As the partial federal government shutdown extends to a month, craft brewers like Ska Brewing Co. are feeling the pinch.
Craft brewers that distribute across state lines need approval from the federal Trade and Tax Bureau, formerly the Bureau of Alcohol, Tobacco and Firearms, for everything from labels to recipes for new or seasonal beers.
"It's a dynamic industry," said Dave Thibodeau, co-founder and president of marketing and sales at Ska Brewing. "We like to experiment, and if we hit on something we'd like to release in all our markets in a month or so, it's going to create problems. If we can't get the labels approved or if you have a new ingredient that needs to be approved, you're stuck. Without approval for labels or a recipe, you can't design a production process."
Experimentation is part of the business structure for craft breweries, he said, as brewers continuously innovate to meet the wide-ranging demands of craft beer aficionados who are always on the prowl for the latest new twist in small-batch brews.
"We're trying to be dynamic and nimble and come up with new beers all the time, so this will definitely affect us," Thibodeau said.
Currently, Ska is developing a specialty beer to accompany a well-known band, which Thibodeau was not at liberty to name, on its summer tour. The brewery would like to begin designing a new beer can, but the project will be delayed if the shutdown extends any longer and Ska can't get approval for the label and the beer can's design.
"The logistics of a new beer has to start with a label approval, and if you can't get that, you can't begin a new product," he said.
Ska beer is distributed in six states, and Thibodeau said, before the shutdown, he had managed to reduce the time it takes to get a label approval from the Trade and Tax Bureau from one month to a one week. Now, he's afraid even if the shutdown ends soon, the backlog will mean it could take months to get approval for a new beer's label or recipe.
Steve Kurowski, marketing director with the Colorado Brewers Guild in Boulder, said at any one time there are probably dozens of new and seasonal beers working their way through the federal regulatory process among the 300 licensed Colorado brewery guild members.
"We're such a highly regulated and licensed industry, and we need so many approvals, that when the government shuts down, the brewer shuts down," Kurowski said.
Kurowski said smaller Colorado brewers can avoid the worst of the partial federal shutdown if they distribute only within the state - in which case they don't need federal approval for their labels or recipes.
But for a brewery distributing across state lines like Ska, the longer the shutdown extends, the more likely it will harm operations. Good-sized craft brewers, Kurowski said, are geared to produce new seasonal and experimental beers several times during the year.
Also, new craft breweries and beer pubs require approval from the Trade and Tax Bureau before opening, and Kurowski said that is hurting on the Front Range. One operator, he said, is waiting to open its doors while paying rent and business loans for new equipment worth hundreds of thousands of dollars.
Thibodeau also is working on a new whiskey for his Peach Street Distillers in Palisade that involves distilling Ska's Modus Hoperandi IPA into a whiskey, but the project is on hold because Peach Street was a few days from getting approval for its label when the federal government - and with it the Trade and Tax Bureau - shut down.
Craft distillers, like craft brewers, are required to get Trade and Tax Bureau approval for labels and recipes.
Peach Street worked for months with the Trade and Tax Bureau on the label and was down to a few last label tweaks when the shutdown hit.
Peach Street would like to call the new product a whiskey, but the Trade and Tax Bureau wants it categorized as a "distilled spirit specialty," which Thibodeau worries might hurt sales.
Thibodeau was submitting details about the product in the hopes that Peach Street would be able to call the new product "Modus Hoperandi Whiskey" and not "Modus Hoperandi Distilled Spirit Specialty."
"The shutdown creates a lot of uncertainty for craft breweries, and if the shutdown lasts much longer, it gets scary," Thibodeau said.