As the Covid-19 crisis and the associated lockdowns, quarantines, and stay-at-home orders persist, our drinking habits and purchasing opportunities are shifting. These changes are creating winners and losers in the beverage alcohol business. While sales for many of the best-known drinks brands are steady or even rising, smaller craft products can no longer rely on bars, restaurants, and taprooms to serve as access points for the consumer.
And so, small beer, wine, and spirits producers and their supporters are left wondering: What can be done to keep these vital and beloved brands alive? Can we save them with savvy purchasing, or is broader governmental action required? VinePair CEO Adam Teeter, Chief Content Officer and Editor in Chief Erica Duecy, and VinePair Podcast Co-host Zach Geballe discuss these questions in this week’s episode.
Listen online or check out our conversation here:
Adam: From Brooklyn, New York I’m Adam Teeter.
Erica: From Connecticut, I’m Erica Duecy.
Zach: And in Seattle, WA I’m Zach Geballe.
A: And this is the VinePair podcast. And guys, we are now in week five, which is crazy, almost at the end of week five. Some people were saying there’s like a light at the end of the tunnel. You know? I’m starting to hear certain dates that people are putting out there. Germany is gonna start opening up their country again next week, which is insane to think about. How are you guys holding up in your sheltering in place this week?
E: I’m actually having a pretty good week.
E: I have to say, I’ve gone through waves. Last week was a pretty terrible week, it was just not a great mental health week. I felt like it was pretty challenging, it was just all sort of down news. But I do think that I’m hearing a lot about innovation and ideas and silver linings and I think that, I’m hoping that in the next couple of weeks we can start to have some ideas around turning the corner on this – getting some good news. But that’s to say that it’s up sometimes, down sometimes, so hanging in there.
Z: Yeah, I think that’s about as apt a description as I’m able to come up with. I would say, the other thing for me that’s been true over the last I don’t know maybe it’s been the last week or so is I’ve been really struck by how used to this new way of living I’ve become. In that, the first couple of weeks it was just like oh my God I miss all these things that I used to be able to do. I miss seeing friends and family. I miss going out to restaurants. I…. all these various things. And now it’s very funny, we just…I was just talking to my wife about this sort of like, OK, what do we do first, when like we can go do something out of the house? And it was so…such an alien thought at this point that I was like, I don’t even know what, like I guess go to a park with our kid and like see friends who have a kid and? It was just…it’s become so…. in this little over a month for me, it’s become this sort of thing that I’m just so…I feel so used to at this point that it’s like, it’s very weird. And I’m a very extroverted person normally and I like to go out and do stuff and it was just so strange to kind of start to think about, if that light at the end of the tunnel that you had mentioned is coming along like….what is that, what am I even gonna do? And I’m not sure. Like I might just stay in my house a little longer just ’cause I don’t know what else to do.
A: Oh God, well, I don’t know. It’s funny, last week I was good, this week I’m like more, just like not as good? Definitely it’s starting to weigh on me more. It was weird, like yesterday the park near my apartment was a lot less full. And like it’s never been so full that I’ve been nervous about being…like taking a walk through it with Naomi but like it was like oddly less full at the time when it usually is….like it used to be like the last few weeks people would be out there from 5:30 to like 7. So like everyone would shut off their Zooms, close their computers and like decided to go outside for like an hour and a half or so. And like this week it seemed like less and less people were in the park and the weather is still…it’s a little cooler but still nice. And we were trying to figure out like why? And we’re like….and Naomi was like, I think it’s just people are starting to be hit by this like whole weight of….the….we don’t….it’s been so long, you know? And maybe they’re just like fuck it, I’m just staying inside. And so that’s kind of hit me this week and I was like God I gotta get out of this. Like all I really want, like it’s really weird, the one thing I’ve been craving more than anything else – this is gonna make Cat very happy, is a draft beer.
A: Like I can make good cocktails at home, I have a pretty good selection of wine, but like I really….I don’t have a draft system! I just wanna go to a bar and get a really good beer on draft. That’s all…you know what I mean? There’s just something about that that I’m like that’s something that I miss. And I didn’t do it like all the time before this, but like when I did it it was always great and now I’m just like… that’s all I can think about. Like all I can think about.
Z: A thing I miss is being able to tell someone else, yes I would like this. To be able to turn my attention from whatever that thing is and then to have it show up in front of me, you know two to five minutes later. And it’s like, I am the by and large the bartender in the house, the sommelier in the house and when and where appropriate I guess the person who opens the beers in the house and so it’s like…not that I mind. But it is this weird thing that I miss of like, “yeah, I’ll have a Manhattan” and instead of saying “I’ll have a Manhattan” and then going and making a Manhattan, I used to be able to say “I’ll have a Manhattan” and then a Manhattan would just magically appear in front of me.
Z: And I do miss that. I miss that sort of like….I guess if that’s my….if that’s the thing I miss I supposed I am fortunate in all of this.
A: I think you are, yeah. It is funny though, ’cause have you guys used delivery yet? I don’t know why but like we haven’t. We’ve really been cooking everything and the friends of mine who have used delivery have said at least it’s like that one like respite, just like, oh, like one night someone make the food that wasn’t me. You know? Or like did the cocktails. But we haven’t done it, have you guys?
E: Oh yeah, I’ve had….I’ve done pizza a couple of times, I mean now we’re out in Connecticut and there’s not that much delivery. So we’ve done pizza and we’ve done a barbecue night, a barbecue delivery and that I swear barbecue never tasted so good.
A: That sounds amazing.
E: Yeah, all I want is someone….I mean and I’ve got two kids too, so I’m cooking and my husband’s cooking, everyone is cooking all the time and the amount of dishes, shocking! Full time eaters in a house, never realized there were so many dishes.
Z: Oh yeah, I used…I’ve been running the dishwasher daily which is really, really weird for me, I’m sort of anti-dishwasher from a dispositional standpoint but it’s gotten to the point, just with two adults and a not-quite-two-year-old in the house we’re going….we’re running a load almost every day and it is wild. I haven’t done any delivery like you Adam, I’ve just sort of been like I’m gonna cook everything but it has been creeping up in the mind for both my wife and I because there are a few things, like barbecue for example that I don’t make at home, not having a smoker or whatever. So there are a few things that we’ve been craving that haven’t been able to have yet and so I think we’re probably gonna go down that road probably in the next few days frankly.
A: So….I think we’re gonna have to do it too. I mean like I don’t know what else I’m gonna do. Like at some point I’m just gonna have to get some delivery ’cause I’m getting sick of cooking dinner every night. So our subject for today’s podcast is, one of the groups of people that we have talked about a little bit but we haven’t focused on fully in the entire podcast since the coronavirus so probably the last five weeks and that’s the smaller producers, right? So we would call them in beer like the small craft producers, the small craft distillers, the small wine producers, and I know as we mentioned before there are a lot of the times people that are getting hit harder because a lot of their focus has been on premise for so long. It’s…. building a brand on premise, seems to be a little bit easier, it’s a better spend of your dollars, right? You can get a few cases in and then it gets moved for you. You know some brands would disagree with that and say that they went off-premise and now were thinking that that was the great strategy but for the majority of like smaller brands most wind up on on-premise before focusing on off-premise. So a lot of them are hurting very badly right now. Whether that’s because kegs aren’t being purchased obviously, their wines aren’t being taken in and or their spirits aren’t being used in cocktails. So we want to talk a little bit about why…. how we can support those brands right now. And also sort of the nature of like what could be coming next for them. Like what’s the outlook look like for a lot of these smaller brands. Zach? I know you have thoughts.
Z: I do have thoughts, yeah. So, I think this is a really fascinating question and in interviewing a few people for the Covid-19 conversation series that we’ve been doing and just talking to other people throughout the industry, I think you’re already seeing a bit of divergence between those three categories, between beer, wine, and spirits. The wine people I’ve talked to are I would say a little less concerned in general, in part because wine by its nature is not a particularly perishable item and while some of them are definitely concerned about cash flow and that’s obviously a real consideration, there are enough that I have spoken to who feel like, if worse-case scenario means that they’re stripping down their sort of staffing, you know they’re not obviously having tasting rooms open, which means that they’ve laid off or furloughed or sort of reassigned people who might be working in tasting rooms, they are probably not working, interfacing with distributors very much but they might be doing more direct-to-consumer sales, which is obviously the most profitable outlet for them. They might be doing more delivery or online ordering in general. And most of them I’ve spoken to say, well, for the most part besides maybe things like rosé, which is really seasonal and very kind of needs to be consumed relatively young in most cases, their product can hold and they might in 3, 6, 9 months be O.K. sort of unloading that product they might be O.K. And if it means that they take lower margins at that point that might be O.K. for them. Beer, though, I mean beer is to me the place where we’re seeing the most issue right away.
Z: If you’re not a brand that has a strong packaging portfolio, so you’re not canning and bottling and you’re just a small craft brewery that’s relying on tap room sales or brewpub or restaurant sales you are probably already basically close to the end, unfortunately. Or you’re having to pivot really quickly. And just…you’re right, Adam. You mentioned when we were talking earlier, no one has an at-home draft system so it’s not even like, even if you really love a brewery, your capacity to really take in much of their inventory is just so limited and you can’t – how many cans and bottles are you gonna buy? A lot of beer is not super long lived in terms of its shelf life, and it’s just that beer is kind of I think the most precarious, and that’s my read on it at least. I think spirits are probably closer to wine, in terms of their shelf life. But they’re also the thing that in a lot of states are much harder, you know, even still, for people to get their hands on and frankly people drink a lot more wine and beer than they do hard alcohol.
Z: It’s just, most people are not going to drink a cocktail or two every single day. Some will, you know, we might. But a lot of people just won’t do that.
A: I think a lot of people are at this point.
Z: Well, maybe so.
A: But yeah….
E: I think that actually craft distillers will be very challenged. One of the episodes I have coming up is with Brian Rosen from BevStrat and that’s a company that represents a lot of small distilleries and they kind of work as a sales and marketing arm to get them placed in restaurants, retail, etc. And one of the points that he made I think is really true, which is: small distillers – these independent guys – they are lacking the kind of financing they need to get through months of lost revenue. So, a lot of these places, they’re relying on the public tastings and tours. They are expecting that they’re going to have restaurant sales and that’s a huge part of their business. And with all of that closed down, and liquor stores being their really only outlet at this point, they are not able to bridge this gap of many potential months of lost wages, of lost income. Plus a lot of them also are pivoting to help make hand sanitizer and so forth. So, it’s a huge amount of business disruption I think across the three tiers, but I think distillers will also be pretty hard hit.
A: Yeah, I think the biggest issue for a lot of them, the distillers and craft beer especially as Zach was saying is that for them too, first of all most people haven’t gotten the PPP that was supposed to come. Right? So, the money as of….as we’re recording today on April 16th has run out so we’ll wait and see if congress is able to re-up that funding. But you know what a lot of them have said to me is like all that’s doing is allowing them for two and a half months to hire people back, to do who knows what? It’s just to put people back on their payroll, but it’s not covering or helping them cover all the losses that they’re making or all the lost, you know, sales of products, food, etc. if they had a restaurant. And then if they don’t open for the next two and a half months, they’re basically back to square one which is zero revenue again and trying to figure out what the hell they do. And its…its crazy, right? So the big question becomes like, how are these people going to survive and what does the path forward look like? Because I think for a lot of these places it’s dire, because for some of these smaller producers especially on the beer and distilling side, because like you said they’re basically half…a lot of them are half-restaurants, half-tap rooms, half-small brands, right? Because a lot of times the law allows for that, and so right now they’re not able to get a lot of their products out there. I would say one of the best ways, hopefully, is for us to really lobby Congress. Right? I think like we need to basically start contacting our congressional leaders and say you need to do more to support these industries. Right? Like these are vital industries to the communities, especially in terms of the breweries, right? Like we talk about them a lot as being local gatherings for families and friends, etc. They’ve kind of become places where it’s acceptable to bring young kids at some points during the day and you can get together with people and like they need help and the only real way I can see that is through law. And so I think a lot of that is gonna have to start happening really soon is like we need to start calling our elected officials and saying, “what are you doing to help?”
Z: Yeah, and I think one of the big points to emphasize here is you know, we’ve talked a lot about, in the past on the podcast you know kind of how people are still drinking, people are still obviously having wine and beer and spirits at home. But one of the big things that’s changed, and I know we’ve talked about this and it’s as Erica mentioned it’s in upcoming episodes of Covid-19 Conversations, is a lot of that drinking has really shifted to some of the most well-known brands. I mean those were always obviously the dominant brands in the marketplace but it’s even more extreme now than it used to be, in part because as I mentioned before some of these smaller producers just have no real way to get their product in front of even consumers who want it. But a lot of it too is just so many of us are….what we do and access is so circumscribed by what the grocery store near us happens to carry or what the delivery service in our area happens to stock and we have so much less agency than we’re used to. And that’s why I think Adam’s advice on talking to your congressional representation in your state, government as appropriate is really good advice. Because unfortunately this is one of the few times that I can really think of, maybe the only time I can think of where you can’t do what I often encourage people to do in these situations otherwise, which is sort of vote with your dollars. Because a lot of the products that I might want to support, I really can’t or if I can its extremely difficult.
Z: Or I have to really seek it out and I wish I could say to people, “Oh, there’s an obvious solution.” I mean, I definitely know that some smaller producers in the Seattle are looking at finding ways to kind of partner together to sell product when and where possible. They’re trying to get aligned with some of the restaurants that are still doing delivery and are offering beverage delivery as well. They’re working to get in front of local grocery store chains that are smaller. But again, think about this, right? One of the sort of advantages of being a buyer as I was for years is you taste with your representatives. You know you taste with people from distributors, from individual producers. That’s not something you do very…you can’t really do anymore, right? Like it’s not safe to be in close proximity to these people. Yes, maybe you can get a sample bottle and that’s a thing although that’s also an expense for the producer, although maybe one they’re willing to take on, but it really does encourage and has encouraged the sort of mindset of we’re not gonna make any changes to our inventory. We might re-order ’cause we’re selling through things, but we’re not gonna bring in new product, we’re not gonna change our product mix-up, we’re just gonna kinda keep doing the same things we’ve been doing to get by. And that’s fine on one level, but it really does disadvantage producers who don’t have a massive distribution chain that’s nationwide.
E: Definitely. I think one of the best things that – Zach I know that it is an additional step or two – but I do think it is worthwhile, to go on social media if there’s a brand you like. You can look on their social media channels. Right now I just opened up my feed and there’s a post from Privateer rum and Maggie Campbell who’s the distiller, she’s doing “Ask me Anythings,” she’s doing all sorts of face-to-face kind of interactions. Whether they’re Facebook Live or otherwise. I find that at this moment distillers, winemakers and brewers are more available and more in front of their customers than ever before. One of the episodes we have coming up on the Covid-19 podcast is with Dan Petroski, who is a winemaker at Larkmead and Massican. Massican is a small winery that he owns. He said, for the first time in his newsletter recently, he gave out his cellphone. Now, people have been texting him and calling him and just wanting to talk with him. And while he did it out of a sense of wanting to connect with his consumers, at the same time that has led to sales conversions. And it has led to people calling him to seek out where they can find his wines, and how they can buy them. So I do think it is a very useful piece of advice to check your social media feeds – any brands that you’ve had before that you like and that you want to support. They are more than willing to hop on the phone with you or to direct message you and tell you where you can find their product. Because the best ways to support your local businesses is to reach out to them directly.
A: Totally. It really seems to be the only way and it’s the way….even if there are other ways, it’s the way that they receive the most benefit, right? ‘Cause no one else is taking a cut, no one else is really involved at the middle man, it’s just getting to them and saying like how can we help if we can? And then its supporting legislation down the road that helps people survive this. ‘Cause I think the biggest thing we need to really think about is there’s help now but there’s also help that has to come at the end, right? And so, once this is over and we’ve re-opened, what programs are we providing for people? ‘Cause like there’s a lot of breweries I love. There’s a lot of wineries I love. I can’t buy them all once this over. You know? Like I can run and do everything at the same time, which is why I am fearful that a lot of people that do not deserve to go out of business will go out of business, just because like there’s just not gonna be enough people that are gonna come…go to every place they love right when this this is over. And so, getting on your phone and calling your congressperson and calling your senator is really, really important.
A: Yeah. And it’s also the only way that you can, as Adam is saying, save this entire industry as opposed to a select few particular brands that you happen to care about? I think it’s important….I think look, there’s a reality that we have to face here, which is that there’s going to be, there already has been and there will be attrition that comes out of this? Any incredibly traumatic, stressful period of time whether it’s a…just a purely financial crisis, a health crisis, or both is going to just inevitably cause some businesses, some producers that we dearly love to go out of business because it’s just there’s no two ways around it.
Z: But for trying to keep the previous pre-Covid sort of landscape that I think we all really appreciated in this country, you know, a really diverse set of producers of beer, wine and spirits, the likes of which we’d never seen in this country prior, we have to…yeah, it has to be a community but also a sort of national effort to keep those things alive. And it’s not just with this industry, obviously there’s lots of other industries where this is true. But obviously this is ours and the one we feel passionate about. And Adam is right buying a bottle of wine, a bottle of gin or a six-pack of beer from a local producer is one, important and maybe slightly more rewarding immediately way to support them. But it is really true, taking that time to reach out to your congressional leadership, to encourage people that you know, your friends and family to do the same. That’s the only way that there’s going to be programs in place to keep these industries alive not just during this crisis but as Adam mentioned afterwards because there’s gonna be a lot of, essentially….there’s gonna be a lot, it’s gonna be a long time before these industries really get back to full strength.
A: And I want to be clear here, like I’m not talking about just, people might be listening and they might be like “Oh, Adam’s sitting here and he’s talking about like handouts,” that’s not all that I’m talking about. I’m talking about the loosening of laws as well to allow people to continue to do the things that they’re doing now, right? So, we talked about this last week but I’m talking about us lobbying our lawmakers to say: hey, let’s allow cocktail delivery to continue until people get back on their feet. Or for the foreseeable future, or maybe forever, right? Let’s allow for a lot of these restaurants to also sell their bottles to go, right? So like if I come into the restaurant, I have a great bottle of wine that night, why can’t I buy that bottle of wine to-go at a 25% reduction in price or something from the list? Why can’t I do that?
A: And then I can take it home and enjoy it down the road. Like this will allow people to bring in more revenue now. Like those are the things that we need to be talking about.
A: So that these businesses can find other revenue streams in the short term in order to, you know, make more money right when they open. And if we don’t do that, if we just say, O.K., everyone has to go back to business as usual prior to Covid-19, it’s gonna be really hard and we’re gonna lose more businesses than we should.
E: Yeah, and I don’t think we can go back to business until there’s a vaccine, like we can’t…I don’t think there’s a real tangible path forward for a lot of businesses. I mean imagine how far you’ll have to be spaced-out to really meet those social distancing guidelines. A lot of businesses will not be able to accommodate that. So its…I think yeah, I absolutely agree that the congressional and the governmental responses are going to be key to this. But I think that, even with that there will be a big culling of a lot of businesses that we love and support.
A: Totally. Well guys, hopefully the moral of the story here is: talk to your elected officials. ‘Cause it’s gonna be the best way…I know we talked about this a few months ago when it came to the tariffs and it’s time now again. If you listened to us then and contacted your elected officials, thank you. Please contact them now. The hospitality industry as a whole, whether its craft producers like we’ve talked about a little bit today or just restaurants and bars in general is one of the largest employers of people in the United States. So, it’s really important that we support this industry so that everyone can get back to work. So please, please, please call them and tell them to support the industry, it would be….it’s vitally important.
Z: 100% right.
A: So, thank you guys so much for listening as always and Zach and Erica, I’ll talk to you next week.
Z: Sounds good.
E: Hang in there!
A: Thanks so much for listening to the VinePair podcast. If you enjoy listening to us every week please leave us a review or rating on iTunes, Stitcher, Spotify, or wherever it is that you get your podcasts. It really helps everyone else discover the show. And now for the credits:
VinePair is produced and hosted Zach Geballe, Erica Duecy, and me: Adam Teeter. Our engineer is Nick Patri and Keith Beavers. I’d also like to give a special shout-out to my VinePair co-founder Josh Malin and the rest of the VinePair team for their support. Thanks so much for listening and we’ll see you again right here next week.