Corona and the Specialty Beer Café

In the last article I wrote about how the corona crisis affected the breweries. Today I want turn your attention to how it is affecting the Specialty Beer Cafés. It might be slightly different in other bars but because I have always considered these to be one of the engines of the Dutch Beer Revolution they deserve special attention.

When corona hit

The government’s decision to close all bars and restaurants meant that the doors had to close and personnel sent home. For the bars with personnel on the payroll there are ways of keeping them on the payroll with the 90% funding, but that still means different costs for vacationtime for example. And let’s not forget the rent and utilities, even though they will not have spent much on electricity.

Some bar owners only have employees with so-called 0-hour contracts. You work for the number of hours assigned to you that week and that is. There are fewer attachments to an employer for example. If you are sick for two days you don’t get paid for those two days. This is one difference with the full contract workers. If you have a bar and also a number of full contract workers you are in a bigger bind. Most owners can run the bar themselves for now, especially because many of the specialty beer bars are not huge places and there will only be a maximum number of guests.

Two weeks ago there was some good news. Restaurants and bars can now open again but with only 30 people max and with social distancing of 1,5 meters, or 5 feet. This is great news of course but it does mean some changes and new ways to do this.

Making money while shut

The closure has led many an owner to come with some inventive ways to still generate some income. The most often seen wat was to sell beer packages. Bring the beers a guest cannot have in the bar to the guest at home. Sometimes including bar nuts and a deck of cards like De Koffer in Groningen has been doing. The owner and maybe one or two employees could be seen driving all over the city to deliver these packages.

In some cases they could still make around 20% of the usual income, but it also meant still paying employees in some cases and having them be busy with a delivery for parts of the day. But it did keep them busy, in contact with other people in the business and it kept the name alive. This last fact could be a very important one down the line.

The near future: 30 people max

I spoke to Rob Alphenaar for some general insight, about what he will do in the near future and how he sees the role of Specialty Beer Cafes in this. Why Rob? Well, apart from being the owner of Haarlem beer bar Het Lokaal (and before that the fairly legendary Café Briljant) and owner of gypsy brewery Briljant he is also the chairman of the ABT (the alliance of beer serving bars), a group of Specialty Beer Café’s all over the country. Being a part of this means a certain standard of excellence and knowledge. 

Bar owners can only reopen when they can be sure that opening will be more beneficial than staying home and use the money that the government can give you. So things need to be done to be sure that opening the bar for the day or night makes the most sense.

Bars can only have a maximum of 30 people in the establishment at once. These 30 people have to sit at least 1,5 meters away from each other, apart from people who live in the same household. So meeting a friend in a beer bar? Sure, but he better sit 1,5 meters away from you.

The government has also decided that you can only enter when you make a reservation. Rob is thinking of having sessions. Guests can book a table and in some cases will get a tasting menu. This way he knows there is guaranteed income. One guest taking 2,5 hours to finish an Imperial Stout is all fine and well, but won’t pay the bills. A reservation, maybe partly prepaid, could solve part of that. Another advantage of this that you can thoroughly clean the place between shifts. It also takes care of too much movement in front of the cafés.

Then screens need to be put up. Plastic screens between people and maybe at the bar as well. If there are no screens you need to figure out what 1,5 meters exactly is and cordon certain areas off.

Many of the specialty beer bars are often small tiny and can only fit 30 people while full anyway. For them it’s going to be harder. Bars will have to offer something special. Not just drinking a few beers but an experience of beer. This is something Rob says the ABT café’s can really offer. Every ABT café has the knowledge, and the beers, to make sure guests will have a pleasant evening with great beer and stories about that beer. They are not the type of bar where people try and break the world record for drinking lager in one hour. In face, whenever I ask owners if they have to throw drunk people out the answer is almost always: hardly ever.

Safety

Are the people working in the bars safe? That remains a question because for them it is impossible to keep to the 1,5 meters and will have to come close to the guests.

The national group of bar and restaurants have some guidelines but they are confusing at times. Not everyone I have talked to is completely certain what to do so they will have to do the best they can. But Rob sees this crisis having some positive side effects, like showing the customer what extra things a specialty beer bar can offer.

So when you are thinking of visiting a bar again, let the specialty beer café personnel give you 2 or 2,5 hours that will be unforgettable.

Corona and Breweries, Part I

This is part I of a hopefully not too long series of how the corona virus is affecting the world of Dutch breweries. Starting with the breweries, I will also discuss how it influences bars and shops.

It has been over a month now since the bars and restaurants in the entire county closed. Everyone involved with beer has been hit hard. The bars are of course completely closed and they try to make a bit of money by selling beer and food for takeaway. Shops other than supermarkets have in some cases seen losses of 50% or more. But hardest hit seem to be the breweries.

Breweries have lost most, if not all, of their primary sources of income. The bars are completely closed, the sale of kegs down to 0. Sales of bottles have gone down as well to the specialty stores. Only those selling to supermarkets seem to be doing ok but tanks are empty, in many cases for the first time in years.

Times like this ask to be inventive. Many breweries have started selling beer directly at the brewery. Something that in normal times is not allowed but this government has decided not to interfere in most cities and counties. But you can only sell so much, and only to people who really want it. It doesn’t make up for all the other sales. Often it is the only way to generate at least some income. Sure, it might take a tiny bit away from the shops, but most people buy one bottle from a brewery together with bottles from other breweries. Here the brewery can sell a box of beer at once. These small sales though can only recoup about 20% or less or regular sales. Yes, you read that correctly, many breweries have lost 80% of their income.

Government Help

The government is providing some help, but this is not reaching all the breweries. The government works with a list of business that they deem need help in this crisis. Breweries at the start were not on that list. They will get some deferrals for income taxes and the government can pay a large chunk of the salaries if employees cannot work anymore, this up to 90% if a company has lost 100% of its business.. But this is not including other parts of the salaries like labour costs, pensions and paid vacation. These costs keep adding up.

Restaurants and bars are on the list. Brewpubs in most cases are not. If your entry into the Chamber of Commerce mentions a brewery first and a brewpub second, you are not on the list so you don’t get the money a restaurant would get. It was only on the 28th of April that it was decided that businesses could get help (a one time sum of € 4.000) for their second type of business, like a brewpub/restaurant.

Bars and restaurants have closed, meaning nearly 100% of all kegs from breweries are not being sold at the moment. The distributors of this beer are getting government support, breweries luckily now get some as well. But the distributors don’t get paid anymore by the bars, so they cannot pay the brewers, leaving the breweries without money from that side.

Deferral

Income tax has been postponed for a while so breweries don’t have to worry about that just now. But that doesn’t mean that it doesn’t have to be repaid. There’s a big chance this will have to be done again when the bars and restaurants are up and running again. The question for the government now is how the breweries are going to repay it and in what time period. With a looming recession we don’t really know if people will start going to bars and restaurants again like they did before.

The Catch-22 of bank loans

If you were a healthy company before corona hit you can get a loan. But because the economic outlook at the moment is not great they are hesitant to just give you a loan, unless you hook up with a company that offers loan but against staggering interest. And the costs that are not being paid right now (taxes for example) will have to be repaid later, adding another figure of money a brewery won’t be able to pay back. The government is pushing the banks to offer loans, the banks say ‘but they cannot pay it back’. The government and brewers say: ‘yes dear banks, that’s the problem and that’s why they need the loans’. And so the cycle continues. Breweries in most cases also have nothing to put up for the loan, another reason banks are hesitant.

Rent

Big breweries often also lease properties in exchange for their beer being served there. These bars are trying to get discounts on rents. In some cases this has already gone down 50%, in other cases breweries (like Haacht) have decided not to ask for any rent during this period. Smaller craft breweries don’t have constructions like this and will have to pay the rent of the brewery space.  So the small brewers are not helped in this scheme and breweries with brewpubs are doubly hurt.

The brewery landscape in one year

It is undeniably true that some breweries won’t be able to come through this. CRAFT, (the organization where all craft brewers are part of) issued a statement that 50% of all breweries are in grave danger.

Michel Ordeman of Jopen, also the head of CRAFT, says that small breweries provide a lot of work as well. Not only in the breweries but also in the brewpubs and restaurants.

First of all we don’t know yet how long bars and restaurants will be closed. So far until at least May 20, but it could be longer if we as a nation decide to go outside en masse again and not stick to social distancing. And if everything does open again nothing is sure as well. Some breweries are going to offer free beer or heavily discounted beer to bars. This could lead to a new price war and might force some breweries who cannot afford this to fold.

50% of all breweries left after all this is over? A shakeup was bound to happen, but like this? The beer shops, bars and festivals will look very different in a year.