Brewers Association’s Bob Pease Discusses Canceling CBC, The Road Ahead for Small Brewers

The Brewers Association (BA) made the difficult decision Thursday to cancel the 2020 edition of the Craft Brewers Conference & Brew Expo America, as well as the World Beer Cup competition, due to concerns over the spread of the coronavirus disease known as COVID-19.

Brewbound caught up with Bob Pease, the trade group’s president and CEO, to discuss the decision and the fallout. Pease also shared that the BA has engaged members of Congress on an aid package that would benefit craft brewers and small businesses, including:

  • an increase in funding for the Small Business Administration for low- and no-interest loans,
  • immediate loan payment deferment on SBA loans with no interest accruals,
  • loan deferments for up to two months with no interest accruals from commercial lenders,
  • paid sick leave for people who don’t have benefits through their employers (minimum of 14 days, maximum of 30 days),
  • Paid quarantine leave for employees of businesses shut down due to quarantine (minimum of 14 days, maximum of 30),
  • Make unemployment insurance available for all temporarily laid off or furloughed employees, with no long-term negative impact on employers’ insurance premiums,
  • Delaying the April 15 federal excise tax filings (the Alcohol and Tobacco Tax and Trade Bureau can only waive penalties if there is a disaster declared).

Read Pease’s conversation with Brewbound, edited for clarity and space, below for his thoughts about CBC, the future of the BA and small brewers, and more:

Brewbound: I wish we were talking on better circumstances. But unfortunately, that’s where we are. As far as the decision goes to cancel CBC, what was the tipping point for you?

Bob Pease: We were trying very hard to balance the public health and public safety priority versus not giving into what felt like at some levels, some level of media-driven hysteria. But we were watching the information from the CDC, and the World Health Organization, and then the health authorities in the city of San Antonio. Dr. [Anthony] Fauci of the National Institute of Health and the head of infectious diseases in this country, when he came out and said large gatherings are basically just a bad idea, that was a key indicator for us. And then, really, the 24 hours starting at some point Wednesday, the President’s speech, the decision by the National Basketball Association to postpone their season, and then quickly followed on by NHL, Major League Baseball, so that 24-hour period was really the tipping point for us.

Brewbound: With social media, there’s always going to be critics who are like, Why didn’t they announce sooner?’ So it’s good to understand where you guys were coming from as far as what your mindset was?

Pease: We understand that there’s always going to be critics. We feel we made the appropriate decision at the appropriate time in the best interest of our members.

Brewbound: As far as the Brewers Association goes, the impact of putting on such a large scale event like CBC, what impact is canceling that event, the World Beer Cup and the Brew Expo going to have on the organization?

Pease: It’s going to have a significant impact on the Brewers Association. That said, we are in a very strong financial position. We will be able to weather this storm, and we will be able to move forward.

Brewbound: You said a significant impact. I have to ask, we saw layoffs after South by Southwest canceled. Is that something that the Brewers Association might have to do?

Pease: At this point in time, that is not in discussion. Like I said, even with the cancellation of CBC, we’re in a very strong financial position, and we do not anticipate laying off any staff.

Brewbound: With events like CBC and GABF, does the Brewers Association maintain insurance on those events? Would it cover an instance of a communicable disease or something like that forcing a cancellation?

Pease: We have looked over the years at the merits of event insurance. What we have found is that the exclusions on most policies coupled with the inability of most policies to protect your revenue, did not make good sense for us to purchase event insurance policies. What we have chosen to do is basically self-insure the Association for an occurrence just like this, and because we’ve taken those steps, we are in the position to be able to withstand this hit.

Brewbound: Looking into the future, how are you viewing Savor and GABF at this time?

Pease: Clearly, we are looking right now at Savor and also Homebrew Con, which is our event for members of the American Homebrewers Association. As of today, those events are still a go. But just like we were with CBC, we’re in a day-by-day, week-by-week mode of assessing the situation, and we’ll make the best decision we can at the appropriate time.

Brewbound: How hopeful are you that Homebrew Con and Savor will go on as planned?

Pease: Very hopeful. I feel very good about the decision that we made regarding CBC, getting a lot of support from my board and former board members. But on a personal level, it makes me really sad that we’re not going to have the Craft Brewers Conference. One of the things we pride ourselves on at the BA is we feel like we help build communities, and the Craft Brewers Conference each year is the gathering of our community. Breweries, suppliers, media, sponsors, we bring everybody together. We take a lot of pride in that, and we think we do it pretty well. To not be able to do that this year makes me, and I know all of my colleagues here, pretty sad.

Brewbound: There’s no way to pull off something similar, but you do have the Great American Beer Festival in the fall. Is there any way to do anything around that, that is in any way similar?

Pease: Interesting perspective. My answer to that would be, to be determined. We haven’t talked about that yet. As you can imagine, the priorities when you cancel an event this size are stacking up like planes to O’Hare in bad weather, and we’re trying to deal with those priorities one at a time. But one thing we are trying to implement would be some type of limited online availability of key CBC presentations, so that we can still provide what we think is valuable content that helps our members’ businesses. That’s one of our initial priorities. Then, once we get through April, we’ll turn our sights more toward what GABF could look like.

Brewbound: Would one of those presentations include the state of the industry discussion — the Bart [Watson] and Paul [Gatza] show?

Pease: In some fashion, yes. Whether it will be the Bart and Paul show, I’m not sure. It might be something coming more from Bart. We realize that’s something super valuable, super important to all the attendees, even people that don’t attend. So that will certainly be at the top of the list.

Brewbound: This is definitely an unprecedented situation that everyone’s dealing with. So many of your members have found success with the taproom-only model, and now we’re in a situation where large gatherings are being …

Pease: Discouraged.

Brewbound: Yeah. For a lot of small brewers, who are fighting for survival anyway in a tougher economic market, in a more competitive economic market, what advice do you have for them?

Pease: We just had an all staff meeting here at the Brewers Association to discuss with our team the impact of canceling CBC and the World Beer Cup. One of the messages I stressed is, I don’t want anybody feeling sorry for the Brewers Association. Our thoughts and our priorities are with our members who are living this day to day and are going to be impacted. Our hope is that many of our members have the ability to weather this storm. I don’t think this lasts forever, but nobody really knows, right? But there is a really good thread on the Brewers Association forum talking about small breweries and small businesses, really, what they need to do to withstand what is certain to be a downturn, but hopefully is a temporary downturn in demand for their products and services.

Brewbound: We’ve started to see some of the effects in Seattle, Pike Brewing Company temporarily closed its restaurant, and it sounds like some of its employees are on standby unemployment. There’s a small brewery in Rhode Island that had to lay off staff. It’s already being felt.

Pease: One of the things we are doing is we are heavily engaged with our congressional champions in Washington on Capitol Hill right now about the impact of COVID-19 on small business and small breweries. And we are part of the discussion on some of those aid packages that hopefully are going to make their way through Congress, if not today, early next week. We have the ability to have the ear of some very important people in Washington.

Brewbound: What would those protect, if they go forward?

Pease: Some things I’ve seen are, no interest SBA loans, unemployment benefits. The package is still being negotiated, but small business is gonna take a hit across this country, not just in the brewing industry. So we’re doing everything we can to make sure we’re part of those discussions, and that if there is anything coming from the federal government, that it goes to small breweries as well as other small businesses.

Brewbound: Is it the Brewers Association’s place, in some of these higher at-risk areas, to encourage members to temporarily shut down their taprooms in the interim?

Pease: I don’t see that as our role. Our role is to follow the advice of local, state and federal health authorities. Let’s be guided by the scientists, be guided by the public health officials who have the most knowledge and information. Our job would be to amplify those messages.

Brewbound: What else am I not asking that I should be?

Pease: The impact on the local economy that our event has is pretty significant. So the city of San Antonio is going to miss out on that. They just announced this morning that they are postponing their big cultural celebration known as Fiesta, which has a $350 million economic impact to that community. They’re postponing that until November. So it’s a double whammy for them. And again, our thoughts and priorities moving forward is what can we do to help our members? We know, in many cases, they’re going to be in a tougher spot than the Brewers Association is going to be in.

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