As the Puget Sound approaches its yearly stretch of unrelenting gloom – also known as winter – many will soon turn to craft beers to cope. In turn, many of the state’s nearly 200 brewing companies have been preparing their seasonal offerings, devising darker beers for the dark months ahead.
But some of those beers may never see the dim winter’s light of day. The effects of the federal shutdown have rippled into the area’s beer industry, one of the most vibrant in America’s craft brewing boom. And even if the shutdown ends soon, damage has already been done.
Among the governmental agencies deemed unessential this month was the Alcohol and Tobacco Tax and Trade Bureau, which approves all new breweries, beer labels and recipes. That approval process, which sometimes takes months, is built into the business strategies of those bringing a new beer to market, and those brewers preparing to open for business.
Under the shutdown, those approvals have ground to a standstill.
The gridlock’s effects differ between breweries and, in turn, beer drinkers. Fans of the Budweisers and Millers of the world need not worry. Mass produced beers won’t be affected, nor will established local favorites like Georgetown's Manny’s and Elysian's Immortal IPA.
Instead, it’s new brewers who will bear the brunt of the shutdown, as well as those beer fans looking forward to new and seasonal drafts in coming months.
Dick Cantwell, founder and head brewer at Elysian Brewing in Seattle, started business in 1995, right as the government shut down last time. He had just taken possession of his space, and while the federal government took a hiatus, he could not.
“We needed to pay our subcontractors, and given our SBA loans, that was difficult,” said Cantwell. “We were sweating a bit, but luckily that shutdown didn’t last too long. It’s not hard to imagine scenarios where new brewers are on the hook for rent right now, on the hook for raw materials contracts, but can’t do anything. Right now they’re probably getting pretty worried.”
Washington Brewers Guild President Heather McClung said it’s tough to gauge the number of new breweries being affected by the shutdown, since they usually stay under-the-radar before opening. Though given that over 50 new breweries have started in Washington in the last two years, there are likely a few out there.
“If you were planning on building a new brewery or expanding, you want this solved soon,” McClung said, noting that the approval process for new breweries was already months long before the shutdown. “If you’ve got SBA loans associated with that, you’re sort of f-ed until this gets fixed.”
For established brewers, this is largely an annoyance. A Redhook spokeswoman said the company was experiencing delays in new labels, as did Elysian. But because they have a stockpile of already-approved beers to serve, the shutdown is a speedbump for their businesses.
For new brewers attempting to gain a foothold in the market, however, the present situation is a drain not only on their reputation-building efforts, but also the bottom line.
Sound Brewery in Poulsbo estimated the shutdown would cost them roughly $13,000 — a result of making seasonal beers that won’t be approved in time for their designated season.
“As it stands, we’ve got two labels that need to get approved for the fall, but we’re almost certainly going to miss it,” said Mark Hood, Sound Brewery’s founder, describing them as a barleywine ale and a darker, Belgian Quadruple-style ale. Also in question is the future of their lighter spring beer and their “Christmas-style” ale, which is aged in Tennessee whisky barrels.
The gridlock may not bankrupt any established breweries, but it can put a dint in their 2013 profits. Cantwell said he was preparing to launch a new “year-round” beer this year – their popular Space Dust IPA – and was lucky that he didn’t get too far into the process before the government stopped. Others, he said, may not have been so fortunate.
“Imagine I’m a small brewery preparing to launch a big, flagship beer,” said Cantwell. “I’m contracted for tens of thousands of dollars of hops, and I’ve got to pay for them. I’m contracted for all sorts of specialty ingredients. That doesn’t go away just because I can’t get the beer approved. This affects all my contracting.”
Even were the shutdown to end today, its effects will still be felt months from now. “Once they get things running again, Jesus, I bet the backlog is going to be incredible,” said Cantwell. “The rate of approvals is going to be glacial for a while.”
And for the region’s countless beer connoisseurs, looking forward to the comforts of new brews to get through the holidays? Those plans may be increasingly tapped out — yet another casualty of D.C.’s dysfunction.
