PORTLAND — April brought a grim outlook for the craft brewing industry.
About a month into the COVID-19 shutdown, a national survey showed three in five breweries said they wouldn’t survive if the pandemic persisted for three more months.
But now nine months in, most of Portland’s breweries are hanging on, scraping by with slashed revenues, minimal staff, and owners and brewers doing what they can to keep the lights on and the beer flowing.
They have done it through innovation and a boot-strap work ethic. Many, through easing of Oregon Liquor Control Commission laws, are delivering beer to customers’ doorsteps. They are building outdoor pavilions. And they are offering packaged beer to-go from their taprooms — and a few have actually grown revenue by increasing distribution to grocery and specialty stores, where sales are strong.
Their efforts have meant only a handful have turned out the lights, and some of those say it’s only temporary until the economy recovers.
Closed are Grixsen Brewing, Base Camp Brewing and Back Pedal Brewing, though they have left open the possibility of reopening if things change. KEX Portland, which opened early in 2020, says it’s closed until spring. Rogue Ales closed its longtime Pearl District pub.
The downturn has also forced some notable beer bars to close permanently or temporarily as well, including The Thirsty Monk, Bailey’s Taproom and the Upper Lip.
A number of enterprises, however, have pushed against the downturn and launched new businesses. Longtime Portland brewer Ben Dobler has opened Hammer & Stitch Brewing in the Pearl District, and restaurateur group Chefstable has partnered with Culmination Brewing founder Tomas Sluiter to open the Craft Beverage Consortium in the former Burnside Brewing and Mikkeller space.
Brewer Sean Burke, whose resume includes The Commons and Von Ebert Brewing, has opened ForeLand Beer in McMinnville, and the owners of Roscoe’s and Saraveza opened a third beer — and whiskey — bar, Tiny Bubble Room in North Portland. And Migration Brewing, while it had to close its Lloyd Center diner, opened a rooftop taproom overlooking Providence Park.
But for the vast majority of breweries, 2020 has been a year filled with fear, frustration and adapting on the fly. Revenue has plummeted, and they’ve been whip-sawed by changing open/close orders out of Salem as COVID cases spiked at points through the year.
And now, as maybe the worst collective year in anyone’s memory comes to a close, the breweries look to emerge at some point from a long, dark winter, as vaccines begin to deliver a glimmer of hope, and innovation and cooperation bring new ways of doing business.
“We’re optimistic — you have to be in this business,” said Garrett McAleese, founder/owner of Kells Brewery in Northwest Portland. “Before COVID, it was already a crazy business where you just hope people show up. And now we’re doing it in a pandemic.”
Struggles and adaptation
When the COVID shutdown came in March, no one knew how long it would last or how difficult it would be. Breweries were forced to lay off entire staffs and close shop.
Quickly, however, they began packaging beer and offering to-go sales from their taprooms. They also began home delivery after the OLCC fast-tracked applications to adjust brewery licenses. Old Town Brewing launched Brewers Market, an outdoor drive-thru beer store.
The next few months brought an additional stitch of relief, as socially distanced outdoor seating and a sunny spring and summer brought some customers out.
But the Northwest’s wet and cold seasons loomed, threatening to make the dark days of lower-revenue winters even more frigid for Oregon breweries. So they started building covered, heated outdoor seating areas, transforming parking lots or street spaces.
When indoor seating was again allowed, they reconfigured spaces to keep groups 6 feet apart. They installed air-cleansing systems. They added protocols to keep patrons and staff safe.
Then, they would be forced closed again. Then reopened. The back and forth has been the hardest for some.
“It’s difficult mostly on the staff with opening and closing,” said Andy Bigley, who with wife Shelly Bigley in 1994 founded Southwest Portland’s Old Market Pub & Brewery. “They don’t know which way to turn.
“We can sustain being closed, but these people are very worried,” he said. “Every time (Gov. Kate Brown) announces a press conference, they are all holding their breath because they think they are going to be unemployed tomorrow. And they have families.”
Bigley has transformed Old Market, building outdoor seating areas and installing electronic air filters. He hopes to install Plexiglas inside when the state allows indoor service again.
But it isn’t cheap. The outdoor structures? “I’m down probably $20,000, and I’ll add about another $20,000 within the month.” And the six rooftop filter units are a little less than $1,000 each.
Then there’s spending money on the right heaters for the patio seating — oh, and the propane.
“I tell you what, running out for propane every day is no picnic,” Bigley says. “But we can bring in enough money so that we can pay our people so we won’t lose them when reopening happens. That would be the death of my business if I were to lose my good crews.”
But aside from all the hustle and hassles, Bigley’s biggest struggle has been what he calls “confusing” messages coming out of state and city leadership. Restaurants, bars and breweries have had to deal with the openings and closings, unclear city regulations and changing restrictions since the state shutdown started in March, Bigley said.
“It’s just very hard to plan when it’s unclear what will ever be allowed under the confusing rules,” he said.
McAleese said Kells’ biggest struggle has been cans, the kind you put beer in. Kells was days away from ordering a couple years’ supply when the shutdown landed, forcing him to skip the order. Pre-pandemic, the brewery had seen its best sales months ever and was ready to implement big plans for packaging and distribution.
But by summer, Kells was through its can inventory, then stymied by a nationwide can shortage — “Coca-Cola put in an order for a billion cans or whatever it was and destroyed the market,” McAleese said. He was told he likely wouldn’t be able to order a significant quantity of cans until 2022.
So he pulled back on packaged beer and distribution sales and began focusing locally, selling more to-go beer out of the pub. That has allowed him to keep going.
“I don’t think anyone is going to make money this year on the brewing side,” he said. “We’re still paying off credit cards from March, April and May when we were closed. The bills don’t stop. You can’t turn off the power because you need to keep the coolers going.
“Right now, it’s kind of do or die. The summer was horrible, but at least we could have people outside. But now it’s freezing cold and dark days. Lot of sighs and moans.”
McAleese gave all credit to his staff, which he said has been “super resilient and flexible. They’ve been unbelievable. Every day we’re coming in, and week to week things change so rapidly. We were completely shut down again for three weeks, now it’s outdoor only again. And everyone’s been pitching in.”
He said he might be able to take out another loan and try to “limp by,” with an eye toward making it through until the vaccine comes and patrons start to return.
Opportunity and optimism
Those dire industry predictions from April didn’t pan out for a number of reasons, said Sam Holloway, a craft brewery consultant and University of Portland entrepreneurship professor. In fact, he said, along with all the struggles came some new opportunities and the chance to rethink operations.
“What the Brewers Association was worried about was that the normal ways people bought beer went away, and they weren’t sure what was going to replace it,” Hollowell said. “But consumers changed how they bought beer. They started using mobile phones, started buying more locally, and in an era of clickbait and immediate satisfaction, beer drinkers were fine with waiting a day if they could get the beer delivered to them.”
He said a “game-changer” was the OLCC changing the laws, which gave small craft breweries the opportunity to “look at what works and react to it, even if that means not going back to the way things were.”
And those new opportunities may not go away when COVID does. Bryant Haley, an OLCC compliance specialist, said the agency wants to help businesses succeed.
“We are going to continue to push for all opportunities we can to pivot with the industry and help them have a life raft,” he said. “These options — delivery, outdoor seating — we’re working with (Oregon’s Occupational Health and Safety Administration) to try to get guidance out to help.”
He said the agency needs to balance that support with making sure the relaxed rules remain safe and sensible.
“We want to make sure the market works in a safe, regulated way — working with our addiction partners and keeping liquor out of the hands of minors and people with addiction problems,” he said.
Hollowell said 2020 might have been painful, but it’s ending “better than we had hoped for a lot of brewers.”
“We didn’t plan on it, but we’ve adapted in ways no one could have predicted, and it’s still working,” he said. “The vision for 2021 is what was a necessity in 2020, but it is working better than some of the old models.”
On the experience side, consumers learned they can have a great beer-drinking experience in their houses and backyards, he said. Breweries can expand on that and continue using social media as a channel to engage people in their homes — a market no one was focused on before.
“For a lot of breweries, their primary customer was the distributor, not the customer,” he said.
That local focus on the customer aligns with how McAleese sees Kells’ future.
“I think what you’ll see from us is little taprooms instead of going out and canning,” he said. “If we want distribution in Salem, why not build a taproom down there instead of a bunch of canning?
“Authenticity is going to play a big role in the post-COVID world,” he continued, “and people are going to want to get back out and chat.”
