Starting a business is always a circus. 20% of small businesses fail in their first year. In more certain times, struggle is unavoidable; now, with a pandemic raging in the background, it’s overwhelming. And with a recent poll reporting 62% of travel and hospitality-related businesses may not survive the winter, launching a fledgling brewery in the midst of COVID-19 seems like a straight three-ring affair.
In Chicago, as elsewhere across the country, existing beer businesses have been forced to recalibrate, restructure, or even arrest production over the last year, with little consensus about how best to pivot. Both Pipeworks Brewing Company and Finch Beer Co. had expansions or second locations in the works when the pandemic hit. The former has since halted a plan to open a brewpub, a goal since 2017, for fear of pouring money into a project that hadn’t yet broken ground. The latter partnered with a restaurant group to debut The Perch—a 5,000-square-foot kitchen and taproom—in August, though it has been limited to delivery-only or outdoor service for much of its tenure.
Others had just opened their doors, or were still months away from launching, when government-mandated lockdowns began to take effect. Such is the story of Crushed By Giants Brewing Company, a third venture from the owners of Chicago brewpubs DryHop Brewers and Corridor Brewery & Provisions, which debuted on the Magnificent Mile in early July. With its target customer base of white-collar workers and tourists all but wiped out, the business opted to close temporarily until indoor dining restrictions eased.
Quantifying the number of breweries-in-progress is murky at best, but even now, almost a year into the pandemic, there are still new and prospective business owners who have opted to move forward with plans for their fledgling businesses—no matter how unpredictable or treacherous the circumstances have become, or the cautionary tales that abound. If there is a truism for this time period, it is that adaptability is key to keeping the lights on—and two new Chicago breweries have taken that strategy to heart.
Casa Humilde Cervecería—which translates to “Humble House Brewery,” and which was founded by brothers Jose and Javier Lopez—is one local beer business that has been navigating the challenges of the pandemic since shortly after its inception.
The Lopezes had worked as the brewery’s lone employees for six months before COVID-19 hit. After initially searching for a place of their own, the two opened Casa Humilde in November 2019 in a brewing co-op and beer hall called District Brew Yards. The site is home to three other resident breweries (Burnt City Brewing, Around the Bend Beer Co., and Bold Dog Beer Co.), a bottle shop, and a popular barbeque joint. Operating in DBY allowed Jose and Javier to outsource the brewing process and on-premise sales to the centralized production and front-of-house staff, and to focus on getting their product into the market.
For half a year, Casa Humilde enjoyed the perks of a communal operation while building the brewery’s profile via off-premise accounts. Then March 2020 arrived, and local lockdown restrictions were put in place. Suddenly, on-premise draft sales and outside keg sales dried up as drinking and congregating indoors were no longer allowed. Jose and Javier were forced to push their business plan into hyperdrive.
“Our plan throughout our first year was to stick to our core beers, focus on on-premise sales and have people take them in, see how they do,” says Jose. “There are a lot of breweries that release a new beer every few weeks. We didn’t want to fall into that just because we wanted to establish ourselves first. But with everything that happened, we had to pivot and bring in new beers.”
Casa Humilde had built a solid core range that speaks to the brothers’ Mexican-American heritage, and which utilizes distinctive ingredients and flavors. Highlights include a Mexican Corn Lager, Maizal; a Farmhouse Ale made with prickly pear called Nopalli; and a Belgian Strong Ale brewed with Mexican piloncillo sugar, called Pilon.
“[Prior to COVID] we did a tasting with a Mexican restaurant. We went through the whole lineup of 10 beers. We’re thinking they’ll probably take two, three beers on draft. Instead they said, ‘Okay, we’ll take all of them.’”
Risking the consistency of these beers to launch new releases into the market seemed scary, but they decided to take the leap, and made a concerted effort to push sales from the in-house store at DBY. From a Pale Ale brewed with orange peel for Jose’s wedding called Media Naranja to variations on its popular Michelada beer, Pa’ La Casa, and a new West Coast IPA, the brewery has been selling out, and finding it hard to keep up with demand. It’s not unusual for the shop to move 25-30 cases on a Friday or Saturday night, and Casa Humilde has begun doubling its batches in response. Both brothers find the situation bittersweet.
“It’s a good problem to have, but sometimes we feel bad,” says Jose. “There are a few stores that [our beer] does well for them, and we have to be like, ‘Yeah, we can only give you those two cases.’”
Being part of a brewing cooperative—one that can order raw materials in greater quantities amidst wide-ranging shortages and offer lower overhead costs—has been a lifeline for Casa Humilde. Both brothers credit their ability to grow during such uncertain times in the industry to sharing a space with seasoned vets.
“If we were to open up our own place around the same time and this would have happened, I don’t think we would have survived,” says Jose. “We would have been brewing, we would’ve needed to start delivering and keeping up with sales. It would have been very tough.”
“We get tips from the other brewers,” Javier adds. “Burnt City and Around the Bend have been around for a while, so maybe they’ve tried something already and they would change this certain thing. Everyone has been great. That guidance and mentorship in the brewing community is just so helpful, you know?”
Another contributing factor in Casa Humilde’s growth during the pandemic was the Lopezes’ ability to build relationships before COVID-19 and then maintain them, despite the limitations of lockdown. Both brothers have prioritized holding tastings, and introducing their beer to Latinx neighborhoods and restaurants. They’ve found that many small businesses often prefer to work with other small businesses, which makes face-to-face connection an important part of their future plans.
“We have to get in front of people, you know? Especially in the Latino or Hispanic community,” says Javier. “There’s a big lack of education [on craft beer]. A big part of it is just introducing it to people.”
The hope is that Casa Humilde’s offerings will take a draft line or two away from multinational-backed Mexican Lagers at taquerias and Latinx-owned restaurants. Remarkably, the brothers are even taking on repairs for certain customers who might not be able to afford the upkeep themselves.
“Some of these people we love and I hope they survive. They’ve been supportive and you can tell they’re struggling. So maybe they’ve got a leak in their draft line; that might cost 200 bucks [to fix],” says Jose. “If it’s something Javier is confident he can handle, we’re always down to help.”
With this type of genuine relationship-building, it’s no surprise that, as the weather warmed up and restaurants were able to open at limited capacity last summer, the brewery began receiving phone calls from customers wanting to expand their Casa Humilde offerings, as well as messages from new prospects they’d been nurturing.
“[Prior to COVID] we did a tasting with a Mexican restaurant. We went through the whole lineup of 10 beers,” recalls Javier. “We’re thinking they’ll probably take two, three beers on draft. Instead they said, ‘Okay, we’ll take all of them.’”
A few miles west of Casa Humilde, in Chicago’s Humboldt Park neighborhood, Jonny Ifergan, Ryan Sanders, and Briana Hestad found themselves near the end of a bumpy, three-year road to opening their brewery and kitchen, Ørkenoy. Even as their plans were cementing, the city of Chicago struggled to outline a clear or cohesive strategy for the hospitality industry during the pandemic.
What started as a one-page business plan—Ørkenoy’s founders wanted to find a small gallery space where they could brew, and serve beer and small plates during art shows—morphed into the lofty ambition of taking up residence in the Kimball Arts Center. It was decided that Ørkenoy would open alongside a Chicago outlet of the Los Angeles-headquartered Dayglow Coffee, owned by Ifergan’s brother, Tohm. The two would be flagship tenants for the 48,000-square-foot loft space’s redevelopment scheme, which would include a full bar, kitchen, and brewing system.
According to the original plan, Dayglow would serve coffee and pastries in the morning, before the space made an evening transition into a bar with a Nordic-themed menu, plus ancient ales and craft cocktails. It would be an all-day-hang type of place, in other words, that would cater to creatives and folks just looking for a relaxed place to unwind.
Ørkenoy’s plans were ambitious without accounting for COVID restrictions, which went into effect mid-construction. At first, the founders thought they might catch the pandemic at the right time and wouldn’t have to open during the lockdown, or that it might pass relatively quickly. But as their open date drew closer and bills came due, they knew they would need to adjust in hopes of ever seeing their original vision come to fruition. From beer production, menu offerings, and serving capacity down to the tableware they were allowed to use, Ørkenoy was forced to adapt to a new reality.
“The idea behind the food and the cocktails and the beer was that of a casual space. All of that has kind of gone by the wayside,” explains Sanders. “It doesn’t make sense for people to come out and do that [during the pandemic]. And it doesn’t make sense for us to sell food or drinks that way. So it really has just changed the entire dynamic of our hopes and expectations.”
“The idea behind the food and the cocktails and the beer was that of a casual space. All of that has kind of gone by the wayside. It doesn’t make sense for people to come out and do that [during the pandemic]. And it doesn’t make sense for us to sell food or drinks that way. So it really has just changed the entire dynamic of our hopes and expectations.”
In addition to working under limited conditions, Ørkenoy struggled to make the critical connection to its neighborhood, a vital component of any new hospitality venue’s survival. While the brewery is located adjacent to Chicago’s trendy Logan Square neighborhood and Milwaukee Avenue’s long stretch of popular bars and restaurants, it’s off the main drag.
“Generating neighborhood goodwill is the hardest part,” says Sanders. “Getting the neighborhood excited and creating a community space is literally impossible right now.”
The immediate effects of neighborhood disconnect were felt in early September, when a window at Ørkenoy was tagged with the phrase “gentrification is racism,” according to Ifergan. The statement was made in reference to the purchase of the Kimball Arts Center, and the process of redevelopment that had displaced some tenants. While Ifergan agreed with the sentiments, he says he was disappointed by some of the conversations around the space; Ifergan himself is first-generation Mexican-Moroccan.
“When I put the [social media] post up explaining I am first-generation too, [people in the neighborhood] were like, ‘We had no idea, Jonny, that you were Mexican. This just makes total sense!’ And it reinvigorated them and made them excited to support us,” he says.
With some newly fortified neighborhood support, the crew at Ørkenoy slowly began to find a formula that worked in most phases. They began holding a café pop-up and offering breakfast “bings”—or jianbing, Chinese breakfast crepes—alongside pastries, coffee, and to-go beer. It’s been a popular part of the business’ survival model, which it hopes to build on by offering more breakfast options, including Danish-style smørrebrød.
“There’s a bit of a desert for breakfast places in this area, so I think that’s why they’ve drawn a crowd,” says Ifergan. “They love the idea of breakfast with coffee. It’s a thing we did not expect or see coming. That’s been a way we’ve made up for losses.”
On the brewing side, Ifergan developed a lineup of Nordic-inspired ales based on ancient recipes, such as a Rye Ale with figs and toasted fennel, several smoked beers, and raw ales. It’s a novel approach in a city that loves Hazy IPAs, but it also runs the risk of alienating drinkers looking for the tried-and-true during a pandemic that has turned craft beer into even more of a luxury item for many.
Despite the risk, Ifergan says the reception has been positive. The next challenge was moving that beer into a competitive market with limited exposure. Ifergan worked with incubator brewery Pilot Project on a buckwheat Farmhouse Ale called Mr. Sparkles Emerson. It was then he decided to begin construction on his own brewhouse, despite little market penetration, opting to sell and gain visibility primarily through draft pours on-premise. Even as COVID restrictions were put into place, his appetite for wholesale remained non-existent. Instead, he relied on social media, storytelling, and a can seamer to move beer.
“It’s just so up-and-down and topsy-turvy,” says Ifergan. “We’re set up as a space to enjoy. We’re lucky we have the seamer since our best-margin product is our beer. We can at least get some out in the world. But even thinking about bringing the mobile canner in here, we wouldn’t be able to afford it because the minimums are too high.”
Both Casa Humilde and Ørkenoy have had to learn how to aim for moving targets. For Jose and Javier Lopez, determining proper packaging ratios presents a challenge, as restaurants carrying their beer may open or close without warning, meaning they may need to repackage kegged beer in cans. For Ørkenoy, a key difficulty is in balancing purchasing the right quantities of raw ingredients for both sides of the business, and in adjusting offerings based on quality and ingredients available.
“There’s no guide,” says Ørkenoy’s Sanders. “There’s not a single person alive that knows how to open a business in this climate really, or how to operate one. We’re all just muddling through this.”
Relief outside of a vaccine seems unlikely, both monetarily and operationally. The local government has been inconsistent, if not incoherent, on its lockdown guidelines, and has lacked a coordinated plan with state government. It allowed taprooms that serve food to operate at limited capacity, for instance, while taprooms serving only beer were unable to welcome patrons inside at all. Having a patio offered some businesses the chance to operate in a limited way, but emergency requests made by taprooms and restaurants that had outdoor space not previously used for patrons were either ignored or outright denied.
“There’s no guide. There’s not a single person alive that knows how to open a business in this climate really, or how to operate one. We’re all just muddling through this.”
Casa Humilde and the rest of the crew at DBY lucked out by renting a large parking lot from a neighboring business. That move has allowed them extra capacity with a patio, complete with propane warmers, firepits, and live bands. Ørkenoy, however, hasn’t been quite as lucky. Located as it is on the 606, a well-traveled east-to-west recreational trail, the business had an option for outdoor dining, but attempts to reach its local alderman for permission were unsuccessful.
“We tried contacting I don’t know how many offices in the city, all departments and nobody, even the alderman unfortunately, has responded,” says Ifergan. “I see people putting up these tents outside with heating elements inside. There’s no difference between sitting in a tent with hot air and being inside this space.”
For Casa Humilde, most guidance throughout the pandemic has come from more personal connections. “Our banker at PNC gave us all the links to walk us through [applying for PPP loans] and the best way to try and get as much as we can,” says Jose. “And we would see a lot of updates from the [Illinois Craft Brewers] Guild. That was probably our best source for what’s going on in the whole state.”
At the end of October, restrictions in Chicago began to tighten as cases of COVID-19 started to rise again. Meanwhile, the Midwest began its descent into the doldrums of winter. With indoor dining again prohibited, Ørkenoy laid off most of its front-of-house staff, with a crew of just four remaining. Ifergan adjusted to brewing less frequently, and Sanders began to design to-go meal packages while paring back plans for a winter menu.
Jose and Javier of Casa Humilde, meanwhile, were fortunate not to feel the effects of a return to restriction, and their patio remains open. The two continue to pursue outside accounts. Growth during such ambiguous and uncertain times is a rarity, which is not lost on them. The recent news that indoor dining will once again be permitted in Chicago will surely prompt another round of planning and rejigging.
“The best thing we can do is pivot and keep pushing more towards those retail accounts off-premise. But we’ve been growing. I would say pretty much every month we’ve seen growth, even despite everything going on,” says Jose.
For Ørkenoy, Ifergan and Sanders are focused on hitting the ground running once the world returns to some semblance of normalcy. Despite layoffs, both say they are hopeful at the prospect of the team they built returning and reaching their full potential, even if just to see people enjoying the space they created. “The most challenging thing is looking at the beautiful bar we built and no one’s ever been able to sit at it,” says Sanders.
Words + PhotosSteph Byce
