Getting craft beer these days is almost as easy as saying, “Biermi.” It’s pronounced BEER-ME, and it’s a new platform designed for craft alcohol producers to sell directly to customers. The website is the brainchild of Brendan O’Leary, co-owner of True Respite Brewing Company in Rockville, Md., and his friend, Bryan O’Connor, a computer software designer from Philadelphia.
Like many small businesses, craft alcohol producers are struggling during the pandemic. They’ve had to quickly shift their business models from a focus on tap and tasting rooms to package and delivery. Biermi started as a way for O’Leary to sell his own beer after Gov. Larry Hogan forced all restaurants and bars in Maryland to close. Then the state loosened restrictions on direct-to-consumer sales. That’s when Biermi became an accidental altruistic venture, where not just one, but hundreds of craft alcohol producers have come to sell their beer, wine and the like.
“The amount of traffic and publicity and people that have been clambering to get on the platform has been a little bit overwhelming. It’s really cool to go back and look at some of our analytics and just watch the growth. I mean it’s everything that you sort of dream of in the startup world,” says O’Connor.
In just nine weeks, Biermi has done about $2 million dollars in sales. More than 130 breweries, wineries and cideries around the country have signed onto the site, which is currently free for them to use.
“This has just been incredible,” says O’Connor. “It started from zero, and it’s just been this 45-degree line that’s going up as far as our analytics are concerned. It’s something that you see on TV shows like Silicon Valley and you read about, but you never really think it’s gonna happen to your product.”
Craft alcohol producers are staying busy producing beer, wine and ciders for delivery. But, O’Leary says, while Biermi and other online sales strategies are providing a financial lifeline to several craft alcohol producers, it’s not an ideal business model.
“Revenues overall, I would say are up compared to normal, but margins are way down,” says O’Leary. “So, while we are selling more beer, we are not making more money.”
O’Leary says that’s because margins on packaged beer are much lower than those on beer sold in taprooms. For example, a pint of beer that normally sells for $6.50 in True Respite’s taproom, once packaged, sells for about $2.75.
“And so very obviously the drop in margin from a pint in draft to pint in a can [means] you gotta sell a whole lot more beer in order to make up for it. So, this shift to packaging has been an entirely different business model from how we were operating prior,” says O’Leary.
The shift came easy for True Respite Brewing Co. because it already had a package and delivery system in place, O’Leary says. But other small producers like Red Bear Brewing Co. in D.C. weren’t prepared to move their business online. The company, in D.C.’s NoMa neighborhood, was still in its infancy when the shutdown hit the city.
“We had our one-year anniversary on March 7, and we locked down quickly after that,” says Bryan Van Den Oever, director of business development and marketing for Red Bear. “When D.C. locked down, we lost about 80% of our revenue because we couldn’t have people in our space. But we were tenacious, and we figured out getting in a canning line — basically contracting a canning business to come in and help us can our products.”
A recent survey from the National Brewers Association found that 61% of the more than 900 brewers surveyed anticipated layoffs due to the pandemic. Red Bear had to lay off 75% of its staff because there just isn’t any work for them, says Van Den Oever. They are not currently on Biermi but, he says, Red Bear is selling beer through their website and having a few remaining employees make deliveries. Van Den Oever says the brewery has also received money from the federal government’s Paycheck Protection Program, which is helpful.
Like many small alcohol producers, Red Bear’s bread and butter comes from selling beer in its taproom. So, while online sales and sites like Biermi are helping some small alcohol businesses make some money during the pandemic, the best thing for them financially would be to reopen as soon as possible.
Gov. Hogan has started slowly opening some non-essential businesses in parts of Maryland. Parts of Virginia are on a similar trajectory. However, breweries, wineries and cideries are not on the list of businesses set to reopen soon. D.C.’s shutdown has been extended until June 8.
With the shutdown, Maryland has temporarily loosened its restrictions on direct-to-consumer sales, highlighting a major change in the state’s alcohol laws. It’s one of the laws O’Leary and others in the Maryland craft beer industry have been fighting to change for years because, they say, it hinders a craft brewer’s ability to reach customers where they are. O’Leary says he expects this new system to remain in place for the foreseeable future, as the craft beer industry in the Washington region and the U.S. undergoes this living sales experiment.
“There have been fears in the past that opening up home deliveries for manufacturers would just ruin the independent private retailers in the state, but that is clearly not the case,” he says. “Breweries are incentivized to keep those pints moving as best they can, but there are opportunities outside of your normal taproom draw to do home deliveries in regions across the state, maybe to people who can’t so easily get to your taproom. And that’s just opportunity to increase your sales, increase your exposure, increase your reach. And I think that is what is going to stick around after we find our new normal.”
This story originally appeared on WAMU.
