Holy Craft!

How brewpubs and tasting rooms are redefining the beer market, and what we can learn from their success.

By
Melissa Vonder Haar, Tobacco Editor

Angel Abcede, Senior Editor/Content Development Coordinator

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“The personal interaction with the drinker and the tasting-room servers is an awesome personal relationship where stories are swapped, questions are answered, appetites are whetted and loyalties take root,” says Williams.

This combination of local, quality beer, a fun environment to sample it in and knowledgeable pourers has helped expand the business of countless craft brewers.

“The retail store opened in August 2009 as a place where people could not only interact with the people who brew beer and run the company but also get the ‘freshest beer possible,’ ” says Kapraun. “I think that’s what made this company successful … being able to interact with people who work here.” 

Untapped Potential

With all it has going for it, the craft movement has plenty of room to grow. And it is.

Litz of Beer Business Daily says, “America’s 1,132 brewpubs were up 7.25% in 2012; 1,118 microbreweries were up 33%, and a lot of companies in this bracket are doubling in size every year. The 97 regional craft breweries were up 13%.”

And as great as the tasting room experience is, it’s the expansion into bar, restaurant and off-premise accounts that has allowed the craft movement to thrive.

“The majority of our consumption is done outside of the brewery,” Lemp says. “Our tasting room represents about 10% of our total sales.”

This transition to wider distribution is one that has happened much more rapidly than many brewers anticipated, further proving the power of the craft consumer.

“Distributing to other accounts wasn’t something we had planned to do right away,” says Kaczeus. “But within weeks of opening, I had restaurant guys in here leaving their cards so they could bring Bootstrap into their locations.”

Likewise, less than two years since opening, Four Hands went from focusing only on draft beer, with a capacity of just over 1,500 barrels per year, to an 8,000-barrel-per-year (and growing) capacity, with 22-ounce bottles of their core line and plans for 12-ounce four-packs. The bottled products came about largely to meet growing demand from a variety of markets.

“We currently have over 250 on-premise customers carrying our brand in the State of Missouri and roughly 100 off-premise accounts; this number continues to grow every month,” and the brewery also has distribution in metro Illinois and Philadelphia, Kaczeus says.

It’s this expansion outside of the taproom and brewpubs that c-store retailers should take note of. While the convenience channel may not be able to duplicate the full experience of these tasting rooms, they can offer craft consumers a convenient way to bring that experience home.

“C-store chains from Circle K to ampm are generally adding more craft—full doors or even growler stations, in the case of Sunoco—as a way to bring in a new consumer and make up for domestic-premium losses,” says Litz.

Williams sees growlers as a great option for off-premise retailers to replicate some of the tasting-room experience, saying, “Nothing tastes better than a freshly brewed and well-poured draught beer. It allows me to bring the brewpub home with me and savor the drinking experience all over again, any time, day or night.”

Still, he’s quick to warn that a growler program is certainly not for every retailer. Some states have legal restrictions, and there’s a significant amount of work (and cost) that needs to go into successfully implementing a growler bar.

“But for those states where it’s legal, where the retailers have implemented a strict quality-control procedure and have a well-educated and knowledgeable staff who can talk to shoppers, it’s a great way to generate trial, traffic and higher market-basket rings,” says Williams.

Growlers aside, craft is quickly proving to be a segment ripe with potential for c-store retailers: a growing, loyal, high-spending consumer base that has often been limited in off-premise options.

“As the volume of beer coming out of taprooms and brewpubs continues to rise, share of craft in the off-premise channels of c-stores, grocery and others continues to climb,” Litz says.

It may be worth getting that bigger boat to accommodate this segment. Why surrender such an opportunity to grocery, liquor or drug?

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