Take your mind back to the halcyon days of 2013. Donald Trump was just a reality TV show star, Boris Johnson was just a Mayor and Corona was just a Mexican Beer. This was the world into which Weird Beard Brew Co was born. We were one of a handful of London Breweries, and one of just a handful of UK Breweries brewing modern, hop forward beers. By and large, the world made sense and it was for all intents and purposes our oyster. We brewed great beers, sold them to great customers and they were drunk by great people. Easy.
Before all this madness started, we sold to bars, bottle shops, and the odd walk in customer who braved the journey to the brewery. Every two or so months we would have an open day, which was great for the books due to direct to customer sales, along with being a great and memorable day out for both staff and customers. We've not had an open day in well over a year now. And with pubs pretty much closed this whole time, our cask and keg sales simply died. To start with, we couldn't even sell to bottle shops. This did improved over time as various restrictions where lifted, but we are no where near pre COVID sales. Far too much beer had gone down the drain, which is essentially pouring money down the plug hole, money we can't recoup on the disposable kegs and beer itself.
We quickly got an online shop up and running, and shifted our transition to cans into a higher gear. This has helped us keep our heads above water, or at least close enough to the surface to take a well needed breathe now and then. But we are not quite making enough each week to cover costs, and the debts are mounting.
We are not the only people struggling. Our trade customers are also in dire straits. We know it's not just us pouring beer down the drain. We know our trade customers have little money to throw around. So it breaks our hearts to have to chase them. But the more lenient we are, the deeper in the hole we get. We also have to factor in that a lot of these businesses may not survive, and we will not see a certain percentage of what is owed to us. So it makes sense for us to be as lenient as we can, to help our customers stay afloat. And hopefully when we are close to normal, these guys will remember our help.
Cash flow is the life blood of a small business. A perfectly viable, asset rich business can fail if the cash is not flowing. To brew beer we have to buy ingredients, usually on 30 day credit terms. The beer itself can take 30 days before it can leave us. Then we often give 30 days credit terms to our trade customers, which more often than not is just the day we start chasing payment. If a customer does not pay us on time, but we need to buy ingredients up front, the arteries get blocked. We do thank our suppliers who have showed us some leniency on this.
Through all of this our local customers have been amazing. They have supported us where they can. And we like to think that we have helped them through difficult times with a mostly same day free delivery service. But people do need to realise there really is no such thing as free delivery. Someone always pays. We are now, to an extant, in competition every other brewery in the country. All hoping to get a few of your valuable pounds. But you can see the squeeze. You can see the free delivery freeholds decreasing. You can see more and more discount codes. More offers. The beer is not getting any cheaper to produce, package safely or to deliver. The breweries are absorbing all these costs. Trying to temp just a few more sales. A business can make more money if you make a little on a high volume of orders. So you have to cut the cost the buyer sees, and hope the gamble pays off. If you, as a customer have a discount code, try not to use it. We use them to try and tempt in new customers. If you know us and like our beer, and you can afford it, please pay what it is worth. That way it's more likely to still be there after lockdown mark 8.
When this is all over, and that is looking so temptingly close, we want to jump right back in. Hire a new head brewer, move towards getting our own canning line, look into opening a tap room on site, and convert our 1968 VW camper van into a mobile bar. We have so much ambitious drive in us, so much great beer to share, and so many good cans in our cold store. But with this drip drip effect of running at a slight loss, each week for so long, we are going to struggle to keep it going. So many of our suppliers will be frustrated with chasing us for the little money we have, some of them have started asking for payment up front. No credit means we first need to spend money to then make it back. Remembering a beer can take anything from 3 to 6 weeks, sometimes more, from the day you order ingredients to the day you can sell.
Covid specific cash flow issues
As mentioned, we do not currently have a tap room. We open up every so often for open days, which are events. We supply the hospitality and leisure industry, so when they suffer we suffer. But we are NOT classed as hospitality. That means we get none of the associated benefits and grants. We have seen a massive decrease in money coming in, but our outgoings have barely shifted.
Full rent & service charges.
Full business rates - No business rates relief due to 3 units.
No grants due to not being hospitality.
No VAT reductions due to us not counting as hospitality, just a holiday, which is now over.
What are we doing to help ourselves?
We have not just sat back and complained though. For a full year we have been working as hard as we can to make the numbers work. First off, as mentioned, it took us just a weeks to get an online shop up and running. There were teething problems, and a financial outlay, but we go there. This on line, direct to customer approach has accounted for 80% of all our sales over the last year. We do sell the beer at a higher price direct to customers than we do to trade, but there is more work and cost involved. The individual beers need to be picked, and packed. The boxes we ship in need to be of a higher quality. All the payments we receive have a little bit taken by the supplier of that service. And lastly, we heavily subsidise postage, and absorb the costs of any loss or damaged items.
We went into the first lockdown with 5 sales & production staff. Now just 1 person full time and 2 part time when needed, furloughed when not. Hell, During this first lockdown we couldn't furlough some staff due to no part time furlough. This meant we either had to let people go, or find things to keep people working, while paying full salaries. A lot of money was spent to pay staff for work that did not need to happen, just so we didn’t have to let them go. The new part time rules have helped massively, but I feel guilty glancing at emails on my phone, thinking how many hours I have or haven't worked. As with everything at the moment, it is unclear how long this will last.
In our first few years we grew and expanded. Outgrowing our original unit, and slowly expanding into 3. We are now trying to bring this down to 2 units to save on rent & rates. This is not ideal, and involves certain compromises. But this isn’t as easy as just handing the keys back, there are costs involved. For example, the unit needs to be returned to how it was originally let out, which means we have to, just to start with, remove a giant cold store. So to save this money, we first need to spend money, that we don't have.
We received bounce back loans, which help us massively. It meant we could shift a lot of small debts, that were potentially harming our suppliers, to one HUGE debt. But lets be clear, they are just that, DEBT. These potentially need to have repayments starting very soon. Even if this is extended, this is still money we have to pay back, and now needs to be included in our business plan, essentially meaning price rises.
We have always tried to get a good amount of our beer into cask, as we love to drink cask ourselves. This means we had a huge number of rented casks. We have sent most of our rented casks back, so we can save on rental. But there are costs incurred there too, eh removing our branding. So even to save money in the long run, we lose now. This also compromises out position when things do re open, as we now can not supply as much cask.
The first, and most important way to help your local brewery are.
Crowd funding as been a last resort to us, hence why we are only launching now. And we would much rather keep the cash flowing in the traditional ways. We realise that not everyone has spare money to give away. So if you want to help a brewery that you do enjoy, there are a number of simple things you can do.
Buy beer direct. It’s as simple as that. Support your favourite brewery by buying from their website. No one really wants handouts, We want to make beer that you guys enjoy. So buy beer as a gift, or enjoy yourself.
If you have a discount code, try not to use it. We use them to tempt in new customers. If you know us and like our beer, and you can afford it, pay what it is worth. That way it's more likely to still be there after lockdown mark 8. If discounts are auto added at checkout, and you can, cancel the discount.
If you can, pay full postage. There is no such thing as free delivery, someone has to pay. If you are paying less than £9 for your beer delivery, you can bet they brewery is paying for it out of their pocket.
What else can you do to help us out?
If you are in a position to go a little further though, we've put together a number of rewards to entice you to pledge. Most of these rewards will be delivered/redeemed later in the year.
£10 donation for our never ending thanks.
£15 donation and you will get your name immortalised* on a special dedicated panel (or window) on our beer bus.
£25 will get you a limited edition 660ml bottle of Barrel Aged Gaslight the Electorate.
£30 will get you a limited edition Weird Beard supporters T-Shirt.
£40 for a 'bottomless glass*' at one of our future Brewery Open Days!
£50 will get you a £60 'discount code' to be used on our webshop later in the year.
£60 will get you the limited edition 660ml bottle of BA Gaslight the Electorate (above) along with a special T-Shirt and a 330ml can of Gaslight the Electorate.
£250 will get a hand picked selection of our beer (worth at least £50) delivered each month for the next 6 months.
£300 will you get you a limited edition, Stirling silver Holy Hoppin' Hell Ring.
£475 will get a hand picked selection of our beer (worth at least £50) delivered each month for the next 12 months.
£2000 will allow you and up to 4 friends to help us design a beer from scratch and come along and help brew it (and drink it afterwards)! This is an experience you and your friends will remember for a long time.
If you can help out, we encourage you to check out our Pay It Forward page.
What is the end game?
When this is all over, we want to jump right back in. We plan to restore our 1968 VW camper van (Fifi La Bus) to create a new delivery van and mobile bar for events. This saves us money renting and moves events outside where they are safer. We also intend to hire a new head brewer, over the next year, to bring a fresh perspective to what we do. Move towards getting our own canning line, giving us way more flexibility as to what we put into small pack and when, while also saving us a bit of money. Then eventually opening up our very own tap room, either on site or in a new separate location. We have so much ambitious drive in us, so much great beer to share, and so many great beers in our cold store.