By Eric Peterson | Apr 22, 2021
San Francisco, California
Beer and spirits
"The concept was to originally just be a distillery, and we were making whiskeys from different styles of craft beer," says Obert.
The first bottles hit the market in 2014. After working with contract brewers and distillers using Seven Stills recipes, Seven Stills opened a distillery and tasting room in San Francisco's Bayview neighborhood.
But the legislation around tasting rooms in California made brewing attractive, as patrons at a distillery's tasting room were limited to a single shot of spirits a day. "All these people were making a day to come and see us and taste the whiskey and tour the facility, but they didn't want to sit there and have one shot and then leave," says Obert.
The natural extension was to also serve the beers used to make the whiskeys as well. Obert says allowing customers to also have a beer as an "element of education" proved better at getting customers to stay longer and spend more.
In 2018, Seven Stills broadened beyond the styles it brewed as feedstock for its spirits and started packaging beer. "It just took off," says Obert. "The volume of beer people were drinking versus the volume of spirits was just so much greater that we rapidly outgrew that facility."
Annual output rose to about 4,000 barrels and the company had 74 employees as of early 2020. The growth led to a major investment to quadruple the operation's production capacity at a new flagship facility in the Mission Bay neighborhood.
Then COVID-19 struck, laying Obert's plans to waste. "We furloughed everybody on March 16," he says.
When Obert tried to restart operations in mid-2020, he couldn't get people to come back to work, leading to a shoestring approach keeping the tasting room's outdoor patio open serving beer from other breweries. As Seven Stills was self-distributing its beer, the inability to get drivers back on their routes led to the dissolution of both the sales and brewing teams. "It's been brutal," he says. "We basically have lost everybody. I still have two of the original 74 employees working for me. Everybody else has left."
Obert says he was able to pivot to hand sanitizer manufacturing with a national contract from Kaiser Permanente and take a "super scrappy" approach to keep the operation afloat and pay off about $2 million in debt. "We've been able to make it," he says. "We ended up beating our 2018 numbers last year."
But that also has included shutting down brewing and distilling production for a full year as he worked to open the Mission Bay facility. "I basically have paid everything off, but now I have this giant facility and all of this production capacity and room to grow," says Obert. "I've been able to get most of the work done on the construction site myself."
"I'm essentially starting from scratch," he continues. "I'm starting to rebuild the production team and I'm not going to be going the self-distribution route anymore -- I have three distributors lined up."
Obert commends SFMade, a local manufacturing advocacy organization, for lending Seven Stills a hand during a tough year. "They've been incredibly supportive during this process, helping us out with our inability to pay rent and also with general support," he says. "It's been invaluable."
Challenges: The relaunch of Seven Stills has a number of hurdles to clear. "Everybody is in the same boat where they've been stuck for a year," says Obert. "I think it's just being smarter and more conservative and less aggressive with my growth strategy."
The big bullet point: "I just plan on taking it slow."
Opportunities: "The demand is still there," says Obert. "We still have people coming in. I hear it 20, 30 times a day, people asking for our beers or when our beers are coming back."
He also points to a program called "When Life Gives You Beer, Make Whiskey." Seven Stills is distilling beer that was stranded in more than 600 kegs due to the pandemic shutdowns. "We're basically taking all this beer that's gone bad from distributors and breweries during COVID and distilling it," says Obert. "I put some feelers out and got a ton of response."
He says he's thinking of initially turning some Belgian beers into gin before moving to experimental whiskeys. "I've got 360 kegs of Belgian beer, so I plan on working through that first, then I've got some IPAs and other beers," says Obert.
Needs: Employees. "I'm just working on rehiring a production team," says Obert. "I'm just going to try to be a lot more involved, since I lost my business partner."