When California Gov. Gavin Newsom issued a stay-at-home order and shut down on-premise bars and restaurants to stop the spread of the COVID-19 pandemic in mid-March, 92% of San Diego-based Societe Brewing’s business was draft beer.
The shutdown stopped the 1,000 tap handles pouring Societe’s beer at 700 San Diego restaurants and bars from flowing.
“It was just like poof, overnight, gone,” Societe Brewing co-founder and CEO Doug Constantiner said. “Like millions of dollars gone. Gone, gone, gone. And that includes the tasting room, which did good business.”
Societe, like so many other small craft breweries, was left scrambling to figure out how to continue on.
In a fortuitous twist of fate, Societe had already commissioned its own canning line, which became operational on February 27. The canning line wasn’t supposed to arrive until April at the earliest, but Constantiner sped up the order earlier in the year after a nudge from one of his mentors.
Societe launched its year-round offerings — The Pupil IPA, The Coachman session IPA and The Harlot Belgian blonde ale — in 12 oz. 6-pack cans. The company also started packaging its quarterly IPAs and specialty offerings, such as its Oktoberfest, in 16 oz. 4-pack cans.
“I don’t want to say it saved us,” Constantiner said of the canning line. “I want to believe that we would have made it draft only. We would have had to figure stuff out. But we’ve tripled in size since then.”
By year end, Constantiner expects Societe will have produced around 7,000 barrels of beer, up from 4,000 barrels in 2019. The Pupil accounts for half of Societe’s production volume, with The Harlot and The Coachman making up 25% and the rest coming from specialty IPAs.
The 3,000 additional barrels will more than offset the loss of on-premise sales, which Constantiner called one advantage of being small.
“It took us four months to get out of the gutter from a margin standpoint with cans and packaging,” he said. “We were doing it the expensive way. Our cans were wrapped. We were buying small quantities of the case cartons, so the cost was pretty high. But as of September 1, we’re finally buying all the stuff in bulk. So we’re on printed cans. Our inventory turnover is pretty quick, so we got to a point where we can turn over a lot of inventory in a short amount of time to justify these big purchases that cut our costs by 50%.”
Societe has also added 60% fermentation capacity since the start of the pandemic, and a second kettle and chiller are on the way.
“We’re speeding up,” Constantiner said. “Now’s the time.”
That philosophy is something Constantiner has imparted to staff, telling them that now is the time to go “pedal to the metal.” Part of that mindset has been to stop trying to predict if the state is going to place additional restrictions on the business. Instead, Constantiner said he views the restrictions as an opportunity to do the things that the company had back burnered until now. That includes using the company’s parking lot to ad a stationary food truck that serves tacos, burritos, bowls and more.
“We always wanted to put a permanent kitchen in, and this just made us do it faster,” he said.
Cans weren’t the only saving grace for Societe. At the outset of the pandemic, Societe launched an online store to ship its beer in-state in California, as well as click-and-collect curbside pickup at the brewery. The brewery also received a loan through the federal Paycheck Protection Program (PPP). When that loan came through in April, Constantiner said one of the first things he did was cut a check for May’s rent and sent it to his landlord. Those moves helped stabilize the business.
In another move toward stability, after furloughing employees for about four business days early on in the shutdown, Constantiner said he brought everyone back following a discussion with his mentor.
“Then we just started bringing more people on and it’s made the company a lot better because we’re getting a lot of outside perspective,” he said.
Year-over-year, Societe has increased staffing 50%, and from the start of the COVID-19 pandemic to the present, the company has upped its headcount by 35%.
“A lot of great people have been furloughed or laid off, so we’ve been able to pick up some really good team members who were all stars at other breweries and other companies,” Constantiner said.
Among those key new hires are:
- Jonas Wilby, as VP of Sales, who spent a decade in sales and national accounts at Stone Brewing and Kiva Confections;
- Abraham Vara, as a packaging lead; Vara was previously with AleSmith;
- Doug Clark, as an assistant brewer; Clark was previously at Green Flash;
- Kevin Dougherty, as a brewer; Dougherty was the former distillery director at Cutwater Spirits;
- Grayson Lang, as quality assurance and quality control manager;
- And Megan Stone, as social media director.
Within five years, Constantiner believes Societe has the potential to grow to 100,000 barrels. He stopped short of calling the 100,000-barrel milestone a goal, but said he is “really enjoying growth.”
“I think growth is so healthy for the business and also a lot of fun,” he said. “ It gives everybody who’s under a roof right now more opportunity to grow professionally, personally. It allows us to hire better talent for specialized skills, like how we hired Jonas or how we hired a lab person or getting another brewer that has worked in huge facilities.”
Last May, Societe announced it was ending its seven-year-old self-distribution business to sign with Scout Distribution in its home market of San Diego. The company also has temporary one-year distribution agreements in Orange County, Los Angeles and Northern California.
The growth hasn’t been without struggles. Picking up new off-premise points of distribution during the pandemic has been a challenge, as resets have been slower to come back. Nevertheless, Societe has received chain store approvals in Costco, Trader Joe’s and Ralphs.
Even though he’s enjoying the growth period, Constantiner said his focus is on building a “great company.”
“Can we have a place where someone works for us for 30 years, retires and goes, ‘You know what, I’m so thankful to have contributed to Societe. And I’m so thankful for how that company treated me,’” he said. “That would make me happy on my deathbed.”