Supply Chain problems hamper the recovery of DC’s splash-based businesses

Breweries, distilleries and bars have benefited from the rising demand over the last many months as the newly vaccinated began to go out to socialize more, but their recovery has been hampered by supply chain and labor market problems.

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Bisnow / Jon Banister

Atlas Brew Works’ outdoor seating area on West Virginia Avenue in northeastern DC

These companies, which often act as anchors for developments and destinations to draw people to new neighborhoods, are still struggling to return to financial stability as new challenges have continued to rise over the past 19 months.

The owners of two breweries, a distillery and an outdoor bar place talked about last week Bisnows Northeast DC Update Digital Summit on the difficulties they face in procuring materials and hiring labor.

Disruption of the supply chain has become central in recent months as ports on the west coast have become increasingly congested and as the holiday season approaches, but breweries have faced supply problems since the early days of the corona pandemic, says Justin, CEO for Atlas Brew Works. said Cox.

Many breweries changed their business model last year to focus more on distributing cans of beer for pickup and delivery as customers drank in their homes instead of in bars and pubs. Cox said this trend, combined with more people supplying themselves with sodas and other canned goods, contributed to a shortage of aluminum.

“The aluminum market just went crazy and it was already struggling because of some major brands coming into the market and putting their products in cans,” Cox said. “And there were tariffs or threats that tariffs put a lot of pressure on the supply side. Just finding aluminum is difficult, especially when trying to come up with new products. It has been challenging on all fronts.”

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Bisnow / Ethan Rothstein

Atlas Brew Works’ new location in the West Half building near Nationals Park.

Atlas has operated its original location on West Virginia Avenue in Northeast DC’s Ivy City neighborhood for eight years, and last year it opened its second location on Half Street SE near National Park. The new ground floor room of JBG Smith’s West Half building features an indoor brewery and dining room that serves Andy’s Pizza and is connected to an outdoor seating area on the patio.

As it worked to open the new location in early summer 2020, Cox said Atlas was facing more supply chain-related roadblocks.

“We have a couple of large garage doors that open up the indoor-outdoor feel and we were thinking of making a change to one of them and I talked to the garage door seller for what I thought would be a relatively little change, “Cox said. “The cost would be like $ 28K and the delivery time was 27 weeks.”

“Wow,” two other business owners in the panel responded in unison to Cox’s anecdote before sharing their own supply chain-related horror stories.

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Clockwise from top left: Metrobars Jesse Rauch, Atlas Brew Works’ Justin Cox, City-State Brewings’ James Warner, Republic Restoratives’ Sarah Mosbacher and Bisnow’s Jon Banister.

Republic Restoratives Chief Financial Officer Sarah Mosbacher, whose distillery is also located in Ivy City, said the supply chain crisis forced the company to change the look of its latest release, Assembly Gin.

“Assembly Gin, as it is available now, has the wrong cap,” Mosbacher said. “The caps we ordered were two months late and this is the story of just like 20 other items we’ve needed over the last year.”

“The caps are finally coming tomorrow and we couldn’t wait,” she added. “So we bring in victims that I sometimes think are imperceptible, but other times I have this creepy feeling of, ‘Oh, that’s not what we intended to present to the public.’ It’s just the lifestyle right now.”

Two new venues that opened this year in Northeast DC’s Edgewood neighborhood were also forced to adapt to supply chain problems as they expanded their premises.

Metrobar, an outdoor bar concept on MRP Realty’s new Bryant Street development, welcomed its first customers in June. The venue offers an old Metro train carriage, which according to the plan is to have indoor bar seats, but that part of the place has not yet been opened, and customers have instead sat at the picnic tables around the train carriage.

“We will eventually open the train carriage with a bar inside and with seating, but it has taken a bit of a delay due to the supply chain, it has been really difficult to get materials, so we have had to refocus ourselves.” Metrobar co-owner Jesse Rauch said.

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Bisnow / Jon Banister

Metrobar co-owner Jesse Rauch standing next to the Metro car in his new outdoor bar on Bryant Street.

Even with the train carriage closed, Metrobar’s outdoor seating was often filled with customers on cozy days this summer, and it has also hosted a number of events. But Rauch said it has faced a number of supply chain-related issues behind the scenes that are not always clear to customers.

“The cups we had been using since we opened fit well with our cocktail program and now they can’t be found,” Rauch said. “We’re trying to find a suitable replacement for the cups we use and you have to make choices regarding the quality of the presentation. That’s not how we want to present ourselves, but our utilities say,” Well, that’s what you have. ‘”

He added that Metrobar’s suppliers have sometimes even delivered less of a product than he ordered.

“We order maybe five to 10 boxes of X, and on the truck it sounds like, ‘Wait, we only have one? Where’s the rest of it?'” Rauch said. “So we don’t get much communication when supply problems arise and when they hit our door.”

Rauch said he addressed many of the supply chain issues described in a Washington City Paper report last week. City Paper surveyed chefs and owners from 30 DC companies and found that almost all products are 20% more expensive than before the pandemic, and protein costs have risen by as much as $ 4 per day. pound.

The Alt Weekly compiled a list of more than 50 items restaurateurs said they have trouble ordering, including different types of food, spices, beverages and utensils, plus items that commercial property owners also compete for, such as HVAC parts and furniture.

“Dealing with shortages and price increases has become my full-time job,” Baan Siam’s head chef and co-owner Jeeraporn “P’Boom” Poksupthong told City Paper. “It has come to the point that items on our menu are in constant danger of having to be pulled. We already took about six dishes. ”

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Bisnow / Jon Banister

The entrance to the City-State Brewing Co. from the Metropolitan Branch Trail side.

City-State Brewing opened in June in Edgewood, a short walk up the Metropolitan Branch Trail from Metrobar, and it has also been forced to adapt to supply shortages, City-State CEO James Warner said. The 14K SF brewery includes 5K SF of taproom space.

“We had to learn right from the start that we had to plan two, three, four weeks based on our orders and do it from the start instead of adjusting back,” Warner said. “Repairs and upgrades take longer due to getting stainless steel or a specific part.”

In addition to building materials for the expansion of the brewery, Warner also faced supply issues that affected the way he designed City-States beer.

“Before we were open, I designed recipes, and they were not designed around a specific ingredient or hop, so when we got close to the production and in the production, we could adapt to what was and was not available, and which supplier would get “to us,” he said. “There were some malt suppliers who could not supply to us, so we went another way.”

Lack of supply is not the only problem that has made it harder for these companies to recover from the pandemic. They have also had to see the shortage of labor as they have tried to hire or re-employ staff.

Mosbacher said the difficulty of hiring people is one of the reasons the distillery has not yet reopened its indoor bar and event space and has instead focused on distributing its alcohol products.

“We have revisited this every few months, but there is not a good economic argument for reopening,” she said. “The job market has changed a lot. The thought of re-employing staff in hospitality right now, when I hear how it has been for our business owners, is very frightening.”

Rauch said it has been difficult this year to staff a new bar, and he has sometimes had to turn to friends in the industry to pick up empty guards at the last minute.

“In this industry you have a lot of transition, someone goes over to something else, and now the person who had three shifts a week and was a major part of your schedule, something pops up and they moved to another thing, what now you do? ” said Rauch. “We do not always have that cry at the door, seven resumes deeply saying ‘I have another person ready to go.’ It is certainly a challenge and still an ongoing challenge that we face.”

Cox said that since Atlas has posted job postings over the past year, he has found that the percentage of applicants attending interviews has dropped, indicating that they decided not to pursue the job.

“A lot of people have just left the hospitality industry and are not planning to come back,” he said. “It’s hard to deal with, especially as we see demand increase a little bit as we get out of this, but labor shortages are still a big challenge.”

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