(Picture taken before the pandemic)
For many craft brewery owners, COVID-19 has caused quite a disruption in business and has created a need to think creatively and grind on. While some have been able to keep their taprooms or beer gardens open, the approaching winter chill will make it more difficult for many breweries to turn a profit.
Grist House Craft Brewery in Pittsburgh is well known for its role as a hub for food trucks, dog-friendly outdoor dining, and live music. However, the brewery has shifted to a to-go only model and added delivery and shipping to their model as a COVID-19 pivot!
We sat down with Tom Schneider, CPA and co-owner of Grist House for a talk of the realities of being a brewery owner, the importance of being financially savvy at this time, and how to survive and thrive as a microbrewery throughout the winter months.
To some, the combination of being a Certified Public Accountant and the Co-Owner of Grist House Craft Brewery may seem like an odd combination. Tell us a little about yourself, how did you get involved with breweries and how have you been able to marry these interests?
Well, accounting is in my blood. My dad was a CPA and I found I had a knack for it, too. My love affair with craft beer started after college.
I was introduced to good craft beer by one of my co-owners, Brian Eaton. After meeting him and Grist House’s other founder, Kyle Mientkiewicz, Brian and I found ourselves living outside DC. It was there that Brian introduced me to the wonderful world of craft beer.
I also got to observe him and another friend of ours hone their skills in the backyard, brewing up some delicious brews. When Brian and Kyle got the idea to start Grist House I offered my accounting prowess, the one skill I have, to the business. The rest is history, as they say.
My inside understanding of the industry combined with my accounting background has also led me to opportunities to work with many other breweries in the area - best client meetings you could ask for!
As an accountant with so much knowledge of the brewery industry, are there any common financial mistakes that you have seen breweries make? What are common pitfalls brewers should look out for and how is that changing because of the pandemic?
Speaking as the accounting nerd, I advise breweries to invest the proper amount of time and energy into their back-office activities.
One of the biggest pitfalls I see small business owners make is not bringing in or enlisting proper help to keep their financials in order. Accurate and timely financial reports can make a big difference in tracking trends in your products and planning ahead. I believe many entrepreneurs will see that this type of investment is well worth it in the end.
COVID has clearly been challenging for microbreweries, what are some of the innovations you have seen in the industry of breweries finding ways to adapt?
Several breweries in our area had already invested in canning capabilities over the past few years, and many others found ways to integrate it over the past year in response to increased demand. I foresee this to-go need being high for some time, so investment in canning capabilities may be wise.
Some breweries have also added delivery services in order to get more product to customers. This type of significant value-added service will likely continue as long as in-person services are shut down or diminished. Whether it’s adding canning capabilities, delivery services, or expansion into outdoor spaces, breweries have been showing their resiliency in the face of this adversity.
How will this change going into the colder months and what should breweries be doing right now to prepare? What words of wisdom would you offer to other brewers?
The winter months are likely going to be lean months. I wish I could say I had the answer on how to best weather these next few months: continuing to make great beer is always a start.
Keep engaging your loyal customer base as well: even if you are not much of a social media person yourself, many small businesses see it as a key to success. Use it to keep your customers interested and keep your brand top of mind.
As mentioned before, to-go and delivery services may be clutch in these lean months. For your business health, reducing expenses to your bare minimum over the next few months could be critical. And, find a good lender.
I know you are a big advocate of breweries investing in to-go options to diversify their income streams. Any tips on where to look, what machines work well, or identifying the right type of canning line for breweries of different stages?
In the current environment, and even after we come out of the shutdown era, I believe to-go options are critical to reaching a broader customer base. The days of over-packed bars and long lines to grab your favorite craft beer may be behind us or at least slow to reemerge.
You may see a portion of your customer base asking for grab-and-go options. Canning lines can be a great means to do this. Weigh your options. They can be a significant investment, and finding the right setup and size for your microbrewery is key. However, the long-term benefit may justify an investment now.
What are the long-term implications of the pandemic on the microbrewing industry?
Hmm, this is a hard one. I think the microbrew industry is at the mercy of the changing landscape, just as all other industries. I’d like to say that once we come out of the pandemic status that all will go back to the way it was, but that is probably not realistic.
It will likely be a slow return to “normal” overall. The industry may see a small boom as taprooms reopen and restrictions are removed. We may see an outpouring of customers that have been itching to get out of their homes and visit all of their favorite places.
However, overall, I think the masses will be hesitant to crowd into spaces for a while. Customers also may have developed new habits or comfort zones which include staying close to home. Continue to innovate and look for ways to serve your ever-changing customer base, in-person or to-go.
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