Pandemic impacts cast a long shadow on North Bay economy

Three years later, many North Bay business are thriving and adopting crisis-inspired innovations, while others are still struggling with disruptions, escalating costs and customer hesitation.

KATHRYN REED

FOR THE NORTH BAY BUSINESS JOURNAL

March 20, 2023

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While the state and federal governments are essentially declaring the 3-year-old pandemic over, businesses are dealing with the lingering effects — some positive, some not so much.

Last month, California ended its COVID restrictions which emerged in March 2020 and crippled the economy. In May, the Federal restrictions are expected to expire.

Many business are thriving, even adopting innovations inspired by the crisis, like a 10-person wedding party ceremony, or planning to improve employee communications in anticipation of the next crisis. Still others face continued disruption of the supply chain or escalating costs of doing business and hesitation from the public to return to crowded venues.

“The theater industry is in no way recovered from COVID,” Lesley Currier, managing director of the Marin Shakespeare Company in San Rafael, said days before the three-year anniversary of California’s shutdown. “Many theaters have gone out of business permanently. Many theater employees left the industry or the Bay Area. Many others have fewer performances to give because fewer people are going to the theater.”

Eli Melrod, founder and CEO of Solful in Sebastopol, said the cannabis retail industry felt “pandemic proof” when it began.

“Three years later, business feels renewed, especially foot traffic into our stores,” Melrod said.

Things like curbside pickup and delivery options remain part of the dispensary’s normal business practices.

The 4,000-square-foot Dahlia & Sage Community Market in Cloverdale saw its customer base double during the pandemic; numbers that have stayed steady.

(Karie and Kurt Kelder as of April 1 expect to fully own the store, having bought it from partners Peter and Frances Kruger. )

“I think people felt comfortable. We didn’t have crowds or lines,” Karie Kelder said.

Never having a COVID breakout among staff meant the store was always open. This was in part accomplished by having two distinct shifts so co-workers were interacting with the same people.

Lessons learned and future options

Even though SolarCraft in Novato furloughed staff for six weeks and cut wages for some by as much as 50%, CEO Phil Alwitt said, “We pulled out of it quite strong and used the time to improve our internal processes and procedures. The end result was not so bad.”

During the next crisis if the government issues similar mandates, Alwitt would keep his team busy with his wish list of improvements.

“We have accumulated a nice rainy day fund. I would use it to make sure people continued to get a paycheck for as long as possible,” Alwitt said.

Lessons learned from the pandemic include to “overcommunicate early via email updates and have a dedicated website,” said Ernie Meyer, chief human resource officer for the Novato-based drug maker Ultragenyx Pharmaceutical.

Erika Dawkins of apparel and home furnishings retailer Bon Ton Studio in Healdsburg plans to learn from the past and sell more online during any future pandemic-like crisis.

“As both a brick-and-mortar and e-comm business, I would lean more into our social media channels — Instagram, Facebook, and TikTok — and adjust our strategy to the current media climate, which would probably look something like implementing live shopping, creating videos and staying relevant with our messaging,” she said.

Dawkins said she survived by investing in technology like point of sale and customer relations management systems as well as her website, along with taking care of her employees, and having a tighter budget and less inventory.

Feeling the pain

As the world enters the fourth year of coping with COVID-19, not all business owners are optimistic.

“The economics of nonprofit theaters in the U.S. has always been tenuous, and COVID really made it obvious how tenuous it is,” Currier, with Marin Shakespeare Company, told the Journal.

Today, she doesn't know what the solutions going forward will be to make live performance a financially viable enterprise.

Currier’s troubles run deeper than the pandemic. Just before the world shutdown California implemented Assembly Bill 5 that made theater workers employees instead of independent contractors, thus adding to the bottom line for venues like hers.

People no longer want to work long and sporadic shifts, which have long been the norm in theater. That is something Currier said she and her colleagues are grappling with, but haven’t find a solution for.

Elaine Bell, owner of Elaine Bell Catering in Napa, said the company finally broke even last year, but lost millions of dollars during the pandemic.

Corporate parties used to be big business, especially at the end of the year. Bell isn’t confident that type of spending will come back.

“Usually we would have a lot more booked now for the rest of the year, but people don’t want to make that decision because they are afraid (of the economy),” Bell said.

She credits the federal Paycheck Protection Plan loan with allowing her to keep most of her staff employed even though there was little or no work to do.

The caterer has 40 full-time workers and can add another 100 during the busy summer season, as well as the first three weeks of December for holiday parties.

“I sought out what work was available and used the time to update efficiencies in our operation,” Bell told the Journal. “In an effort to help my community of clients, I allowed booked events to postpone to one to two years later with no increase in pricing. In the future, I may not be able to afford to manage that luxury.”

Ian Deveraux White, founder and vintner with Smith Devereux Winery in Napa, is also trying to figure out life post-pandemic after his production dropped by half when customers, like the catering company that had been ordering 3,000 cases of Smith Devereux, shutdown..

Pre-pandemic the winery was bottling 6,500 cases of wine. During the pandemic White sold much of his juice to other vintners to recoup some of the cost of doing business. This year he plans to bottle 5,000 cases..

The distribution stream was cut by about 20% starting three years ago, but his direct to consumer and wine club business doubled during the pandemic.

“Heck, they were all drinking at home and I was picking up the phone and talking about the wines and the vineyards; building authentic friendships and my wine club every day,” White said.

Now he says traffic is off: "Fewer people seem to be making time to explore and discover and support the small wineries.”

Making changes

Wedding planners got creative when the industry came to a screeching halt in spring 2020.

“When we were able to have two-person gatherings, we created a proposal package. When we were able to have 10-person gatherings, we created our first micro wedding package for 10 people or less for two hours,” Samar Hattar, owner of Blissful Events in Petaluma, told the Journal. “We even sent the at-home guests that tuned into the stream some fun wedding favors and wine so they could join in with a toast with the happy couple.”

The micro wedding package is a lasting legacy of the pandemic.

“It has done so well that we have now implemented it and created similar packages for dozens of wineries all over Sonoma County. Micro weddings have become one of this year's trends,” Hattar said.

Virtual wine tastings became the norm for the Far Niente Family of Wineries & Vineyards based in Oakville.

“As we have returned to a degree of normalcWe find our tasting rooms are again flush with visitors and we are placing less emphasis on virtual outreach. We continue to offer virtual tastings, although less frequent,” said Julie Secviar, vice president of human resources for the wine portfolio that consists of Far Niente (Oakville), Nickel & Nickel (Oakville), EnRoute (Sebastopol), Bella Union (Rutherford), Post & Beam (Oakville), and Dolce (Oakville).

Remote work also continues to be allowed for some employees.

“As a result, work–life balance and employee satisfaction has increased along with productivity,” Secviar told the Journal. “Most importantly, it showed us that as a leadership team, we have the ability to be agile, to respond quickly and not only survive but thrive. Leading to a launch of a new product during this most uncertain time.”

Biopharmaceutical company Ultragenyx in Novato is excited about having an expanded talent pool with people able to work from home.

“Some all-company meetings are better via Zoom,” Meyer said. “(It has) enabled teams to connect on a more personal basis. We know so much more about their children, pets, hobbies, et cetera.”

Kathryn Reed is a journalist who has spent most of her career covering issues in Northern California. She has published four books, with the most recent being Sleeping with Strangers: An Airbnb Host’s Life in Lake Tahoe and Mexico. She may be reached at kr@kathrynreed. com or kathrynreed.com, and on Twitter @Kathryn0925 or Instagram @kathrynreed0925.