Photo by Matthew Curtis
THE GIST
On June 25, the Brewers Association (BA), a non-profit trade group representing America’s “small and independent” breweries, laid off a handful of key staff members. Those affected by the layoffs include Julia Herz, formerly the BA’s craft beer program director and Acacia Coast, formerly the BA’s state brewers guilds manager. A spokesperson for the BA confirmed the layoffs and said the organization informed its committees and members of the layoffs on June 26. The Brewers Association has not provided any further comment.
This comes less than two months after the BA laid off nearly 25% of its staff in April and reduced salaries for its management team, leaving it with a reported staff of 52. That round included the loss of Andy Sparhawk, the acting editor-in-chief for the BA’s editorial site, CraftBeer.com. Herz then filled that position. It’s unclear what role the site will play in the future.
At the time of the April layoffs, the BA called it a necessary step to “maintain the long-term viability” of the organization after losing revenue from its three largest events: the Craft Brewers Conference (CBC), SAVOR, and the Great American Beer Festival (GABF). The BA canceled CBC and SAVOR this year as a result of COVID-19, while GABF will take place in virtual form in September.
WHY IT MATTERS
The BA depends heavily on event revenue, which has dried up as the pandemic prevents large social gatherings. The decision to cut further staff, especially staff that is crucial to executing the BA’s mission, is a sign of how severe the financial loss has been for the trade group.
The federal government has made certain kinds of businesses ineligible for pandemic-related relief funding like Payroll Protection Program (PPP) loans, meant to help companies avoid layoffs. Strip clubs, political consultants, and lobbying groups, for example, are barred from the funds. The Brewers Association is ineligible because it’s classified as a 501(c)(6), meaning it’s a non-profit focused on the business interests of members, largely through marketing and lobbying. Charitable non-profit 501(c)(3)s are in some cases eligible for PPP loans.
Speaking to GBH’s Bryan Roth in mid-May, BA CEO Bob Pease said the earlier round of layoffs was painful for the BA and to him personally, as he’d worked with some of those employees for more than a decade, but that they were necessary for the fiscal survival of the organization.
“We are always asking ourselves, what can we do to be good stewards of the member's money? So that really was what drove the decision to engage in the reduction in force measures that we took,” Pease said at the time. Tax filings show the BA reported net assets of $21.3 million in 2018, the most recent year for which data is available.
Julia Herz has long been a public face of the BA, spearheading its craft beer programming for 13 years, according to her LinkedIn profile. In that role, she regularly presented at regional and national conferences, and acted as one of the biggest voices for the entire craft beer industry. She provided education and resources to breweries and the public regarding craft beer, the state of craft brewing, beer styles and trends, and craft beer and food pairing.
As the state brewers guilds manager, Acacia Coast provided support and leadership for state brewers’ associations and guilds and helped newly organized guilds get off the ground. She held that role for more than nine years, according to her LinkedIn profile.
Coast’s vacant position comes as a further blow to state guilds, who have struggled to make up lost revenue in the wake of canceled events this spring. The funding shortfall comes as the guild’s role is more important than ever in terms of the guidance, advice, and legislative support it provides to member breweries during the pandemic and complicated economic re-openings.
Michelle Forster, director of the Wyoming Craft Brewers Guild, told GBH’s Bryan Roth in mid-May that some state guilds had lost 70% of their expected yearly revenue as a result of canceled events.
“We're pretty heavily dependent on grant money from our parent organization. Those of us who are relatively new guilds, which includes Wyoming, we're also not going to see that come through because [the BA] has really taken a hit with their event revenue as well,” Foster said at the time.
Rising COVID infection rates nationally and news that states like Texas will reverse course on economic re-openings indicate the pandemic’s effects will continue for a significant period of time. The BA is unlikely to begin earning event revenue any time soon; Pease last month floated the idea of a “hybrid model” for next year’s CBC that includes a small in-person event as well as virtual programming. A survey the BA sent this week soliciting feedback around a virtual event indicates that an online version of CBC 2021 is a strong possibility.
As the public health and economic toll of the pandemic mounts, the BA will need to balance support for its member breweries with fiscal realities. Small breweries need guidance during this time—both in terms of how to safely reopen taprooms and how to find diverse revenue streams—but their national trade group is struggling, too. Hopes that the pandemic’s economic toll on the industry would pass once states reopen economies has proven to be wishful thinking.
Words by Kate Bernot