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Eat and Drink

How Colorado Brewers and Distillers Are Coping in the Age of COVID-19

Relying on to-go growlers and making hand sanitizer, the closure of local brewpubs and tasting rooms for on-site consumption has forced owners to quickly adapt.

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The team behind Boulder’s Ska Street Brewstillery doubled the size of their Durango company—Ska Brewing Co.—from 70 to 140 employees to open their new venture. They crafted an ambitious menu; filled taps with Ska Brewing beer and hard seltzer; and lined the bar with bottles of pear brandy, rye whiskey, and more from sister company, Palisade-based Peach Street Distillers.

The brewstillery opened on Monday, March 16. And then it shut down one hour and 11 minutes later, when Governor Jared Polis forced all restaurants and bars to shutter on-site dining and drinking to slow the spread of COVID-19. “That was the extent of our new business in Boulder,” says Dave Thibodeau, who founded Ska 25 years ago, and then Peach Street Distillers a decade later. “We spent every penny we had to get the place open. We had to lay everybody off the next day.”

Larry White of Ska Street Brewstillery. Photo courtesy of Ska Brewing Co.

Like brewers, distillers, and restaurateurs across the state, Thibodeau is bewildered and anxious. He devoted half of his life to building a successful business. Now he doesn’t know whether his breweries, restaurant, and distillery will survive. “I can’t tell you how torn up I was,” Thibodeau says. “I was just crying. And then I had my neighbors and friends asking if there was anything they could do. That is what keeps me going.”

For Thibodeau, the potential losses extend beyond a delayed Boulder opening, the shuttering of the Ska Brewing pub in Durango, and the Peach Street Distillers tasting room. Ska Brewing sells about half of its packaged beer to restaurants, mostly through kegs. And now, with all restaurants in the state closed until at least April 30, no one is placing orders for kegs of Ska’s signature Modus Hoperandi IPA. “We have a warehouse full of kegs we can’t sell,” he says.

With on-site brewpub and tasting rooms sales mostly gone and restaurant accounts on hiatus, breweries and distilleries across the state have, for the most part, one source of revenue: retail outlets, including grocery and convenience stores.

But that may not be enough.

The founders of Lyons’ eight-year-old Spirit Hound Distillers felt that they “were turning into a big-kid company this year,” because they put together a health plan for employees, says co-founder Craig Englehorn. “We felt so good about that,” he says. “And now we are literally going day by day. It’s horrifying. Like most legitimate Colorado distillers, we didn’t have deep pockets going into this. A couple months of trashed cash flows and we will lose distilleries, no question.” The Spirit Hound tasting room was an important part of the company’s revenue, as were restaurant and bar accounts.

Like other distilleries across the state and country, including Ironton Distillery & Crafthouse in RiNo, Spirit Hound now dedicates part of its labor toward the production of a product in high demand: hand sanitizer. Lyons Mayor Connie Sullivan asked if Spirit Hound could make it, since distilling the key ingredient—liquid in excess of 60 percent alcohol—is straightforward for spirits makers. For now, Spirit Hound is giving the hand sanitizer away, with the bulk going to first responders and hospitals. Meanwhile, Englehorn says a local hospital is working to budget funds for the distillery-made product.

Brewers aren’t making cleansers. But they are pushing on-site sales of to-go beer, cider, and hard seltzer, at least in most of the state. Mayor Michael Hancock’s announcement on March 24 that breweries, distilleries, and liquor stores must shut down in the face of a stay-at-home public order was met with horror—and long lines as consumers prepared to stock up. Within an hour, Hancock dialed back the order to allow those businesses to stay open.

Prior to Hancock’s order, Patrick Crawford, one of the founders of Denver Beer Co, said sales of growlers and six packs at the brewery “can support the salary of our general manager. And when all of this gets fired up again, he can rehire the staff and pull the team together to reopen.”

“It helps keep the lights on, and lets us burn through cash a little more slowly, at least,” he said. “We were joking around the other day [about which] will outlast the other: coronavirus or our cash?”

Like Denver Beer Co., Sanitas Brewing Co. in Boulder relies on both liquor store and on-site restaurant sales to make the business hum. “We are hanging on for dear life,” says co-founder Michael Memsic. “ I don’t have a Doomsday fund. My resources are going to run out really quickly here. I need help from my bank. I need help from my landlord. I need help from the federal government. Otherwise, we won’t make it.”

Michael Mesmic of Sanitas Brewing Co. Photo Courtesy of Sanitas Brewing Co.

On the Monday morning that Polis made his announcement, Memsic had a staff of 21 people, from bartenders to brewers to salespeople. Now Sanitas has four employees, in addition to Memsic and his business partner. Memsic is selling beer to-go from the taproom; it doesn’t bring in much, but every little bit counts. For Colorado breweries to survive the coronavirus, consumers must go all-in with support, he says.

“It makes a difference to get beer from independent brewers, including in liquor stores,” he said. “It makes a difference to not buy White Claw or Bud Lite. Pick five small, local breweries and once a week pick up a burger and a growler from one of them.”

To encourage the purchase of locally-made beers, a new alcohol-ordering service, Handoff, has limited beer options on its platform to brands that are based in the Mile High City. The Denver company works with liquor stores that have delivery services to connect booze shoppers with stores and brands. “This community means a lot to us. Without it, our company wouldn’t exist,” says co-founder Tommy Riley. “Any impact we can make to alleviate the situation, we will do it. When we learned on-premise sales would be shut down, we re-worked the tech platform within hours.”

The loss of on-site drinking and dining has diminished nearly all of the revenue at all of the Mountain Sun Pubs & Breweries, which operates five brewpubs in Boulder County and Denver.

The first, Mountain Sun, opened on Boulder’s Pearl Street in 1993, and was a social experiment from the beginning. Tips were pooled. Every employee performed every role in the restaurant, and customers paid with cash, check, or a “karma envelope,” which meant that if you didn’t have one of first two payment options, you could mail in what you owed.

Nearly 30 years later, that approach persists at all Sun pubs, in all of their psychedelic-rock-poster-glory. And it all worked; the TV-free pubs are famously crowded. The company flirted briefly with packaged sales more than a decade ago, but quickly abandoned it. “The community aspect is so important to us. Our goal from the beginning was to bring people together to talk about the world, play Parcheesi instead of look at a screen,” says Michael Absalom, the general manager of Southern Sun in Boulder. “It’s the very core of our being. Not having people congregate goes against our DNA. We want to give everybody a high five and a hug.”

But now, congregation is not an option. And for the Mountain Sun pubs, neither is selling six-packs and cases through liquor stores.

The company is pushing ahead with to-go growler and food sales, paying employees at its Boulder County pubs $20 an hour to cook, pour beer, and clean, clean, clean, Absalom says. It continues to take care of employees’ health care and offers interest-free loans too. Every staff member receives two free meals a day and a free growler of beer each week. All tips gathered through carry-out growler and food sales—Absalom says customers are tipping with immense generosity—are pooled, and when the pub reopens, all employees will decide collectively what to do with the money.

“Every sale helps. Every growler. Every burger,” says Absalom. “Every local brewer you can support, get that growler and stay home with your family and enjoy it. Every single one of those sales is essential.”

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