Given the state of the economy, domestic beer sales figure to be strong. Since domestic brews often cost less, Americans frequently tend to support the home team and drink local. Innovative promotions, various size options and a variety of on-premise marketing campaigns and tie-ins have also helped to drive domestic sales.
Yet total beer consumption on-premise fell by 1.4 percent in 2009, according to the Beverage Information Group, Cheers’ parent company. Despite the dip, sales of American domestic beer—especially light beer—account for the majority of beer sold. Retro appeal explains some surprising stars, such as Keystone Light, which is up 12.7 percent, according to The Handbook Advance 2010, also published by BIG. The heavy-hitting quartet of Bud Light, Budweiser, Coors Light and Miller Lite continue to lead the domestic sales lineup as expected.
Bob Barry, chief operating officer of the Greene Turtle chain of sports bars, with 25 units in Washington D.C., Delaware, Maryland and Virgina, says, “We support domestic brands through tie-ins with televised sporting events and their beer sponsors. We want to bring in customers for several hours to enjoy the game and a few drinks and appetizers, followed by dinner.”
Greene Turtle began its “Beef up your Beer” campaign two years ago, offering a 22-ounce serving for just fifty cents more than the 16-ounce price on targeted domestic brands to kick-off the campaign. They currently offer domestic drafts in 22-ounce servings as well, for one dollar more. “We rotate through the domestic brands with this campaign,” says Barry. Prices vary by location, averaging around $3.50 for a 16-ounce domestic, $4.50 for a 22-ounce domestic. The Greene Turtle saw an approximately 10 percent increase in beer sales with this campaign.
In the upper Midwest, the Green Mill chain is a privately held St. Paul, Minnesota-based casual dining franchise with 28 units in Minnesota, Kansas, North Dakota and Wisconsin. All offer house-made pizzas, priced from $11.49 to $20 and up, and casual food matched with domestic beer. Average annual sales are roughly $2.2 million per unit. “Beer sales are up to 15 percent of sales chain wide, with two percent of sales from wine and spirits from six to seven percent, depending on location,” says CEO Paul Dzubnar. The chain carries 32 beers on average per location, priced from $3.50 for domestic taps to $5 for imports.
“We have put more craft beers on tap because the trend is going that way and sales of a craft brand will increase the check average,” says Dzubnar. “However, our greatest volume still rests in our domestic beer sales, with the number-one sales increase over last year being Coors Light.”
On-premise promotions include an active Mug Club with more than 7,000 members, offering loyalty benefits such as special pricing on beer—where legal—promotional check inserts, table-top displays and group activities including chartered bus trips to see baseball’s Minnesota Twins play. Expansion plans include nearby states such as Iowa, and some suburban markets in the Southwest suburbs of Minneapolis. They also opened a new concept, the Twisted Fork Grille, which offers more unique craft beer brands like Eel River Organic Blonde Ale and Moylan’s Hopsickle. The Twisted Fork offers 32 brands of beer, priced from $4 to $8 for domestics.
Supporting the Home Team
At independent venues, a range of regional and craft domestic brands are also up in sales. In Boston, the one-year-old Post 390 Restaurant offers 47 brands of beer, plus innovative twists on comfort fare, such as Beer and Bacon Mac’n’Cheese, priced at $15. And the three page beer menu also prominently features classics such as Miller Lite on draft and Bud Light in bottles among the 35 bottled brands listed, priced from $3.75 to $14. Brahm Callahan, beverage director at Post 390 says, “We’re in the Back Bay Financial District and most business people like light beer.”
Callahan continues, “Our beverage sales are 25 percent beer, 25 [percent] spirits and 50 [percent] wine. We do a special promotion called ‘Tap Wars’ with three brewers competing on draft in a single style: the [brand that receives the] majority vote wins a draft line presence for a month. At the end of every quarter, we will do a beer dinner with whichever brand is the volume best-seller among the featured styles, such as IPAs, hefeweiss and Oktoberfests.” Tap Wars flight prices vary by the featured brands, ranging from $8.50 to $10 for three samples. Regional brands include Harpoon Brewery (IPA, $6), Berkshire Brewing Co. (Steel Rail Ale, $5.50) and value-priced 16-ounce cans of Narragansett Lager ($3.75) from Rhode Island.
Even quick service restaurants are adding value-priced domestic beer to their lineups. In Minneapolis, the Smashburger chain of 73 units offers burgers with customized condiments and local brews. “We want to be the favorite place for a burger and a beer in every city we’re located,” says Smashburger’s founder, Tom Ryan.
Research with customers and distributors helps each unit discover which bottles to choose for the “Bucket of Beer” program. “Typically, the unit offers a nationally distributed mainstream beer, a light beer and the remaining choices are local,” says Ryan. The price is $2.99 for a single beer and $9.99 for a bucket of four bottles.
“Beer sales represent about three percent of our revenue and we plan to boost that percentage,” adds Ryan, “because we fit the occasion when people want to grab a burger and a beer for less than $10.” Each licensed unit conducts in-house taste testing for beer styles, “so we feature stouts in some markets, lime-accented beers in the Southwest and IPAs in other states,” adds Ryan. “Even retro beer brands do very well, such as the Grain Belt Premium in Minnesota,” he says.
Local tastes are highlighted at the Horse & Plow restaurant in the American Club, the four-star resort owned and operated by the Kohler Company of Kohler, Wisconsin. Kohler’s group director of culinary arts, Ulrich Koberstein says, “We do a great business with all the domestic beer brands, but a lot of the excitement is in the craft beer segment.” The operation generally carries more than 100 brands of beer, priced from $3.50 for Miller Lite, to $22 for a 22-ounce bottle of Stone Brewing Co. Old Guardian Barley Wine.
Sean McMullen, manager of the Horse & Plow, adds, “We offer several ‘gateway beers,’ which feature quality combined with low gravity and less aggressive hopping.” The gateway beers appeal to fans of national lagers as flavorful, low-impact alternatives.
The Horse & Plow gathers customers from both resort lodging at the 237 rooms of the American Club and day visitors to the nearby golf courses, including Whistling Straits, site of the 2010 PGA Championship. An annual beer festival that has been running for two years also draws fans of craft beer, replete with an amateur “Beer Cup” played on the Blackwolf Run golf course. Year-round beer dinners bring brewmasters to the Horse & Plow to speak with patrons during guided tastings. The Beer Maker Dinner Series takes place five to six times per year, with tickets ranging from $50 to $60. “We’ve had a five percent increase in beer sales over last year,” adds Koberstein.
“It’s possible now to build an entire gourmet meal around the flavors of specialty beer,” says Koberstein, “and we test menus by picking just the right beer to complement the food.”
A West Coast Take
In San Francisco, the 33-unit boutique hotel chain Joie de Vivre (JDV) Hospitality has experienced fantastic growth in terms of its beer sales. Morgan Plant, vice president of food and beverage for the chain, says, “As a company, beer now accounts for 20 percent of beverage sales overall, and just a few years ago our sales of beer matched coffee sales. In our casual restaurant and bar accounts the domestics are very strong, with about 35 percent of beverage sales.” The chain features seven to 20 beers on average at each location, priced from $3 to $12.
In autumn, 143-room Hotel Durant in Berkeley, CA, converts its parking lot into the largest tailgate for the University of California, Berkeley, drawing in alumni by the busload and garnering between $80,000 and $100,000 for each of the eight home football games. “It’s truly a staggering response to domestic beer,” says Plant.
Craft brewers play an important role at the Hotel Durant’s restaurant, Henry’s as well, whose chef Eddie Blyden honed his skills at top San Francisco brewpubs such as the 21st Amendment. “We focus on the unique California craft beers at Henry’s, but other units do a fantastic job with more mainstream beers,” says Plant. The restaurant features tavern staples such as burgers ($12), plus European pub classics such as steak frites ($25) and braised rabbit with spaetzel and mustard sauce ($17).
The Durant is hardly alone in its successful focus on promoting local beers. For example, the Huntington Beach Mediterranean restaurant, Zimzala—which is part of JDV—features a happy hour with $2 drafts of Primo, a lager first made famous in Hawaii and now owned by Pabst. With events such as the 2010 U.S. Open of Surfing competition at the nearby beaches, it’s a natural fit for Primo, which is the best-seller among all food and beverage choices at Zimzala. It’s one of many signs that domestic beer sales are hanging tough and riding out the recession.