"The Impossible Choice" by Jeff Bagby, Co-owner and Head Brewer, Bagby Beer Co.

Discussion in 'COVID-19' started by Todd, Mar 22, 2020.

  1. Todd

    Todd Founder (5,941) Aug 23, 1996 California
    Staff Moderator Fest Crew Society

    hottenot, SFACRKnight, Roguer and 4 others like this.
  2. MostlyNorwegian

    MostlyNorwegian Zealot (548) Feb 5, 2013 Illinois

    Governance is a far different occupation than being the "owner" of a business and it requires much larger choices than how to be vindictive and/or to be able to brag about making cost cutting measures.
    I'm sure there is something to be learned from an ounce of prevention is worth a pound of cure right now.
    hottenot, Roguer and BrewHound601 like this.
  3. BrewHound601

    BrewHound601 Initiate (51) Jan 30, 2020

    I cannot understand why they would just throw in the towel though; so prematurely? we are only 1-2 weeks into this. How bad do these people expect it to get. Maybe they were already failing...
  4. JayWhitson

    JayWhitson Crusader (760) Feb 25, 2015 Montana

    If you look at the progression through China, and assume America won’t start lifting restrictions until reported cases go down daily...
    SchmiviaSteve and hottenot like this.
  5. BrewHound601

    BrewHound601 Initiate (51) Jan 30, 2020

    I'm skeptical; The government cannot keep businesses on lockdown like this for longer than a few weeks.
    hottenot likes this.
  6. JayWhitson

    JayWhitson Crusader (760) Feb 25, 2015 Montana

    We will see. The more I read from doctors and scientists (the ones whose professional opinions matter) seems like they might not have a choice. I’m currently unemployed and think the only think worse than this is being sick as well.
  7. FatBoyGotSwagger

    FatBoyGotSwagger Meyvn (1,461) Apr 4, 2009 Pennsylvania

    That's why most states effected added another few weeks of unemployment to existing benefits. This is going to go on for some time..hopefully not 18 months and will get worse in the coming weeks before it gets better.
  8. Giantspace

    Giantspace Crusader (780) Dec 22, 2011 Pennsylvania

    The government needs to step up and be in the every day persons court, not the side of corporate America. Extend unemployment benefits, help the states do this. Get cash into pockets today, $1200 is not enough. Make sure everyone is ok and can eat and pay rent. It’s a shit ton of cash but what other option is there if you want some semblance of an economy back.

    Once the sick get well in theory they will be able to go back to work and get things running again, no matter how small that is. If I get sick and recover I’m sure as shit going out to get a job.

    Unchartered waters call for uncharted actions.

  9. JayWhitson

    JayWhitson Crusader (760) Feb 25, 2015 Montana

    I agree, but am skeptical that a common sense answer will be applied. We also need corporations to not close the employment options we will need when the infection is suppressed.
  10. mactrail

    mactrail Poo-Bah (9,773) Mar 24, 2009 Washington
    Society Trader

    Bagby also says "Insurance companies are busy denying our claims of the Business Interruption coverage we pay for, citing a little known exemption for bacteria and viruses. It is not acceptable, and the lawsuits are already starting. We are calling on our State and Federal government to step in. In the absence of this insurance, we are desperate for funding...
    SchmiviaSteve, MrOH, Roguer and 6 others like this.
  11. MostlyNorwegian

    MostlyNorwegian Zealot (548) Feb 5, 2013 Illinois

    Perhaps they see the writing on the wall, and it's going to take quite a few months to recover. Not really a good time of the year to get hammered either. A lot of beer could be on the schedule to be brewed or to get finished for packaging to send out for spring, and all it entails for beer drinkers. If they have a few beers that are seasonal that drive their sales for the rest of the year. It's a death notice.
    How is the cash flow being sustained for cash intensive business when so many taps have gone dry? Breweries that heavily rely on keg distribution for their cash flow are deeply screwed for the time being.
    Not sure the real reason. But, with cash flow becoming an issue because sales have dropped fantastically in short order. I think it's going to be a very interesting, and hard summer for a lot of breweries where releasing new product is going to be concerned.
    unlikelyspiderperson and Peach63 like this.
  12. Brewery-CFO

    Brewery-CFO Initiate (61) Mar 9, 2013 Indiana

    Correct....we are all finding out that business interruption insurance does not cover viral/contagion. There will be lawsuits but by the time they go to court it won't matter.
  13. Brewery-CFO

    Brewery-CFO Initiate (61) Mar 9, 2013 Indiana


    Update - I've heard of several breweries in my area that have already let go of some to all of their workers.
  14. AZBeerDude72

    AZBeerDude72 Poo-Bah (1,936) Jun 10, 2016 Arizona
    Society Trader

    I think we have a ways to go on this bug. I was talking to a person at Wal-Mart Sunday and she informed me that the National Guard is going to replace the truck drivers for their stores. That the Govt. feels a high risk of people working sick and they want to ensure disease free people hauling food/goods. I was thinking well if this is supposed to end in a week or so why this move, then I realized this is not ending any time soon we are just being told that to tamp down panic.
    My guess on this is May until it slows down and life returns to normal some.
    JayWhitson likes this.
  15. BrewHound601

    BrewHound601 Initiate (51) Jan 30, 2020

    Very sad week for small to mid size business. Do you think the big brewers constellatio, Aninbev, Heineken, etc... will buy the smaller ones out?
    JayWhitson likes this.
  16. HouseofWortship

    HouseofWortship Crusader (776) May 3, 2016 Illinois

    But will the demand for craft beer change if this is a long term economic down turn with huge hits to unemployment? If I don't have income or are scrapping to pay the bill, the $20 4 pack or $20+ BA stout starts to look like an absurd decision. Brewers will have to adjust or consumers will flock to alternatives.
  17. DrumKid003

    DrumKid003 Aspirant (239) Aug 10, 2013 Oklahoma

    I could see regional breweries bought out and turned into a national brand, or breweries with a large "cult" following bought out and turned into a regional band. I'm putting the over/under of being bought out at 20%, while the rest will go broke or give up before it costs the owners everything else they own.
    BrewHound601 likes this.
  18. Giantspace

    Giantspace Crusader (780) Dec 22, 2011 Pennsylvania

    It’s going to get exponentially worse once Trump tells people it’s ok to go to work and not stay in. He will be doing this after the 15 day “test”. His stock portfolio is shrinking and to him that is the economy.

    I get the economy is bad but lifting the suggestion will decimate the country and make Italy look like a walk in the park.

    This is why it was Imperative to be testing like wild fire from day 1.

    The spread is coming from people who don’t show symptoms but are spreading it all over. It takes up to 14 days to show and that’s why it keeps getting worse as time goes on.

    Stay safe and VOTE

  19. DrumKid003

    DrumKid003 Aspirant (239) Aug 10, 2013 Oklahoma

    This is what I see happening in the near future. If there are that many people out of a job, or their income has been severely curtailed, they aren't going to play the $20 4-pack game anymore. Taprooms will also have to reduce their prices, or increase the pour size, if they want to keep people coming in the door.

    $8 for a 10oz, 8%ABV WCIPA, with Mango? Yeah, that's not going to fly anymore. They'd be better off upping the pour to 12oz or 14oz, and leaving the price alone.
  20. BrewHound601

    BrewHound601 Initiate (51) Jan 30, 2020

    First stop blaming Donald Trump- If anything blame the communist Chinese Government for hiding this since October. Secondly, testing has ZERO effect on containment - People need to isolate regardless at this point. Testing will not prevent any spreads. EVERYONE will eventually test positive, symptoms or not.
    SP23, dcgunman, vince4953529 and 5 others like this.
  21. officerbill

    officerbill Disciple (374) Feb 9, 2019 New York

    "denying our claims of the Business Interruption coverage we pay for, citing a little known exemption for bacteria and viruses."
    This exemption isn't "little known", it's standard on interruption insurance.
    Very few policies cover losses for infections & disease without a special rider, but almost all cover losses due to civil authorities.

    Had he remained open, with a skeleton staff, providing take out and delivery he would stand a good chance of his carrier covering part of his loss because he was following civil orders, and attempting to mitigate losses, by maintaining as much of his business as legally allowed; instead he made a unilateral decision to fully close.
  22. Brewery-CFO

    Brewery-CFO Initiate (61) Mar 9, 2013 Indiana

    I think you will see some hit to demand but the cut to craft supply will be greater. So I think those that come out of this will be able to grow quite a bit. My reasoning is we tend to view craft beer as an "affordable luxury" item. The recession will really hit big ticket items like cars, jewelry, etc. So a month from now everyone is going to be hurting but we also want life to return to normal. We can't afford to buy a new car but we can still "splurge" on a $10 six pack of craft beer. That is just my opinion, I may be wrong.
    denver10, Ronmarley1, Jaycase and 2 others like this.
  23. Brewery-CFO

    Brewery-CFO Initiate (61) Mar 9, 2013 Indiana

    Not sure if the big guys will. They really slowed down their M&A activity over the last few years. I think the most likely scenario would be venture capital purchasing quality breweries in the 20K+ BBL range for dirt cheap. What I envision would be someone buys a couple of breweries located in different parts of the country and then uses the name recognition of each brand to push the other brands in a given market. Like if you purchased a brewery in the midwest and one in the southeast. You could now release the midwest beer in the southeast and vice versa. You would tend to get a greater push by the distributor in each market since your combined brand is now bigger and they will have holes to fill at grocery, liquor stores, etc for slot spaces that are no longer being filled by breweries that just went under. Does that make sense?
  24. HouseofWortship

    HouseofWortship Crusader (776) May 3, 2016 Illinois

    It's an interesting take. The craft boom and associated "luxury pricing" of craft really started after the Great Recession so we don't have a historical predictor to reference.
    unlikelyspiderperson likes this.
  25. HouseofWortship

    HouseofWortship Crusader (776) May 3, 2016 Illinois

    It isn't the communist Chinese Government's duty to protect the lives of Americans. We do pay someone for that job and they get the blame.
    Angerhaus, grilledsquid, MrOH and 4 others like this.
  26. AZBeerDude72

    AZBeerDude72 Poo-Bah (1,936) Jun 10, 2016 Arizona
    Society Trader

    I believe they got the blame due to their lack of transparency, when they knew about this back in late Nov. they did not notify us or others about it. I think that is the reason for the comments and I believe both sides of the aisle agree on this.
    denver10 and BrewHound601 like this.
  27. cjgiant

    cjgiant Poo-Bah (5,024) Jul 13, 2013 District of Columbia

    How small are we talking? I would think what most of us consider "larger locals" are way too small for the big guys.

    20% by the big guys or in general? I'd say that's way too high, either way. The "extreme local" aspect of the new brewery boom make them a combined force against the bigger producers (even locally), but I'd think very few of them on their own are worth a second thought to buy out.
    BrewHound601 and officerbill like this.
  28. HouseofWortship

    HouseofWortship Crusader (776) May 3, 2016 Illinois

    Not sure what the international protocol for letting 191 other countries know about someone coming down with an illness is, but the facts are, that anyone in the Financial Industry with access to a Bloomberg Terminal was aware of this virus in November.
  29. AZBeerDude72

    AZBeerDude72 Poo-Bah (1,936) Jun 10, 2016 Arizona
    Society Trader

    I cannot speak for conspiracy theories only what has been reported. Those in the health industry who monitor these sort of outbreaks from what the news has reported where unaware until Jan.
    I believe there are scientists around the world who work together to watch and study outbreaks, and they are on the front lines for this stuff. I believe their protocol is to warn every nation since that is sort of their job.
    Anyway all news sources indicated we found out in Jan, and those same news outlets said the Chinese saw issues in their country months earlier, so I guess people can decide who is to blame.
    BrewHound601 and officerbill like this.
  30. BrewHound601

    BrewHound601 Initiate (51) Jan 30, 2020

    They deserve every part of the blame; I also blame OVERALL government with bipartisan blame.
    AZBeerDude72 likes this.
  31. BrewHound601

    BrewHound601 Initiate (51) Jan 30, 2020

    I wouldn't mind if AnInbev or whoever absorbed the craft at this point; Business in this country will feel this. Better to secure a job of servitude to stock symbol SAM and be on the poverty level than to have no craft beer at this point. Maybe small business IS INDEED unsustainable and a pipe dream at this point and century.
  32. Giantspace

    Giantspace Crusader (780) Dec 22, 2011 Pennsylvania

    You are wrong.

    Look at Korea, they test and test and test. Look how they are doing. Test non symptom showing people and quarantine them if positive. Don’t let big business dictate your response.

    Be a leader not a complete dumb ass. Let the people that understand this talk, not throwing shit you make up out there or wishing it will go away and then tearing into the media because they report how poor you are doing.

    If Trump was Chinese he would be putting these reporters in jail along with all that spoke bad about him. He needs to go now.

    I fully blame our president. He ignored this for months and now is considering opening the country up so he and his friends in corporate America can make tons of $ off Americans.

    He should be helping the average Joe out as well as well as some big business. Look at how much airlines spent in stock buy backs to prop up share values. Look at how much they want to save their ass. It’s pretty close to what they spent.

    Maybe government having part ownership of them might be ok.

    How many Americans are employed by the cruise lines?

  33. BrewHound601

    BrewHound601 Initiate (51) Jan 30, 2020

    SP23, officerbill and DrumKid003 like this.
  34. Giantspace

    Giantspace Crusader (780) Dec 22, 2011 Pennsylvania

    I’m done.

    Can’t argue with someone who is always right and does not look at fact.

    Is this Trump on BA?

    grilledsquid likes this.
  35. BrewHound601

    BrewHound601 Initiate (51) Jan 30, 2020

    You seem to want to argue, this is about beer and should not become political. Given that I received likes with my response I am confident within the context of my response. You seem to have a difference of opinion and seems to be more concerned with social issues. Henceforth that will cause apparent forking of opinion. I have no respect for China; Korea are not a model society either given that they haven't moved past consumption of dog meat.
    SP23 and DrumKid003 like this.
  36. unlikelyspiderperson

    unlikelyspiderperson Meyvn (1,247) Mar 12, 2013 California
    Society Trader

    Ah yes, that well known milestone that all cultures progress through...:rolling_eyes:
  37. southdenverhoo

    southdenverhoo Disciple (392) Aug 13, 2004 Colorado

    in my market, from the beginnings of craft through about 2013, the focus was on distribution to retailers, both on- and off-premise. That's what folks like Avery and Breckenridge and Boulder Beer and Ska and Oskar Blues and Left Hand and Great Divide did. I mean, they had their taprooms but the primary focus, and most of their production, centered on distribution.

    Then the gazillion small breweries opened, first a trickle and then a flood, with very little concern for distribution to outside retail outlets and more focus on retailing themselves from their brewery taprooms: selling everything they made directly to the ultimate consumer. That model became so successful that the first wave breweries started getting into multiple taprooms, either via satellite brewpubs or simply opening restaurants under the brewery name.

    Now this particular business disruption is hurting the second wave model more than the first wave model, which is interesting. If anything, off-premise retail is BOOMING while people can't go into shared public spaces like brewpubs, or brewery taprooms.

    I'm very curious what the long term effect, post COVID-19, will be...
  38. HouseofWortship

    HouseofWortship Crusader (776) May 3, 2016 Illinois

    One of the ironies is Trump never divested himself of his hotels and the hospitality industry is getting hammered by the shutdowns so how does he bail those industries out without an even further conflict of interest? He would essentially be bailing out himself.

    And we in the US can be looked down on by many cultures for eating pigs and cows. Judge not lest yea yada yada. Really the only animals that we shouldn't be consuming are ones that are already threatened and we are just further reducing numbers by eating them- whales.
  39. officerbill

    officerbill Disciple (374) Feb 9, 2019 New York

  40. MrOH

    MrOH Meyvn (1,069) Jul 5, 2010 Maryland

    I think that there will be a renewed interest in homebrewing once this is all over, sorta like there was 10-12 years ago. If the LHBSs and homebrew clubs make it through this.