Over the past week, we’ve been steadily uploading a series of articles that have tried to provide the context necessary for us to introduce you to things we have in store for 2021. We wanted to take a temp break from that “deep dive” series and focus on the immediate headspace of the 3 founders as they look back at 2020.
It goes without saying that 2020 was immensely tough. At the same time, I would argue that it was the year we have learned the most. We learned about the market, we learned new things about our industry and our peers, and we learned a huge amount about ourselves.
Here are some observations from my perspective:
① We were lucky.
Seriously lucky. We were selling 97% of our beer in keg format just last year. Our keg sales dropped off a cliff in the second half of March and in April they were barely a tiny fraction of what they normally would be.We just happened to already be looking at 2020 to start up our B2C site and brought it up a little to March. Without that, I dread to think what might have been…. Having a niche can be a strength but being overly invested in one sales channel is a dangerous strategy.
② People will go to astonishing lengths to support local businesses.
Our taproom was reduced to take-out only and, yet, we didn’t see our sales drop off anything like we expected them to. And we heard the same story countless times from beer bars and breweries across the country.
③ Technology is wonderful.
If you’re going to have a major global pandemic, I guess it’s better to have it at a time when you can talk whenever you like (even in groups!) while looking at one another, and even show people around your brewery. Online tours, tasting sessions and nomikais made social isolation bearable while allowing us to engage with customers in a way we could never have imagined doing had this all happened a decade ago.
④ That our industry is full of wonderful people.
The market for beer, as with many other consumer industries, collapsed, and what was left was scraps. It would be easy to imagine camaraderie going out of the window while people competed for what little sales they might be able to get. Instead, we had great breweries such as Isekadoya, Minoh and Yggdrasil calling up and asking to buy our beer so they could sell it in mix sets with beer from other breweries. We even enjoyed exchanging stories in the odd brewery zoom nomikai!
⑤ Craft beer fans are the best.
They got online, supported and engaged with breweries. I’d like to say that the only reason people bought our beer was because it is delicious but, seeing orders from familiar names of so many people who have supported us for years, both for their own homes and as gifts to their friends and families, told me that people were also looking for little ways of helping us out when they knew we were in a time of need.
And there was something else key that we learned as well. In a crisis, people have an amazing ability to work together for a collective goal. The KBC team banded together and adjusted on the fly constantly during the summer. At times hours were long and more hectic than they have ever been but people stuck with it throughout to help make sure that KBC was able to see the year out.
On the sales and distribution side of the business, aside from shouldering a huge increase in workload from shipping 10-20L kegs to packing and shipping off boxes of 6 bottles at a time, we also looked to engage more with our customers and increased bar and restaurant delivery services, including starting to take beer down to Osaka. We approached and started getting our beers into a wider range of department stores, bottles shops and high end supermarkets while learning on the fly throughout about an entirely different kind of distribution model.
The crisis gave us the perspective and the spark to move forward and get ourselves set up for a different post-corona world. We are just at the start of our wider distribution and I am really excited about the prospect of people gaining better access to our beer, first within Kyoto, and then across the country. While I in no way hope for a similar year to 2020, I am glad to have gone through it, and excited about what 2021 will bring.
2020 has been a trying year to say the least. Covid 19 wreaked havoc on the plans and operations of nearly every business throughout the globe, and Kyoto Brewing Co. is no exception. At times it was hard to know what situation to even be preparing for, much less how to go about preparing for it. The result of that felt like we were sucked up into a tornado that we had to try to guide from the inside even though the internal parts were constantly changing and we had no control over where it was headed. Straining to say the least!
Despite the pandemic, we were able to brew some of our most interesting beers to date as well as a few collaborations. Using Brettanomyces for the first time in collaborations with Godspeed Brewery as well as Upright Brewing was both a lot of fun and a learning experience. Just prior to the pandemic spreading we were also able to brew collaboration beers with our friends in Taiwan, Taihu Brewing, and our trip there was a highlight of the year for Ben, Paul, and I. Blank Revival, our collaboration with BET, was well outside of our normal brewing realm but produced one of our favorite beers of the year. We also strayed from our comfort zone with New Frontier and brewed our first lager, and we liked it so much we made a second version just a few months later! 2020 also saw the Mari series of Belgian IPAs begin to take shape, and assistant brewers began to become more active in creating new beers as was the case in Tropical Rays.
The biggest change for us this year was certainly bottling. Almost overnight we went from packaging just our year round beers for sale in the taproom to bottling almost every single product we were making. In addition to the sharp learning curve, there is also a logistical challenge involved in predicting, preparing, and managing all of the inventory needed to make this happen. Finally, our bottling machine was purchased in 2015 when we were much smaller than we are now, and by the time it was getting steady use its capacity was already about 2 years behind where we needed it to be. That meant many long days watching two bottles get filled at a time, and the company will forever be grateful of the dedication of our brew team during these mind-numbingly slow and tedious packaging runs.
While the pandemic drastically impacted our brewing schedule (we brewed less than 100 batches for the first time since 2017), one positive outcome is that we were forced to seriously reevaluate our products for the first time since our inception. While this was a physically and emotionally straining process, we emerged from it with a much better sense of who we are and what kind of beers we want to brew. While this means we will be saying goodbye to certain products in 2021, it also means that all of our releases have a clear purpose and reason for existing, which not only makes them easier to create, but also easier for customers to enjoy. We hope you are as excited for these changes as we are!
On the business front, I think this year was the first time I really felt that the presence of 3 owners has been a huge advantage to KBC. Up until recently, it was assumed (and somewhat expected) by everyone that all 3 founders were intimately aware of what was happening in all facets of the company, and until this year, we unwittingly operated within and adhered to the confines of that assumption. This often meant that we had 2 or 3 founders trying to make decisions on the same thing. As the company continues to grow, that manner of running the business is just not feasible and it’s been very liberating (though admittedly there is a little anxiety) to simply let go of certain areas of the business and to trust someone else that it gets done (and vice versa).
The main reason for this feeling is that there was a long period of time where the founders were constantly extracting ourselves from helping to run the brewery and meeting together offsite to discuss what the company should be trying to achieve and how we’re going to do it. Through those many, sometimes difficult, talks, we cobbled together a gameplan and more importantly were all on the same page about how to execute our role within that plan. Another great by-product of not being around to sometimes help fight the fires has been that some members of the team have inadvertently had to step up.
Looking back at 2020, the fact that we had certain people work-from-home and had our desks spread out into multiple rooms throughout the brewery (the goal being to create a safe environment by minimizing exposure) meant that we were somewhat unintentionally creating a self-reinforcing atmosphere of needing to become independent. Truly, it’s been great to witness people assume more mantles of responsibility and to actually have people pitch ideas to us or suggest another a better solution than what we originally came up with. I think our operations has become more resilient as a result.
On the IT front, KBC has only doubled-down on its embrace of IT to help us out. We overhauled our business website to work not only with bars, restaurants, hotels but with distributors, supermarkets department stores alike. We also created a direct-to-customer website and then overhauled it a few months later so they could customize their beer orders. With the success of the website, we’ll only continue to invest in additional features and are already at work trying to add a bottle/can club feature to the site that we hope to share in a few months time.
In the early days, we often times had to tell customers who called us or sent us emails that their orders had to be entered on their own via our website. This was quite a foreign concept at the time and it oftentimes meant that certain establishments simply didn’t want to do business with us. We understand we’re not for everyone but in sticking to our policy, the way in which we provide beer to our customers is extremely transparent and ordering can happen 24/7 at the leisure of the customer. It has enabled us to focus on what we feel is the more important part of the logistics, getting it to the hands of the customer, error-free, cold and quick as possible.
Lastly, on the finance side, it’s been very sobering having to borrow as much money in 5 months as we have borrowed over 5 years. Some of that has gone into infrastructure (IT projects and of course our new canning line) but a big chunk of that was simply to ride out the Corona period and fulfill our promise to not let go of anyone. I think a great side-effect of the borrowing has been that the founders have rolled up our sleeves even further (though they were already past our elbows!) and we’ve come to the realisation that if we’re going to be in this deep, we might as well do it to our own beat.
I think the combination of a variety of factors this year is only going to lead us to doubling-down on doing more things that we personally want to do and not just constantly think of what’s good for the company (ex: following market trends). What this means for KBC and how people will perceive us remains to be seen but more than anything, I think this is what has me the most excited for the upcoming year.