While we are pretty lean on inventories, we have some beer lying around at the Taphouse and at the brewery which we won't be able to sell till the lockdown is over and restaurants are allowed to open. The beers won't go bad as we continue to maintain the temperature of these beers in our cold rooms and tanks. While the lagers, which are our major portfolio, improve with time, the other beers like the wheat beers and IPAs tend to lose flavour as time progresses. Hence, we will have to wait for the lockdown to be over in order to ascertain the extent of our losses in terms of our inventory.
Impact on the beer market
The microbrewery industry in Maharashtra which is the flag bearer for the craft beer industry as well will turn out to be one of the biggest losers due to lockdown situations. Microbreweries in Maharashtra are allowed to sell their beers either through their own taprooms or their partner restaurants. As it is unlikely that restaurants will be allowed to operate anytime soon for dine-in consumers, the microbrewery industry is facing huge losses. Most players in the microbrewery industry are young entrepreneurs with limited access to capital. As restaurants are closed our payments for the beer supplied to them in the previous months are pending. In this situation, it is difficult for us to even make payments to our employees their salaries for the month of March. The outflow of cash is only expected to increase over the next few weeks due to upcoming statutory dues, electricity bills, etc. Even if the restaurants are to open, no one knows how long it will take for the situation to normalize. Even when wine shops are allowed to open and people are allowed to buy liquor, it won't help us as we can’t supply to the direct customer in any way.
Losses faced during the lockdown
The microbreweries across Maharashtra have around 100,000 litres of beer lying around as inventory at either their taprooms or at their respective breweries. The monetary loss faced during the lockdown apart from the obvious loss of revenue will be determined only once the dust settles and we are allowed to enter our taproom and brewery premises. Majority of our sales during the year happen during the month of Mar-June as the temperature is conducive to beer drinking during these months. Hence, the revenue loss that we are facing is huge.
The trends to follow in the beer industry post quarantine
One thing which could really help us post the lockdown period will be the permission to sell our beer from our breweries and taphouses directly to our consumer through growlers. Growlers are refillable containers of beer which come in a variety of sizes (500ml, 1L, etc.). Growlers are a common sight in western countries like US, Germany and even South-East Asian countries like Thailand, Vietnam. If the state government were to allow us the sale of growlers it would achieve multiple objectives:
A] People can enjoy our beers whilst sitting at home and practising social distancing until the threat of corona is completely eliminated from the country,
B] It will help small entrepreneurs like microbrewery owners to stay afloat till we don’t need to practise social distancing anymore and people can freely come to restaurants. We won’t need to downsize our staff as well
C] It will help the state government earn the excise duty which will be much needed by the government in order to recover from the loss faced during the lockdown
Your point of view about the industry getting back in action post COVID-19
It is going to take a long time for the restaurant industry and hence the microbrewery industry to recover from the fallout of the coronavirus. People will still want to practice social distancing for a few months after the lockdown is lifted and hence, restaurants will be the last place they would want to go for a few months. I don’t expect the industry to go back to pre-corona times till at least October. I just hope that the excise department listens to our petition on allowing for the sale of growlers so that we can sustain ourselves till the time the situation in the restaurant industry normalises.