It’s one of the bright spots in an otherwise somewhat dim American economy: more craft brewers are selling more beer, in more styles, than ever before.
According to the On-Premise Barometer Handbook, published by the Beverage Information Group, Cheers’ parent company, 2009 sales of craft beer reached 13.6 percent at bars and restaurants thanks to a growing presence on tap handles and beer menus.
The increased quality of craft beers coupled with diversity—more than 1,600 craft brewers making more than 75 styles of beer, according to the Brewers Association of Boulder, Colorado—brings more business to on-premise accounts. BIG’s definition of a craft brewery is one that produces two million barrels or less annually.
Fast-growing brands, according to case sales data, include Yuengling Traditional Lager, up 10.4 percent, with aggressive marketing that emphasizes its heritage as America’s oldest family-owned brewery. Fat Tire Amber Ale, from New Belgium Brewing Co. of Ft. Collins, CO, increased 15.4 percent and Sierra Nevada Brewing Co.’s Pale Ale grew by 7.4 percent. Shiner Bock from the Spoetzl Brewery, Gambrinus Company and F.X. Matt’s Saranac Amber and Golden Pale Ales are also up. Two of the Craft Brewers Alliance’s brands, Widmer Hefeweizen and Redhook ESB, show increases as well.
Sales of Boston Beer Co.’s Samuel Adams Lager helped the brewery boost revenues by 10 percent over last year. The brewery also tapped a growing trend toward beers made by two or more different brewers according to a unique recipe. Infinium Ale, the first beer from the collaboration between Boston Beer Co. and Germany’s Weihenstephan Brewery, launched this fall. Presented in a curvy, 750-ml. bottle corked and foil-wrapped bottle that looks more like wine than beer, the Infinium targets the tabletop and customers who crave limited releases.
Seasonal and Special
At the Euclid Hall Bar & Kitchen in Denver, seasonal beers and limited releases are part of the draw for customers. Tony Maciag, general manager of the two-story gastropub says, “We’re craft-centric in our approach, and having great luck with large-format, expensive bottles.” The 750-ml. bottles are priced between $20 and $60.
In his first month of operation, Maciag offered the Sierra Nevada Brewing Company’s 30th Anniversary Limited Edition Bock priced at $29.75 for the bottle, which is not printed on the beer menu, as a special release for servers to sell. “No one even remotely questions the price due to the quality of the beer,” he says of the large-format bottle program.
“Our staff loves it because the check average went up,” Maciag says, “and our customers love to feel that they are in on the secret—now they’ll come in and ask, ‘what do you have that’s special, that’s not on your beer menu?’ ” Guests typically share the larger bottles.
Euclid Hall’s menu offers beer by the numbers (think Euclidian math), starting with “Arithmetic” light beers such as North Coast Scrimshaw Pilsner ($4.75) and “Algebra” medium-bodied ales such as Lagunitas Censored ($5.75), on up to “Quantum Mechanics,” which includes those highly complex brewed such as Avery Brewing’s Reverend Quadrupel, priced at $14.75 for 22-ounce bottles.
In addition to the seasonal or special releases, Maciag also favors vintage beers, or small quantities of beer that have been aged for several years. It’s a different way for some operators to think about beer, but many bold, barrel-aged or blended strong ales do benefit from mellowing with age, he notes. “I just got 12 bottles of one-year-old Great Divide Brewing Co.’s winter seasonal, the Old Ruffian barley wine aged in Stranahan barrels. It’s a Colorado–brewed beer aged in Colorado whisky barrels, so it attracts our customers who value buying locally,” says Maciag.
Seasonal styles are currently the fastest growing craft beer category, in part due to consumers demand for variety.
“It’s a fantastic time to be selling American craft beer,” says Suzanne Schalow, formerly the beer manager of the Cambridge Common in Massachusetts, “and it’s absolutely the right time to be supporting American-made products, and ‘Oh, P.S., Americans are making some of the very best beers in the world.’ ”
Examples of these beers start with estate beers, brewed with hops or grain grown on farms owned or partially supported by the breweries, which are becoming popular as summer or fall seasonal beers. Imperial releases, the biggest flavor and considered the more extreme interpretations of beer styles, are increasing in numbers. Fresh hops have inspired many brewers to brew wet hop or harvest ales. Yet selling a beer brewed with hand-picked hops is more of hand-sell, according to Schalow.
“Server education and training is essential to selling craft beer,” Schalow said. “We began our staff training with our beer list, which includes the brewery’s description of every beer with details such as IBUs (International Bittering Units, an index of the hoppiness of the beer) and ABV.”
“Anything unusual requires a base of beer knowledge and enthusiasm on the part of the server,” says Holly Heslop, co-owner with her husband, Charlie Christopher, of the 180-seat neighborhood restaurant and bar. “We focus on tasting and sampling, because that’s really the way to get people comfortable with something new, and play up the positives.” Servers and bartenders taste and discuss potential food pairings and gain confidence to share that with customers. “Staff incentives are great, especially imaginative awards such as brewery tours and other learning experiences.”
Servers who pass the exam gain in confidence and their selling success and check averages actually go up. Having “a solid beer education is really worth the investment,” she notes.
At the Yard House, the multi-tap Irvine, CA-based chain with 27 units in 10 states, “beer guru” and beverage director Kip Snider says, “We’re set apart from other chains by the sheer number of beers, from 100 taps in our smaller units up to 250 taps, with new additions and changes every Tuesday.” Prices range from $4 to $9 per glass for craft and specialty brands, with some regional variation by unit.
Snider believes that standards for “quality brewing have increased across the board, with brands like Dogfish Head, Rogue, Stone Brewing Co. and Firestone Walker, which makes our house IPA and other house brews, all at the forefront of innovation.” He also cites the Boston Beer Co. for being the leader in seasonal releases and creativity, “starting the trend of seasonal beer releases long before other American brewers.”
“Craft is where it’s at in the Old Chicago chain,” concurs Tracy Finklang, beverage manager at Louisvillle, CO-based Rock Bottom, Inc. The 101 units of corporate and franchised Old Chicago restaurants promote sales of seasonal releases through “Mini Beer Tours,” flights of six to eight different craft beers promoted via Facebook, Twitter and email blasts. “We keep our online guests top of mind,” says Finklang, “and we have a database of a million-plus consumers who have completed the original World Beer Tour.”
The Economy and Education
While they are growing, sales of craft brands still account for less than nine percent of the overall beer market. It’s a so-called “long tail” category, with many small breweries selling higher-margin SKUs in multiple micro-markets across the United States. That can pose a challenge for chains such as Yard House, says Snider. “If we can only get one of two kegs of a limited release collaboration ale, we just can’t sell it,” says Snider, “because we don’t have a chalkboard like some of the smaller operators.”
Snider also believes there’s more room for range in serving sizes and pricing given the economy. “I’d like to applaud those beer distributors who are holding the line on price increases in the craft category and working with us as partners,” he says. Another tactic to increase check averages is to offer snacks at the bar, such as small servings of finger foods like steamed edamame, hummus dip, or deviled eggs. Introduced in the Irvine’s location in August 2010, just one month later more than 2,000 snack items were ordered at the bar accounting for nearly $9,000 in incremental sales.
“We’re blessed to have 44 percent of sales from beverages,” says Snider, “with beer accounting for 26.4 percent, spirits at 12.5 percent, wine at 4.6 percent and N/A [non-alcoholic] beverages making up the rest.”
Those numbers are impressive, but the craft category is also showing more consolidation in the last year. International Brewers United (Pyramid and Magic Hat) was acquired by North American Breweries (NAB) in August 2010. However, craft consumers may not care if a brand is owned by a holding company. “I think it’s important for people to be able to connect a face with a brewery,” says Adrienne Pierluissi, co-owner of the Sugar Maple in Milwaukee, which features 60 taps of craft beer, priced from $4 to $12 per glass. “Craft beer lovers make up a strong community. The tours that craft breweries offer are so fun, the personality of the brewer comes through and generates lasting enthusiasm.”
With just over 150 seats, the Sugar Maple provides an intimate setting for beer appreciation, built with in-house tasting classes, special events like the annual barley wine festival and live music. “We have lots of musicians happy to come up from Chicago for a gig at the Sugar Maple because our beer selection is a big draw with the performers,” says Pierluissi.
Will the diversity of American craft beer and extreme flavors overwhelm on-premise consumers? There’s been a drive toward “session beers,” low-gravity and more drinkable brews. With the advent of collaborative ventures such as Tenth and Blake of MillerCoors, there is growth in craft beer marketing sure to keep the community of beer drinkers growing.