Brewers feeling pinch of closed taprooms

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Third Nature Brewery had just gotten into the swing of things when Gov. Gretchen Whitmer ordered all restaurants and bars to shut down dine-in services. Now, the six-month-old brewery must learn to operate without a usable taproom.

“It’s tough,” said Third Nature co-owner Chad Zitzelsberger. “Anybody who says other than that probably isn’t being honest.”

Whitmer recently passed an executive order effective March 16 forcing all of the state’s restaurants and bars to shut down for dining in to curb the spread of COVID-19. She followed that up with an executive order on March 23 requiring all “nonessential” workers to remain off the job and in their homes except for special circumstances until April 13. She said takeout dining still is allowed.

The orders have put a particular strain on new businesses like Third Nature, which opened in Rockford last October. Zitzelsberger said the biggest concern on everybody’s mind is budgeting for the future.

“I think the question on everybody’s minds is how long is this going to last?” Zitzelsberger said. “Does anyone honestly think a week is going to go by and it’s going to be business as usual?”

While the taproom is closed, Third Nature now has to operate exclusively on to-go orders for food and beer. The brewery also has begun delivering to people’s homes.

Zitzelsberger said Third Nature has gotten an outpouring of support from the community after the taproom shutdown.

“People don’t have to place orders, but they’re going out of their way, and they’re tipping more,” he said. “The question is if it’s going to be enough if the shutdown goes from two weeks to two months.”

But despite consumer support, Third Nature still is suffering financially without its key source of revenue. Zitzelsberger said the brewery is losing about 90% of its revenue without traffic to its taproom.

“It’s tough to quantify because it’s still so new, but if numbers stay as they are, it’s about 85% to 90% from not being able to have people in our taproom,” he said.

Going from a brewpub to a delivery service — which is something the owners didn’t plan for originally — requires a different business infrastructure to support, Zitzelsberger said.

Another young craft brewery in Grand Rapids, City Built Brewing Co., has had to cut its staff severely in response to the shutdown. Owner Ed Collazo said the brewery has laid off everyone except salaried staff, going from 48 to seven employees.

“We’re doing what we can to earn enough income to make payroll for salaried staff,” Collazo said. “I’m working the front. We got some kitchen staff in the back.”

Collazo reported good sales overall for packaged beer. City Built fortunately had a new release scheduled when Whitmer’s dine-in executive order was passed, so the brewery just had to change how it released it.

City Built has suffered a tangible loss of revenue, Collazo added. Similar to Third Nature, City Built is predicting about 80% loss from the taproom closure.

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