"Only one piece has to break and then everything shuts down."

💀 Murdered darlings: Craft brewers vs. "sUpPlY cHaIn IsSuEs" edition

Editor’s note: In journalism, “killing your darlings” means cutting stuff from a story that doesn’t quite fit, no matter how much you love it. “Murdered darlings”¹ here at Fingers are interesting chunks of reporting from a recent piece that didn’t make it into the published draft.

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Last week I published a big report at VinePair looking at some of the ways in which supply chain bottlenecks, shortages, and slowdowns have been affecting the American craft brewing business. Though the piece was pretty in-depth, there was still a ton of material that didn’t make the cut.

Below are some unused quotes from craft brewers across the country who were gracious enough to tell me exactly how fucked up everything is for them right now. (Emphasis mine throughout.) Topics include:

• 🕒 The double-edged sword of “just in time”

• 🚚 Vans in demand

• 📈 Prices going up

• 🍓 Bad yields for berries and barley

Some of this is admittedly pretty inside-baseball, but I found that exploring something as opaque as international logistics through the lens of something as familiar as craft beer gives me a better understanding of what the shit experts mean when they talk about “sUpPlY cHaIn IsSuEs.” Hopefully you do, too.

And one more note: even for a product as nominally “local” as craft beer, your favorite brewers are not exempt from the vagaries of global trade. They source tap handles, merchandise, equipment, and ingredients from Europe, Southeast Asia, and beyond. If you’re looking for an example of how globalization manifests in unexpected corners of the U.S. economy, craft beer is a pretty good one.

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🕒 The double-edged sword of “just in time”

Kevin McGee, president and CEO of Anderson Valley Brewing Company in Boonville, California views the logistical chaos as a pointed indictment of the inherent fragility of “just in time” (JIT²) approach to inventory management:

The thing about “just in time” and keiretsu approaches is that they're very fragile. They require a lot of attention to detail, real-time analytics, stuff that… does require basically keeping your eye on everything all the time. If you get complacent with that, if you look at your supply chain the way you look at Amazon Prime and don't plan for contingencies for when things don't work as smoothly, then things can kind of fall apart. Then, when you get behind, if you don't have contingencies for things like blank cans or case trays, everything shuts down.

[…]

The fragility of just in time [is] assuming that the supply chain is always going to be stable, always going to be available to you… What [you’re doing with JIT] is valuing cash flow and lower inventory spend over stability and contingency. It’s a totally viable business model, but like I said, it's fragile if something goes wrong, because only the one piece has to break and then everything shuts down.

When I asked Mike McGovern, Austin Beerworks’ co-founder, for how JIT does/doesn’t apply to pandemic operations at the central Texas outfit, he told me ABW was “doing the exact opposite of just in time” these days. He elaborated on McGee’s “cash flow > stability” JIT framing: