At a press conference earlier this afternoon, California Governor Gavin Newsom announced a regional three-week stay-at-home order, which will apply to regions that fall below 15% of their remaining ICU capacity. San Diego is included as part of the greater Southern California region, which the State projects will reach the qualifying figure above by early December. The order will limit breweries and brewpubs to sales via take-out or delivery. No on-site drinking or dining will be permitted either indoors or outdoors.
This order comes a day after San Diego County’s Health and Human Services Agency reported 1,217 new COVID-19 cases and 16 more deaths, raising the county’s pandemic totals to 84,638 cases and 1,035 deaths. San Diego County was moved into the State’s most-restrictive purple tier on November 10, where it remains with 50 more of the state’s 58 counties. The stay-at-home order is an effort to curb the spread of the coronavirus so as not to overload hospitals and medical facilities that are already struggling to treat record numbers of patients.
Governor Newsom warned an order like this was on the table in a press conference on Monday. In the days that followed, local brewery owners came to regard the stay-at-home mandate as inevitable, and began preparing as best they could for its arrival. This is the second time hospitality businesses have been limited to delivery and to-go sales, the first time coming in mid-March when a stay-at-home order was issued at the onset of the pandemic. Since then, breweries have pivoted to packaging their beers on a much greater scale. Even so, this figures to be a make-or-break time for local brewing companies; one that not everyone will make it through.
The team at Five Suits Brewing has yet to experience life in the beer business unimpeded by a global pandemic. The family-run Vista interest opened in June and its first six months have seen its team executing a limited version of its business plan while adjusting to constantly shifting government regulations. All the while, they have done their best to stay positive and put themselves in a position where a second stay-at-home order wouldn’t completely break them. Co-owner and Head Brewer Nick Corona feels they’ve accomplished that mission. His current concerns are for his contemporaries and their employees.
“I hope that many prepared themselves for the long haul. Sadly, some will not be prepared. There is only so much that can be done before fallout begins,” says Corona. “My heart hurts the most for our industry workers, as they will likely be the first to be impacted. So many were impacted back in March and I can’t stand the thought of that happening once again.”
Conditions aren’t any better for brewpubs and hospitality companies with in-house brewing capabilities. Grant Tondro heads the beermaking arm of the 3 Local Brothers restaurant group (which includes The Barrel Room and Urge Gastropub eateries), Mason Ale Works. While his beer-production operation is insulated from the impact of the stay-at-home order, the bread-and-butter business that carries it will feel the brunt of Newsom’s mandate.
“Though our social-media efforts mainly focus on Mason Ale Works, we are still very much a restaurant company. In fact, before the shutdown, 90% of our revenue came from the restaurants. While a stay-at-home order will not affect our brewery operations at all, it will have a drastic effect on our company,” says Tondro. “As far as staying afloat, it really comes down to trying to do enough to-go business to cover payroll and other major expenses, and drive brewery sales to carry the load of the restaurants.”
When asked how long he believes his businesses can survive under current conditions, Tondro says he and his partners have enough capital to last a few months, but it will ultimately come down to how much grace their lenders, landlords and vendors—all of whom are facing their own sets of pandemic-related hardships—are willing to extend them. The same goes for owners of production breweries of all sizes. Even with multiple vaccines providing a light at the end of the tunnel and cause for hope, the cavalry won’t arrive soon enough for every business to be saved.
“Although we are all looking forward to putting 2020 behind us, I believe 2021 will likely be a horrible year for many in the industry,” says Mo Nupsl, owner and Head Brewer at Bay Park’s Deft Brewing. His business opened in 2017 and has invested a great deal in providing a quality on-site experience, going so far as to open a shared outdoor area with neighbors Lost Cause Meadery and Cucina Caprese Pizzeria. “Although it’s quite possible the second half of 2021 will bring optimism, regrowth and maybe even opportunity for many, the first half of the year will likely be brutal and take a big toll. I think most of us believe that we’ll unfortunately start seeing an acceleration in business closures very soon.”
In the last two weeks alone, two brewery-owned venues have shuttered. The first was San Marcos Brewery, whose owners cited the impossibility of carrying on amid COVID-19 restrictions when announcing the closure on social media. A week later, Pacific Beach-based Amplified Ale Works announced it would be vacating the Miramar brewery and tasting room it has operated since 2015, leaving it without a facility in which to manufacture its beers. These venues join a list of pandemic-era closures that includes Vista’s Iron Fist Brewing, Escondido Brewing, Miramar’s Thunderhawk Alements, Hillcrest Brewing (which remains open as a non-brewing restaurant), Bolt Brewery’s La Mesa tavern and Two Roots Brewing’s Ocean Beach tasting room. Kearny Mesa’s Circle 9 Brewing and San Marcos-based Rip Current Brewing are still open but openly for sale.
San Diego’s craft-brewing community is tight. Brewery owners and personnel are typically open about their businesses’ health and challenges, often teaming together to help each other out. This has been the case during the pandemic, but the increasing difficulties during this lengthy ordeal have eroded much of local brewing companies’ wherewithal.
“We feel that to-go sales of cans, growlers, bottles and merchandise could keep us going for a few months, with obvious pain and strained revenue, but enough to pay the essential bills,” says Nupsl. “However, we all then become vulnerable to other related factors outside our control such as the aluminum-can and bottle shortages, failures of key equipment such as our canning line, our staff contracting COVID-19, and more”
Nupsl says the local, state and federal government will also play a major role in whether or not his business can survive. “The PPP (Paycheck Protection Program) stimulus was a lifeline for many breweries earlier in 2020, helping offset some of the losses incurred, but the ongoing pandemic has outlived the effectiveness of the first PPP loans and grants from the federal government. A second round is needed, and desperately by some. If it comes, it could save some breweries. If it doesn’t, the ill-fate of many craft breweries—and bars, restaurants and so many other small businesses—in the first half of 2021 will be sealed.
“We can’t last forever, and if things don’t get better, we’re going to have really big problems in the not too distant future,” says Tondro. “Unfortunately, I think we will see a lot more places shutting down and a consolidation of brewers and breweries.”
When asked what people can do to most effectively help breweries through this heavily restrictive period, Tondro replies, “Buy beer! Buy it directly from us, as that gives us the highest margin. Buy gift cards. Buy merch. Ultimately, the business problems caused by this shutdown can only be fixed with cash.”
When asked the same question, Corona goes beyond the business aspect of these strange times, imploring the public at-large to realize their part in how everything is and will play out, as well as the influence they have at this moment in time.
“No amount of business closures will change an individual’s compassion for other human beings, and that’s what needs to be done right now,” says Corona. “Our business will be impacted for sure, but now is a time for individuals to realize the power that they possess and do what’s right. Wear your mask, stay at home, travel when essential and stop being selfish.”