Brew Talks Virtual: The Road to Recovery: The Pandemic 1 Year Later

Justin Kendall [00:21] Hey everyone. Welcome to the first virtual brewals meetup of 2021, brought to you by Dogfish Head. My name is Justin Kendall, and I am the editor of Brewbound, and I am joined by my colleague and co-host, Justin Fonte. Happy American Craft Beer Week, Jess.

Speaker 2 [00:40] Happy American Craft Beer Week, Justin. Thank you for that reminder.

Justin Kendall [00:44] I know, and we're gonna be talking about Beyond Beer offerings during this, so it's the perfect time, right?

Speaker 2 [00:50] Appropriate, very appropriate,

Justin Kendall [00:52] very appropriate. So, we don't have a lot of time with our guests today, so we're gonna get started really soon, but first, I want to throw out a thank you to Brewbound's newest edition, Zoey Lacata. Uh, she's joined us as editorial assistant. She's doing a great job. And she's the reason I could prepare to do this. So, also, one of the big reasons we can do this is our sponsors. So, again, a big thank you to Dogfish Head. We're so proud of our partnership with you. We're also brought to you by the Reyes Beer Division, Orchestra Software, and John I. Haas. Again, thank you to our sponsors. We are very appreciative. So, even though this is 2 hours, it's gonna go fast. So let's not waste time here. Now, we're back and it's, we're a little more confident than we were when I was in a 450 square foot apartment, uh, during the start of the pandemic. Shots are going in arms, consumers are more mobile, and the on-premise is pretty much open. So, a lot of positives here and we're gonna talk about some of those. And we have a few more answers than we did last year. So, we've got two panels. I'm gonna tell you about the first in a minute, but Jess, how about you hit the second?

Speaker 2 [02:11] Sure, so our second panel, which should kick off right around 4 p.m., is gonna be a dissection of the fourth category of offerings. So hard seltzer, hard tea, RTD canned cocktails, hard kombucha. Uh, we've got a great panel lined up to talk about all of those things. Certainly some experts in that field. We will have Dave Berwick, who is the CEO of the Boston Beer Company, which makes truly hard seltzer and twisted tea brands, as well as, of course, Samuel Adams, Dogfish Head, and Angry Orchard. We will also have with us Katie Beale Brown, who is the founder and CEO of Lone River Beverage, which was acquired by Diageo in March, and produces Justin's probably favorite ranch water. And then the 3rd, we will have joining us Ed McBrian, who's the chief operating officer of Manhattan Beer Distributors, you know, a tiny little, you know, outfit in a tiny little city. So, um, Ed's definitely gonna be able to tell us all about what's going on in that category, so it's gonna be really exciting. Make sure you stick around.

Justin Kendall [03:05] Yeah, and before we get started here, if you have questions for any of our panelists, drop them down below. Uh, there's a chat chat feature. Jess and I will be keeping an eye out for those, and we'll be shooting them to our, uh, panelists. So let's get to it. Here's panel number one, Sam Calagioni, the co-founder of Dogfish Head Craft Brewery, and straight out of the pages of the New York Times. Thanks for being here, Sam.

Speaker 3 [03:31] Great to be here with you, Justin and Jess and my esteemed fellow panel. It's really exciting for today. I'm locked and loaded with the AZO. Let's do this. Yes,

Justin Kendall [03:40] let's do this. And we've also got back a year later, John Lane, the co-owner of the Winking Lizard Tavern. Thanks for being here, John.

Speaker 4 [03:51] Thanks so much for having me again. Uh, much better times than last time we met.

Justin Kendall [03:57] Absolutely. And also, a return panelist, Julie Verroti, the co-founder of Denizen's Brewing, but now, she is with the US Small Business Administration as an associate administrator of field operations. Thanks for being here, Julie.

Speaker 5 [04:16] Thanks so much for having me, Justin. It's good to be back.

Justin Kendall [04:19] It's always a pleasure to talk to you, and also a pleasure to talk with is Amy Gutierrez, the category manager of beer for Bevmo. Thanks for being here, Amy.

Speaker 6 [04:31] Thank you for including me this year. We definitely have a lot to say.

Justin Kendall [04:35] Yeah, we're psyched to have you. A lot going on with Bevmo and uh your new partner Gopuff. So let's get going here. Last year when we met, there was a lot of uncertainty, and a year later, we've got a lot more answers. So this panel is gonna go a lot better than last time, I think. So, let's get to it, Sam, a year later, how is your business going, and do you see a light ahead that isn't a train coming through a tunnel?

Speaker 3 [05:03] Yeah, let's, let's hope it's not a chain because we are seeing some wonderful shafts of light, uh, ahead of us. And, you know, Mariah and I, uh, a big bet was last fall when things were not as, as bright-looking. Uh, we went over the million-dollar mark raised for the Nature Conservancy, our biggest non, nonprofit, uh, partner as a brand that really embraces sort of an outdoorsy, uh, ethos. And we said, you know what, let's go for it and for 2021. our big focus month being July. Let's build a whole program called Mother Nature. Let's do this, hoping that by then there'll be light at the end of the COVID tunnel and people will be as excited to unplug from their screens as we are right now and get out and plug into uh Mother Nature where the bounty of our awesome natural ingredients grow. So, Mariah and I are partway through a trip from Miami to Maine, going up the East Coast right now, meeting with our distribution. Partners filming at Mother at uh Nature Conservancy Preserves up and down the state. So it's a great time for us to be checking in here, uh, with our, with our industry and the learnings that we're seeing. And we're definitely seeing, as you said, Justin, on-prem starting to reopen, albeit, I think, uh, a heightened focus on outdoor spaces, decks, golf courses, pool bars, etc. to go opportunities staying very vibrant, even post-COV. from our on-prem uh partners and see our distributors getting excited to have us as sales representatives of breweries back in market. Again, maybe not so much inside their distribution, uh, center buildings, uh, but out in the marketplace supporting our customers. So, really excited to be on this trip right now, mostly celebrating our core 4 beers, our canned cocktail launch, and our Lemon Quest non-alcohol launch as we make our way up the coast.

Speaker 2 [06:52] Sounds like quite an adventure, Sam. Uh, John, why don't you give us a little update on how things are in, in Ohio?

Speaker 4 [06:58] Great. Thanks so much. So, um, it's, we're almost to our one-year anniversary when we reopened, uh, May 21st of last year is when we reopened. And, um, we had a really, really good summer and actually a really good fall and then the bottom fell out in November and December like a lot of the country and into January when cases rise, rose and the governor kinda put a clamp back on us, 10 o'clock curfew, etc. etc. But we've been climbing out of that and um we got great news uh yesterday at 5:30. The governor had a press conference and he's reopening, lifting all health restrictions, uh, dealing with COVID on June 2nd. And, uh, in today's press conference, he, um, because our biggest issue is employees, which I'm, I'm sure we'll talk about in a minute. But, um, um, announced that on June 26th, he's gonna, uh, tell the federal government that we no longer need the extra $300 unemployment benefit. Um, we're trending really, really well. Um, we're, we're trending at about, uh, 94% of 2019 sales. So we're ecstatic at that, at that. And um, yeah, my, my, my, my teams are motivated, um, they're pumped up and I think we've got a really good vibe going uh with our guests as well.

Speaker 2 [08:25] That sounds great. You guys are really off to a good start, it sounds like. Amy, Bevmo's had quite a year, so you have a new partnership with uh on-demand, you know, convenience e-commerce platform, GoPuff, and what can you tell us about what, what the year has been like in Bevmo world?

Speaker 6 [08:43] Well, we are performing very well, uh, with the stores closed last year, you know, consumers are excited to come back and shop in person. You know, we were very nimble last year to be able to set up a lot of new self-distributors, you know, who could not sell the on-premise. Um, we're up double, double-digit growth to last year. So with a strong sales results, we, they're continuing just completely different partnership with GoPuff that we're all still learning about.

Justin Kendall [09:10] Julie, you definitely went through the biggest life change of any of our panelists. Your advocacy megaphone has gotten a lot louder. How much different is it going to be in a position to advocate for more small businesses with the SBA for you?

Speaker 5 [09:26] Uh, uh, it's actually not that different, um, other than the fact that I'm not speaking from a private citizen, uh, perspective at this point. Um, you know, I am a member of the administration and, uh, doing whatever I can to bring empathy and, um, help to small businesses across the country, you know, whether you're in beverage, alcohol, or any other type of industry. Um, and I'm, I'm Really, you know, grateful to be in this position, um, and, you know, my, my eagle-eye focus is meeting customers where they are and in my case, my customers are small businesses. Um, and that is something that not just coming from me but from the leadership at the agency, um, administrator Isabel Guzman, who started, I guess 3 weeks after I did, you know, we are hyper-focused on making sure we're bringing equitable help, um, that is technology-focused and customer-centric. Um, and so I have directed the 68 field offices across the country and the 700 employees that work there, that it doesn't matter if it's inconvenient to us. What, what matters is it, is it convenient to the small business owner who's asking for help. Uh, and that, that is the focus and the direction that I've given, uh, for all of the programs and services that the SBA has to offer, and I'm really proud and honored to be working with my colleagues because it didn't take much convincing to even give that direction. So, uh, I'm You know, I'm really hopeful with all the legislation that's been coming down with the American rescue plan and obviously, there's talks with other legislation uh that President Biden is trying to push through, uh, that will be able to bring even more help to get this economy jumpstarted and even better than it was before. Um, I personally am looking forward to the roaring twenties, um, and I, they, they can't start soon enough, in my opinion.

Speaker 2 [11:14] So, Julie, what is the need state that you're seeing for uh small businesses and how challenging has it been in meeting that demand?

Speaker 5 [11:21] Uh, I think it's a few things. Um, one being, uh, the starting and the stopping, and the constant pivoting has been pretty horrible for folks. Um, not having certainty has been really frustrating. Um, I also think really just cash flow has been a, a huge issue, you know, especially in the beverage alcohol space where You know, one state might be operating at a certain level and another state might not be, and then in some cases, you've got counties sitting next to each other that are operating in totally different um restrictive areas and ways. Um, so I think the biggest thing, um, and you'll see that with a lot of the programs that the SBA has been implementing since, uh, the Biden administration took over. It's really trying to create certainty in the rules and promulgating the regulations, um, even down to just a very concrete example that I think that this audience will relate to, uh, the Restaurant revitalization Fund, for example. Uh, Congress gave the flexibility to the SBA, uh, to either force folks to get the grant funds to spend it by December 31st of 2021. Or they could potentially, you know, increase that date whenever they wanted to as far out as March 11th of 2023. And the first thing the administrator did was look at that and say, guess what, we're going directly to March 11th of 2023. So that businesses can actually have certainty, have 2.5 years to be able to make sound financial decisions with these grant funds as opposed to waiting for the SBA to extend it 6 months now and then another 6 months later. Um, so even down to that small level of detail, really trying to meet business owners where they are to help create that certainty and then get, you know, cash, uh, into the hands of businesses as quickly as possible to help stabilize the economy.

Justin Kendall [13:08] We don't wanna dwell on the last year, but what is something that you've implemented in your businesses that was a reaction to COVID that really helped you out and that you're planning to keep around? And I'm gonna start with you, Sam. What, what was something that really worked that you wanna keep around now?

Speaker 3 [13:27] Well, I think that, uh, a lot of, uh, breweries of all scales, uh, will, would say something similar in terms of, uh, you know, the, to go and curbside opportunity, but also the, the way, you know, necessity is the mother of invention and how, uh, different technological platforms reacted quickly to make, uh, you know, those kinds of to go platforms just more user-friendly, both the user being The, the company, uh, and the consumer. So it's like QR codes had a moment like a decade ago and it seemed like more fad than trend, but I think QR codes are gonna stay, uh, very viable. And I think to some degree, it may change, you know, service long term for certain sort of fast casual restaurants, etc. uh, particularly as the cost of hiring, uh, co-workers stays really high, it can be a really efficient. Uh, means. I'd say to contrast that in terms of, uh, you know, kind of what we, what we hope go away to some degree would be while the pantry loading moment helped a lot of brands and a lot of companies, it is nice to see for, you know, breweries and companies that really take an artisanal approach to what they make, the opportunity to kind of romance the liquids again. And it's, uh, you know, an example for us is our art series, which is kind of a 1499. Uh, six-pack, a little bit more expensive, a little more esoteric, seeing that, and Amy, you guys have been great at supporting that. Seeing that grow, kind of reminds us that for a certain number of customers, there's a better sense of safety in stores and there's less just buying and a return to kind of shopping and curating those choices. So I think for smaller brands that really love to romance the uniqueness of their recipes, that's a change that I'm looking forward to.

Justin Kendall [15:14] John, what are some things that you implemented at the Winking Lizard that you're looking forward to keeping around, and what are you looking forward to getting rid of?

Speaker 4 [15:24] Yeah, so, um, we, we reduced our offerings both on the, um, spirit side and, um, the bottle side, the craft, uh, beer bottle side. And, you know, by dialing in, um, we've had a, a lot, I mean, the sales have been actually very, very good by doing that. We've got a lot less waste, and I think that's the biggest thing. We've got a lot less waste by, uh, a little less of a selection. Um, we are rotating some things, but, um, by and large, uh, we've always been a core brand house, and that's played very, very well in our favor. I think to, to Sam's point, people, when they came, came back, they wanted, they wanted tried and true. And, um, I think that's playing out very well for us. And we're looking forward to actually Being able to, to, um, Sam mentioned QR codes, we just signed on with beer board and so we're really excited about being able to maybe offer up some more drafts with a lot less waste. And I think that's, that's, that was the key for us is having less waste through all this. Uh, get rid of. I can't wait to have the biggest bonfire in the world. Um, the EPA. Don't tell Julie, uh, the EPA might get after us, but, uh, when we set a bonfire to $100,000 worth of plexiglass dividers that we have in all of our restaurants. So,

Justin Kendall [16:51] I'm both, uh, sad that I don't live next to a winking lizard and happy after that statement. Uh, Amy, what, what's one thing that you're hoping sticks around, um, let's just say post-pandemic, and what's one thing you're looking forward to getting rid of?

Speaker 6 [17:09] So keeping around definitely is the online pres uh presence that we have an improvement to drive delivery now that we're with GPuff and it definitely offer our customers a wide variety of products, you know, alcohol, ice cream, pet food, everything that they have um brought to us is we definitely. Our online presence for us was getting the proper images online. I, my two assistants helped put over 1500 new, um, online images that are qualifying. So the online presence for us is definitely gonna stay around. It's what thrives. And going away, don't laugh, but, um, in-person appointments, it is like easily done via Teams and Zoom, and it allows me more time to talk to more people, you know, I can have a very productive 20 minutes as opposed to having a supplier, you know, travel. Across the country with all their expenses and everything, I mean, yes, in person and getting to know somebody and all that, but, um, I'm going to continue because I can see more people and I think it's, it's, it's very important to broaden that and not just keep it where it is. So that's what I'm looking forward to getting rid of.

Speaker 2 [18:21] Totally logical. Uh, friendly reminder for everybody, uh, watching, you can submit questions in the portal. Justin and I will do our best to get them answered. So anything you wanna know from these guys, now is definitely the time to, to drop those into the chat function. So, we're gonna move on to some challenges that have been taking place, particularly recently. And right now we're hearing about issues from aluminum shortages, cardboard price increases and shortages, pack tech price increases. Truck driver shortages, labor market tightness, and now gas shortages and price hikes due to a recent cybersecurity attack. Now, Sam, earlier this week, you were in the New York Times discussing labor shortages in a very creative way that Dogfish had came up with to uh to do some recruiting. Has that been the biggest issue for you?

Speaker 3 [19:06] Yeah, and John and I were chatting about this ahead of the panel, and I know a, a, a lot of uh hospitality folks are facing similar challenges. Uh, and, and yeah, particularly for us, so we came up, our, our sort of, our company already has, you know, world-class benefits and payday cases, and, but to sort of sweeten the deal in the moment, uh, you know, we've started to do vintage cases of a 120-minute IPA, uh, if you join us. On our, our, our journey in addition to a signing bonus. And it's interesting as Mariah and I have gone up the coast in the last month, you're seeing the signing bonuses of $200 to $1000 from everything from grocery stores to, you know, McDonald's. Um, so it's not just the, the beverage industry that's facing this, but I would say, you know, our single biggest challenge is, uh, workforce, and then I I'd say sort of within the marketplace, I think another big challenge is a, as a watch out is, you know, skewed proliferation in the three-tier system, um, as folks come out of, and I see Amy shaking her head, I can only imagine how many people are, are coming to her with their, their, their newest innovations. And I think it's a moment where you gotta go deep with your innovations like locally to prove them. Out before you bring them, uh, try to go national into the three-tier system, uh, cause like John, John, I know he doesn't have as many taps as he used to have, so there's not as many, as much shelf space or as draft handles for innovation. So suppliers, I think, need to be, uh, more careful than other, uh, other to go deep in every regard before they go national, uh, with their innovation launches.

Speaker 2 [20:43] Really interesting stuff, um, and definitely some big challenges. John, what would you say are your biggest challenges right now that you guys are facing?

Speaker 4 [20:50] So there's a, there's a couple of things. Um, after 37 years of having, uh, discounted wings on Monday and Tuesday night, um, we had to discontinue that this week. And, um, you know, two reasons. Uh, but the biggest reason is just short supply. Um, we were cut 60 cases, so when you're talking 60 cases at 40 pounds, it's a lot of chicken wings. Uh, on Monday's delivery, uh, we knew it was coming. So we had to act quickly and announced we just can't do it. We've got enough wings to, uh, offer on Monday to Sunday, but we just can't do wing nights when they really spike up. Um, and on, on top of that, they're $137 for a case and a year ago, they were $90. So, um, and it's all, it's all labor-related, uh, the same thing, the chicken processing plants. Uh, I know the one we, uh, buy out of Mississippi, uh, needed 100 people and they said, we'll teach you how to cut chicken, do it all, $50 an hour, and they got 5 people. So, um, that. Just shows you, it's not, it's, this, this unemployment issue isn't, uh, is across the country. Right now, we need 200 workers. We, uh, when we closed down, we had 1,147 employees. Now we have 927. So, to ramp back up, um, and that's what's gonna hold us back. It's, it will hold. Um, the economy back because everyone's not gonna have enough workers to, to produce, to get to the levels, you know, um, of where you were pre-pandemic. So, you know, commodities and, um, and labor for sure.

Speaker 2 [22:36] I had no idea. I knew about the chicken wing shortage. We totally should have put at the top of this question. So I'm very sad to hear about the demise of wing night. I love a good wing night. Amy, I know you have kind of hinted at a few of your challenges. What specifically has been, uh, most troublesome for Betmo?

Speaker 6 [22:52] In stocks and everything that goes into that is what you guys are talking about. So 2020, definitely the aluminum shortage. Um, I even had to pull some products from ad because they, they just could not keep the product in stock, um, but I do know some breweries have stopped production on certain packages to help combat that and just, you know, putting their concentration into better sellers and also some move from cans. To bottles using the same UPC codes and that's been um successful, but everything else we like to talk about the, the, the labor, the truck drivers, everything that comes down to make sure that product's being produced and on the shelves is that's our number one goal right now is to try to keep products in stock.

Speaker 2 [23:36] So two more questions for you. How many of those can to bottle on the same UPC switches did you see?

Speaker 6 [23:42] I can think of at least 4.

Speaker 2 [23:45] Interesting. OK. And then, you know, just in general for you as a buyer, how much of a death sentence are out of stocks for you? Does that kind of change your strategy on that particular brand moving forward?

Speaker 6 [23:56] You mean for how I feel about being out of stocks? Yes, because it kind of puts a bad taste in your mouth, right? So I'm working, um, on about 3 of those right now trying to get past that and doing everything we can. I got a phone call this morning for my 4th of July ad, so I have to pivot really fast as soon as I get off this call. So it is, it's due to cans. It's due to the shortage of product coming overseas and cans coming overseas. So yeah, it's, it's very much a challenge.

Speaker 2 [24:25] Wow. Uh, Julie, from the administration's perspective, how can we help fill the labor gap?

Speaker 5 [24:34] I think, uh, the biggest thing we can do is get shots in arms. Um, really, um, folks need to get vaccinated, uh, and that's, you know, at this point, uh, people live, you know, within 5 miles of where they can get a shot right now. And so I think getting shots in arms, I believe, uh, uh, President Biden just announced, I think yesterday we reached 250 million shots already. Um, we really need to get to that 70% of adults vaccinated by July. Um, that's gonna be the thing that opens the economy up. That's gonna be the thing that gets people back to work. You know, the, the labor shortage is complicated, you know, it's a mix of, we'd be fooling ourselves if we didn't say that, you know, it's a mix of both, um, you know, benefits and pay and the unemployment, the extra pay that folks are getting, but it's also, you know, there's still a pandemic happening and, uh, you know, in beverage alcohol and an on-premise and In this industry, uh, in this space, you know, you have to work with the public and so there is still a fear, um, and I think the biggest way to fix that fear is getting vaccinated and getting our country back on track in that way and we can really fully open up and get past this.

Justin Kendall [25:45] Let's get into some of that opening back up. Um, Sam, what are your expectations for recovery? What does it look like? Does the business ever get back to pre-pandemic levels, and when do you expect it to happen?

Speaker 3 [26:00] Well, by, by business, I mean, uh, uh, you know, I don't know if you're talking like our, our own retail outlets or overall within the, the marketplace. Um, maybe, you know, just to say what, what, uh, it was obviously our retail locations that got more adversely impacted than our production, uh, facilities. So staying on that, you know, I think, I, as, as John said, I, I think we're in for a very busy, uh, year. What's really frustrating Trading as we see awesome foot traffic in Rehoboth and Milton, maybe because, uh, you know, President Biden's summer home is here. Uh, but it's like the customers are here, but getting enough folks at the, at our retail outlets to, to be there with them, uh, is, is a big challenge. But I am confident, you know, that as Julie said, if we can get to that herd immunity this summer, I am confident, uh, you know, this is the, the year that we have to get through and that 2020. To we're, we're planning for a return to normalcy. Now, I do think the new norm will just kind of accelerate, kind of what I've, I've often called like the jaws of death, like within the craft beer world, there seems to be two models that are accelerating, and I think the COVID moment only helped to, you know, um, accelerate the acceleration, which is kind of the hyperlocal model and the national model. And I think uh uh the most challenged model is say that 20,000 to 200,000 barrel brewery, especially those are focused on mostly out of state, out of home state distribution, um, and especially, frankly, those that have, uh, chosen for, for better or worse to be 100% focused on beer production. I know the next panel's gonna talk a ton about the fourth category or beyond beer, but I do think that was, uh, there was a moment. When that was kind of expected for bigger companies to be that diverse in their portfolios, but I do think consumers are looking for that amount of choice or a broader num amount of choice, even if they're going into a taproom brewery, you know, uh, whether that place makes its own seltzers, its own, uh, RTDs, but that diversity of offerings expectation, uh, is something that I think is gonna stay relevant, uh, and only get amplified post-COVID.

Justin Kendall [28:10] John, what are your expectations? When does the business come fully back, um, and what's it look like?

Speaker 4 [28:17] So, I mean, that's a really good question. I mean, we're ecstatic where we are right now at 94% of 2019 sales were, were, were absolutely ecstatic. But it will be harder and harder to get, uh, you know, really get the ball working until we are fully staffed in our restaurants. That's A. B, you still gotta remember, and I, I agree with Julie, shots and arms and herd immunity is gonna help. I mean, You know, a third of the people have not cared one bit, have been out the entire time. The middle third have been very cautious about when they come out and they go to places where they, where they felt safe. Um, and, uh, you know, a third of people haven't gone out at all, and I, I actually just talked to someone the other day in our restaurant. It's the first time he's been out in a year. Um, so that's still happening. So gaining that, those that customer confidence is gonna be key. And, you know, I know I mentioned the governor reopening everything on June 2nd. That just doesn't mean that we're automatically gonna take every bit of our plexiglass down. We gotta think this through. Um, you know, our, our guests that have been coming in because they felt comfortable before, will they still be comfortable as we do, um, as, as we do open up more and more? Will they be comfortable with our staff if they're not wearing a mask? Um, and these are questions that at least we've got a little bit of time to talk to our guests, to talk to our staff, and, um, we, we definitely have to make, you know, our customer base continue to feel, um, confident about coming into our restaurants.

Speaker 2 [29:57] Amy, what are your expectations for recovery and, and does the business ever look like it did pre-pandemic? I know your business is a little bit different, so what are you, what are you thinking?

Speaker 6 [30:07] So we, we are definitely in a unique situation and because we are retail and we have a, a wide variety of new products that we're offering our customers, but like I, I talked about getting product in stock and this is where I need the supplier and brewery's help in communicating. If you, if you heard you're gonna be low on something and you know what might be in an ad or you know. Special email blast or whatever just pick up the phone and call me you know let's talk about it change, you know, let me help you help me, you know, stay in stock we'll pick something that is in stock so that's the biggest thing for me right now so we, we definitely have recovered very well, um, and then pre-pandemic with the GPuff business model changes I. I can't compare pre-pandemic because I, I, it's gonna be totally different. It already has started to, you know, manipulate in, um, for our changes for, you know, we have over 20 stores now with a GA, um, outlet inside. So we're definitely seeing some weird numbers right now to last year. So we're gonna have to wait and see what happens.

Speaker 2 [31:10] Mhm Definitely, uh, Julie, the AP has reported that 186,200 businesses have applied for restaurant revitalization fund grants in the first two days. So, how is demand pacing, and are you ready for applications from people like John?

Speaker 5 [31:28] Well, actually, the latest numbers that were announced yesterday that is that it, as of the first week, 266,000 applications were submitted. Requesting over $65 billion which is double the amount that Congress allocated to this program. 147,000 of those applications came from businesses who are owned by women, veterans and social and economically disadvantaged individuals requesting about 29 billion of that, of those funds. Um, so I said this the last time we were here, uh, obviously about a different topic, uh, but if you're interested in this fund being, um, allocated more money, highly recommend reaching out to your congressional members, um, so that they can put more money in the pot. Um, this is a, this is a program that I think is gonna be, uh, life-changing for businesses in the hospitality space. Um, the, these are funds that are, that are grants that are not taxed on the federal level, that is gonna help make up the gap of what people lost in 2020. Um, and that, and that is, that is the goal, you know, in, in any federal program. Um, you have to balance things. So, speed of distribution of the funds against an equitable, equitable distribution of the funds against protecting against fraud, right? And so, you can have two of those, you can't have all three at the same time, right? So, um, this is a, this is a program where we, we were tasked by Congress to get the money out fast, um, and get the money out equitably. Um, and, and also, you know, I think that the program office that built this, built this program has done a lot of protections against fraud as well. Um, but you know, this is taxpayer dollars and I know that a lot of folks are wondering where's the money, when are we gonna get the funds. Um, people are working diligently to get funds out. As of yesterday, 21,000 businesses had received the funds already and the application had opened up on May 3rd. Um, so about $2.7 billion had already been put into bank accounts. Um, so I, I, I think that, you know, over the next few weeks, you're gonna see a lot of businesses being able to take advantage of this program, and I just, again, There's clearly not enough money that has been allocated by Congress, um, and so it is, it is absolutely, um, necessary for folks to be reaching out to their representatives and their senators, um, to take a look at this program.

Justin Kendall [34:02] John, how much of a free for all right now is it for tap handle space at your place, and what advice would you give to suppliers out there who are looking to get on with you?

Speaker 4 [34:15] I am gonna say through all of this, um, My supply partners have been very empathetic and, um, you know, as before, uh, it was push, push, push. Um, now they've been a lot more empathetic and, um, you know, as we uh start to open, I'm, I'm using about 28 out of 33 of my tap handles. Uh, again, you know, just didn't want any waste whatsoever. So if we're getting ready to pull something off, we, we had an extra tap handle in the restaurant to, to burn through it, um, while we put the new on. We have done a lot more one-off kegs. So, um, with partners, you know, where I, I, I get, uh, 17 or 18 kegs, I put it on, when it's gone, it's gone. And that's worked very well. Um, I, I mentioned before, I'm a core guy, so, you know, a lot of the core brands have, uh, that stand, uh, stand up in the marketplace, no matter what. Um, that's what we've, we've pretty much have been driving. But as we move out of this, uh, and I think with beer board's help, to be honest with you, I'm gonna be able to do a lot more, uh, offerings and, um, using a QR code right now, we, we market everything on a monthly basis, on a monthly placemat. And so using a QR code, especially for our draft business, if we're out of something, we can just put the new one on and the customer doesn't know any better, you know, it'll go right on the QR code, they'll be able to see it. And, um, so. You know, they're started where I've, I've been taking meetings here in my office here for, uh, literally almost ever since, uh, we reopened on May 21st. And, um, there is a big push, but, um, I, I think, um, understanding that, um, we still can't do all that we were doing, that we will be able to. So, don't get frustrated. Make the call and, um, You know what, we'll make the decisions from there.

Justin Kendall [36:18] And remind us how much of your beer business has come back so far? How's that tracking and how's that compared to other categories?

Speaker 4 [36:26] So, um, through this, through all of this, um, the spirits category is pretty much held as a percent of sales. So, about, uh, 9.8% of my business is, is spirits. And that, you know, even when, uh, numbers were, um, the sales numbers, overall sales numbers were down, the spirits category is the one category that kind of held. Uh, beer is up to about 85% or so, uh, pre-pandemic. Um, but you gotta remember with these shutdowns, um, especially in the winter, I mean, good lord, I'm, I'm from Cleveland and our Cleveland Browns finally made the playoffs. Are you kidding me? And we could not capitalize on it. We were shut down at 10 o'clock. Um, we can't stack and rack the bar, uh, with beer drinkers. And so, you know, all those fun times, all, all those occasions, we couldn't capitalize on. So, I'm so bullish on the beer category coming right back. Um, I think we're gonna see it as we open up, um, and Um, you know, excited about the future.

Speaker 2 [37:34] Great. Uh, Sam, you're on the verge of opening an on-premise outlet in Miami, so in the former concrete beach space. How confident are you feeling in an on-premise return right now? And how have you altered your approach given the state of the world?

Speaker 3 [37:47] Yeah, so I mean, Florida's uh known for its theme parks and what we're trying to build there in, in the Art District of Miami, uh, it's kind of an adult theme park for adventurous, you know, drinkers and eaters. So we're trying to put in a lot of, as I mentioned earlier, I think there's a heightened expectation for more dynamic offerings. So, of course, we'll have your, your tried and true, uh, approachable IPAs and Pilsners, but we're introducing a whole pro uh A whole line of uh um beer cocktails, so fermented from malt, but like our mojit ale is combining locally freshly juiced cane syrup, like that reducing rate at the point of service into each pint glass with muddled uh mint and lime. So beer cocktails. Uh, we're working with the University of Florida's ag department to source experimental fruit varieties to do Florida fruited sours in addition. The sequence ale, so hyperlocal, fruit and sours, frozen, uh, concoctions start, you know, based on sour beers, and then food offerings as well, like small plate offerings as well. So a very like dynamic lineup, but also even like entertainment-wise, there'll be a micro, uh, record store, you know, as the official brewery of Record Store Day, we've got partnered with Sweat Records, a Miami record company to curate a whole wall of vinyl where the staff. Half of the record stores making recommendations for what album to bring home with what, what 4-pack to bring home. As I mentioned, on-prem, uh, the to go option is gonna stay really strong. So our thoughts is what better way to, to enjoy a night after you've gone out for your meal, but to bring home a great album, maybe buy a turntable from us and a, a 4-pack, uh, at home. So yeah, Mariah and I are, are heading down there, uh, next week. But you know, I know one of the questions Justin had. Well, you know, is, is, is there gonna be like a Donnie Brook in fist fisticuffs as on-premise comes back? And I think that the beer industry, this is, I, I, I feel a great sense of unity compared to years past as we come out of the, the, the pandemic across all the beer sort of, uh, you know, stakeholding trade groups from the BI to the BA to NBWA because this is a moment that we need to shine. If you think of the heart of the beer industry. The unique muscle where we outshine wine and spirits on-premise, the chamber of that heart, uh, you know, is the draft system. Wine and spirits can't beat us at fresh, sessionable, sociable draft. That's where beer wins. Uh, and then off-premise, the critical chamber where we beat wine and spirits is the cold box. And let's face it, that's under siege, especially as the beyond beer category, uh, gains, uh, momentum. With canned wines and spirits company focused on that cold box. But again, this is where our muscles are the strongest. So I think in this next year, for beer as a, as a whole to gain back share against beer and wine, focusing on those two chambers, the draft opportunity on-prem as we come out of the pandemic and protecting and amplifying our strength uh in the coal box off-prem are gonna be the keys to, to beer's success.

Speaker 2 [40:56] I love how you just flex your, you know, English and literature background with the use of the word Donnybrook there. That was great.

Speaker 3 [41:02] Is that trademarked? I'm sure if you went to Untapped, there's 7 different Donnybrook beers out there.

Speaker 2 [41:07] There have to be, but if there isn't, there should be a Dogfish Donny Brook like next week. Sam, will you guys have the Dogfish head can cocktails available in Miami and at your other retail outlets?

Speaker 3 [41:17] That's a great question, Jess, cause it shows just how um Like labyrinthine, the world of, of, of spirits is compared to beer. We all know, you know, post-prohibition, the government said every state can set their own laws and the complications, but also advantages that created, and it's even more nuanced with spirits-based liquids than it is with malt-based in terms of control states, and, and, and all, all those nuances. So the yada yada yada is Florida. As a state that we can't sell our spirits. We'll have our, our non-Ak, our lemon quest there. Uh, but within Delaware law, we will be able and we do sell our canned cocktails, but that's also, you know, a really interesting component. And I know Katie on the next panel can talk, uh, very, very with from experience about like Texas's unique laws, uh, as you navigate spirit-based alcohol drinks, uh, versus malt-based.

Speaker 2 [42:14] For sure. So, Amy, how have your shelf sets changed over the past year? What, what have you kind of noticed?

Speaker 6 [42:21] Well, we don't schematic our ambient sets, only the cold space. So since March last year up until the end of the year, we set up almost 1000 new SKUs. So the stores are very challenged right now to manage that inventory and uh because they order their own inventory. So with the GoPuff acquisition, um. They only stock about 200 beers in their fulfillment centers to what they, you know, deliveries that they make. But for us, when we combine our store with theirs, we call it an omnistore, which is going to be all of them going forward. We only have a few stores that aren't, so they only offer those 200 beers. But if in an Omni store, whatever current stock that store has, it's available on the GoPuff app, you know, for a quick and affordable delivery. So that's kind of, um. The, the difference with our sets is like if the store doesn't have room, they just don't bring it in, you know. So the, the differences between working with GoPuff and Bevmo, it's still, you know, the suppliers on their side, they still need to contact both John and I. You know, we've worked together and we're trying to collaborate more, but it's still new and we're working through those details, but with the digital age of the breweries just need to, you know, help promote their beers, continue to steer customers to where to purchase products and, you know, drive them to the platforms.

Speaker 3 [43:42] Hey, Amy, I got a question if that's all right. Is when you mentioned that, that, that there's no schematic for the ambient, the warm shelves, do you use those as like a farm league and a proving ground where if something is successful in that ambient space, it can move into the cold shelf, or, or do you look at it that way at all?

Speaker 6 [44:01] The whole box is um strictly driven by sales. So if you have a SKU that that popped in at the middle of the year after the sets were there, it will get a, you know, plug and pull in August. Um, each individual store can do something more with that product and it might not sell here or there, but we do our sets, uh, lots of different sets, so we. Have like 7 different areas and depending on the boxes, they run from 5 doors all the way to 14. So it, it needs to be sales for that specific area, you know, I can think of a beer in Contra Costa. It would make it in San Diego because it's not down there, so it's available to be in the coal box and the sales were good enough for it to actually make it in there. But the stores all have their own store choice doors. You're from 5 to 10 doors. You have one full box. You can do whatever you want. Most of that is local and a lot of it is kombucha that needs to stay cold. And if you have 10 or 11 or more doors, you have 2 store choice. So that little bit of flexibility for that and, and some stores do have end caps that are coolers, so there is a little bit of space for those smaller folks that their product really needs to stay cold.

Speaker 2 [45:12] OK So, John, Amy, Sam, how have your relationships with suppliers changed over the last year? I don't know who wants to tackle that first.

Speaker 6 [45:23] I will. Well, Sorry,

Speaker 2 [45:26] you have the floor, Miss Amy. Go right.

Speaker 6 [45:28] OK, so for me it is basically is the Zoom, the team, you know, the phone calls, um. And the relationship now that we need to align with GoPuff on major meetings for like special projects or promotions, pricing, and then we, we need to align between us on our marketing programs. So between the two companies during last year and coming into this year, I believe that is what is gonna change the most for, for me is having more shorter meetings via video.

Speaker 2 [45:58] Mhm. How about you, John?

Speaker 4 [46:00] Um, well, uh, my role shift a little bit between being a government legislative affairs guy dealing with politicians, what I've never had to do, um, and balancing that with seeing supply reps. Um, I haven't changed that much. Um, I've had a few, uh, suppliers kind of disappear through all this, which has been kind of weird. Um, but for the most part, you know, I'm still one of those guys that wants to taste the product. I wanna know about it. Um, am, am I looking at IRI? Absolutely. But, you know, I still believe, uh, on-premise is in the front, uh, even though, um, I see, uh, suppliers more and more maybe, um, trying to go around us, variety packs and then not offering us maybe something in the variety pack that we think is gonna match and help us. Um, so, you see a little bit of that, um, you know, some of the companies. Uh, cutting back, um, on on-premise, uh, representation. I think that's a big mistake as we come out of that. I think if you ignore the on-premise, um, You, you, you really shouldn't do that. Um, you know, there's, there's plenty of markets where there's market leaders, and if you can get your product, I guarantee if you can get your product into, in, in our restaurants, that, you know, it's gonna move the needle on the on-premise at, at key spots. So, Uh, you know, I haven't really changed my approach. Um, I'm not a, I'm, I'm a Zoom guy here, but I'm not really a Zoom guy. I still wanna see people in front of me. I wanna know them. Um, and, you know, our business is built on relationships. The pricing is what it is. My, my food guy laughs at me all the time. Oh, what kind of point of sale did you get, dude, you know, while he's cutting million-dollar deals. So, It's, it's, it's a little bit different, uh, but I, I still wanna try the product. I still wanna know what I, what's, what's going on our shelf.

Speaker 2 [48:01] Sam, I know relationships are really important to Dogfish Head's, so how have yours with suppliers changed in the past year?

Speaker 3 [48:08] Well, I mean, you know, uh, you know, like John said, we're a big relationship. If we can be in person, like I've been visiting star fruit farmers in Florida personally as, since I've been vaxed and, uh, uh, a regenerative farming grain expert in North Carolina. So getting out there and, and meeting the folks that are, that are making our ingredients feels good to be, uh, doing that again. Um, Um, but, you know, uh, uh, you know, to Amy's point, I don't think I'm gonna have, uh, an existence going forward where Zooms aren't some big fraction of my workday, because there's certain meetings that are just way more efficient, uh, to do this way. Now, what's interesting is Mariah and I are going up the coast. A lot of distributors are echo, echoing what Amy's saying in that they don't want Salespeople from Boston Beer or other suppliers to come into their building, but what they do want them to do is get back out in the marketplace, meeting with John Lane, meeting with, meeting with Amy, meeting with the retailers. Our salespeople, I think, are shifting towards spending more time with the retailers face to face, and less time with the distributors, uh, face to face is something that we're seeing.

Justin Kendall [49:20] Well, Sam, we're gonna have to leave it there. That is our first panel. Stick around. We're gonna have Boston Beer CEO Dave Berwick, Katie Beale Brown, the cofounder the founder of Lone River Beverage Company, and Ed McBrian from Manhattan Beer Distributors. So we will be back.