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Central Florida breweries struggle to stay solvent

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As Florida lurches to the end of our fifth and deadliest month yet of dealing with the coronavirus pandemic, the state's crisis response is still little more than a patchwork of inconsistent local regulations and hastily issued statewide proclamations, often delivered in tweets by public officials.

One of the more surprising Twitter announcements came from Halsey Beshears, Florida's head of business regulation, who notified online followers on June 26, "Effective immediately, the Department of Business and Professional Regulation is suspending on premises consumption of alcohol at bars statewide."

The declaration, issued minutes after the state disclosed another 9,000 new COVID-19 cases in Florida, included the state's 320-plus breweries but not restaurants. It was the first rollback of a reopening step since Gov. Ron DeSantis began Phase 1 of restarting the economy, and it left brewery owners furious and seeking answers.

During the first reopening phase in May, bars, pubs and nightclubs deriving 50 percent or more of sales from alcohol had to stay closed, but restaurants could begin serving outdoors and inside at 25 percent capacity. Breweries serving food could offer alcohol takeout and resume seating and consumption, with six feet of space between tables, outside and indoors at 25 percent capacity.

The Phase 2 reopening that began on June 5 allowed restaurants and entertainment complexes to expand seating to 50 percent capacity inside, except nightclubs. Breweries and bars were open under most of the same rules as restaurants, except for a prohibition on using barstools.

That order remained in place for nearly 21 days, until the Beshears tweet stopped all on-site alcohol consumption once again – but this time only at bars, pubs, nightclubs and breweries. Restaurants were left open and can continue to serve alcohol inside. That really burns the brewers.

"This time, by allowing on-premise consumption in restaurants and not allowing it in breweries and bars, it really put us at a disadvantage," says Duane Morin of Toll Road Brewing Co. in Ocoee. "Earlier in the year, when everyone was on a to-go–only basis, the playing field was relatively level. It was sustainable at that point because it was a temporary situation."

Morin estimates his drop in sales during the first closure to be about 47 percent. The rules being different now, says Morin, means the hit to sales is much more dramatic.

"This time around, our revenues are down about 85 percent, which is a much less sustainable situation than earlier in the year," Morin says. "You can go to the chain sports bar or chain restaurant and you can sit there for four hours and you can drink beer, cocktails, you know, as long as you have food," says Morin. "So it's really a huge disadvantage for us."

Breweries share some characteristics of bars, including a beer and wine service license, but they are unlike nightclubs and bars in producing and selling their own product on the premises. Breweries tend to house large equipment with higher overhead – literally and figuratively – so they usually have enough space to spread out patrons. Many breweries have been able to adapt by serving food, but not all, and many are still waiting on additional licenses that would allow them to do so.

"I'd say three-quarters of them don't have a restaurant because it's a different business model," says Robyn Esser of Sanford Brewing Co. "Brewery manufacturing and a tap room is kind of one thing. You start getting into a restaurant, that's an entirely different operation. I mean, we almost have to treat it like two different businesses because they're two different mindsets."

"These poor places are having to be forced into a completely new business model, a completely new business," says Esser, who is also president of the Central Florida Brewers Guild. "I just feel for all of them."

The local guild has been supporting the Florida Brewers Guild, which hopes to change state law to more clearly distinguish breweries from similar service establishments.

In a July 20 letter to Beshears, the Florida Brewers Guild said, "The entire Florida Craft Brewing Industry is now in jeopardy." The letter estimated then that 90 percent of breweries in Florida had been "closed more days in 2020 than they have been open."

The Florida Craft Brewing Industry "is a manufacturing industry first and retail second, but one cannot exist without the other," the letter states. "Please help us put together a plan that helps us reopen our industry."

DeSantis has repeatedly pointed to young adults, like those who might congregate in bars, as one of the reasons for the surge in new cases. Beshears would later say his order, backed by DeSantis and still in place as of press time, will remain in place until new cases of COVID-19 began to decline.

Also growing, however, is statewide unemployment, as more than 1,300 Orlando businesses have closed since the beginning of the pandemic, according to a report last week. More than 100 Florida breweries are in danger of closing in the next two weeks, says the Guild.

There is some new hope this week. In yet another tweet, Beshears announced he would begin speaking to bars and breweries about "ideas on how to reopen."

"We will come up with a Safe, Smart and Step-by-step plan based on input, science and relative facts on how to reopen as soon as possible," Beshears tweeted.

Charles Frizzell, co-owner of Broken Strings Brewery in Orlando, says breweries might have been able to remain open, had there been more initial enforcement of the rules by state and local authorities.

"When people are speeding on I-4, you don't shut down I-4," says Frizzell. "You pull the people over that are speeding."

Frizzell, a past Central Florida guild president, says the current order threatens owners' entire life savings and investments.

"You just don't strip people's livelihoods," says Frizzell. "When you pass laws or you do these things, there's supposed to be people out there enforcing the rules. You don't just shut it down and say we don't have the ability to enforce."

Frizzell and others are encouraged by Orange County's new enforcement tasks forces, and are hopeful they can be part of reopening.

"I think that's the way it should have been getting from the very beginning," Frizzell says. "That's how you enforce rules and regulations."

Chris Rock of Orlando's RockPit Brewing agrees that enforcement is key, and that craft brewery owners are particularly strict on adherence.

"Everybody's been really great about following the rules when they come in, so they are wearing their masks, they're standing in line, they're not trying to crowd the bar," Rock says. But he stresses that breweries already follow an increased set of standards.

"It's such a weird thing," says Rock. "Technically we're a bar in their eyes, however, one of the reasons that we are not allowed to have dogs in our tap room is because they classify beer as food."

In other words, beer is food in some cases – like when allowing animals on the premises is concerned – but not others – like when it comes to the division of "food sales" and "alcohol sales."

"A lot of breweries are on the cusp," says Rock. "We were, two weeks ago, on the cusp of just shutting things down, super limited and basically going into complete survival mode, meaning nothing is really getting done we're just selling stuff to maybe pay our light bill."

"I'm all for supporting the cause and trying to get some of this under control," says Bill Downs, co-owner of Suncreek Brewery in Clermont. "But it just seems like you're kicked in the teeth when you go by a chain restaurant and their parking lot's packed."

One source of hope for breweries – besides reopening – could come in the form of annual license fee waivers, which brewers say they plan to discuss with Beshears. No matter the size of the brewing operation, the fee is $3,000 per year.

"It's already a hard pill for them to swallow, annually, when they get that $3,000 fee every October," says Downs. "Going through the fact that we've been closed more days than we've been open, our tap room, that's gonna be really hard for a lot of people, including me."

If Beshears waived the fees, it would benefit small brewers the most.

"To me, it seems like that's just the logical first step that they could take, as far as other assistance," says Downs.

Garrett Ward, co-owner of Orlando's Sideward Brewing Co., agrees that a fee waiver would be a good first step toward keeping breweries in business. He says his brewery, located in the Milk District, transitioned to takeout early in March, and they have been able to remain relatively stable.

"We've been pretty steadfast in trying to keep our employees on the clock as much as possible," says Ward. "But anything helps, right? In our case we have four different licenses. We have a license for our beer, we have a license for our cider, our food license, and just the license to serve in general."

Those fees alone can add up to more than $4,500 a year, more than a drop in the bucket during a year parched dry by declining business.

Ward says he is focusing on the positive aspects of his business, including participation in the new Black Is Beautiful project, a nationwide collaboration of breweries to "raise awareness for the injustices People of Color face daily." Sideward and Broken Strings are among eight Orlando-area breweries participating in the effort, in which each brewery creates their own version of a base recipe developed by Weathered Souls Brewing Company in San Antonio, Texas.

Black Is Beautiful, the beer, is a moderately high-alcohol stout meant to "showcase," according to its website, "the different shades of black." The project gives competing local breweries yet another reason to collaborate.

"We are just about to release it next week, most likely Saturday," says Ward, who didn't vary the recipe too much. "Ours is literally just straightforward. Typically, we do kind of crazy things with our stout, but we kind of wanted to do something just straightforward and true to style."

Frizzell of Broken Strings said their Black Is Beautiful beer, a blackberry-and-chocolate variation, will support the local NAACP chapter.

"It just made sense, you know, it's a good cause," Frizzell said.

Ever the hub of community activity, breweries are manufacturing, service and retail operations, so it makes sense to create laws fitting their unique businesses. As the state weighs options to stop the virus and ways to keep businesses alive in the months and years to come, rethinking breweries might be a critical step to keeping more than 10,000 Floridians employed.

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