Greg Engert remembers when the typical beer drinker was a middle-aged white male, but these days that definition has expanded considerably.
“It’s all ages, all sorts of people,” says the beer director of the Neighborhood Restaurant Group, which operates the Washington, D.C.-area restaurants Rustico, Birch & Barley and ChurchKey. “It’s not just former wine drinkers or men or women. It’s spread out to a much wider audience.”
The reason is craft beers, which Beverage Information Group, Cheers’ parent company, defines as being produced in quantities of less than two million annually.
Beer sales might be slumping overall: BIG’s Beer Handbook 2011 reported a 2.3 percent drop in 2010 from 2009 in total domestic sales for draft and packaged beer—but sales for the leading top micro and specialty brands jumped 11.6 percent over the same period. The biggest increases came from Blue Moon, distributed by MillerCoors, which jumped 30.4 percent, and New Belgium Brewing’s Fat Tire Amber Ale, which rose 15 percent. Sierra Nevada Brewing’s Sierra Nevada Pale Ale (9 percent) and Boston Beer’s Samuel Adams Boston Lager (7.7 percent) also had significant increases. The top five—Blue Moon, Samuel Adams Boston Lager, Sierra Nevada Pale Ale, Fat Tire and Shiner Bock—remained the same in 2010 as they were in 2009.
“People really have a thirst for something different all the time,” says Adam Sandoval, who manages the 110-seat Red Bird Restaurant, a fine-dining restaurant and wine bar in downtown Missoula, Montana. The restaurant has six tap handles—all craft beers from Montana or the Northwest—priced at $4 for 16-ounce pours and roughly 70 bottled beers, about 80 percent craft, priced from $3 to $35.
Something for Everyone
A wide array of flavor profiles—seasonal, fruit-flavored, India Pale Ales, porters, stouts, pilsners, cask ales, beers aged in wine barrels—offers something for every palate.
“It’s everything across the spectrum,” says Kip Snider, director of beverage for Southern California-based Yard House Tap Room, which offers roughly 490 beer brands—priced from $4 to $8.25 for 10-ounce pours—across its 32 restaurants in 10 states, with approximately 65 percent of those craft beers. “And that opens the door to a lot more people being intrigued by beer.”
More women are drinking craft beers, many operators say. “There was a time when you’d approach females and ask them if they’re interested in beer, and their reply was, ‘I don’t like beer,’” Snider says. “And now you can’t say that without going through a spectrum of tastings and realize what they thought of beer is no longer what beer is today.”
Most restaurant executives said the rise of craft beer is a mixture of better tasting beers and improved marketing and promotion by the distributors and manufacturers. Engert, however, disagrees. “I don’t think it has to do with merchandising at all,” he says.
All of the restaurant group’s beers are craft. Birch & Barley and ChurchKey share a beer list that includes 50 drafts—priced $5 to $13 for 10-, 12-, 14- and 16-ounce pours–in constant rotation, 500 bottles ($5 to $16) and five cask ales ($6 to $10 for 10-, 12-, 14- and 16-ounce pours).
“There are a million factors,” Engert adds. “It’s a steady turn of the American public away from convenience and to flavor again. And realizing that craft beer is an affordable luxury. It’s not so far away from the macro brands that it lands in a different fiscal category.”
Big breweries keep raising the cost of their beers, says James Kramer, vice president of beverage operations for Houston-based Landry’s Inc., which manages 40 concepts, including Claim Jumper with 37 locations across the United States, and Saltgrass Steak House, with 47 locations in Texas, Colorado, Louisiana, Oklahoma and Nevada. “So you’re starting to see a shrinking of the gap in price between domestic and some of these craft beers. For a guest or a consumer going into the retail segment, they can get so much more for a little bit more and get a much better beer. The value perception is helping to drive that a little bit, too.”
On average, Claim Jumper carries six to 12 craft beers while Saltgrass carries three to four, priced from $3.95 to $4.95 for bottles and pint pours at both locations. Saltgrass’ best-selling craft is Shiner, Texas-brewed Shiner Bock, priced at $4.25 a pint, which Kramer credits to the chain’s Texas roots.
The bigger factor, Kramer says, might be the changing American palate. “I see it like what the wine industry went through,” Kramer says. “People getting out and experimenting, trying new things, learning to appreciate the differences and nuances of wine. I think that’s happening on the beer side as well. I feel the palate and the expectation of the consumer is becoming a lot more than it was a few years ago.”
Another key factor driving the growth in craft beers is a focus or interest on buying local.
“We get a lot of tourist traffic through here,” Sandoval says, “and people come and they specifically seek out the local microbrews. They want to hear about what they’re doing in the local breweries.”
Popular local beers, Sandoval says, include Harvest Moon’s Belgian White, Bayern’s Pilsner and Amber, Big Sky’s IPAs and seasonal beers (all $3 on tap), and Kettle House’s 16-ounce cans ($4) of IPAs, Pale Ales and Scotch Ales. Harvest Moon is located in Belt, about 188 miles from Missoula. The other breweries are also Missoula-based.
Engert also sees an interest in local brews, noting that beers from D.C., such as Brau, Port City and Lost Rhino brewing companies—priced $5 to $6—are popular. It makes sense, Engert says, to stock local beers.
“It’s good from a business aspect,” he says. “They’ll be fresh, and sometimes they’re self-distributed so they come in at a better price point than other beers.”
Claim Jumper Restaurants can add, upon management approval, a beer, often local for added flexibility, Kramer says, adding that the chain’s top-selling beers are the CJ Draft Beers, which are produced, depending on the restaurant’s location, by Firestone, Bayhawk or Leinenkugel.
While pints are the best-selling size, executives say, many establishments are introducing tasting programs.
This past summer, Yard House started a “Shorty” program, featuring half-pint pours, priced from $2.50 to $3.50. “Rather than having one or two, sometimes three pints in our establishment,” Snider says, “now they can have five half-pints and do a little bit more sampling. That’s allowed people to broaden and try different beers.”
ChurchKey and Birch & Barley offer four-ounce tastings priced from $6 to$10. “It’s feeding the consumer’s interest in tasting and experimenting,” Engert says. “With so much new stuff coming out, people are coming in wanting new stuff all the time.”
Craft Takes Work
Yet focusing on craft beers is not for everyone. “It’s going to be based on the volume of people coming in, for one thing,” Sandoval says. “We have a fine-dining restaurant and a wine bar, and if we just had fine-dining, we wouldn’t be able to do what we’re doing now at all.”
Adds Engert, “You don’t hook up all these crazy new craft beers just for the sake of doing it. You have to educate your staff, update your menus, clean your draft lines extensively. But if you work hard at this every day, I think you’ll have more people drinking your beer than you would have with the macros. So while the profit margin may be slimmer, it might be better because of your volume of consumers.”
Craft beers, restaurateurs say, are not going away. “It’s on fire right now,” confirms Snider. “When does it stop? Who knows? It’s doing really well for us, and that segment is continuously growing, and I think it’s going to continue on for years to come.”
Adds Engert, “What we think of craft beer today is going to be kind of what beer is very soon. There’s not going to be a distinction. The macros will go on, but I think the craft beers are going to crowd out the national macro beers.” So the future continues to look bright for craft.