The Tipping Point

A make-or-break moment for small business

Written by Brighid Hartnett

Instead of hibernating this winter, Zak Koga is going to set up igloos. To combat the Wisconsin cold, Koga’s brewery, Karben4, is creating an outdoor space for customers to eat, drink and be merry — at a distance, of course. 

“I’m sort of a wartime-general-type of person,” Koga says of his plans to brave the winter and the tough climate for small businesses in the pandemic. “There’s a lot of focus that’s offered when stuff starts falling apart. It’s like, ‘OK, good. I know exactly what to do. Let’s do this, and this, and this — let’s survive now.’”

Zak Koga, co-founder & owner of Karben4. Photo submitted by Zak Koga

Business owners across the state have shared Koga’s demanding experience over the past nine months. In March, Gov. Tony Evers declared a state of emergency to stop the spread of the coronavirus, eventually banning all gatherings of more than 10 people. The Wisconsin Department of Health Services also issued a safer-at-home order, which required certain businesses to close or reduce their operations. The restrictions left many businesses reeling, with rent and utilities to pay but no customers coming through the door.

Wisconsin Economic Development Corporation Secretary Missy Hughes likened the experience to a natural disaster — and businesses across the state are still trying their best to weather the storm. According to a July report from the agency measuring the economic impact of COVID-19, Wisconsin businesses reported a collective $22 million in lost income since the state first went into lockdown. 

“[Their] dream has basically been turned upside down and shook out onto the floor,” Hughes says. 

For Koga, the shutdown demanded a pivot in Karben4’s operations. 

“Two-thirds of my business just evaporated in 24 hours,” Koga says, recounting the uncertainty he felt when Wisconsin restaurants and bars were restricted to carryout options only. “So in a lot of ways, I just dove right into action.” 

Based in Madison, Karben4 beer is a staple in fridges and grocery stores across Wisconsin. One of its most popular brews, the Fantasy Factory IPA, features a label with a cat riding a unicorn. These types of quirks are what make Karben4 unique — the brewery doesn’t shy away from anything bizarre or amusing. In addition to an eccentric tap list and playful branding, Karben4 emphasizes community connections between local businesses — which is what inspired Koga to plan a COVID-19-safe drive-up taproom.

Set up in local church parking lots, Koga’s drive-thru events featured a rotating cast of vendors. Patrons drove through the lot and filled their cars with a variety of food and beverages purchased from nearby businesses. Karben4 also partnered with area farmers, increasing the sales of locally sourced farm products.

“[They were] hugely successful events that were able to generate over half a million dollars for dozens of businesses,” Koga says. “The direct-to-community model is what I’m starting to call it.” 

But Koga recognizes his work isn’t over — that’s where the igloos come into play. 

Fantasy Factory is an India Pale Ale brewed locally in Madison by Karben4. Photo by Brian Huynh

“We’re going to try to set up an array of igloos outside so that people can still have a place to go,” Koga says. “I’m definitely concerned for the general morale and mental health of our community in the winter.” 

Aside from plans to accommodate for Wisconsin’s harsh winters, Koga also hopes Wisconsinites will continue to explore options for safe connectivity and engagement — not only as a way to get out of the house, but to maintain flexibility as communities move into new seasonal realities. 

“I think the warning here, for our community, is we have to continue to look at the information that’s being made available to us,” Koga says. “We have to adjust.” 

But he notes that his community has already come together in some remarkable ways. Koga says at least one of his neighbors from Waunakee, Wisconsin, showed up at every brewery event or drive-thru taproom. 

“We didn’t have to explain how screwed we were as a food and beverage industry. Everyone knew it, and they acted,” Koga says. “They took the time to preorder beer, to preorder food, to show up, to wait for us to come out and put it in the trunk, all this really convenient stuff. They were willing to get on board with it.” 

Tom Buhler, Chief Community Affairs Officer of Butter Buds. Photo submitted by Tom Buhler

Though recent years brought a wave of dairy farm closures and reduced demand, Tom Buhler and his family found renewed purpose in Butter Buds. The company, born out of a farming tradition passed down through generations, develops and manufactures dairy flavoring and butter products for restaurants and cafeterias and for sale at grocery stores. 

“I think it was definitely an impetus for getting into the business,” Buhler says of his dairy farming heritage. With beginnings in Racine, Butter Buds has expanded to distribute its products — including butter, cheese and dairy flavoring — on a global scale. 

Butter Buds are butter-flavored granules that can be used in place of butter, margarine or oil. They are produced in Racine. Photo by Brian Huynh

But like Koga, Buhler couldn’t have foreseen an economic shutdown spanning several months. The coronavirus is something the company’s leadership team is still working to mitigate in both development and distribution. “We’re still adjusting and adapting,” Buhler says. 

Butter Buds’ main pivot occurred in its sales department, where employees typically make in-person appointments to work with customers on product development and selection. Due to social distancing protocol, these meetings have transitioned to a virtual format. But due to the worldwide scope of Butter Buds products, the samples travel well and salespeople can still engage with customers over video chats. 

While restaurant closures and limits on gatherings reduced Butter Buds’ sales to food service providers, Buhler noted a surprising uptick in a different type of clientele. 

“We were feeling the effects,” Buhler says. “And then we saw the opposite effect in the other side of the business, which is products that you find in a supermarket, where business was going up.” 

While the ratio is unusual within the scope of Butter Buds’ normal sales, Buhler says his business is up for the challenge. 

“It is an unprecedented time, and we don’t have a lot of best practices that we can turn to. So I guess that’s another way of saying we’re all trying to figure it out,” Buhler says. 

Halley Jones didn’t plan on moving her entire storefront during a pandemic — it was the sort of decision that came to her swiftly and without hesitation.

“Long story short, I signed the lease the last week of May, and I opened there the first week of June. So that was a snap,” Jones says of her new store location. 

Jones owns and operates The Purple Goose, a clothing store in Verona, a suburb of Madison, where she opened over 15 years ago — and now, the store has found its new home in nearby Paoli. As an instructor at the UW–Madison School of Human Ecology and a veteran in the retail industry, Jones is well-attuned to market fluctuations. However, the pandemic produced unpredictable retail trends, and Jones sought to meet the needs of customers by developing an app for her store. 

“We were able to build our online presence in the course of a month and ramp it up to not replacing our store inventory, but probably doing 30% of it online, which would have taken me five years and lots of marketing dollars and hair-pulling to try to get that,” Jones says. 

Jones is already looking to the future with plans to hold socially distant outdoor events to keep customers engaged throughout the winter season. 

“We’re Wisconsinites — there’s nothing to say that people won’t put on a winter parka and cute fuzzy Uggs,” Jones says. “We’re actually, in Paoli, putting in fire rings in outdoor areas that hopefully will go through the holiday season, and make it not only possible to sit outside, but almost inviting to come and enjoy a cup of cider or a beer.” 

The Purple Goose is a women’s fashion store located in Paoli, an unincorporated community located south of Madison. Photo by Brian Huynh

These plans are consistent with many other businesses looking to ensure longevity as the pandemic persists. For Jones and The Purple Goose, it’s all a matter of observing how the next few months play out in order to plan for her next move. 

“The quote of the year: All we have to do is wait,” Jones says. 

The process of shutting down the store, reopening and eventually moving locations reinforced the community-first attitude Jones fosters within her business. Now more than ever, Jones recognizes the importance of her store as a third space for local shoppers to develop interpersonal connections and establish relationships within the community. 

“People feel connected when they come to The Purple Goose — it’s not only a gathering place for the community, but it’s a place where people can get re-energized and feel good about themselves again,” Jones says. “Those places are definitely missing right now, and we need to figure out a safe way to bring an element of that back for those people who need it most.”