Like playing Jumanji // Brussels' brewers reckon with post-pandemic reality and cost of living crisis
Inflation at 12.27%, its highest level since 1975. Energy price inflation at 63.03%. Food prices up 12%. A labour shortage in the hospitality sector. No growth economic growth predicted for 2023, and a recession on the horizon. Breweries asking customers not to steal glasses because they cannot afford the glass to replace them. Shortage of carbon dioxide and aluminium. Beer consumption continuing to slump. Disastrous harvests in central Europe following the summer’s prolonged heat wave. Few of us have been able to escape the consequences of the cost-of-living crisis that has gripped Europe in the start of 2022. And brewers are no different. Having barely digested the fallout of two years of pandemic-related restrictions, they are now struggling to adapt to an increasingly bleak economic environment. After nearly a decade of near-unbroken growth and expansion, it is uncharted territory for many of them.
“The best decision of the decade”
Yvan De Baets sounds like a man who has dodged a bullet, but looks like a man who knows there are still a few left in the chamber. De Baets and Bernard Leboucq opened Brussels’ oldest conventional brewery, Brasserie de la Senne, in 2010 – making him the closest thing to an elder statesman here. He is relieved because for once he listened to a salesperson from the brewery’s gas supplier. “We signed a contract for a fixed [gas] price until 2026” before the pandemic, he says. “It is already the best decision of the decade.” They have also avoided the worst of the electricity price rise thanks to the solar panels installed on the brewery’s roof when they built it in 2019. “Now that the price [of electricity] is crazy and rocketing, we make a little bit of money” selling electricity, De Baets says. “It’s not a lot, but it’s something.”
They have been lucky too with some of their raw materials suppliers. The hop harvest season just past was terrible in central Europe, where De Baets sources the vast majority of hops used at de la Senne. Yields and quality are down due to the ferocious heatwave that hung over much of Europe for the summer. He has been able to avoid price hikes because of his close relationships with the farmers who supply him. “So we will have good hops,” he says. “That's the only thing I can really think of where the price hasn’t risen.” This is where De Baets’ optimism stops. COVID-19 pandemic appeared to barely put a dent in the decade long growth spurt that started with de la Senne’s opening over a decade ago. Those fat years are now history. “I think this will be worse than COVID,” De Baets says. “2023 will be an annus horribilis” for the whole industry.
It is not just down to rising electricity and gas costs. It is the price of everything, and it is hitting everyone. The cost of malt? Up 30%. Aluminium crown caps to seal bottles? Too volatile to even get a price for 2023. The price of bottles, if you can get them, has exploded. Paper, cardboard, carbon dioxide - costs have all gone up exponentially. “Caustic soda, which we use to clean in breweries? The price went up by a factor of ten,” De Baets says. Still, if there is a glimmer of optimism in what De Baets expects to be “very hard times” ahead, it comes in his hope that out of the crisis might come a turn towards sustainable growth. “My only hope is that it will boost our societies to go greener, and to relocate industry back here,” he says. “But the positive effects of that will [only] be seen years [from now].”
“Nobody's going to buy shit”
De la Senne are not the only Brussels brewery to have made a long-term investment in green energy only to see it pay almost immediate dividends. Just like their bigger colleagues 20 minutes down the road, Tipsy Tribe - the city’s newest brewery - are also selling electricity into the grid thanks to the solar panels they installed on the brewery’s roof. Located on a residential street in Koekelberg, in a storage space the previous tenants of which burnt down while operating an illegal marijuana farm, Tipsy Tribe officially began brewing in August 2022. Daniel Fastenau and Aylin Dirioz Fastenau, originally American and Turkish, respectively, started working on seriously on opening a brewery in early 2021, with sustainability an important part of the business. Their 17-odd solar panels which now produce enough energy to independently power the still they use to distill alcohol for the distillery arm of the business - producing gin, vodka, and in the future whisky (they call Tipsy Tribe a ‘brewstillery’) - with some left over to sell into the energy grid on a sunny day. “It definitely makes a dent” in their bills, Fastenau says.
Which is a helpful, if not comfortable, cushion considering they have not escaped the same kind of price hikes experienced by their larger, longer-established colleagues. “[A] thing that's wrecking us right now is the cost of CO2,” Fastenau says. Their small size and output - the brewery has twin 1,000 litre fermentation tanks - mitigates the amount of CO2 they need and insulates them to an extent from too-severe price shocks. But in other areas their small scale is an obstacle. “I'm looking to order labels for our gin,” Dirioz Fastenau says. “The price per unit is even higher for us because we don’t have economies of scale, and it impacts us a lot.” Which means, for example, that they cannot supply local shops eager to stock their gin because they cannot get labels printed. It is the same with brewing ingredients. The brewery sources hops from the USA and New Zealand (as well as Belgium), but the lack of the kind of long-term relationships built up by De Baets coupled with unsympathetic exchange rates means the price of these imported hops is absorbing more and more of their cash. “You just have to incorporate it into your cost,” says Fastenau. “But then at what point do you kind of price yourself out of the market? At what point are you eating so much into your margins that it's just not worth it anymore?”
When finalising their business plan in 2020 and early 2021, the pair had few illusions about the kind of economic climate they were launching their brewery into. Still, they did not think they would be dealing with an unprecedented cost of living crisis. “I assumed it was going to be COVID from here until goddamn forever,” Fastenau says. Their business plan reflected this. “It was like, nobody's going to buy shit…everything was the most conservative estimate I could possibly think of with an error margin on top.” It has been a lot to deal with, on top of the stress of juggling new parenthood with a new business, cowboy builders, dalliances with Belgium’s food safety authorities, and the other issues that come with opening a brewery in Brussels. Nevertheless, Fastenau is phlegmatic about where Tipsy Tribe is two months into its existence. “We're behind schedule and over budget. I would have preferred to be much, much further by this time. But [given the] extenuating circumstances, there's not much we could have done to really get any further than we are,” he says. “Especially with two kids, at home, I think anything else would have been god damn near impossible. Yet we've done our best and I'm happy about that. At least in the current climate.” In any case, it is still a little too early to tell what, if any, the impact has been on them. “We don't have enough of a dataset to say,” he says. “For us, every sale is an upturn…It's a long way to go.”
“Like playing Jumanji”
Samuel Languy knows exactly what the impact of these rolling crises has been on Brasserie En Stoemelings. The brewery he founded with his friend Denys Van Elewyck in 2013 has grown significantly since they started brewing in the kitchen of one of their mothers. Moving first to a co-working kitchen then to a Marollen shopfront smaller and more DIY than Tipsy Tribe’s set-up, in 2017 they ended up at their current location in Laken, near neighbours of de la Senne. Sales in the two years that followed grew 30% and 40% respectively, with the brewery expanding far bigger and faster than the pair had originally anticipated, and were bullish heading into 2020. “COVID was a massive slap in the face,” Languy says.
The brewery pivoted as best they could, launching an online shop and shifting their sales focus away from shuttered cafés to supermarkets. “Since COVID started, it's like a Jumanji game has started where, every three months, the whole rules of the game change,” he says. “You need to be flexible, you need to be able to adapt, and you never know what comes next.” It worked, and they barrelled through 2020 and the first half of 2021 supercharged on adrenaline and “crazy” sales. “We had an amazing first semester. I mean like really crazy,” Languy says of 2021. So well that they hired new production staff to keep up with demand, expecting the second half of the year to be similarly successful. That is not how things turned out.
In previous years, En Stoemelings had been too small to experience the seasonal fluctuations of beer sales, but that was not the case by 2021. Sales for the second two quarters of the year failed to match the first, and the drop in sales coupled with the cost of those new employees left them exposed when COVID numbers peaked again in the winter and consumption cratered. Languy accepts the impact of the pandemic was out of their hands, but recognises their own culpability in the hit to the brewery’s finances. “We made a very, very bad mistake,” he says. “We thought after selling 200,000 [litres of beer] in 2020 that into 2021 we would be able to keep going up.” Worse was to come.
Rising energy prices began to make themselves felt in October 2021, but it was in Spring this year when they really began to bite. The brewery had, just as in the previous two years, launched into 2022 assertively optimistic, planning to refocus on bar sales as Belgium opened back up. Then came the war in Ukraine, twin energy and cost-of-living crises, and with them rampant inflation. “The backlash was really harsh. When we reached the end of the second quarter, the [sales] numbers were not right.” That meant something Languy never thought he would have to do: fire people. Those people have since found jobs elsewhere in the industry, but it was a painful experience for all involved and one which has left its mark. “It’s [saying] okay, I've been wrong. Like, I did something bad, you know? I couldn't maintain, keep things going.” It has also resulted in a more conservative - “defensive” in Languy’s words - approach to 2023, and led En Stoemelings’ two founders to reconsider what they wanted from the brewery. With economic prospects unlikely to improve in the near-term, the hustle required to get as much beer onto as many taps as possible was maybe no longer enough. “Denys and I noticed that, you know, maybe it's [constant growth] not something we actually want to do,” Languy says., mentioning their barrel-ageing and experimental mixed fermentation projects as areas they might prefer to focus attention on.
In any case, En Stoemelings’ mission for the coming year is clear: “2023 to us is do or die.” They will shift production to kegs, and Languy believes that craft beer will slide down people’s list of priorities as inflation endure. Other than that, he has given up planning too far ahead. En Stoemelings will still attack 2023 with (albeit tempered) ambition, and Languy is determined to wring some value out of their recent tribulations. “I think we might arrive at the end of 2023 and say, it was a good thing it all happened. Most of our changes and pushes forward have come through crises,” he says. “So, yeah, I love a crisis.”
