Dodge, Duck, Dip, Dive
A discussion on raising the minimum wage to $15 an hour seems to be a long way from any interesting conversation on Cider, right? Yes and no. There could be some argument on the “interesting” part, but that’s more digression than anything else. Let’s put that part aside for a second.
The death of local independent businesses – mom and pop stores – has been progressing for the past couple decades due to corporate chains and e-commerce. Combined with unrealistic rent expectations from owners and landlords, it’s even effecting urban areas.
Perhaps you’ve heard of this little phenomenon that has greatly increased the number of tasting rooms in neighborhoods across the country. These are local independent businesses. They are ducking the corporate chains, dodging the e-commerce bullets, dipping and diving around unrealistic rent expectations.
Sure, craft beer started a lot of it. I recall some random day in March of 1998 visiting the upstart Samuel Adams Brewery with four other people, only one of which had any interest in beer. Predictably, I was drinking most of the samples (mine and everyone else’s), including the delicious, sherry-like 1997 Triple Bock.
Much has changed in the past twenty years. It’s not just for craft breweries anymore (who borrowed the idea from wineries, by the way). Cider and mead have both started to find their own path for tasting rooms where legal. It’s more than that though. Some are selling into the corporate chains, engaging in e-commerce (again, subject to legality) and buying property of their own.
Thinking about it further, it’s interesting how the food truck phenomenon has paced with this. Since food and alcohol tend to pair well together, a tasting room proprietor can invite local food truck businesses to park, rent free, on their property. By not charging rent for the space they own (or rent themselves), they are supporting other local independent businesses.
As a necessity of survival, all of these local independent businesses must run lean and fast. Raising the minimum wage on these particular businesses might not have that much of a deleterious effect. Wage is not the predominant factor in their cost of goods sold (COGS). It’s not a key component cost like – let’s say aluminum, for example – that might radically alter their COGS. Additionally, since local independent alcohol producers are charging higher prices than a fast food chain hamburger, they don’t have to sell that many more units to make up for a small increase in cost. Even if they have to raise their prices by $0.50-1.00/unit, that’s a nominal increase and many consumers won’t notice.
Local independent alcohol producers are the new mom and pop stores. They are participating in and driving local commerce in places that were never anticipated. If raising the minimum wage is a concern for some businesses, it won’t be a significant concern for these mom and pops. They are mobile. They will find ways to dodge, duck, dip, dive…