House Bill 669 Proponent Testimony — Greg Lehman, Watershed Distillery (May 28, 2020)

Summary

Proponent testimony on House Bill 669 by Greg Lehman, Founder/CEO of Watershed Distillery, dated May 28, 2020, to the House Commerce and Labor Committee. Greg Lehman states that Watershed was started in 2010, that distilleries were allowed to sell bottles in 2012 and to open a restaurant in 2016, and that in mid-March when restaurants were ordered to close the distillery shut down its restaurant and laid off 32 employees. The testimony states that restaurant customers closing represented 60% of the business. It supports expanding the space in which bars and restaurants can serve customers and allowing delivery of bottles through third parties.

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                           House Bill 669 Proponent Testimony
                                       May 28, 2020
                          House Commerce and Labor Committee


Greg Lehman Found / CEO
Watershed Distillery
1145 Chesapeake Ave, Ste D
Columbus, OH 43212
www.watersheddistillery.com

My business partner and I started Watershed in 2010 when there were just a handful of
operational micro distilleries in the state. There are plenty of challenges any distillery
founder faces, regardless of location: funding, sourcing the right equipment and
ingredients, learning to use that equipment, learning to work with a buzz 😊, quality
control, staffing. These things were not unique to us.

When we started in Ohio, we could not sell bottles out of our distillery and we could not
offer cocktails from a restaurant on site. A number of groups then worked together
(Government, Lawmakers, Distillers, Job Ohio) to change those restrictions and open
up opportunities within this young industry. In 2012, distilleries were allowed to sell
bottles out their distilleries. In 2016, distilleries were allowed to open a restaurant, an
opportunity to expand on-site experiences and revenue. These changes helped foster
and grow the young distilling industry. Now, we are going through our toughest period
as an industry and are fighting to stay viable.

The impact of coronavirus continues to unfold. In mid-March when restaurants were
ordered to close, we not only shut down our restaurant and layed off 32 employees, but
we saw all of our restaurant customers across Ohio shut their doors. Those customers
represented 60% of our business. Restaurants are reopening very slowly. We do not
have a timeline set for reopen. We are still trying to make economic sense of how to
operate at 50% capacity. This is an industry with very thin margins. If our traffic is down
10% we will lose money. At the same time, we are trying to figure out how to operate in
a way that is safe for our guests and our team.

This bill would speed up the path to reopening for bars and restaurants by expanding
the space in which they can safely serve customers. The increase footprint helps us
navigate the issue of keeping our guests and our employees safe with more room to
create proper social distancing. Expanding the footprint of our business also helps us
get closer to achieving economic viability. We have a small restaurant, so we would not
physically have space for enough people to keep the lights on. Any additional seats get
us that much closer to be able to operate a sustainable restaurant.

Allowing the delivery of bottles through third parties helps us limit the number of people
our team comes in contact with at the distillery, keeping everyone safer while allowing
for our bottle sales to remain healthy. In a world where we’re trying to limit social
interaction, but also keep our team employed and safe, this feels like an excellent
opportunity for growth. The additional revenue stream will help us keep our employees
paid. It would also help us bring on additional people as we see an increase in sales
from our bottle shop by opening up for longer hours to meet the additional demand.

I know the question of making sure the bottles are delivered to someone 21 or older has
been questioned. I would challenge back that we are not coming up with something new
here. We can look to the success beer and wine delivery has had through third party
companies that operate safely and legally. Mirroring their best practices seems like a
commonsense approach to this issue.

Greg Lehman
Founder/CEO
Watershed Distillery
1145 Chesapeake Ave, Ste D
Columbus, OH 43212
www.watersheddistillery.com


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