War, weather, economic woes and wary consumers — what else could go wrong? Try SARS and sundry other calamities. If you believe in Murphy’s Law everything that can go wrong will then you’ve already settled into your well-stocked bomb shelter to sip on reconstituted Tang and sup on MREs.
For those with a more positive outlook, however, things aren’t half bad. Despite or perhaps because of all the craziness that has kept consumers on tenterhooks recently, they’re still going out, albeit less often than before.
The beer industry saw a modest gain of 1.3% in 2002, according to Adams Beverage Group’s 2003 Handbook Advance, with craft beer, imports and light beer seeing the strongest gains. But in January and February, domestic beer sales were off 2.5%, or 700,000 barrels, according to the Association of Brewers. Imports were hit even harder, down 8.5%.
“Our sales are flat, but we’re happy to be so,” says John Lane, partner at Winking Lizard Tavern, Cleveland. “We had the second worst snow year on record, so winter was a little rough.”
Now that we’re heading into summer, though, people’s thoughts are turning to beaches, bikinis and beer. What are they likely to be looking for?
The beer business is still dominated by the big three domestic brewers–Anheuser-Busch, SABMiller and Coors–and summer is prime selling season for these big guys. Consumers will be blitzed with the usual barrage of advertising and promotions, prompting many of them to order what they see on television.
There’s no doubt the big guys can help you pump a lot of volume through your operation. When it announced its quarterly earnings in April, for example, Anheuser-Busch posted both volume and revenue gains and claimed it now has more than half the domestic beer market with a 52.1% share. Even brewpubs often carry products like Bud Light, Miller Lite or Coors Light for those not adventurous enough to try the house brew.
“You don’t see a lot of breweries that carry beer other than their own,” says Kirk Aardahl, director of beverages for RAM International, Lakewood, WA. “About 80 percent of the beer we sell is ours, but we sell Coors, Bud and bottles, too, so we can bring in people who only want a domestic.”
Ram International, a Cheers Award winner for best chain beer program this year, operates 23 brewpubs in eight states. The chain’s stores operate under a half dozen concepts, such as C.B. & Potts, Humperdinks, Shenanigan’s and The Ram. The company’s Bighorn beers, brewed on premise, are common to all, but concepts and menus vary.
The big boys aren’t the only game in town, of course. More and more consumers are trying the wide variety of styles and flavors available from craft brewers and importers.
“We do see a lot more people opening their minds to beer beyond Coors Light or Bud Light,” says Kip Snider, beverage manager at the Yard House, Irvine, CA, “particularly with micros that are brewed in a lighter style. Sierra Nevada used to be about the only pale ale you could get. Now there are 50 or more.” The Yard House, with 250 tap handles in its flagship Long Beach store, has a good percentage of those, along with most other beer styles. The four-unit chain plans three more stores in the next year.
“The big three-and-a-half Bud, Coors, Miller and Sam Adams still account for the bulk of our sales, about 75 to 80%,” says Tim Johnson, beverage director at Champps Entertainment, Denver, “but craft beers like Fat Tire still continue to fill in gaps and offer opportunities to raise check averages.”
People who are drinking other than mainstream domestics seem to be looking for bigger, bolder flavors and moreunusual brands.
“The American palate is really into hops right now,” says Beatty McDonald, manager of Redbones, Somerville, MA.
“There’s a lot of movement towards Belgian style and hoppy styles, more intense flavors,” agrees Chris Black, Falling Rock Tap House, Denver. “People are looking for the next thing that will knock their socks off, like the first time they tried something beyond an industrial lager.”
Beers that are attracting consumers’ attention come from far and wide. Redbones recently ran a special on a hard-to-find 1997 Swedish porter, then featured a wheat beer the following week.
At the Yard House, Belgian ales like Hoegaarden White and Lindeman’s Framboise are becoming more popular, and Stella Artois got another tap handle because it sold so fast.
Half the beer sales at Winking Lizard Tavern come from Miller Lite and Labatt Blue, but brands like Great Lakes, Newcastle Brown, Hoegaarden and Sierra Nevada are selling well too.
“We brought in Rogue ales for our seasonal draft program six years ago,” says Lane, “and we couldn’t give it away. We brought it back this year and it’s doing wonderfully. People are ready to try big flavors.”
Dba, New York, last year’s Cheers Award winner for best independent beer program, prides itself on its selection of hand-pumped, cask-conditioned ales. Having something that unusual gives customers another reason to come.
STAYING IN CONTROL
The drop in traffic, due to the war in Iraq, a tough economy and terrible winter weather in many parts of the country, has caused many operators to find new ways to tighten their belts and stay sharp. Often, that has meant tighter inventory control and fewer offerings.
Five years ago, for example, Bennigan’s was known for its Copper Clover beer program. The program put as many as 100 brands of beer in a Bennigan’s unit, making the chain a real beer destination for customers.
“The beer game has been a question mark for Bennigan’s the last couple of years,” says Jim Barnett, beverage brand manager at the Dallas-based chain. “We lost momentum with Copper Clover because high turnover of both employees and managers meant the staff was not as well educated. We had so many brands that we couldn’t keep a quality beer in the cooler.”
Since it pulled the plug on Copper Clover four years ago, the chain has examined its overall beverage program. Copper Clover made Bennigan’s a beer destination at the expense of its spirits program, according to Barnett. The chain has since revamped its beer program, cutting inventory and is now considering reducing the number of tap handles in most units to 20 from 30. Stores now must carry a minimum of 35 beers and a maximum of 45 from an approved list of about 100 brands.
“More than 80% of our sales come from 16 products, and the top 50 account for 97% of our beer sales,” Barnett says. “Why would you want to carry more than that?”
Other operators are following similar strategies. Redbones now has 24 lines, down to 50 from 60 five years ago. Many are rotated to give customers a taste of new beers like a recently-featured white ale from Japan. The Yard House plans to put 105 tap handles in the new units it is opening in San Diego and Denver, down from 250 in existing units. Inventory will concentrate on high-demand local beers in each market.
A side benefit of good inventory control is fresher product. Because brewers such as A-B and Boston Beer have been touting freshness for several years, consumers now have higher standards for freshness.
“‘Bigger, better, fresher’ is our motto,'” RAM’s Aardahl says. “That’s one advantage of a brewpub. You can see the beer being brewed. You can smell it, too.”
But you don’t have to brew your own beer to ensure that the beer you serve is fresh. Paying attention to product rotation of both bottled and draft beer is key. And more operators are pushing draft as a fresher alternative.
“Draft continues to be the way we want to go, both from a taste and profitability standpoint,” Johnson says.
“Our draft sales are way up about five percent bucking the trend to bottles,” Lane says. “We’ve really been pushing draft, especially since we moved to all stainless components.” Winking Lizard’s stainless draft system means less likelihood of off-tastes and odors.
Bennigan’s will implement a freshness program for all units by the end of the year. “Born-on” dates on kegs will be logged when beer is delivered and again when tapped. Dates will be checked periodically, and out-of-date kegs will be pulled.
FOOD IN THE FORMULA
While new or unusual beers may bring customers through the door, often what brings them back is the food.
“It is all about the food, to be honest,” Snider says. “People at first think about our tap handles, but they come back because of our 120 menu items.”
The Yard House revamped its entire menu five years ago, creating one that represents what Snider calls “American fusion,”in which familiar American items are heavily influenced by Asian and Hawaiian cuisine. Since the menu change, customers see the operation as a restaurant, not just a bar.
“You have to have quality food or you just become a bar,” agrees Aardahl. “If you’re just a bar, then you don’t have families, and without them, you don’t have much business.”
Most of Ram International’s concepts have a “fresh sheet” that promotes daily specials. The menu insert sells beer with food, suggesting which of the brewpubs’ beers go best with each special, saving customers some guesswork.
Winking Lizard also places a lot of value on its food program. “You have to have good food to bring people in,” Lane says “People can go anywhere for a Martini or a Miller Lite.”
Winking Lizard’s competitive edge is its value orientation. Where others might charge $7.50 for a bacon cheeseburger, the Lizard charges $5.50. Special food nights give customers something to look forward to, and bar owners, a way to build repeat business. Mondays and Tuesdays, for example, are 25-cent wing nights.
At Rock Bottom Breweries and Old Chicago Restaurants, good food is a given.
“It’s all about the beer,” says Tracy Finklang, corporate beverage manager for Rock Bottom, the Denver-based company that operates both concepts. “We serve really good food, but we make a big investment in our beer selection at Old Chicago and in our brewing equipment and expertise at Rock Bottom.”
Some places, like dba in New York and New Orleans, don’t serve food at all (though dba doesn’t mind if you bring your own or even have it delivered). They are bars in the truest sense, and proud of it. In their case, patrons come not only for the ambiance and camaraderie, but for the knowledge and expertise of the staff.
SERVER IN TRAINING
That knowledge doesn’t come easily, as Bennigan’s discovered. At Champps, customers have recently been trading down from spirits to beer because of the economy, according to Johnson. Ironically, they’re drinking higher end beers, though, because of server suggestions and promotions.
The Yard House has a “411” session before each shift to go over specials, the beer of the day and the drink of the day. While the emphasis of its extensive training program is on food, every beer on the menu is described in terms of style, point of origin, flavor and alcoholic content.
With customers going out less often, good service is particularly important.
“Here it’s been business as usual, but we always work hard on improving the friendliness of knowledge of the staff,” Redbones’ McDonald says.
Those characteristics make guests more comfortable and often lead to repeat business. At Falling Rock, for example, instead of offering samplers or beer flights, bartenders help customers choose by asking questions and giving them tastes.
“A couple of questions and a taste can help customers narrow down their choices from 69 to one or two very quickly,” Black says.