Austin Craft Brewers vs. COVID-19: Hi Sign and St. Elmo Brewing

The one known constant of Twitter is its rampant fecklessness, but I did read something pretty amusing on that platform the other night, micro-authored by St. Louis Post-Dispatch restaurant critic Ian Froeb, who predicted: “The cocktails-to-go genie ain’t going back in the bottle.”

Photo by John Anderson

Of course, in this all-inclusive pandemafuck one-star resort in which we are all captive guests, I’m taking that tweet to mean that loosened alcohol restrictions – at least in a state as comparatively progressive to Texas as, um *checks notes*, Missouri – has enabled a stream of transaction-based revenue that is both virus-responsible and economically favorable. Froeb is right, the trillion-dollar idea that was sitting just beneath the food and beverage industry’s noses all along was to engage ever so lightly with your customer base for maximum brand loyalty, and perhaps not the table-tapping over-attending bar-butler bullshit that we were forced to handle when all we ever wanted to do in a bar is privately discuss just what the hell happened the other night on 90 Day Fiancé. Amazon figured this out. Then the grocery chains. And Texas, through the facility of Governor Abbott, has followed this pathway for legalized door-to-door cocktails. It can be presumed that the restaurants and bars who've participated in this temporary adjustment have benefited with an additional means to float their businesses and whatever skeleton crew remains on staff.

But one industry that has not benefited from the piddly luxury of front door service is the small, independent craft breweries of Texas. And while home delivery by small Texas breweries wouldn’t exactly be the entirety of torque needed to sustain the industry overall, it would at least be an upgrade to, like, a mid-grade Honda when every brewery is relying on curbside Power Wheels. Despite a substantial appeal to Gov. Abbott, it has not been enough to grab his attention on this small-business matter. Home beer delivery, according to the Texas Craft Brewers Guild website, would be a way to effectively remain socially distant, but also help temporarily stimulate a niche industry struggling to find revenue and keep staff employed. If you want to help the Guv get to work on that you can click here to sign the petition.

In this edition of Austin Craft Brewers vs. COVID-19 (read part 4 here), the Chronicle checks in with the founders of two superstar Austin breweries – Hi Sign Brewing and St. Elmo Brewing Co. – to see how their businesses are handling the statewide taproom closures.

Hi Sign Brewing (Source: hisignbrewing.com)

Hi Sign Brewing

Hi Sign is officially three years old as of March, but it feels like we should measure that in dog years. That’s because Hi Sign’s program development and beermaking skills have rapidly matured since their quiet debut back in 2017. Hi Sign’s Hi-C hazy IPA remains one of the best surprises of the Austin beer scene, rivaling some of the highest regarded Pinthouse Pizza juicy creations, while also supporting this iconic beer with a cast of delicious role-players in the refreshing Violet the Blueberry Blonde and masterfully controlled Blood Orange Ubuntu Coffee Stout. We talked to Hi Sign founder Mark Phillippe (via phone) about his brewery’s reaction to the citywide taproom shutdown.

Phillippe on how sales are going at Hi Sign since the temporary order to shut down Austin-area taprooms and how he’s adjusted to the changes caused by the pandemic:

“We’ve lost all of our draft sales. When you take the taproom away, that’s 60 to 70 percent of our sales just gone. We did have a nice lift in the beginning of this [shutdown], and it was obvious that people had the mentality of going out and supporting local [breweries]. But rationally that has pulled back a bit. We do still have consistent sales, but it's definitely lower than that first week. I don't have the opinion of, ‘Oh, it'll pass’ or that we’ll get back to normal as quickly as possible. We put measures in place on what we will do [over] a month ago in the event of an uncertain future, so it's worked out better for us so far. It'll be challenging for companies who woke up two weeks ago and didn't know what phone call to make first. We haven't had to lay anyone off yet, but our costs didn’t really go down. Our labor costs stayed the same. I hope people keep cognizant of that when they see our pricing and [automatic gratuity]. I remade our entire website and kept it updated. We kept Twitter and Facebook and Instagram updated and if you place an order for beer, someone will come out to give it to you with rubber gloves. We’re taking every measure possible to comply with all the safety requirements. I hope people realize that it's one way to still get our beer. I think we’ll survive, but it’ll take a village. There are gonna be a lot of breweries that don't make it through.”

Phillippe on how Hi Sign has adapted to production schedule changes caused by a lack of a taproom and slower distribution:

“We actually changed our production model a year ago. We realized that in the current [Austin] market, there were a lot of breweries making great beer that we had to stay competitive with. So, we cut our batches in half so that our customers could get fresher beer from us more consistently. Those 15bbl batches will last 30 days and inevitably see a return in the market with consumers saying, ‘This is super fresh,’ and they like it more. With that said, we haven't brewed beer in a week to a week and a half. The biggest impact on us has been the storage because we brewed like 60bbls [leading up to the March influx of tourists] and it put a squeeze on our cold storage. It's like, ‘Okay where do we keep this beer and how do we keep it fresh?’”

“So now, we’re gonna focus on some smaller batches, one barrel at a time. That works better in this environment. We’re gonna focus on Hi-C [Author’s note: undoubtedly one of the best hazy IPAs in town, on par with a Pinthouse Pizza-level beer] and Super Astronaut Imperial IPA. We’ve got an awesome hop contract this year, so we’ll continue exploring with those kinds of things. Our location is constricting, so it's tough. We don’t have that natural foot traffic so it makes it kind of difficult to start those new batches and explore as many new beers as we’d like. Thankfully, Super Astronaut and Hi-C have caught on so it's been a gift for us to focus on and not have to rely so much on developing new [beers].”

Phillippe on the amount of to-go business it would take to keep Hi Sign afloat for the indefinite future:

“In order to stay viable with to-go beer, it would take a lot. It's just the reality of this situation. It's not a sustainable business plan in the long term. Our beer-to-go sales could go ten-x and we’d still probably only break even. We’re probably not in that different of a situation than many of the other brewers doing the same thing. Like I said earlier, if you didn't know who to call a month ago, your bank and your vendors and whoever … Let’s just say that not even half of the banks know what to do right now. Beer-to-go is just one piece of the pie.”

“What would really help is if the government was able to waive restrictions on beer delivery. Texas has always been the worst state for supporting [craft] beer laws, but with beer delivery, there would be no downside. It would create additional jobs; I would be down at the post office everyday. It would generate more tax revenue for the state and most importantly it would generate more interest in the product while also promoting social distancing. There is no downside to it. [A customer could] stay home and have beer delivered to them.”

Phillippe on the brewery’s plans to keep customers interested in supporting Hi Sign:

“I’m focused on making creative and interesting ways to sell our beer but not shifting our plan overall. That’s just not a good plan at this point because a lot of this is out of our control. But what we can [control] is to provide additional value for our brewery, that’s how we’re approaching each decision. That comes with consistency in our beer and continuity with serving it. There’s so much uncertainty right now and that’s really the best thing we could do for our customers. We ordered a ton of glass growlers, and I’ve read the reports that 12-packs are up like 40 percent, so I suspect we’ll be able to offer some 12-pack deals, maybe something like El Berto [Author’s note: their exceptional year-round Mexican lager, the only local brewery perhaps that does a Mexican lager mainstay] for $15 instead of a six for $9 on a limited basis.”

Parting thoughts to the people of Austin regarding Hi Sign and other small, independent breweries?

“This [situation] isn’t just about Hi Sign, this is about the overall beer community. It takes a village and we’ve all got to be out there championing these [breweries] and it should make people feel better about supporting local when they buy beer and tip. A general rule of mine – and I’m a combat veteran and have gone to a lot of therapy at the VA – but we’re gonna come out of this better prepared. Be patient. Have patience. When supporting small businesses, try to remember that everyone is doing their best. It's just important that we get this situation right and in the long run, everyone will be better off. Know that when you go home and enjoy your beer it helped to keep our lights on. In two places: Our business and our homes.”

Beer-to-Go Hours: noon-8pm daily. To-go orders: 512/382-5264 or email togo@hisignbrewing.com; Updated tap list available at www.hisignbrewing.com

Tim Bullock (l) and Bryan Winslow of St. Elmo Brewing Co. in 2016 (Photo by John Anderson)

St. Elmo Brewing Co.

If the Austin beer scene was assigned as characters from the Avengers, St. Elmo would probably be the ultra-creative, machine-hearted, workhorse Iron Man, to Austin Beerworks’ low-key “aw-shucks, just doing our part, y’all … but doing it awesom-er and more importantly, first!” Captain America gambit (with Chip McElroy as Stan Lee). The two breweries will forever be linked together in every print article ever created, given St. Elmo’s 23-and-Me lineage to Beerworks, but St. Elmo has built their own reputation as a true brewing superpower by nailing every single batch of beer that has ever come out of their magical 15bbl brewhouse. Carl, St. Elmo’s Kolsch-style beer is synonymous with both “patio weather” and “day drinking” (go on, look it up), and their overall branding and graphic design is downright exhilarating. We reached out to Bryan Winslow and Tim Bullock, co-founders and beer knowers of St. Elmo, to see how their temporary taproom shutter is influencing their brewery.

Winslow and Bullock on how sales are going at St. Elmo since the quarantine mandated all taprooms closed and how St. Elmo has adjusted to the changes caused by the pandemic:

“March, April, and May are by far our most profitable months of the entire year, so right there our three biggest months are gone, and also, every year we grow so we would have [expected to do] another 10 to 20 percent more. All distro was gone, which is like 30 percent of our sales and we don’t do packaged beer in stores, so without the tasting room, that’s another 40 percent. So, we’re down like 60 to 70 percent overall. It's pretty intense but at the same time we’re very grateful for that 30 percent because that means we're able to tread water and survive. Without it, it would be soul crushing. That first week [of the taproom closure], so many people came to see us and grab beer. We haven't had to let anyone go and have found creative ways to restructure pay and who’s working when. We are cautiously optimistic. Maybe it's slowed down a little from that first week, but it's been really consistent.”

Winslow and Bullock on how St. Elmo has adapted their production schedule to adjust to changes forced by the pandemic:

“Our brewing schedule is down to once a week, but we’re trying to maintain a sense of normalcy around here because if we don't keep brewing, it's kind of like use it or lose it. So we’re [brewing] at least once a week to keep it going. The hardest part has been the crowler shortage. We were selling like two to three hundred crowlers a day – which is awesome – but all of a sudden the crowlers ran out and it was like, ‘Hey, we can get you a pallet next week’ to ‘We can maybe get you a box in a week.’ Ball [Corporation] is the only place that makes crowlers in the entire world and until this, they only made them every three months. We might be getting more, but we also heard [crowlers] might be unavailable until July. That's the only way we can make money at all. Well, we can get 16 oz. tall boys, so we made the switch to tall boys [Author’s note: four-packs of 16 oz. tall boys is my preferred beer bundle, its superior in many ways to all the other packaging options, so the news isn’t all bad]. So we borrowed an Oktober seamer from Fairweather [Cidery] and [imminently-launching West Fifth brewery] Hold Out because they weren’t using theirs. We got new labels and ordered a new label printer. I mean, it was, ‘How can we turn this place into a distribution brewery that it was never meant to be in, like, two days?’”

Winslow and Bullock on the amount of to-go business it would take to keep St. Elmo afloat for the indefinite future:

“Well, we had never planned on packaging [at St. Elmo], but we had to find a solution without our tasting room in operation. It's been really cool to see how flexible our whole team is. I like to [compare the situation] to a middle school dance and [the St. Elmo team] were all on the dance floor and no one knew what to do and it was awkward. But now it's like a high school dance, and we kinda know what we’re in for and what to expect [jokes Winslow]; we were used to being Beyoncé's backup dancers here at St. Elmo.”

“So, it makes you rethink your business and what was once a part of our mentality at St. Elmo. We know that our online store is still gonna be there [after the taproom closure ends] and we’re gonna have a new revenue stream through the website with beer-to-go because of it. [Texas craft] beer delivery is something that would really help everybody, too. It's annoying to watch on Instagram all these California brewers delivering to neighborhoods thinking that this kind of thing could be happening in Texas too.”

Winslow and Bullock on the brewery’s plans to keep customers hyped up about St. Elmo:

“We are still brewing a new beer every week and keeping up with our Friday ‘new releases’ like we’ve always done. We’ll try to always keep a sour beer on the menu. Right now we have Penelope, which is our passion fruit kettle sour. We released a pale ale called Cortes which is a Guava pale ale. [Out now is] a collaboration hazy pale ale we did over FaceTime with Austin Beerworks called Air Five. Our Mexican Lager, Bueno, comes after that. We’ll have lots of new beer in four-pack tall boys. And now that we’re a packaging brewery, it won’t ever be a surprise for us to see Carl (Kolsch, St. Elmo’s flagship beer) doing well. About 95 percent of our distribution is just Carl.

Parting thoughts to the people of Austin regarding St. Elmo and other small, independent breweries?

“This [situation, ‘no delivery’ option, in particular] will leave an indelible mark on consumers and the bad beer laws we have in Texas regarding how consumers are able to enjoy their beer. Hopefully something comes of that. Also, everyone should know that [St. Elmo resident food truck] Soursop is open and they have a host of their own unique challenges. We need for them to get through this experience as well.”

Beer-to-Go Hours: noon-8pm daily. To-go orders and updated beer menu & merch: www.st-elmo-brewing-company.square.site