Although Short’s creates a lot of different products, CFO Rachel Brege said they work hard to reduce the number of inputs overall.
“We did things like standardizing mother cartons and we are moving to labeling cans inline rather than using shrink wraps for smaller runs,” she said. “Not only did we reduce waste from managing fewer SKUs but we also could buy larger quantities of fewer items to help manage costs.“
The best cost saver for AleSmith has been around bulk materials and purchasing cans ahead of demand.
“While it has saved money, it does have a negative impact on cash flow,” said President Brandon Richards. “We also discovered the need to get cans at a lower cost in order to increase our margin and grow our can business.
“As we swung into consumption at home in 2020 and as we grow that segment of our business, cans and raw materials will play a huge role in what we can do. I anticipate seeing some pretty big increases in material costs which will eventually trickle down to the beer drinker in the form of more expensive beer on the shelf.”
As for cash flow, AleSmith has been conscientious of how it spends to grow the business and has learned to take on projects that are small and digestible to foster that growth without biting off more than they can chew.
Bret Kollmann Baker of Urban Artifact said that breweries need to look at contract out services when and where they can.
“There is a reason P&G, GE, and other large manufacturers contract out electricians, packaging, or whatever else they can. It saves cash,” he stressed. “Other than that, the next biggest thing we did was start/get better at planning for known cash hits. This includes property taxes, corporate taxes, and even the winter sales slump. By socking cash away during the spring through fall, we were better prepared to ride out low months or upcoming cash hits.”
Co-founder Brady Duncan said that the MadTree “Math Department“ (Finance, Accounting, and his fellow co-founder Kenny McNutt) has been amazing through the pandemic in helping constrain budgets thoughtfully.
“We went after PPP money and stayed in very close communication with our banks,” Duncan said. “Our bank, LCNB, has been amazing in pausing debt payments and being empathetic to the impact it has had on our business which relies very heavily on our “own-premise” sales.“
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