NYC megdistrib Manhattan Beer has unique view of what it’s like to sell beer in epicenter of COVID-19 pandemic. The disease is already deeply affecting its biz across so many dimensions: health of workforce, organizational structure, effect on sales, what the future might look like. What’s happening in NYC is a possible peek into future for other parts of US (hopefully not as severe). Manhattan founder/ceo Simon Bergson and coo Ed McBrien provided window into how this crisis has already changed Manhattan Beer.

Dozens of Cases of COVID-19 Both Simon and Ed emphasize that NYC “just the leading edge” on effects of COVID-19, so “use the time to get prepared…. Start planning now,” urged Simon. Dozens of Manhattan Beer employees already diagnosed with COVID-19 and over 100 in quarantine. New cases come almost every day. Importantly, already 50 out of quarantine too, Simon notes, and back to work.  By now Manhattan has well-established protocol for employee cases and “very good sense of what’s required,” said Ed. You have to screen and trace contacts, where they’ve been, who they’ve talked to, including customers. And then notify anyone potentially affected. Manhattan strictly follows CDC guidelines, regarding “close and prolonged contact,” i.e. anybody in contact for 15 minutes or more and less than 6 ft away must be quarantined.  Affected areas of facilities are all cleaned by a professional sanitizing co.  Employees now all get hand sanitizer, gloves, masks and practice social distancing. Those employees mandated to quarantine get paid during 14-day period. It’s “the right thing to do,” said Ed.  Also, only one employee per truck and one at a time in settlement room.  Manhattan gave raises to hourly and salaried workers in “appreciation” of their efforts during these trying times. Co has physician’s assistant on staff who’s been really helpful. Another critical component in all of this: “communicate with clarity and transparency” with entire organization each time a case comes up.

Huge Hits to Biz in Apr; 12K Accounts Closed; 50-60 Mil Annual Visitors Gone Manhattan Beer was off to its best start ever this yr. “Business was terrific,” said Simon “until the 3d week of March.” Then “all of a sudden, BOOM! It just stopped.” Manhattan $$$ sales up 20% and gained almost 3 share of $$ to 59 of NYC metro yr-to-date thru Mar 22 in IRI data. But as time went on, pandemic took huge bite out of biz. Overall biz down 40% last week, said Simon. That’s on lower end of its projections for 40-50% drop this mo. Simon shared these details because it’s “important” other distributors “should be prepared for a hit like this.” NYC is “quiet, dead,” said Simon. With on-premise shutdown, about half its accounts, 12,000 out of 25,000, just closed practically overnight. Then too, NYC gets 50-60 million tourists visiting a year.  That’s also down to zero.  And many affluent NYer’s fled to 2d home or a parents’ home elsewhere. Finally, there’s a ripple effect with so many losing their jobs, they will now have trouble buying same amount of beer.

Restructuring, Hopefully Temporary Manhattan Beer already had to make painful adjustments to new reality with new “game plan” and “restructuring” of its sales force. Co laid off about 200 of its 1750 employees. “Hopefully, that’s mostly temporary,” said Simon. Manhattan no longer needs on-premise sales dept for now, tho some of those folks fit into unfilled off-premise slots; some warehouse reductions too.  

A Very Different Biz Down the Line; “Slow to Come Up to Speed” No one knows when NYC (and rest of world) will come out of this and what mkt place will look like when it does come out.  “I don’t think we’ll rebuild this all at once,” said Ed. On-premise biz especially “will be slow to come up to speed.” Big chunk, perhaps as much as 20-30%, of on-premise accounts won’t re-open, said Ed. Manhattan is modeling a marketplace that slowly recovers, and is still “pretty tough volumetrically over the summer,” said Ed, and only returns to “some semblance of normalcy” sometime this fall.  Ed gave shout out to NBWA as valuable resource, sharing best practices, experience from the field, expert advice. One final message from Ed: “You cannot overcommunicate” in pandemic period. “The reason is because people are afraid,” worried about “‘the health of my family’ and ‘can I pay my bills.’” How Manhattan treats its employees/customers during this crisis really matters. “This will be [important] chapter in Manhattan’s history” that will show “leadership responded in the right way,” said Ed, consistent with the DNA of the company” that Simon founded. “People are going to judge us by how we responded to this crisis.”