A letter from our CEO regarding the impact of COVID-19
Dear members and supporters of Fair State,
I am writing to announce that, due to the impacts of COVID-19, today Fair State has had to reduce its staffing levels. When the crisis hit, we chose to rapidly reconfigure our operations and measure sales effects before making rash decisions. The degree to which our whole team has stepped up to this task cannot be understated. Every day I am humbled by the passion and talent they bring to their work. Their combined efforts have made Fair State who we are today.
We will continue to equitably navigate our business by spreading reductions out over a larger number of staff. We are furloughing all full-time staff, including executive leadership, by at least 20%. We unfortunately must also make larger cuts to our sales and production staff. The volumes of production are just not there: the bars and restaurants where we work are not open. We will continue to pay for all health insurance premiums, even for those who must be furloughed completely, through at least the end of June. My sincere hope is that we will be able to scale our workforce up to full-time staffing, but it is just not justifiable at this moment.
Simply put, our business has been ravaged by this pandemic. The forced shuttering of our taproom for pint sales, though absolutely necessary for public health, has eliminated the lifeblood of our operation. Although we are still able to sell crowlers to-go, these revenues do not come close to recouping the loss of pint sales. This problem is compounded by the fact that the costs of selling these products are 450% higher. Keg sales to bars and restaurants, 35% of our overall volume, evaporated overnight. Contrary to popular perception, these sales are not being made up at liquor stores, where meager boosts to craft beer sales have been dwarfed by the increases in macro beer and liquor.
These problems are further compounded by Minnesota’s arcane beer regulatory scheme. We are prohibited by law from selling 12 and 16 oz cans directly to you. These packages are substantially more economical for us to produce than crowlers. Minnesota is the only state in the country that imposes such a package-type restriction on to-go sales from a brewery. We have had to cancel exciting limited releases and we are sitting on beer that we would otherwise be able to sell through our taproom. Our state’s bars and restaurants are similarly hamstrung through this crisis because they are prohibited from selling alcohol to-go. The simple fact is that Minnesota’s laws force small businesses to fight this recession with their hands tied behind their backs.
State, Federal, and local governments have sprung into action to support small businesses. We are seeking every avenue of support that is available to us. The SBA’s payroll protection program is a step in the right direction. However, even coupled with the other support that has been made available, it is simply not enough to allow our nation’s small businesses to weather this storm.
This is the hardest and saddest day that I have experienced in my time at Fair State. Treating our people right has always been a cornerstone of our business philosophy. We truly have one of the most talented teams in the industry. However, we must take the necessary steps to ensure that we have a thriving Fair State on the other side. I remain confident that we will weather this storm, and I look forward to the day when we can once again celebrate our team and our members in the beer garden.