Night Shift leadership told its 12 production employees work could dry up as early as today, as the company prepares to wind down brewing and packaging operations at its Everett, Massachusetts location.
The company will shift to contract production at Framingham-based Jack’s Abby Craft Lagers and Pawtucket, Rhode Island-based Isle Brewers Guild (IBG), which had been producing about 50% of Night Shift’s volume.
“What we’ve told the production staff is like there might not be any work after today, but we are going to guarantee everybody’s paycheck till October 1, so two months,” co-founder Rob Burns said. “Then, if they have to sit at home, that’s what’s going to happen. After that, we’re still unsure because we’re reacting to this news and we wanted to be transparent and forthcoming to the staff and give them as much notice as soon as we knew. We don’t have all the answers, like we would like, today.”
If employees are still sidelined by October 1, the company will offer them severance packages, Burns said.
Burns and co-founder Michael Oxton pointed to supply chain disruptions of carbon dioxide (CO2) as a driving force behind the immediate production pivot to other locations.
“CO2 is definitely a catalyst for this, or maybe the final straw in a lot of ways,” Burns said. “We’ll probably run out of CO2 sometime today.”
“We just learned last week,” Oxton added.
Since finding out its supply was about to be cut, Night Shift has called several other suppliers, only to be told that there is no CO2 available for purchase.
CO2 is used to move beer throughout the production process, to package it into cans and bottles and to push it through draft lines for taproom service. The beer industry dealt with a shortage during Summer 2020, when production of CO2 – often a byproduct of ethanol production – plummeted along with demand for gasoline.
This time, disruptions to other CO2 streams are causing the problem. Ammonia plants, which aid in fertilizer production and also give off CO2 to be captured, have been offline for off-season maintenance, according to Gasworld, which predicted a “long, hot summer ahead” for the U.S. CO2 market. In addition to that, a CO2 well in Mississippi is contaminated, Gasworld reported.
CO2 aside, Night Shift has struggled to mold the Everett location to meet its needs as a craft beer and hard seltzer producer, and has relied on off-site production.
“It’s been a problem-solving effort since we moved in, but really over the last three years investing dollars and ideas and schedules and all sorts of shifts to just like ‘How do we make this work?’ so that it’s optimized and it’s still not,” Oxton said.
The Everett brewery is “in a dense urban environment with limited land and small ceiling heights, and it is not designed to match the scale,” Burns said. Night Shift has expanded the facility several times since it opened in 2012. In the decade since, both Night Shift’s business and the craft beer industry have evolved at a near-breakneck pace.
“When we signed a lease here, we had brewed about 500 barrels of beer,” Burns said. “Nearly all of our beer went to 750 mL cork-and-cage or capped bottles. It was a different industry and we had a different product we were making, and now the No. 1 thing we sell is 12-packs.”
For the past few years, about half of Night Shift’s volume has been produced at other locations, and the Everett brewery is on pace to produce 22,000-25,000 barrels this year – a lot of volume to make in less-than-ideal conditions, Burns said.
“We have known for a long time that the Everett facility is not optimized as a major craft beer production plant,” he said. “Our plan to solve that was to build the Philadelphia brewery, and once that plan got canceled in spring of 2020 you could say that was the start of this snowball.
“We still, despite that, continue to spend money to make Everett more successful,” he continued. “We’ve spent $10 million in the production space since 2019 to try to increase the efficiencies and make it more capable for the scale production but despite all that, we’re just not able to get there.”
The Philadelphia brewery, announced in August 2019, would have provided 30,000 barrels of capacity immediately, with the ability to scale to 200,000 barrels over time. But the tumult the COVID-19 pandemic wrought upon the beer industry made the plan too risky, and Night Shift abandoned the plan in May 2020. Once the Philadelphia brewery was off the table, Night Shift signed a contract with Jack’s Abby to help with production.
In 2020, Night Shift’s volume only declined -2%, a loss that was recouped threefold with a +6% increase in 2021, according to the May/June issue of the Brewers Association’s (BA) New Brewer. Last year, Night Shift produced 38,840 barrels of beer, excluding its Hoot Hard Seltzer.
The company took a margin hit last September, when Night Shift Distributing shut down and Night Shift sold the rights to distribute its products in Massachusetts and Connecticut to Sheehan Family Companies.
An Employee’s Perspective
The larger scale at its contract partners’ breweries make those production runs far more efficient than the Everett facility, Burns said.
“The biggest fermenter we can get in there is 60 barrels, and we have a 60-barrel brewhouse and we can easily brew four to five batches in a day [in Everett],” Burns said. “So right now, that requires a brewer to clean five fermenters versus someone at Jack’s Abby or IBG who cleans one. Right there, we just 5x-ed the amount of work we have to do.”
Production employees were told in January that it would be less expensive to move production to Jack’s Abby and IBG, said a production employee whom Brewbound has offered anonymity to protect their privacy. The employee said co-workers are “mostly just sad and shocked” at the news.
“There’s almost kind of a lightness that comes with everyone experiencing something really difficult all together, and there is a little bit of that,” the employee said. “So it’s almost better knowing that this is what is going to happen. There was a lot of stress from being worried for the company and being worried for the direction and being worried like ‘Are we doing enough? Is this going to be enough?’”
Despite knowing the company’s struggles, Night Shift hired three new production staffers in the last month, which made the news of the impending production shutdown even more shocking, the employee said.
“It was that much more surprising to have that conversation yesterday that none of us were going to have jobs because we just added three,” they said. “I think that just speaks to the poor communication that has plagued the company – just from the difficulty in scaling to go from such a small company to such a big one in such a short amount of time.”
Despite internal communication woes, the employee praised the work environment and Night Shift’s dedication to paying production staff a living wage.
“When they started the business, they wanted to make sure that their brewers were able to make a living wage, and so far, they had really stuck with that, which is partially why it was so shocking that they went the route of laying off the whole production team all at once,” they said. “That almost makes it more difficult. In the past, they really have treated us well and they’re not they’re not bad guys.”
Burns and Oxton said they wanted to lead with transparency and honesty in discussing the situation with staff, even with limited information.
“It’s so hard for us to give definitive answers, not because we’re trying to hide it,” Burns said. “I just feel like we got suckered punched and we’re just gasping for air trying to figure this out.”
What’s Ahead for Night Shift?
As many other craft breweries have, Night Shift is exploring spirits-based, ready-to-drink canned cocktails (RTD) as a way to offer drinkers something that keeps them in the fold. The company recently received federal and state licenses to start distilling in Everett.
“We’re looking at rolling out some RTD products, some traditional bottled 750 mL stuff that we’re super excited about,” Burns said. “This is where the plan becomes more fuzzy, because we thought we would have more time to start figuring out what these products were, and potentially save more jobs.”
Traditional spirits could be a boon, because they don’t require CO2 and sell at higher margins, but such a product will be farther in the future.
“We’re not prepared to launch a spirit line today,” Burns said. “There’s obviously a lot of work that needs to go into it. We thought we had a lot more time to dip our toes in, trial stuff in the taproom, figure out what we could scale, what would work, similar to how we’ve launched every single product.”
Both Burns and Oxton stressed that neither Night Shift’s taproom in Everett or at Boston’s Lovejoy Wharf are shutting down. With the addition of spirits, the consumer experience stands to improve.
“The plan is not to shut down the Everett taproom or shut down production of some level and effort whether it’s R&D or distilling,” Oxton said. “The plan is definitely to evolve Everett.”