COVID-19, A Brewer’s Tale

If you ask any of my friends or employees, they’ll tell you that I’ve been predicting an economic downturn since 2017. Sure, American consumers have been strong and relentlessly optimistic, but there has been a lot of trouble brewing behind the scenes.

I don’t want to dig too deeply into the how or why, because a) it can be boring, and b) it can sound overly political, but needless to say, the American economy was on thin ice long before COVID-19 became a reality, and now that we face it eye to eye, we see how easily its fiery bellows have served to melt the ice underneath, dropping us all into an icy bath of surprise and shock.

The reason I write today is not to complain, or to ask for money. On the contrary, our community has been the most amazingly supportive group of people I’ve ever met.

Instead, I feel called to offer a perspective that I feel may not be offered, simply because others in my position may be reluctant to show weakness, worried that it could have a negative effect on their business image.

At this time in our lives, and in the business cycle, I feel that we have nothing to lose, as it’s very possible that a few more months of this lockdown could result in the permanent closure of our business, and I don’t believe there is any merit in dying on my shield. Instead, I believe I should share my thoughts and perspective so that others may feel emboldened to do the same, and in the event of catastrophe, it will not have come as a surprise to the rest of you.

First, I want it to be known that I have sympathy for anyone concerned about, or having already been affected by this nasty virus. I’ve lost both a father and sister as of late, and I understand what it’s like to watch a family member or friend slip away.

That said, I also cannot deny the fact that the closures affecting our business, and others, are anything but disastrous.

I’ve said it before, but we are a family/employee owned business that willed this brewery into existence through hard work and perseverance. The few investors we have are not your traditional investors. They are friends and family members that invested because they believed and trusted in us to build something great.

This is not to say that their contribution was unwarranted. The point is simply that unlike most every other brewery you see or visit, we did not come from money, and Four Stacks was bootstrapped on hustle and hard work. We have invested every single dollar we’ve ever owned (and more) in this business, and are so heavily invested that Four Stacks’ future is our future. In other words, if Four Stacks fails, my family fails, and we lose everything, including the house our children have called home for the past 8 years.

Now that I’ve gone over the stakes, let me talk about what it’s like to run a business that has been shut down due to COVID-19.

The first thing that happened was an Executive Order from the Governor that resulted in shock across the board for all of us. Initially, I didn’t know how to act. I was almost too shocked to make any decisions at all. I tried to create a fairytale in my head that this was all a hasty governmental decision that may soon be reversed. Eventually I came to terms with it, and had to make some shitty decisions.

First, we had to furlough half of our team.

I didn’t want to do it. I still spend every day thinking of new ways to raise money so that I can bring them back.

Second, I had to immediately contact vendors and creditors in an attempt to suspend, terminate, or defer services. Fortunately, most of our vendors understood and agreed to pause billing until we re-opened, whenever that may be.

Unfortunately, whilst utility providers may not be disconnecting service during this time, there are still bills accruing that will likely come due at the worst possible time.

Furthermore, our landlords are both requesting full rent, and in the event we cannot provide it, expecting a partial payment because we are still open and offering to-go sales.

What I’ve tried to explain to them, and what they fail to understand, is that to-go sales at 30-40% of average revenue barely cover wages, insurance, and COGS. We don’t expect a free lunch, but if staying open and selling to-go beer is justification for them to seek rent, then we would be better served to suspend operations entirely.

In addition, we don’t know when we’ll be able to open again, if at all. First, we were closed for 30 days, now we are closed into mid-May. If Florida’s curve does not flatten, May could become June, then July, etc.

Trying to budget for supplies, wages, etc is an impossible task amidst so much uncertainty. We can’t afford to brew beer if we can’t afford to sell it, but we can’t sell it if we can’t brew it. So as of now, we are playing guessing games with staff payrolls, brew schedules, and ingredients.

To make matters worse, every brewery in the country is selling crowlers and growlers, and as a result, there is a 30 day delay on being able to receive any of these mission critical items.

So what do you do other than keep trying to do what you love, and keep going one step at a time?

Yes, we have applied for stimulus via bridge loans and PPP loans, and we are hopeful that these will provide more munitions to fight against the unknown. However, even if we were to emerge unscathed from this crisis financially, there is no doubt that it will have had a lasting impact on the community around us. As of this week, there are more than 10 million people out of work across the nation, and this number will only increase as the negative effects of the virus take hold over our people and economy.

As optimistic as I may be about our future, it’s hard not to be concerned about the manner in which our country may forever be changed.

Beyond that, I feel lucky that we are even able to sell to-go bottles and fills. Many bars and restaurants in our city have closed completely, being ill-equipped to do what we do. As I tell our team, we are lucky to be able to sell anything at all given the situation, and even though it sucks working 10 hours/week instead of 40, we are at least able to clock in 7 days/week.

I also couldn’t be more thankful for the many food trucks that have stuck with us during this difficult time. Special thanks to Bobby Daddy’s, the Smokin Bowls/Dulce Dough team, El Indio, SPG, Haute Dogs, and Surly Mermaid for not just hanging out without canceling dates, but being unwavering in their support. If anything, a slow to-go day makes me feel worse for them than it does for us. I couldn’t be more thankful to have them as partners.

Most important of all, I want to thank the incredible Four Stacks team. Talk about sticking with someone…this crew has been INCREDIBLE. 100% positive all the time. Always pitching in and helping out. Always thinking of ways to make the most of the situation, build each other up, and more often than not, supporting me when I’ve felt like falling down.

Regardless of what happens with COVID-19, or our business, I can speak with certainty when I say that we have the best customers, the best team, and the best family/ies in the business. Thank you to everyone that has offered their support, be it with purchases or words of encouragement.

Thank you all, I appreciate you.

Nathan Hangen

Founder

Four Stacks Brewing Company

 

Introducing the Founders Fund

If you’re familiar with our origin story, you’ll know that our operation begin a little differently than most. We weren’t blessed with millions in the bank or investor dollars behind us, and almost every bank laughed us out of the building, sighting lack of industry experience as our fatal flaw. Thankfully, our first venture, a small e-commerce software business known as IgnitionDeck, was sturdy enough to use as collateral for non-traditional financing, and had sufficient profits to help fund the initial purchasing and demolition.

Unfortunately, lengthy permitting delays, and frequent ones at that, meant that we were paying interest on capital that we couldn’t deploy, and to complicate things further, we were forced to lease additional space in order to meet specific functional requirements. This meant that the scope of the buildout would increase, and costs would double, all before we even purchased a single piece of brewing equipment.

We made a conscious decision early on to spend the bulk of our funds on the taproom, believing that size of brew system was less relevant than the atmosphere we wanted to create as the first craft brewery, and really the only craft beer hotspot, in our small town of Apollo Beach. As a result, we started with a (very) small 1.5 BBL system with limited capacity, a cold room instead of cold refrigerant (glycol), and a walk-in cooler that was about half the size we truly needed.

Still, fortune favors the bold, and despite the never-ending series of challenges we faced, we always found a way to make it work. It was certainly a tough couple of years, and those of us that remain have more than a few gray hairs to show for it, but all in all, our belief in the company never wavered, and we now have an incredible product to show for it.

Read more