learn to put them aside to unite in these tough times. The pain is real, but we can all get by with a little help from our friends. Fact.


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Contributed by:

Dave Byrn is the Managing Director of Crafted Beverage Consulting with extensive brewing experience in the USA and Asia. Based out of Vietnam, when not helping clients fulfil their brewing dreams he is a contributor to SEA Brew

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