This article is part of a Fortune Special Report: Business in the Coronavirus Economy—a look at the impact of the pandemic on more than 50 industries.
The shutdowns that came with the spread of COVID-19 have rocked every community, but perhaps no sector has been devastated as much as the hospitality industry. Bars and restaurants—whether they are small and independently-owned or part of larger hospitality groups—operate hand to mouth, meaning they don’t have large reserves of savings. Receipts from last night’s dinner service go into procuring product for the next day’s meals and the next shift’s payroll.
With forecasts estimating unemployment could reach as high as 32.1%—the worst rate in American history, far higher than peaks seen during the Great Depression—nonprofits are working with corporate vendors that have larger financial reserves to provide aid to the millions of food industry workers and their families—not just monetarily but with needs as basic as putting food on the table.
And liquor brands are possibly more well positioned than most to lend a helping hand, as in-store, online, and direct-to-consumer channels all saw record sales figures in March. Citing its own growth as more consumers start purchasing alcohol online, millennial booze startup Haus is launching The Restaurant Project, which will be a special line of all-natural aperitifs the Sonoma, Calif., company is cocreating with chefs from across the United States.
Crafted to reflect each restaurant’s flavors and style, the new low ABV spirits will be sold in sets of two, retailing for $80. Haus will be donating 100% of the profits to these chefs’ restaurants, with the intention of setting up a scalable revenue source to support employees, pay the restaurant’s monthly bills, and stay in business. And Haus says it will pay restaurant partners immediately, so every purchase has immediate impact, and will keep the project running for as long as restaurants are impacted by COVID-19.
The Restaurant Project is launching with nine initial partners: Hugh Acheson’s Empire State South in Atlanta; Ashley Christensen’s restaurants in Raleigh, N.C.; Edouardo Jordan’s restaurants in Seattle; Sara and Evan Rich’s Rich Table in San Francisco; Nick Mathers’s Èlephante in Los Angeles; Andrew Tarlow’s Marlow Collective in Brooklyn; Sara Kramer and Sarah Hymanson’s Kismet in Los Angeles; Matt Molina’s Hippo in Los Angeles; and Brandon Jew’s Mister Jiu’s in San Francisco.
The Marlow Collective beverage, for example, is inspired by a grapefruit spritzer, with bitter grapefruit balanced by nutty fig leaves, cardamom, and vanilla. It’s the aperitif equivalent of a spring picnic. So not only will customers be able to support their favorite participating restaurants through the purchase of these bottles, but the drinks could spark fond memories and let buyers bring home a small part of these places.
The relief kitchen
Other spirits makers that already have direct distribution relationships with restaurants and hospitality groups have been funding direct relief efforts. In mid-March, bourbon producer Maker’s Mark partnered with chef Edward Lee’s LEE Initiative in Kentucky to turn one of his restaurants, 610 Magnolia in Louisville, into a soup kitchen, serving dinner to any restaurant or bar worker who lost a job or significant hours as a result of COVID-19.
All of Lee’s restaurants have been shut down, resulting in the layoffs of hundreds of employees. “It was shock and dismay at first,” admits Lee. “And then I realized that we have to react quickly in a positive way as our entire industry was crumbling before our eyes.”
The LEE Initiative already had a relationship with Maker’s Mark: The bourbon maker has been a partner in the nonprofit’s Women Chef Initiative for the past two years. Lindsey Ofcacek, managing director at the LEE Initiative, reached out to Maker’s Mark after Lee’s team decided to pivot the restaurant to a relief kitchen. “[Maker’s Mark] immediately responded with seed money to fund relief kitchens across the country,” Lee explains. “They were essential in this endeavor.” And the team at the LEE Initiative is small, so funding from Maker’s Mark has been critical in not just supplying food but also in keeping a minimal staff working the kitchen and front of the house.
And, to be expected, demand that first night was high. Chef Lee was prepared to serve approximately 250 dinners the first night, but more than 400 people showed up over the course of the evening, lining up outside the door as early at 4 p.m. Representatives from Maker’s Mark were also there that first night for observation, and although the company initially committed to funding only one week of service, they immediately doubled it to two weeks.
“We are living in a time where the entire world is firsthandedly experiencing how important the food and beverage communities, specifically their employees, are to our everyday lives,” says Rob Samuels, chief operating officer at Maker’s Mark, about the decision to maintain the program. “It’s time for us to return the favor and take care of a community that is so accustomed to taking care of us. The roles have reversed, and we cannot turn our back on our friends in these times.”
Since then, the program has proved both so successful and so critical that it has evolved into the Restaurant Workers Relief Program, which has expanded to over a dozen more restaurants in major U.S. cities, including Cochon in New Orleans, Mita’s in Cincinnati, Mozza in Los Angeles, and Gertie and Olmsted, both in Brooklyn, N.Y. There are ongoing talks to activate additional locations soon, and more than 25,800 meals have already been served within the past two weeks.
“Right now, every single city, town, and county are in need; the numbers are staggering. We are doing what we can to help in the cities that we can activate,” Lee says. “But the truth is, we need thousands of kitchens mobilized across America. We need federal assistance to do this, and it is possible.”
Beyond dinner service, Maker’s Mark will be funneling money to the LEE Initiative for not only preparing and packing dinners but also necessary household supplies including diapers, wipes, baby food, nonperishable canned food, cereal, and toilet paper, bundled together into care packages that can be picked up nightly by those in need. Dinners are offered on a first-come, first-served basis, and care packages are limited to one per person, except in unique emergency situations. The Lee Initiative says it will continue to offer this program—running seven days a week—until the group can no longer financially support the program.
The digital tip jar
While there will be some small businesses, including restaurants, that will benefit partially from the passing of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, worth more than $2 trillion in aid, numerous restaurant industry titans and personalities have stressed that it won’t even come close to restoring things to the way they were. It could take weeks, and even months, for those bars and restaurants that are able to reopen at all.
Some restaurants and bars have been able to stay open by leaning on takeout and delivery orders, cushioned by relaxed laws for alcoholic-drink orders. But if they weren’t already set up for takeaway, then most businesses had to make a fast transition—or shut down indefinitely. In the immediate days after the shutdowns in mid-March, many managers took it upon themselves to start grass-roots efforts, launching GoFundMe pages, with donations supporting former employees while out of work.
Punch, a popular and independent online magazine, has taken a creative approach with its own fundraiser. Backed by Bacardi and produced in collaboration with the nonprofit Restaurant Workers’ Community Foundation (RWCF), Tip Your Bartender launched on March 30 as a social initiative to benefit the bartending community.
“We saw a lot of ‘tipping’ being done ad hoc on social and felt like there was opportunity to organize it—to bring the audience of cocktail enthusiasts and bartenders together and give each a chance to raise money for their teams, while also raising money for RWCF’s large-scale relief,” says Talia Baiocchi, editor-in-chief of Punch.
Every weekday at 5 p.m. EDT, for the foreseeable future, Punch plans to host a “virtual happy hour,” in which a bartender will go live on the magazine’s Instagram account and make a cocktail.
“We’ve got an audience of consumers who really miss going to bars and supporting their favorite teams,” Baiocchi explains. “We also talked to bartenders who told us about the greater heartbreak of having to shut down and lay off employees, but also the everyday heartbreak of not being able to go to work and do what they love to do.”
Among the participating bartenders is Mary Palac of Paper Plane, a craft cocktail bar in San Jose, which initially shut down operations entirely in mid-March. “When [California] Gov. Gavin Newsom announced the shuttering of all the bars and restaurants in California, I had already felt it coming for a few days,” Palac recalls. “I think I felt both fear and a small bit of relief. Fear for the future, for myself, my team, my entire industry. And the tiniest bit of relief that we wouldn’t have to continue to expose ourselves to infection.” At the time, Santa Clara County had the most known cases of COVID-19 in the state.
Since then, the management team has been evaluating the viability of a takeout and delivery operation. “Part of our hesitancy was to make sure we weren’t endangering the staff to exposure, so our ownership has taken on the burden of preparing our program nearly entirely alone,” Palac explains. “And we didn’t want to roll out basic cocktails anyone could make at home; we wanted to be able to share some favorites from our signature drinks, so that our guests could still enjoy something truly special.”
Palac says Punch reached out to her via Instagram, and she jumped at the opportunity. “The entire process was smooth, and coordinating felt easy,” she explains. “They even set up a test run through our social media to make sure we’d launch the live set with no problems.” As the inaugural team, Palac and colleague Patrick Braga prepared a cocktail named “Here Comes the Sun,” a fruity, floral, and sweet concoction of gin, sherry, passion fruit, and milk shrub.
Each bar team will be getting a $1,000 fee for participating. Additionally, viewers will be encouraged to tip directly to the bar team’s Venmo account, and Bacardi will be matching all tips with a contribution to RWCF. There are more ways that patrons can continue to support their favorite bartenders: Palac suggests ordering gift cards and swag on top of to-go orders, as well as contacting their local representatives. “If you can’t contribute financially, speak up for us,” Palac says. “Share and amplify our voice; we need help.”
The immediate objective of Tip Your Bartender is getting much-needed dollars into the hands of members of bar teams who need it most. Long-term, of the total dollars donated via Bacardi matching, 50% will go directly to crisis relief for individual restaurant workers; 25% will go to nonprofit organizations serving restaurant workers in crisis; and the remaining 25% will go to zero-interest loans for restaurants to get back up and running.
“This is an industry that knows a thing or two about communication, and I think that has really made a difference—and fast,” Baiocchi says. “There’s a long road ahead, and that fear isn’t going to go away. But if the industry and all of us who derive so much joy from these businesses keep doing what we can to save them, I am hopeful.”
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