CRAFT BREWERIES STILL HOPPING
Franklin County and beyond have seen 10 new openings, 47 statewide
The coronavirus pandemic devastated Ohio’s bars and restaurants. Dozens of taverns, pubs and eateries have closed in central Ohio since the virus first reached the state in March.
Craft breweries, however, are still opening at a healthy clip.
Since the pandemic reached the Buckeye State, nine breweries have opened in central Ohio and five have closed. Statewide, 47 opened and 15 closed.
The trend doesn’t necessarily mean that small breweries are thriving — although few would argue the coronavirus robbed Ohio of its appetite for craft beer.
Most openings were in the works prior to the pandemic, as a craft brewery typically takes months or years to go from the drawing board to the grand opening.
An official tally from the Ohio Craft Brewers Association lists 10 openings in Franklin County and the surrounding counties during the pandemic, against six closures.
However, the 1487 Brewery is on both lists because it closed its Alexandria taproom and moved to Plain City.
A delayed opening wasn’t an option for most of the nine breweries that went online in the last year.
“These folks opening breweries have likely been in planning since pre-pandemic,” said Mary Macdonald, executive director of the Ohio Craft Brewers Association.
“Many already had a space they were renting and invested in equipment. Once they are invested, the best way to get revenue coming in is to start producing beer and opening to the degree they are able.”
Buckeye Lake Brewery owner Rich
ple, in March 2000, Cisco Systems — the country’s leading maker of routers and other internet equipment — had $600 billion in market capitalization, and it had revenue at the time of less than $10 billion. Today, Cisco has about $30 billion in revenue and a market value of $300 billion. So in 20 years, business tripled and the stock is down 50%.
Some people say, “Well, the stock is going up, and if I buy today, I think I can sell to someone tomorrow at a higher price.” That’s the “greater fool” theory, and we don’t do that. We look for good companies with good prospects. The unfortunate thing today is that market valuations are extremely high. So if you invest today, most likely you’ll be disappointed with returns in the next five years.
So how do you pick a company to invest in?
Dillon: There’s a three-part formula that’s very simple to calculate your return on investments. One part of the formula is: the income while you hold the investment — that is, dividends. You can get a reasonable estimate of that. Another part of the formula is, what price you will sell the stock. That is something we don’t know — you have no clue.
The No. 1 thing in the formula is the one thing you’re certain of: the price you pay. That is the only thing you can be certain of.
Tesla at one point was worth all the car companies in the world combined. Now, I’ll admit that Tesla cars are great. But that doesn’t mean it’s a great investment. It really depends on the future and the valuation today. That’s the only thing you can control, what you pay.
Does everyone at VELA buy into that long-term investment philosophy?
Dillon: Absolutely — and in a crazy time, it’s better actually. In my career, there were three difficult times to invest — the mid- to late-1980s, the mid- to late-1990s and the past five years. The reason is irrational exuberance. That happens. Human beings are emotional creatures.
The fever just started to break in the last couple of months. I think it will take most of the next year before it becomes a widely held view that, boy, the markets really were crazy. But today that is not the consensus. Conditions are eerily similar to 2000-2005, for somewhat the same reasons. I think it was Mark Twain who said, history doesn’t repeat itself, but it rhymes. It’s getting crazy again. You have peaks and troughs driven by emotion.
Title: CEO of VELA Investment Management
Employees: 15 full-time, plus a chief compliance officer shared with another firm
Assets under management: $128 million