The COVID-19 pandemic has undoubtedly hurt a lot of businesses in the craft brewing industry. But even with challenges presented by a loss of on-premise sales, a theme starting to emerge from some brewers: August was their “best month ever.”
Count Night Shift among them.
Night Shift — which operates a brewery in Everett, Massachusetts, a wholesale business in Massachusetts and soon in Connecticut, a coffee business and on-premise locations in Boston — reported that last month was the company’s best moth ever.
Night Shift co-founder Rob Burns told Brewbound that the company lost about 30% of its wholesale business due to the pandemic, with a majority of that volume belonging to Night Shift Brewing. Nevertheless, the company’s overall business is up about 16% year-to-date, and the wholesale business is up about 50%.
“August was our best month ever,” Burns said.
“Traditionally, that’s a much slower month for us,” he explained. “It’s usually one of the slowest just because so many people leave to go on vacation. We do sell beer on the Cape and Nantucket and Martha’s Vineyard, but … we usually go down in August. And so a lot more people are clearly home.”
There it is.
Nevertheless, Burns is cautiously optimistic about those trends carrying over into the fourth quarter of the year, even with the on-premise business a fraction of what it used to be and volume from sales to college students likely not returning this fall and winter. Despite the pandemic, Night Shift is on pace for volume growth by the end of 2020 but likely won’t see growth to its bottom line.
“With our Boston location [Lovejoy Wharf brewery], we’re just bleeding money,” Burns said. “So that’s just crushing us. But top line, we’ll be able to get some growth. We’ll get some volume growth. I think last year we finished around 39,000 barrels. I think we’ll be in the low 40s by year end.
“We’re, we’re feeling pretty lucky and fortunate that’s the position we’re in, even though it’s not totally all roses,” he added.
Helping drive that business has been the introduction of 12-packs of flagship Santilli IPA in February and Hoot Hard Seltzer variety packs in April.
Demand for hard seltzer variety packs has left Night Shift struggling to keep up with demand. Burns said the company finally gained traction in August on meeting demand, and the hard seltzer brand was the company’s best seller for the month.
Heading into 2021, Night Shift will look to add more 12-packs, as well as large-format pack configurations for the Nite Lite franchise, which is already in 12-packs.
“Right now, we’re steering away from the 15-pack because we want to more mirror macro than we do a craft with that product,” Burns said. “So more of an 18- to 30-[pack] is the target.”
After a big August, Hoot Hard Seltzer is Night Shift’s third-best-selling brand and on track to leapfrog the Nite Lite brand family, which skews more heavily toward draft and has struggled due to the loss of on-premise occasions caused by the pandemic, and land right under Santilli IPA.
“Last year, Nite Lite was our top volume mover,” Burns said. “The Nite franchise is struggling a little bit just because it was such a big draft play for us. And the 16 oz. Nite Lite cans were really big in more of the venue-type places and on-premise as well. So that has been struggling, but the 12-packs are still growing.
“It’s kind of crazy for us to think that for a craft brewery, we have a hard seltzer, a light beer and then an IPA,” he added.
Another thing that might be hard to imagine is that Night Shift is exploring wine as its next venture. Burns said the company views wine as an e-commerce play — a “pandemic resilient” product that can be shipped directly to consumers. After nearly a year in the marking, the first shipments could come as early as later this month, Burns said.
With Lovejoy Wharf no longer needing to focus on draft beer production, the company has turned the brewery into “a kind of de facto winery and an R&D plant for wine,” Burns said.
“We’re having a bunch of fun filling those tanks with wine,” he said. “Whether they go into more of a flavored spritz, kind of fun, playful wines or more traditional, we’re still kind of playing around with kind of liquid and ideas. But we’re pretty excited about that and gearing up to be able to sell those.”
Night Shift co-founder Michael Oxton added that the company’s plan is to start small with its own Night Shift branded wine, as well as a collaboration with California’s Benevolent Neglect.
“I think the idea, at least to start, will be to cover a variety of different options out there, get some feedback, keep it small and iterate,” Oxton said. “Don’t invest in anything too big, too quickly because we’re just so unfamiliar with the space.”
With wine, Night Shift will look to both produce its own product and contract produce. Night Shift will start by bottling its offerings and later explore canning.
“Right now we’re really thinking it’s more of a direct-to-consumer play and in our taprooms,” Burns said, adding that the company is able to sell its wine by-the-glass and to-go from its Lovejoy Wharf restaurant and to-go in Everett. Burns said he hopes to add on-premise, by-the-glass sales in Everett by the end of the year.
This wouldn’t be Night Shift’s first venture outside of the beer space. The company began roasting coffee last year, and that business has doubled, Burns said. The company also launched a cider earlier this year, but that project has moved slowly.