E-Malt.com News article: USA, OR: Coronavirus pandemic forces Deschutes Brewery to lay off more than 300 people

Deschutes Brewery, Oregon’s leading craft-beer producer, has laid off more than 300 people because of the economic blow the coronavirus pandemic is laying on the state’s brewing industry, oregonlive.com reported on March 25.

Founder Gary Fish, who started the downtown Bend brewery and pub in 1988, on March 25 told The Oregonian/OregonLive that with all of its tasting rooms and pubs closed, Deschutes was forced to let a majority of its employees go.

Deschutes operates a brewery, pub and tasting room in Bend, and in 2008 opened a second brewery and pub in Portland’s Pearl District. It also has a tasting room in Virginia and contracts naming rights for the Deschutes pub at Portland International Airport.

“All are closed due to the government requirement,” Fish said. “We are happy to comply, but unfortunately with those businesses shuttered, those employees – there’s nothing for them to do.”

Fish said he couldn’t provide a specific number of layoffs, but that staffing of pubs and tasting rooms accounts for about 240 to 250 layoffs. He said “across the board” reductions in sales, marketing, production, administration and all the other departments brought the number to “over 300 easily.”

Deschutes had employed about 490 people, Fish said, and every department has been “impacted by the significant business reductions that have occurred as part of this crisis.” About half of the staff had been in food and beverage service, and the other half in production, administration, sales and marketing.

Fish couldn’t immediately provide a figure for how much revenue has been lost, but he said food and beverage in Deschutes’ pubs and tasting rooms constitute 20 percent of the company’s overall volume, with draft making up 25 percent of beer volume.

Brewing is ongoing “in a locked building under strict safety standards,” Fish said, “and continues to produce for off-premise sales.”

He said packaged beer volume initially declined but it has rebounded and “seems to be gaining momentum,” he said. “Our sales team is working hard on the phone to make sure our accounts are properly served and merchandised.”

Deschutes has been best known for popular flagships beers such as Mirror Pond Pale Ale, Black Butte Porter and Inversion IPA. It also produces a wide range of other IPAs, pub-style beers, seasonals and experimental beers, along with a respected barrel-aging program that annually offers beers such as The Dissident and The Abyss.

In 2019, Deschutes sold over 60,000 barrels of beer in Oregon, behind Anheuser-Busch InBev, MillerCoors and the Craft Brew Alliance’s Widmer Brothers Brewing.

The company in 2018 laid off dozens of workers, about 7 percent of its workforce, after anticipated growth never materialized amid a brewing industry that has grown increasingly competitive, particularly for craft breweries with widespread distribution such as Deschutes.

Because the economic effects of coronavirus have been so swift and unexpected, Deschutes was unable to offer a severance package, but “we did it with an eye toward those employees qualifying for unemployment as quickly as possible, and in most cases we facilitated that action,” Fish said.

Fish said Deschutes hopes to bring a substantial number of the laid-off workers back “in fairly short order,” he said. “No one knows the future, but we remain optimistic that we can begin to bring people back as soon as business volume justifies it.”

The economic wipeout caused by COVID-19 shutdowns has spread hardship across all sectors, craft breweries among them. Most are small and have struggled since “stay home” orders were issued and social distancing mandates put in place, though many are trying to bring in at least some revenue through to-go orders, deliveries and packaging.

Deschutes isn’t offering beer to-go at any of its locations, but “we continue to look at that,” he said. Early on, he said, his team determined that food takeout "was not a viable alternative we could manage."

Coronavirus is “going to have a profound impact,” Fish said. “If your business is only draft, and the government declared that you cannot open to the public except to-go, that’s going to have a dramatic impact. It’s a question of how these businesses can survive.

“I know the Congress and president continue to work toward a stimulus bill, but until that happens, or even after, who knows how long that effort will make its way all the way down to a small brewery in the West.

“This could take weeks if not months,” he said. “There will be a lot of pain that occurs in that period of time.”



29 March, 2020