THE WAKKER WEEKLY
Issue #1523 – Posted on: 6-April-2020
Editor’s note: As we complete our second week of closure due to the pandemic, we find there is still plenty of activity going on at YOUR Bushwakker despite the doors being locked. Although the brewery is not actively brewing any beer at this time, Bushwakker head brewer, Michael Gaetz, has been keeping a close eye on various beers as they happily ferment away and is also conducting a number of beer transfers from fermentation vessels to conditioning vessels and then to aging tanks. Certain beers which will benefit greatly from this “extended beer aging period” include his brand new Double Honey Imperial Irish Red Ale as well as the 2020 edition of our Baron Bock and a new American Barleywine. Explosive beer flavours are coming your way!
We were also very happy to clean out Chef Mike’s kitchen cooler of all remaining fresh veggies, eggs, fruit and potatoes. We loaded up a pallet of goodness and delivered it to the Regina Food Bank last Tuesday afternoon.
We are also investigating the possibility of making Bushwakker beer available for home delivery with the help of fellow Regina craft brewers, Pile O’ Bones Brewing. We will keep you posted on this exciting opportunity.
In the meantime, continue to practice your safe social distancing practices and remain connected to one another and to us. Try to support local businesses whenever possible. Be vigilant in your resolve to protect yourselves which in turn will protect others. The more disciplined we are at being separated now, the sooner we will all be together again later!
Last Tuesday was a warm and fuzzy kind of day. We cleaned out the Bushwakker kitchen cooler and dropped off a pallet of fresh produce and eggs to the Regina Food Bank. Smiles for all involved while in the midst of the storm.
The annual Prairie Dog Magazine “Best of Food” Regina reader’s poll is back! Deadline to vote has been extended to April 28th! We are pleased to announce that you have nominated your Bushwakker in a record- breaking 23 categories in this year’s contest! Thank you for your incredible support! Those nomination categories include Regina’s Best: brewpub, pub, restaurant,pub server (both Cheryl and Rayna), nachos, appetizers, soup, salad, pub pizza, gourmet pizza, wings, dessert, business lunch, lunch restaurant, sandwich, local burger, chicken burger, veggie burger, local fries, restaurant for a first date, restaurant for a budget date, restaurant for a party AND restaurant for a fundraiser!
Visit the voting site at https://prairiedogmag.com/best-of-food-2020/#// before April 28th and turn those nominations into victories! If you vote in at least 20 categories, you have a chance to win a $500 prize package from the Prairie Dog.
An important message from Regina’s fiercely independent newspaper. Real talk: alt weeklies (and biweeklies) across North America were struggling to survive before the coronavirus shut down the planet. Papers (and their websites) have closed forever in Montreal, Edmonton, Calgary and Ottawa. New York even lost the legendary Village Voice, the original alt! Your donation will help Regina’s Only Alternative weather this storm and, hopefully, move into an era of expanded coverage and more awesome articles, illustration, comics and more. Visit prairiedogmag.com/support to help. Don’t let the Dog die, Regina. It’s an important part of this city’s scene.
What Does the COVID-19 Crisis Mean for Craft Beer? (Part I)
By Jason Foster
As the globe continues to react to the growing crisis that is COVID-19, there has been much talk (in addition to the human costs of the pandemic) about its economic impacts . We are seeing hundreds of thousands of workers in Canada alone laid off, or unable to go to work, while thousands of brave health care, emergency services and other essential workers (including grocery store workers) work around the clock to keep us healthy and safe. Governments are stepping up to do what they can, but we all know those efforts do not fully address the hardship and struggle many are experiencing.
There has, understandably, been much less talk about what this crisis will mean for the craft beer industry in Canada. The pandemic and its aftermath will, I am certain, radically alter the craft beer landscape. I want to offer a few provisional thoughts about what I think might shakedown in the coming weeks and months.
But before I do, I want to say very clearly that I recognize it is just beer. I do not wish to elevate the struggles breweries and pubs are facing at the moment above the very real and very serious hardships being faced by workers across all industries. We all have bigger problems now that require our collective attention. But there are also real people behind the breweries and watering holes we patronize, meaning it is not a trivial matter either. Besides, this is beer website and I write about beer.
I don’t need to tell anyone reading this what is happening. Bars and pubs are closed across the country, while restaurants are take-out only. Liquor stores are open but either restricting hours or shifting to delivery/pick-up only. Breweries are still operating (for now) but taprooms are shuttered. Many have begun delivering beer, either on their own or through a delivery app. Some provincial governments have eased rules allowing restaurants to sell packaged beer and wine with take out orders.
So, determined consumers can still get their favourite local craft beer, they just need to work a bit more to get it. Evenings in the pub with friends are being replaced by virtual bottle shares and Skype visits.
I relay this well-known information to set the appropriate context.
Some beer observers are saying an extended pandemic response will thrust the industry into a full-blown crisis. For example, the much-respected (and entertaining) Jordan St. John, is predicting the number of breweries in Ontario will be “cut down by a third to a half” over the next few months as the crisis continues. Stephen Beaumont and others have spoken about the struggles of craft beer bars that have been forced to close and may not re-open when this is over.
Will it really be that bad?
St. John knows the Ontario beer scene much better than I do, but I don’t believe the situation is that dire across the country as a whole. I think the effects will be uneven – there will be big losers but also companies that find a way through. More importantly over the long term I think the industry will come out the other end changed, but stronger. Business models will have to change, but there will still be business to be done.
In this post I want to explore how the crisis and the longer term economic slump will affect the various players in the industry. In a second post in the coming days I will take a closer look at what the industry might look like when we are out the other side of this period of difficulty.
There are two pieces to the economic impact. First there is the immediate and short-to-medium-term effects of the preventative measures to stem the virus’ spread. But then there is the longer term impact of both a depressed economy trying to rebuild after a disaster (which could take a couple of years) where people have less money to spend, and the subsequent waves of the virus that experts are predicting (which will necessitate additional, hopefully localized, shutdowns). The two elements will affect different players in different ways.
So, let’s look at each party in turn.
First, there are the bars, pubs and restaurants. For my purposes I am only considering those that focus on craft beer, but they are part of a larger industry suffering grave effects. The short term is bad news here, for obvious reasons. I believe most craft bars will weather the short term crisis. It is hell on their employees (who have all been laid off), but their business model remains a robust one, and one of the advantages of being closed is that costs are reduced (but not eliminated). The longer term economic sluggishness will be more problematic, but I am confident they are better positioned than many of their competitors in terms of drawing people back.
Liquor stores (I am talking privately-owned stores – government-owned stores will be fine) are also in relatively good shape. There are reduced sales at the moment, but they (it appears) will be allowed to continue to operate through the crisis and most have a diversified portfolio to smooth out any drop in craft beer sales. Again, the economic slump will impact their sales, but I do believe the adage is mostly true that alcohol, and craft beer in particular, is recession-proof.
Import agencies, on the other hand, might be in for a rocky ride. Already knocked about by the rise of local-ism, importers are likely to see a double whammy. Their brewery suppliers, also rocked by the crisis, will reduce volumes moving around the country/continent/world as they re-consolidate local markets. If the economic recession extends, it is not unreasonable to expect consumers to accelerate their switch to local, for a variety of reasons. I suspect that select brands with strong followings and higher margins will be fine, but overall I anticipate the import craft market to shrink in the foreseeable future.
And now we get to breweries, which is the most complex situation. The big boys will be fine, they always are (until their eventual collapse, but that won’t be because of this crisis). For smaller craft breweries, I think it will depend on how they are positioned. Ironically, production breweries that sell a higher proportion of their beer through retail will likely fare the best. Everyone will see sales drop in the short term, but with liquor stores being open and the rapid growth of delivery (which only works for non-kegged product) the losses should be minimized for these breweries.
Hardest hit will be breweries who rely heavily on on-premise sales of kegs. That market has disappeared and will be slow to recover. Those breweries with packaging capability might be able to shift, but I suspect it may already be too late to do that effectively. I am also concerned for brewpubs, as they have lost all of their revenue stream in one go. Maybe they can mitigate losses with some delivery/pick-up business, but when your business model relies on bums in seats, it will be hard going.
Some of you might have expected me to say that tap room-focused breweries will be hardest hit. I don’t actually think so. Yes, they also have lost their primary revenue stream – people visiting the tap room. But what I have seen so far is that they have been among the fastest to set up delivery/pick-up systems, which I think can help a lot. Their smaller and more loyal customer base is more likely to rally around and support them in the short term – as long as they have a reasonable packaging option available – plus they need to move less volume than a larger production brewery. There is an advantage to being small and nimble.
Finally, contract brewers are in an interesting spot. They legally can’t self-distribute (meaning delivery is not an option), but they also tend to be more reliant on retail sales in stores. That said, without a bricks-and-mortar brewery to help build community-connections, they will be at a distinct disadvantage. In a way they have less to lose (fewer staff, little overhead) but will find it hardest to pick up the pieces later.
The biggest factor in all of this I haven’t mentioned yet. Business models are one thing – and they can change quickly as we are witnessing. But the financial health of the brewery will matter A LOT in the coming months. How much liquid cash to handle ongoing expenses? Do they have a source for additional capital to help bridge the bad times? How fast were they moving product before the crisis?
As in Ontario (as St.John references) there are many breweries in western Canada that were on shaky footing before the crisis, and they may not be well placed to hunker down and wait. For example, Alberta has been through five years of economic struggles, meaning there are a number of breweries that weren’t getting the sales they had targeted in the early going. This crisis will just make all that worse.
I don’t think we will see a third to half of breweries close in western Canada in the next few months, as St. John predicts in Ontario. But there will be casualties – and it may be places we don’t expect. Ten percent is likely, maybe higher. And many others will have to take drastic action to survive.
All of this assumes there is no significant support package for the beer industry coming from the government. I honestly don’t see that happening. Current measures are not enough to change the core economics of the situation. And beer just isn’t central enough to the economy to merit the attention of policy makers. Auto, oil, lumber, agriculture, manufacturing, airlines, transportation, high tech are all bigger players and more likely to see support. Beer, not so much (which is not a criticism, just an observation).
The craft beer industry is in for some rocky times – as is everyone else. Plus these are just my thoughts as I sit in my basement office trying not to touch my face. If you have another perspective or think I am wrong in some way, please let me know. I am always prepared to change my opinion when presented with new facts.
Now that I am done with the doom and gloom, I will turn my attention in the next post to some thoughts about what the beer industry will look like when all this is over.
The bartender asks the guy sitting at the bar, “What’ll you have?”
The guy answers, “A scotch, please.”
The bartender hands him the drink, and says, “That’ll be five dollars,” to which the guy replies, “What are you talking about? I don’t owe you anything for this.”
A lawyer, sitting nearby and overhearing the conversation, then says to the bartender, “You know, he’s got you there. In the original offer, which constitutes a binding contract upon acceptance, there was no stipulation of remuneration.”
The bartender was not impressed, but says to the guy, “Okay, you beat me for a drink. But don’t ever let me catch you in here again.”
The next day, same guy walks into the bar. Bartender says, “What the heck are you doing in here? I can’t believe you’ve got the audacity to come back!”
The guy says, “What are you talking about? I’ve never been in this place in my life!”
The bartender replies, “I’m very sorry, but this is uncanny. You must have a double.”
To which the guy replies, “Thank you. Make it a scotch.”
Let’s keep a little optimism here! The late Bushwakker co-founder and president, Bev Robertson, did not give up when he was faced with the extreme uphill battle of opening the first full-mash brewpub in the province. Taking care of yourself in order to take care of others during this pandemic is something we can all do.