Talk with the business leaders shaping Chaffee County’s beer, wine and spirits who have joined together as the Ark Valley Libation Society, and you’ll hear some business facts and figures. While their products – beer, wine, and spirits – may be seen as refreshing and celebratory beverages, all say they are growing their businesses against some economic and environmental headwinds.
Among them are the threats and uncertainty of a trade war, rising costs, transportation routes, climate change and economic stresses like adequate workforce housing.
“The trade war Mr. Trump started is directly impacting Colorado’s craft beverage producers from increased aluminum costs to reduced or completely halted exports,” said P.T. Wood, owner founder of Wood’s High Mountain Distillery in Salida, said a recent order from Europe has been cancelled. “We still have a robust domestic market for our spirits but the lucrative export market has basically been shut down for us.”
Aluminum costs directly affect craft breweries. “That trade tariff on aluminum, means would add 3 cents per can to our wholesale production costs,” said Elevation Beer Company Brand Manager (and keg orator) Andy Astor.
“An increase in aluminum, when you sell 3 million cans a year, is definitely a drag on margin. And market uncertainty isn’t good – which is what a trade war is. For us, it’s not just making the leap from being a small, regional brewer, we’re exporting now, and I can tell you upsets in the trade markets make foreign distributors nervous.”
Aluminum isn’t the only worry for Chaffee County producers of beer and spirits. The effects of climate, not just short-term drought or fire but long-term weather extremes, worries Vino Salida Wine Cellars Sales and Marketing Director Jessica Shook. “The industry is experimenting with hybrid vines to counteract the growing temperature extremes we’re seeing. We especially need vines that can withstand lower freezing temperatures.”
All said they worry in general about the consolidation of their distributors and the effect in Colorado of a possible state bill that would allow the sale of beer and wine in grocery stores.
“We’re at the crossroads of raw materials and agriculture; we’re grains and hops,” said Soulcraft Brewery Marketing Director Eric Ramsey speaking generally about the craft industry. “We’re already dealing with ingredients that can be affected by weather and supply. As a craft beer industry worried about surviving on grocery shelves, we wonder how grocery store employees who don’t know anything about craft beers are going to help customers and understand our products.”
Those craft producers shipping products out of the county say transportation is a critical factor in their cost structure.
“How long the product takes to get to market, especially when we’re a craft brew, is important,” said Astor. “We’re balancing a lot of unknowns, everything from trade uncertainties to rising costs of labor, gas, ingredients and materials.”
As craft companies within their own industries, some Ark Valley Libation Society members are attempting to move from start-up to small, regional libations brands, while others are taking the leap to multi-state distribution. The effort is not easy.
All say that as local businesses, they share common concerns about attracting and keeping good employees.
“We’re bringing money and jobs into this valley,” said Wood. “Every one of us is locally owned, and we all live and work in the Arkansas River Valley … we’re an economic force.
“We’re all creating jobs here in the valley and we want to be known as good employers,” said Astor. “Workforce housing is a huge concern for all of us. Over in Buena Vista, Eddyline is even buying an old motel to remodel as employee housing.”
The six members of the Ark Valley Libation Society – four brewers, two distilleries and a wine-maker – have joined together to create the Ark Valley Libation Society Drink Card, available for sale at each location. The card is available at Elevation Beer Company, Eddyline Brewery, Deerhammer Distillery, Vino Salida Wine Cellars, Wood’s High Mountain Distillery, Soulcraft Brewing and Moonlight Pizza and Brew Pub.