We have to give Jeff Erway credit, he has always been open and honest with us about everything pertaining to La Cumbre Brewing and the craft beer industry as a whole. It was no surprise, then, that he did not hold back in our interview for the annual Look Back/Look Ahead Series on Monday afternoon.
The days of Erway focusing on a more administrative role at La Cumbre are gone, as he is back in the brewery most of the day, working hard to keep his understaffed operation humming along amid a year of upheaval and unexpected challenges.
“The plan (for 2021) was completely up in the air,” he said. “I’ve never felt … since probably a year or two into this, I’ve never felt so much like I am riding a bucking bronco, so to speak. It’s funny, you talk about businesses running you or you running the business. I’ve felt probably right up until the pandemic, the prior five or six years, I feel like I’ve done a good job running the show and being the one running the business, not the business running me. For sure, these last 20 months I do not feel that way. I felt like there was no way to plan ahead and know what you’re going to try to do.”
La Cumbre has managed to roll with the constant punches as well or even better than most breweries, keeping a steady run of beers in package and on draft at its two taprooms.
“We did come out with a brand calendar, and by and large, we stuck to it,” Erway said. “As more and more brewers have done more and more of the one-off releases, they had seen the success that other breweries have had in doing these, (but) we’ve pulled back on it. There hasn’t been nearly the enthusiasm, or maybe there has been the enthusiasm, just split amongst a lot more beers.
“The last six or seven months has been so dominated by staff shortages and logistical challenges, I’m just tickled pink that I went and had a pint of our dunkel that just got released today, and despite all of these staffing shortages and changes, at least we’re still making world-class beer, at least I can be super proud of something we’re doing.”
Little moments like that one with a pint of Munich dunkel have often been the only silver linings for Erway and other brewery owners.
“I wish I could tell you that I have been traveling the world and the country and looking for my newest muse, and trying to figure out what kind of pathways are going to lead to growth for us in this next year,” he said. “But, with about 15 percent less staff in production and distribution, 15 to 30 percent less staff over the past six months, we are selling more beer than we ever have, and by a decent margin. Good news, it’s of a higher quality than it’s ever been. We have a new QA/QC manager (Elizabeth Agosto) and she’s amazing, she’s doing a great job for us.
“We’re doing our damnedest to try to keep up on draft specials on tap. On one hand, business is great, and on the other hand, all of us are just walking around with a thousand-yard stare from being so damned tired just trying to keep up.”
The staff at La Cumbre has been a bright spot.
“I am ecstatic with the staff,” Erway said. “We have about, at last count, 29 staff members out of our 51 that were here before the pandemic. I am so goddamn proud of the way that they have stepped up and risen to that challenge. That challenge, professionally and emotionally, all of us are worse for wear, all of us have scars from it, and I look around our industry here locally and I can see eyes welling up with tears on the eyes of front-of-house managers, on servers’ faces, on brewers who truly haven’t had a day off in six weeks.”
The rest of the New Mexico breweries have also provided Erway with a cautious sense of optimism, with the vast majority of breweries still plugging along, and only a handful having closed their doors so far in 2021.
“I’m proud of my staff, I’m proud of the local industry as a whole,” he said. “By and large my friends/competitors have done a really bang-up job of keeping their customers supplied and happy. There is a lot to celebrate for. We just did Thanksgiving with my (extended) family for the first time in years. You look back to March of 2020 and there was so much up in the air. None of us could have possibly conceived of what an absolute shitshow the next 20 months was going to be. There are some things to really celebrate. This industry is pretty resilient. The people in it are, by and large, pretty resilient. And yeah, I’m pretty grateful for those two (Cory Campbell and Paul Cornett) in there you were just chatting with. I’m pretty grateful to the men and women that get in here at 6 a.m. every morning, day after day, (even though) it really does feel like the whole house is burning down.”
The supply chain breakdown was only the beginning
As we discussed in our last interview with Erway, the global supply chain disruption and its effect on breweries has only worsened. Since then came the news that Ball Canning was going to change how it does business with pre-printed cans, and then came the news that the barley crop was severely impacted by climate change, particularly in the Pacific Northwest, where most brewing barley used in the United States is grown.
“Normally we sign next year’s malt contracts in October or November,” Erway said. “It’s usually not a very rushed thing. Overall it’s a much less stringent form than hop contracts have taken in the last few years. We like it that way. But, I got a call from our malt salesman back in mid-September telling me that he had just sent over a proposed contract for me, and this is one of the three big malt suppliers in the country for our silo malt, and he said I sent over a proposal and basically you have the next hour or two to consider whether or not you want that contract, and the prices go up tomorrow. I was like, well, I won’t use the bad language that I used, but I don’t like being rushed, especially when we’re talking about over a million pounds of malt. And then, I tried to get quotes from the competitors and neither competitor would give me a quote.”
That came before the news was official that the barley crop turned out poorly, to put it mildly.
“There were rumblings about how this harvest was going to be a bad one, and Australia has had a bad malt year because of drought, and specifically the Pacific Northwest has had a really bad malted barley year,” Erway said. “It looks like yields will be down by 40 percent and the overall quality of the malt is so low that much of it will not be able to be used for malting barley, instead it will be used for feed. It’s at an all-time high for cost for feed barley, so we’re actually competing with cattle ranchers for barley.”
Add it all up and prices are increasing anywhere from 10 to 20 percent on malted barley. That will have a major impact on all breweries, from the giants down to the neighborhood pubs.
“Not only are prices going up by over 10 percent — I’ve heard of some people paying as much as 20 percent more — and I’m talking about large contracted breweries, we’re not talking about your small brewpubs, which by the way could be completely screwed this next year,” Erway said. “There are thousands of small brewers around this country who do not have their hands completely on the heartbeat of what’s going on in the malteries and the malt fields. They don’t even realize what’s coming down the path for them. And, they do not have the tools to deal with the quality of malted barley that they’re going to be getting.”
All of that bad news caused Erway to reflect back on that initial conversation about malt contracts.
“I did not realize it at the time, but my sales person at that malting facility was clearly looking out for my best interests and trying to do right by me, because the price increase that I saw was considerably less than what I’ve talked (about) with other people,” he said. “In addition to that, because this is the second largest malting company in the world and I know the company well, I’m guessing we won’t see a cliff with quality. I’m guessing we’ll see a decline, but they will do a good job with buffering, so to speak.”
The hop harvest, at least, turned out all right, Erway said, but clearly the industry is in for some tough times ahead.
The issues with aluminum cans are already hitting breweries hard.
“I talk to my friends around the industry and it seems like just about everybody has a similar story,” Erway said. “And, I’m talking about up and down the food chain, from the smallest breweries — I was talking to Rob (Palmer) over at Left Turn, and he and I sit down regularly and chat, (and) he’s just doing his damnedest to try to keep up, keep beers on tap — to friends at the very largest craft breweries in the country, and even for them, and I won’t name the brewery, but we’re talking about a brewery with several hundred thousand barrels a year. They have a total of four brands that they’re going to be able to get printed at this point. Everything else is going to be labels and shrink wrap.”
Those labels are not cheap, either.
“It doubles the cost,” Erway said. “It depends on your supplier, but let’s just say overall it’s going to double the cost, between mislabeled cans, or your labeler being down. The labels cost almost as much as the cans.”
Switching back to bottles will not work, since canning lines cannot be repurposed in such a way, and there is also a global glass shortage, because of course there is.
Ending 2021 on a high note and looking ahead to 2022
La Cumbre quietly started celebrating its 11th anniversary on Monday, re-releasing 2019 La Negra Imperial Stout on draft, with a few bottles available for sale. Beer specials like that will continue throughout the week, as overall it will not be like the celebrations of yesteryear.
“We welcome our customers into our place with open arms, but I feel like this one is for the staff here,” Erway said. “Everyone was so goddamn disappointed last year that there was going to be absolutely zero for our 10th anniversary, nothing. And, we normally do a pretty good job of showing everyone a good time, showing the staff a good time.”
Erway even went and made an anniversary beer for his staff to enjoy, rather than focus on something the public would buy up in droves.
“Our anniversary beers have never been like our most sought-after beers,” he said. “So I brewed one that I knew the staff would be excited about, just a plain ol’ farmhouse ale, bottle conditioned, super straight forward. I tried it yesterday, I loved it, the staff is going to love it. Probably our most popular beer of the last year was the helles that we released this summer, as far as the staff goes. We kept a half barrel of that just for them for the event. I feel like especially considering how short-handed Alan (Skinner) and Daniel (Jaramillo) are, they’ve done an exceptional job of archiving and making sure that we’ve got really cool beers to tap throughout the event on tap of the event that we have scheduled for the solstice, Darkest Day.”
An anniversary party celebrating the La Cumbre staff sounds like a good idea to us.
“But, I am super stoked to have my kids and my wife and all of our staff to be able to come together and celebrate, obviously, 11 years of accomplishment, but even more than that,” Erway said. “The fact that I truly feel like whatever the next couple years has in store for us, we made it through to the other side of this. Is everything perfect? No, it’s not, but we made it through, and we wouldn’t have done it without all of them.
“The one thing I feel like I’ve got to celebrate right now is just all of these people that have stuck to it, and they’re still here and still kicking ass for us, day in and day out. Keeping beer on shelves and everything else.”
As for the year to come, it can be just as hard to project as 2021 was at this time last year.
“Nothing that I’m ready to announce right now,” Erway replied when asked about his plans for 2022. “We are good on cans through the first quarter. The good news for the smallest of brewers, for the Gravity Bounds and Bow and Arrows that are doing these small can releases, is I think they probably will not see much of a difference in the supply chain for those blank cans. They’ve already been going to the brokers, they’ve already been getting their cans shrink wrapped. They’re fine. I think the largest of brewers, Sierra Nevada, they’ve probably got pretty good contracts for cans for the most part.
“The Ex Novos and La Cumbres and Marbles of the world, Bosque and Santa Fe, we are right in the middle, in the worst position possible as far as can supply (goes). I think anybody that thinks their brand calendar that they put together for next year is solid, it’s not going to change, I’ve got bad news for them. I think they’re counting their chickens before they’ve hatched. We’ll see.”
The biggest move on deck for La Cumbre will be in the brewery.
“I am very cautiously somewhat optimistic,” Erway said. “We’ve got a new canning line going in in early March, so that is taking up every waking moment that I’m not back there cleaning tanks, transferring beer, and brewing and such. We’re working with that project (first). I’ve got my eyes on possible new projects, but I’m really going to have to see what the labor market is like. I keep on getting invited by distributors to come on, visit us, we’d love to work with you. I’d love to expand into your territory, but I don’t have the staff. I don’t the help to do that. I think that’s the big question on everybody’s minds right now. When do people come to work entirely? I don’t know the answer to that.”
Those staffing shortages, on top of everything with the cans and the malted barley and the supply chain, are going to continue to weigh on breweries and all the industries around them.
“I feel like the political nitwits are spending all their time just pointing fingers at entrepreneurs (or) lazy labor that don’t want to go work, but I’m not pointing my finger at anybody,” Erway said. “I think it’s great that there are people out there in a position where they don’t feel like they have to rush back into the job market. I think it’s shitty for us, but we can’t be their first concern. This concept that all entrepreneurs have to do is pay people more and they’ll come back to work, I know plumbers that are offering people $40 an hour and they can’t get people to come back to work. It’s not just money.
“I’ve got trades people that I’ve done three-quarters of a million dollars of business with, and I’ll call them and they’re like I’ll get to you in about three-and-a-half to four weeks, and three-and-a-half to four weeks later comes up and they don’t show up. I call them and they say I’m really sorry, man, but I don’t have any people to send.”
As we wrapped up so that Erway could get back to work, he did add this final line: “I’m going to be absolutely fascinated to see what this conversation is going to be like a year from now.”
So are we, Jeff. Thank you for the interview, and thanks to your staff for battling through these past 20 months.
Keep supporting local, now more than ever!