Despite steady sales prior to the pandemic, two local breweries in the Conejo Valley have become recent casualties of COVID-19, forced to close their doors after continued financial uncertainty and slowed business.
“My dear Thread Heads,” Tim Kazules, owner of Five Threads Brewing Co. in Westlake Village, wrote in a goodbye letter to his customers on his website before he closed on Jan. 30. “It is with heavy heart that I announce that after six hard fought years, Five Threads Brewery is closing permanently. Unfortunately we have not been able to scale up our sales fast enough to cover rising expenses and we find ourselves at the end of our funds.”
Kazules had spent the duration of the pandemic thinking of creative ways to keep the doors to his small brewery open – he rented a food truck and hired a chef, extended hours, hosted happy hours and karaoke nights and Taco Tuesday events, invested in social media marketing and money mailer inserts, but “nothing, nothing was catching,” he said.
“Looking back, it probably would have been a good idea to have hunkered down and just kind of waited it out and kept up a really scaled down operation and as much as the PPP requirements would have let us,” Kazules said. “But hindsight is always 2020 and we didn’t.”
‘One-two punch’
Five Threads opened in 2015 after the former Amgen Inc. associate scientist in oncology imaging accepted a voluntary lay-off to jump head-first into the world of craft brewing. With dreams of eventually scaling up distribution and opening several tasting rooms, Kazules was on his way with several beer awards under his belt and steady sales up 20 percent before a major competitor, Tarantula Hill Brewing Co., opened in August 2019. Kazules took a financial hit. By the time he’d come to understand how to operate in the new market, the pandemic began in what he called a “one-two punch.”
“I think we could have, one way or another, gotten through the Tarantula Hill hit. I think we could have recovered from that. But then the pandemic just really kind of put the nail in the coffin,” Kazules said. “We just really didn’t get a chance to get back on our feet. So, you know, the T. Hill opening knocked us to the mat. And as we were starting to grab the rope and climb back up, COVID just did one of those WWE moves.”
Five Threads wasn’t the only local craft brewery knocked to its knees by the pandemic. Twisted Oak Tavern’s Agoura Hills location closed two weeks prior, on Jan. 16, citing similar financial strain and the impact of inconsistent COVID-related regulations that forced the Los Angeles County brewery and restaurant to operate under more strict restrictions than its Camarillo location just 15 miles away.
“There was a couple of factors there. One was our lease was coming to an end this year, so we were having to deal with that. And our landlord really wanted all the rent, didn’t really want to work with us on abating or deferring it,” Jeff Walker, owner of Twisted Oak Tavern, said.
Market entrance
In 2020, small and independent brewers nationally produced 23.1 million barrels of beer and realized a 9 percent decline in output, according to the Brewers Association. And overall, 2021 saw more openings of craft breweries than closures across the country.
In fact, the Conejo Valley has seen a new opening in recent months. Naughty Pine Brewing Co. first opened its doors in September, but the spate of closures weighs heavily on the operator as she has managed slow business through the last month.
“It’s sad, you know, it’s not a morale booster, that’s for sure. It’s kind of heart wrenching to see other local businesses, especially breweries in my industry, shut down,” Brit Brouhard, owner and brewer at Naughty Pine, said. “As far as how business is going, I’m doing fine. I think Dry January definitely was a little slow and Omicron slowed us down, but when I talk to other brewers, I know it’s not just me, across the board everybody has been suffering through the last four to six weeks.”
For Brouhard, more breweries operating in the area makes the Conejo Valley region a destination spot for craft connoisseurs. While she noted there can be a strain added by new businesses such as hers facing competition in the market, the closures didn’t appear to be part of a natural business lifecycle.
“I mean, they always say when one (business) closes, it makes a possible opportunity for another, but I think with COVID we’re definitely seeing more changes than normal,” Brouhard said. “Of course, there’s always a little bit of a revolving door with small businesses but, at the same time, from my perspective, I feel like the ones that are closing seem to be more casualties of the pandemic.”
Future plans
Walker at Twisted Oak Tavern noted several factors in the closure of his Agoura Hills location. For one, business still hadn’t recovered in that area. With more people working remotely, fewer are stopping by for a beer after work or to decompress on the weekends. Operating two locations and seeing the difference in business between the two made the difficult decision to close more clear cut.
“Certainly, the hole that we were in was exacerbated by some of the impacts of being so close to the county line, when you had times where we in Ventura County could be open inside but L.A. couldn’t. We even had instances where L.A. County wouldn’t let us show anything on TV but, if you go just two miles down the road, you can watch the game on TV. I think that was a factor that we didn’t see in Ventura County. … It was really those factors, together, that led to the closure.”
For now, Walker will continue Twisted Oak operations in Camarillo – in a restaurant space which opened just months prior to the pandemic, based on the Agoura Hills location.
As for Kazules, he plans to return to biotech and cancer research for now, but that doesn’t necessarily spell the end for Five Threads. He’ll be taking a break from day-to-day operations to recover his losses, but is still looking for investors or ways to scale down his operations and maintain the brand while working in his former career.
“I think the future of Five Threads has to be in an e-commerce space. … If we are to survive, it would be on that new kind of paradigm of being a boutique shop,” Kazules said. “But if you were to ask me, ‘Would you do it again?’ Yes, I think I would. I think I’ve grown and learned so much in this time. It’s just invaluable. People told me it’s like a Ph.D. in business. A very expensive one, but, yes, it was invaluable and I’m glad to do it. In hindsight, I would have definitely started differently, but that’s part of the growing process.”