How New Belgium is Navigating Now
While some of the biggest craft breweries are struggling amid COVID-19 uncertainties, some are still growing and haven’t yet laid anyone off.
That seems like an anomaly in these times, and who knows what the coming weeks will bring. But for now, New Belgium chief Steve Fechheimer says they haven’t had to lay anyone off – and they’re growing double digits, driven by off-premise Voodoo Ranger numbers.
Steve says the brewer’s March trends, through the 17th, are up 19% overall. A 31% jump in the off premise is driving that. That represents “a couple point acceleration from where we were March 10.” (Note, the Voodoo Ranger family, which is regularly about half of the company’s total depletions, is up almost 64% month to date through March 17, vs. up 41% YTD.)
And, like everybody right now, they’re seeing a “huge shift out of draft and into package.
“We’re shipping very few kegs right now; we have kegs in inventory, so we can fulfill orders as they come in,” said Steve. “But we’re not running our kegging line right now because there’s just not demand for it.”
Many distributors have cancelled all draft orders from most suppliers. Steve thinks that’s a good thing.
“Honestly, we’re super appreciative of our distributors making that call and making it decisively,” he said. It’s “good for [the industry] in the long run that distributors are reacting so quickly to these changes, to get their inventory right so we’re minimizing potential bad beer or out of date beer issues down the road.”
That begs the question, how does one forecast in this age?
RETAILERS ARE FOCUSED ON CORE SKUS. “It’s certainly been difficult,” Steve answered. “But what we’ve been consistently hearing is, retailers are focused on core skus. So for us, that’s about … Voodoo Ranger and all variants. And that’s about Fat Tire, and variety packs. That’s the majority of our business. And we’re really prioritizing those skus.
“We’re also seeing a shift out of 6 into 12 packs,” he said. “So we’re managing that as well.”
But just because they haven’t had to fire or furlough anyone doesn’t mean they haven’t made seismic shifts in their workforce, or their best practices. They have.
They’ve closed all of their taprooms in North Carolina and Colorado, pilot brewery in Denver, as well as in San Francisco, where they have the Magnolia brewpubs.
WHAT THEY’RE DOING DIFFERENTLY AT THE BREWERY? Steve says all of their office workers have been working from home for well over a week now.
“All of our sales teams have moved to virtual meetings,” he said.
At the brewery, they have “two distinct workforces that aren’t crossing over, to minimize risk of infection. We’re large enough that we can keep two separate shifts; that’s been a real priority for us.”
There are also precautions about “how brewing interacts with warehousing and packaging.” And their environmental health team has instituted “a ton of new protocol over the last 10 days … to keep the workforce safe.”
“We also have our own on-site doctor,” as has long been the case at New Belgium. “Dr. Patti, she’s great. We have our own COVID-19 task force, and she’s a really important member of that team, bringing that sort of direct health guidance” to the brewery.
They’ve also instituted a COVID special leave policy, to allow people who have been impacted by COVID-19 to stay home and receive pay without dipping into their regular PTO (the measure also takes into consideration caregivers). They’re also encouraging people who don’t feel well to stay home.
WHERE LION LITTLE WORLD BEVERAGES FITS IN. Of course, New Belgium is in the enviable position of having a larger company, Kirin’s Lion Little World Beverages, to help financially and beyond.
Steve noted that they’re “fortunate to have the financial stability that comes with having a partner like this,” as well as “access to some of their broader capabilities and understanding. It’s really hard for us to hear about all the job losses in the industry right now… we just feel fortunate where we sit, we’ve got a ton of empathy for our friends in industry, and our customers throughout the hospitality industry who are really struggling right now.”
SOME CROWLER GOODWILL. A little feel good anecdote. A barrage of to-go sales have made for Crowler shortages (see next story). But New Belgium shared some of its stash with a local brewery in need.
“Denver- based Ratio Beerworks reached out to us in need of some crowlers,” communications chief Leah Pilcer shared. “We were able to move quickly and provide them a pallet so they could continue to beer to go program.”
ETC: MORE DTC. Finally, the brewer shared that they’re doing more direct to consumer sales, naturally, as the on-premise has been largely shutterd.
They are utilizing Drizly for delivery at home, and are featuring it on their homepage for customers.
They’re also promoting new DTC Specialty limited release bottles, which are not available nationally, and only shipping to select states (Washington, D.C., Vermont, Nebraska and Nevada). “We fulfill orders at our warehouse and then direct ship to consumers”, said Leah.
“WHERE’S MY CROWLER?” JEREMY RUDOLF ON THE CURRENT CROWLER SHORTAGE
As many craft brewers are acutely aware, current on-premise restriction measures to help contain COVID-19 have spurred a run on takeaway beer from breweries and restaurants.
And that has meant a shortage of one of the most convenient takeaway receptacles: The Crowler.
Specifically, the 32 oz. Crowler is temporarily out of stock – and just in the last day, 25.4 oz. Crowlers are now currently out as well.
That signature 32 oz. can option — normally 90% of their can business — is on back order until about April 6, Jeremy Rudolf told CBD. (The 25.4 oz. format should be back in stock even sooner.)
Jeremy basically invented the Crowler, and now runs Crowler Nation, a subsidiary of CANarchy and Oskar Blues, where the package was invented around 2012. Crowler Nation sells the Crowlers and Crowler Nation can-sealing machines. They sell nationally, but their largest markets are California, the Carolinas, and Colorado.
SO, WHEN WILL BREWERIES GET THEIR NEW CROWLERS? “We’re on back order on the 32 oz. cans in both colors, and they are being produced this week, and then they’re being shipped as quickly as possible to all nine warehouses around the country,” he said. Then they’ll be chopped up into everyone’s custom quantities, and shipped as soon as possible.
“We’ll be back selling with two to three more trucks behind that. Everything will be firing off as soon as possible.”
Jeremy noted that the imminent round of 32 oz. Crowlers “will be shipped in the order that they were received, and we will get through it, but I imagine it will take a week or two to get caught up.”
Ball produces the Crowler cans, and they currently do it quarterly, as they don’t have a dedicated 32 oz. line. Despite having pushed for the most production possible, Jeremy said, it’s not been enough to survive the last gap between runs.
“We always produce more than we need, but it still wasn’t enough,” he said. They’re pushing for future runs to start earlier.
TWISTEE CANS ALSO SEEING “HUGE DEMAND.” For those operations that don’t have a Crowler Nation sealer machine– either breweries, or increasingly, restaurants who have temporary bev alc to-go sales privileges – Twistee cans are a good option, and they are seeing a ton of demand.
“That is a can with a resealable lid on top already, that you just fill and send out (like those giant Monster cans you see with the dome-like tops),” said Jeremy.
They’re sold out of the 16 oz. Twistee size, but they have 12 oz. and 19.2 oz. options still, as well as the 25.4 oz.
“So all these places that are now scrambling to get into the Crowler game don’t have to buy a machine,” he said.
BOTTOM LINE: GET IN THE QUEUE. “There are people that have cans that won’t in a couple of weeks,” Jeremy says. “They are getting in the queue, which is smart.”
“As orders continue to amass, we’ll probably announce future orders being received this week having a ship date of a week or two later than what was ordered last week. We’ll just have to keep moving it, based on our ability to get inventory out the door.”
DOGFISH HEAD’S BEER & BENEVOLENCE FOUNDATION DONATES $50,000 TO LAID OFF DELAWARE RESTAURANT WORKERS
The Delaware Restaurant Association’s 501(c)3 Educational Foundation is starting a relief fund to send cash to restaurant industry workers displaced by COVID-19 shutdowns.
The fund, Restaurant Industry E.A.T.s (Emergency Action Trust), is supported through donations from individuals and “grants from local private foundations and corporate partners,” the Delaware Restaurant Association announced in a press release on Monday.
Their “goal is to provide $500 grants to as many qualifying displaced workers as possible” with an initial goal of raising $1 million to provide 2,000 grants, per Delaware Restaurant Association president Carrie Leishman.
So far, the Beer & Benevolence Foundation, started by Dogfish Head founders Sam and Mariah Calagione, has been among the biggest donors: As of yesterday, the fund had collected over $65,000 from an anonymous individual donor and $50,000 from the Beer & Benevolence Foundation,
The Beer & Benevolence foundation plans to donate an additional $50,000 once the fund has reached $150,000. The company also plans to donate profits from the hand sanitizer they are distilling at Dogfish Head to the E.A.T.s fund.
“As a beer supplier to the industry, and restaurant operators ourselves, we know the important role restaurants play in our local economy,” said Mariah.
“We appreciate the Delaware Restaurant Association’s quick response to the current crisis facing hospitality workers here in Delaware and encourage those who are able to join us in supporting the E.A.T.s fund.”
As the press release explained, “Delaware’s restaurant workers (over 49,000) make up 10% of the state’s workforce, and contribute over $2.2 billion in annual sales. It is anticipated that as many as 25,000 will file for unemployment benefits in Delaware,” making cash support critical.
Donation links for individual donors will be posted online within a few days. Funds will be distributed to qualifying applicants by the E.A.T.s fund starting April 6.
Jenn, Jordan, and Harry
“Every moment is a golden one for him who has the vision to recognize it as such.” – Henry Miller
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