I checked in via phone with Stanton Webster, co-owner of PostModern Spirits to see how he and the business are doing. He started off by saying how fortunate he feels. His daughter’s school transitioned quickly to online learning and he’s become her at-home teacher, while trying to navigate the business. She has one or two zoom sessions a day with teachers and other students and they have a lesson plan to navigate.
He said initially, while acting as teacher, helping others as much as possible and managing a business, there wasn’t much time for rest. He said in the early days he “survived on coffee, fried chicken and no sleep.”
As for the business side of things, he feels like he got clued in early and had a slight head start. He was in Nashville the week after the tornadoes visiting businesses and doing some volunteer work. When he stopped in at Peninsula to visit with the owner, who is a friend from Seattle, the friend asked if he was tuned in to what was happening there.
Stanton dug into the news enough to realize that Seattle bars and restaurants were being closed or operating at limited capacity because of the illness. He began considering the likelihood that it would impact us all and began proactively reaching out to his bank, his landlord and others.
He looked at the cash the business had on hand and began considering a zero revenue situation and making plans to make the cash last. People began talking about a one or two week shutdown, but he realized it would be longer and started making plans for it to last for months. He met with his employees and began meeting with about 30 or 40 downtown restaurant and bar owners.
The company has a distributor for the tri-cities, Knoxville and Nashville. They were about to launch in Chattanooga before the shutdown, so that had to be delayed. Then bars and restaurants closed and that was a heavy blow. Bar sales also drive bottle sales, so that hurt in a couple of ways.
Watching the behavior in the tasting room at Post Modern it became obvious people would not maintain their distance. “It wasn’t safe environment and we didn’t know what safety looked like” at that point. They closed the tasting room to customers, shifted to bottle sales, laid off employees and began applying for the various loans and programs being offered.
Stanton spent a lot of time on the front end making models and spreadsheets. After a week or two he realized nothing was as expected and there were no predictions that could be made. This is an issue that is bigger than even our federal government. When it is something of this magnitude, you realize there is no one answer, need luck, hard work.
PPP was difficult to navigate and his local credit union was not participating. He said that Citizen’s National in Sevierville came through and he was able to rehire his employees. Having employees meant they could get work done, but with the tasting room closed and the bars closed that used their spirits, they knew they would have to improvise. Stanton says he is fortunate to have a partner in Ron Grazioso who has a science and engineering background and experience in project management.
They began to be creative with revenue streams. They started making sanitizer, but realized their capacity was limiting. Instead it made more sense to shifted their ingredients to bigger distilleries and create some revenue that way. They began to give away the sanitizer they made in an effort to help. They will fill 8 or 16 ounce containers for customers who drop by.
They realized they had a capacity to bottle more sanitizer than they could make and worked out a contract with KaTom (Ed. Update: I’m told KaTom is donating 80 gallons of sanitizer to first responders, 40 to the city and 40 to the county today. They are also working with Marc Nelson Denim to produce masks.) to be their bottling agent for sanitizer which would be distributed across the country. They modified their facility and Stanton said with Ron’s expertise and experience, “he was able to put us in a great position to ramp up bottling production.” With the new operation, they were able to add a couple of staff members and assign all employees to work their forty hours on the new bottling operation, which kept them safe from having to interact with the public.
Stanton said they were fortunate in a couple of ways. First, they had ramped up production at the end of the year in anticipation of an increase in the excise tax on spirits. They wanted to make as many bottle of spirits as possible before the tax increase. The tax increase was delayed, but the extra production allowed them to enter the pandemic and subsequent shutdown with extra product on hand, freeing them up to devote energy to the new enterprises.
Second, they had a line of bottled cocktails they’d gotten licensed to sell, but had generally used them only for bulk contributions to charities for specialty cocktails for events. Given the current circumstances, it became obvious they should now sell the bottled cocktails for carry-out at the tasting room.
“Like so many businesses downtown, we are making a hard pivot. Between the loan and sanitizer, we are doing well. We are have been able to pay our obligations. Certainly not thriving, but surviving. We are now looking at how to return to distilling spirits and looking for new revenue streams. It’s challenging. Parts would be fun if it wasn’t during a pandemic with the human costs.”
This isn’t likely the last threat. We could have done better economically if we had managed our response better in order to allow small businesses to function. We need a plan ahead of time. Payroll taxes could be suspended, for example, so employees could be paid in order to preserve their income and the business. I hope we figure out a way forward to learn from this experience.
On the front end of this so many businesses held on because they felt they had to take care of their people. Small business owners take that very seriously. We need structures in place to allow businesses to have the ability to deal with it.
The PostModern Tasting Room (205 West Jackson Avenue), staffed by the owners, has remained open for bottle sales only. That includes their distilled spirits and bottled cocktails. Hours are more limited, now, but they are serving up bottles from 3:00 pm to 7:00 pm Monday through Friday and noon to 4:00 pm Saturday and Sunday.
This Week’s Giveaway!
This week I’m welcoming partners City People. They are chipping in to purchase local gift cards to encourage others to give. This week they are offering a $50 gift card to Lox Salon in the Old City and a $50 gift card to Royal Bark Social Club. To enter send an email to KnoxvilleUrbanGuy@gmail.com with the subject header “Lox Salon Gift Card Giveaway” or “Royal Bark Social Club Gift Card Giveaway,” depending on which you want to enter. The deadline to enter is midnight Friday night.
Same rules as before: “like” Knoxville Page on Facebook, or City People to help us help local businesses and donate at least $10 to something supporting COVID efforts or to someone impacted by the pandemic. Confirm in the email that you’ve done both and tell me how much and to whom you donated. Each entry requires its own donation. If you cannot donate at this time, enter anyway and just say so. It’s all good. The contest runs until midnight Friday night.
In the meantime, if you’d like to have access to multiple local gift card purchase options at once, visit Knoxville Page. If you’d like to have your business represented there, send me an email at Knoxvilleurbanguy@gmail.com and I’ll connect you up. During this difficult time, all money for gift cards goes directly to the business you choose to support.