Amid Coronavirus Closures, Russian River, McMenamins Cut Staff

As the hospitality industry grapples with the impact of mandated closures of restaurants, bars, brewery taprooms and tasting rooms, craft breweries and brewpubs are beginning to announce staff layoffs and furloughs.

Santa Rosa and Windsor, California-based Russian River Brewing Company furloughed 90% of its staff — about 175 employees, co-founder Natalie Cilurzo said.

“These are the hardest decisions and conversations we have ever had to make,” she said. “The situation changes every day, and each day we have to add to the list of furloughed employees.”

Employees from every department at the craft brewery have been affected by the furloughs, as Russian River has shut down on-site service at its taprooms. Cilurzo said many employees have paid vacation and sick time that they can tap into while they’re out of work, and furloughed workers in California are eligible for unemployment benefits. All employees on Russian River’s health benefits package will be covered through April no matter how many hours they work, she said.

“The financial impact from all of this will be absolutely devastating to not only the craft beer industry but our local, national and global economies,” Cilurzo said. “This is unbelievably bad on so many levels.”

As Russian River’s food service ramps down at its two locations, the company is “planning to give out the leftover food in our kitchens that will spoil.”

Russian River doubled the size of its workforce in 2018 when it opened its $50 million, 85,000 sq. ft. Windsor production brewery, taproom and restaurant.

Farther up the West Coast, McMenamins, which operates 55 brewpub and hotel locations in Washington and Oregon, has announced it is temporarily shutting down all but one location and laying off nearly 3,000 employees. The company’s 23rd Avenue Bottle Shop in Portland, Oregon, remains open.

“It is with great sadness that we have to stop the music and close … for now,” the company wrote on Instagram. “But we will return, revive, and be reborn to weave the tale of how music never really stops and stories continue to be told.”

The McMenamin family told Portland’s KOIN that the layoffs allow employees to collect unemployment benefits and allows the company “ensure that there will be jobs to come back to when this extraordinary episode ends.”

In California’s Bay Area, Cleophus Quealy Beer Company, said the shutdown is too much to endure and the San Leandro, California-based company will have to close.

“It is with heavy hearts that we announce Cleophus Quealy Beer Company will be permanently shutting down after April,” the company said on its website.”

Although the brewery is closed for the remainder of March and into April, Cleophus Quealy said it would use “all remaining resources to pay our employees for the next two months, in order to help support them through this extremely difficult time.”

Tom McCormick, the executive director of the California Craft Brewers Association (CCBA), a nonprofit trade group that represents the interests of the state’s craft brewers, said he’s hearing of breweries in the state laying off between 60% to 80% of their staff.

“We’re seeing huge layoffs,” he said. “So the biggest needs are assistance for their employees, unemployment to streamline that process, to quicken that process.”

Although the impact has hit “across the board,” many smaller breweries that dependent on at-the-brewery taproom sales have been the hardest hit, McCormick said.

As of October 2019, 1,039 breweries were in operation in the state of California. McCormick said breweries in the state are in need of relief on excise and sales taxes, as well as no interest loans.

“One of the big ones right now is most insurance carriers are saying that the virus is not included in their loss of business writers,” he added. “So they’re looking for relief from the government to force insurance companies to include the virus in their coverage.

Last week, Seattle, Washington-based Pike Brewing announced the temporary closure of its Tankard & Tun brewpub and seafood restaurant in the city’s Pike Place Market district. As many employees as possible were shifted to the company’s Pike Pub and all affected employees are on “standby unemployment.”

According to Craft Business Daily, an unnamed Indiana craft brewery could lay off as many as 200 workers.

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