Start-up breweries have opened their doors to a new world this year and face obstacles they never imagined when they started planning their brewery projects.
These breweries, including Slow Lane Brewing in Botany and Bucketty’s in Brookvale, have faced challenges common to startups around the world. But they also had to deal with restrictions and instant blockages that proved painful for even more established breweries.
“When we first opened we had to open with everyone wearing masks and everyone had to be seated,” said Nick McDonald, co-founder of Bucketty’s, which launched in February this year after a difficult development process.
“A few weeks later people could get up and dance, we became a bit of a concert hall in the area, which was amazing.
“But then we had the restrictions pushed back for a few weeks, and people just don’t like to sit down and drink beer!” It’s difficult because you have to be stricter than you want, but having to close the doors was even harder. “
Opening up after the worst is over means people have learned from the first lockdown and ongoing restrictions.
“There’s that uncertainty, I guess, that’s mostly it, but as this lockdown has happened people are more relaxed about it, there’s not so much fear – it’s more frustration. “said McDonald.
“People are good at recording and cleaning up, everyone’s done it before, so it’s not that big or scary.”
It’s been a big learning curve in aspects of running a business that breweries started before COVID never would have had to consider.
“We had to be creative in the planning of the space when thinking about how to do social distancing – the customers are understanding, they are as frustrated as we are.”
Bucketty’s was forced to get creative quickly during shutdowns last month, and it has rebuilt its sales room into a drive-thru to sell beer on the go, as many established breweries have done during COVID.
“We got the notification at 2pm on Saturday that we would be locked up, so we got everyone out at 6pm and upset the whole room. We took down the furniture and the live music stage and were able to turn it into a drive-thru and had our first customer within an hour.
“We have to sell beer to stay afloat, so doing the drive-through is a cool pivot, it creates buzz and experience.”
Elsewhere in New South Wales, Alex and Yvonne Jarman opened Slow Lane Brewing in January, after putting the reception hall project on hiatus during COVID and focusing on wholesale.
“It’s very hard work. You are constantly reacting and changing your approach based on customer feedback, depending on what happens, whether we are locked out or new restrictions are in place.
“React and change your approach like which beers to have in your repertoire, what proportion you can, how to market.
“[We learned that] we need to react quickly and mobilize our people quickly, ”explained Alex Jarman.
“With the bar closed for on-site consumption, we’ve changed our opening hours to make take-out every day, as opposed to just Friday through Sunday when the bar is open. We also offer local same day delivery.
But there are other issues that new breweries face that are much more long term.
Deciding to get into packaged beer is a major decision for any brewery, and COVID-19 has caused a seismic shift in small breweries towards packaged beer to offset losses due to site closures.
But for start-up breweries that never had big in their initial plans, it has been a minefield.
“Actually, we just got our cans at a few local bottle stores recently, but sending five 10-minute cases to make $ 100, is it worth it?
“It’s good to introduce beer to bottle stores, but unless you’re doing massive volumes it’s hardly worth doing on a small scale, it’s good for the brand but financially. it’s not that helpful, ”McDonald explained.
“Wholesaling is good for flipping inventory so it doesn’t sit around for too long, but paying bills is negligible. “
At Slow Lane, however, the team decided to focus on wholesaling first during the pandemic, and Alex explained that it was about being even more flexible than ever with business plans. and strategies.
“Initially, we were focused on opening our brewery tasting bar in the first half of 2020,” Jarmon said.
“However, when COVID hit, we decided to delay the opening and focus on wholesale and takeout and online. We were canning the majority of the beer we produced and the bar eventually opened. its doors in January 2021.
“[But we had] greater focus on wholesale and take-out and online marketing and sales.
“With more and more customers consuming your beers at home, you need to focus more on the quality of your beers in cans. Their first experience of your beers could now be through a can versus the brewery.
Small businesses are already struggling during their first few years of operation. According to Report on the number of small businesses in 2020, small and medium-sized businesses had an average 65% chance of survival over five years.
When they manage to stay afloat, start-ups rarely make a profit in the first year, with some estimates suggesting it may take three to four years for a business to make a profit – depending on the industry, the start-up investment and many other factors.
But in addition to these start-up pressures, new breweries face bottlenecks and restrictions with subsequent loss of trade, but also without the government support and benefits package that was launched last year but which has been largely deleted.
“We’ve been busy since we opened so we’ve built up cash reserves, but they’re depleted now, a few weeks of closing are huge – it costs to keep the place open,” said McDonald.
“Our activity is greater than 99% at the tasting room bar, we have no big money to rely on.
“Having cash reserves was a good thing, if we hadn’t had it would have been more stressful, we can go on for a few weeks, as long as the lockdown doesn’t last for months.”
At Slow Lane, the team tried to account for any potential disruption related to COVID.
“We are fairly careful with our forecasts, but it is quite difficult if not impossible to predict the bottlenecks to be able to take the loss of income into account,” Jarman explained.
“Even though there is no lockdown, we would expect there to be restrictions on the operation of our brewery tasting bar. It seems normal to us now.