MANCHESTER, NH – Jason and Margot Phelps, the owners of Ancient Fire Mead & Cider in Manchester, are closing their mead production and taproom operations for good before the year ends.
The reason?
“The pandemic ultimately got us,” they posted on their Facebook page last month. “This pandemic has been tough on everyone financially and psychologically, so that’s part of the story, but the timing and sustained challenges have created a much riskier proposition for us and our fledgling business.”
While the owners could have potentially continued the business, which opened in March 2018 after about two years of planning, by taking out additional loans, the Phelpses decided it was more than they were willing to take on.
“We’d be able to borrow the money if we wanted to,” Jason Phelps said in an interview with Manchester Ink Link.
It would have meant not only new debt, but a business plan that would require drastically scaling up the production and distribution side of the business, while still not being sure the market will return to normal any time soon, he said
They had already completed the first phase of their business plan and paid off the initial financing from Enterprise Bank and the Manchester Development Corporation. The Phelps also put some of their own money into launching the business.
“The first two years, we achieved a lot of what we had planned,” Phelps said.
His contemporaries in the local brewing scene say Ancient Fire has been a success on many levels, including creatively. Backyard Brewery head brewer Paul St. Onge said they always had amazing, unique and very well made product offerings.
“I consider them personal friends,” said St. Onge. “And as a brewery we really loved that they were so close to us and offered such a cool product. They’d have killed the market in any other timing instance, and that’s just really sad for me.
Jason, a 25-year software engineer, and Margot, a 10-year IT project manager, got into homebrewing in 2003, shortly after selling their IT business and during Jason’s brief tussle with cancer.
By 2010, he had won an award for best home-brewed mead and was invited to join the homebrew club Brew Free or Die by Great North Aleworks owners Rob and Lisa North. They have been friends ever since.
“We were sad to learn that Ancient Fire will be closing as Jason and Margot have done so much to bring flavorful craft meads and ciders to the people,” Lisa North said. “Cheers to everything they have achieved and to whatever future adventures await!”
Ancient Fire’s concept was unique. Though a meadery, it hewed closer to a typical nanobrewery with a cozy taproom, friendly owners, and a lower-alcohol product that was served on tap and sold in pints and growlers. The Phelps dubbed it “draft-style” mead; a carbonated beverage that hovered around 5-to-7-percent, crafted with sweet honey and ingredients like green tea, hibiscus and chilis to create a well-balanced palate that retained its homemade charm.
They also occasionally retailed higher-test honey wines in bottles, and ciders.
Since it opened, it relied heavily on taproom sales. Phelps said about 75 percent of its overall sales were out of the taproom, while the remainder of its revenue came from direct shipping, retail and merchandise.
Unfortunately, that left them exposed when the economy for in-person dining and events evaporated due to the COVID-19 pandemic.
Phelps said mead is more costly to make than beer, and prices for honey have risen by about 20 percent in the past few years, which ultimately mean lower profit margins overall.
Experimenting with a new type of beverage and operating in a less-known segment had already put them at a disadvantage when trying to compete in a market crowded with beer and traditional wines. Moonlight Meadery in Londonderry was the only other meadery in the area, and unlike Ancient Fire, it focused on high-volume honey wine production for national and international distribution.
Volume is an important factor when operating a meadery in New Hampshire, where meads are legally considered wines, regardless of their ABV. That’s because wines are taxed differently than beers.
Wine manufacturers – among which Ancient Fire is counted – pay 5 percent of their sales to the NH Liquor Commission, where breweries pay 30 cents of each gallon of beer sold to the state.
“Brewers would pay pennies by comparison,” Phelps said.
That’s why, if he continued the business, he would have to pivot into a new stage of growth for the company, by increasing production, finding new sales channels and getting a beverage manufacturer license to allow him to distribute through third-party distributors (the New Hampshire Liquor Commission distributes and sells all the liquor and wine in the state).
“Boy, man. That’s a tough market,” Rep. John Hunt (R-Rindge) said of the mead and cider business.
He says wineries that make meads and cider have it particularly tough without a beverage manufacturing license, compared to breweries. Over the years, Hunt has sponsored legislation that helped make it easier for brewers to self-distribute, start smaller with a cheaper license and most recently allow food trucks to meet the food requirements of taller-drink-serving taprooms.
When asked if lawmakers would consider a new license classification to lower the cost burdens of smaller meaderies as they’re starting out, he said there would likely be bipartisan support for that, but it so far hasn’t come up.
“If someone came to us and said they wanted a nano-meadery, we would have passed that in a heartbeat,” Hunt said. “They only have to come to us.”
On top of the expensive overhead and legal vagaries, Phelps said they constantly faced the challenge of educating consumers on the unique nature of their product.
“We take a second hit … in that not everybody understands what we do,” Phelps said.
Ancient Fire started fairly strong despite its disadvantages, he said, and was starting to feel sales pressure to grow by early 2020. They also had plans to launch a significant marketing push to spread brand awareness and educate consumers starting with the 2020 Made in NH Expo. But that event, like so many others last year, was cancelled.
“It was soul crushing,” Phelps recalls.
During most of 2020, the company was breaking even. There was an initial uptick in sales from loyal customers who wanted to support the company when fear and uncertainty motivated local consumption in the early days of the pandemic, but it didn’t last.
So far, 2021 has been much of the same, with a new uptick in sales from folks who heard the announcement of Ancient Fire’s impending closure, aside from the occasional crowd-pleasing product releases that helped move the needle.
The last few weeks have been “absolutely nuts” with the rate of sales, Phelps said. “We’ve had some of our busiest weekends we’ve ever had.”
During all of this, the Phelpses made it part of their mission to raise money for The American Cancer Society, the New Hampshire Food Bank and other local charities. Over the four years they’ve been in business, they raised about $30,000 for charity, often matching donations out-of-pocket.
Prior to opening the business, they had already raised about $130,000 for mostly cancer-related charities.
Moving forward, Phelps said they don’t have any immediate career plans. The first thing they want to do is decompress, and perhaps rediscover what it feels like to sit on the other side of the counter at their favorite local breweries. Some of them are still struggling, he said.
“Go check on your friends who run breweries and restaurants. They’re all going through the same thing,” he said.
At this rate, Phelps expects they may lock their doors anytime between the week of Thanksgiving (if they run out of inventory) and mid-December.
