Few things are hotter these days than a cold draft beer. “Draft is hot,” says Kip Snider, director of beverage for Southern California-based Yard House Tap Room, which offers 130 to 250 beers on tap, priced from $4 to $8.25 for 10-ounce pours, in 32 restaurants in 10 states. “Everybody knows that.”
Many might also know that draft consumers still skew predominantly male, but operators are also saying that women aren’t shying away from ordering something from the taps.
“I used to say [the draft consumer] was a male 21 to 50,” says Bob Barry, chief operating officer of The Greene Turtle, an Edgewater, Maryland-based, sports-bar chain with 29 locations in the Mid-Atlantic states that offers 16 to 24 draft beers priced from $3.50 to $9.75 for 16- and 22-ounce pours. “But now it’s everybody.”
The reason? “The draft beer market is changing dramatically,” Barry says, “because of the craft and import explosion.”
BY THE NUMBERS
Nearly 50 percent of the alcohol sold at Red Robin Gourmet Burgers, a Greenwood Village, Colorado-based chain with more than 450 locations across the United States and Canada, is draft beer (five to 13 taps priced from $3.49 to $5.99 for 16- and 22-ounce pours), says senior beverage manager Jill Helmerick. Of that, 60 percent is craft and imported beers.
According to the Beverage Information Group’s (BIG)—Cheers parent company—Beer Handbook 2011, draft and packaged beer sales each dropped 2.3 percent in 2010 with draft maintaining a 9.6 percent market share versus packaged beer. Draft saw 236,141 2.25-gallon cases sold in 2010, down from 241,806 in 2009. Yet the leading micro and specialty beer brands saw increases, selling 64,715 cases in 2010 compared to 57,980 in 2009, a jump of 11.6 percent, BIG reports.
Other chains have similar reports. The Greene Turtle sells 65 percent draft beer compared to 35 percent bottled beer, and beer outsells liquor 65 to 35 percent. At Minneapolis, Minnesota-based Buffalo Wild Wings, a beer-centered, sports-bar chain with 773 locations in 45 states and Canada, draft beer accounts for 85 percent of total alcoholic beverage sales, marketing and brand manager Patrick Kirk says. Most locations have 24 tap handles, serving pint and 22-ounce pours that range in price from $3 to $8.
Draft beer accounts for 25 percent of total sales at the Yard House, Snider adds, compared with 11.5 percent for spirits and 4.5 percent for wine. The only bottled beer sold at Yard House locations is nonalcoholic.
The craft beer boom has even led Red Robin to begin offering a regionally specific beer at its corporate locations this fall. “By advertising these brands on our menus we can communicate to our guests that Red Robin not only offers great draft beer, but we offer the best regional and local craft beers, as well,” Helmerick says. “We know that guests are more willing to experiment with a new beer at a restaurant, than in their home; therefore, we want to offer a great variety for our guests and give them the ability to sample beers they can’t get everywhere.”
Choice selections include Racer 5 IPA (priced from $4.99 to $5.99 for 16- to 22-ounce pours) in Northern California and Mac & Jack’s African Amber ($4.99 to $5.99) in the Northwest.
PROFIT MARGIN
Draft beer’s big three—Budweiser, Coors and Miller—continue to maintain their market lead. They remain the top sellers at The Greene Turtle and Buffalo Wild Wings. “Bud Light’s been No. 1 for a long time,” Kirk says. He also adds that, “but we certainly sell a heck of a lot of other beers.”
“When it comes to craft beer, the big players—Bud, Bud Light, Miller, Coors—those are the standard because we have a great partnership with Anheuser-Busch and the MillerCoors people,” Barry says. “Those sell extremely well and the consumers push that. They kind of demand that we carry those type of brands.”
However some craft beers can often provide a better margin, some operators say. “You can get a higher dollar per glass for a craft beer than you can for a domestic beer,” Barry says. “The domestic beer market, whether draft or bottle, becomes very competitive. If a restaurant around you is promoting $2 pint night for domestic beers, it’s very difficult to run and chase that down and maintain a profit. However, if you’re keeping unique brands and keep brands fresh enough, you’re going to sell. You may not sell as many versus the guy who’s selling the cheap pint night, but you’re certainly going to sell.
“Big brands are still on call, but the crafts are certainly moving forward. As the economy went down, people woke up and said, ‘Hey, I can got get ‘X’ amount and go home and grill.’ So we have to make something special, something that is going to want to make them come in by offering something different they can’t get at a package store,” Barry says.
Helmerick agrees. “Draft beer is about an experience,” she says. “We are focusing more on local beer offerings rather than mass domestic beers on draft since guests seem to be looking for more unique products to round out their dining experience.”
In fact, the Acadia Cafe, a 90-seat bar (75 inside, 15 on the patio) in Minneapolis has 27 beers on tap priced from $4 to $10 for pint or 12-ounce pours, that don’t include the leading brands. The major domestics were never part of Acadia’s game plan, co- Jeff Radnich says. It was all about craft.
“Craft beers have more complexity, a larger flavor profile,” Radnich says. “It serves to distinguish us from every other bar.”The bar’s most popular draft is Surly Furious ($6 a pint), an American pale ale from Brooklyn Center, Minnesota, that the menu describes as “A furiously hoppy and bitter ale—delicious and fantastic, but it will bite your tongue off.”
POPULAR STYLES
Among the most popular beer styles nationwide, restaurant executives report, are India Pale Ales. “The West Coast IPA has transformed and moved all the way to the East Coast,” Snider says. “Whereas back in the day, the East Coast for the most part was more English-style pale ales, a lot less hoppy. But that hop crowd had continued to move across the nation.”
Wheat beers are also in demand. “It’s kind of a universal beer,” Kirk says, “that men and women both like. It transcends ages, and is a great entry into the craft world.”
The most popular wheat beer at Buffalo Wild Wings is Blue Moon, a Belgian-style ale brewed in Golden, Colorado. Priced at $5 for a pint, Blue Moon is the chain’s fourth-best-selling beer on tap. At Yard House, Blue Moon ($6 a pint) has been the best-selling draft beer for the past four years. “It’s just a very approachable and refreshing brew that pleases so many different palates,” Snider says.
CHOICES … CHOICES
How do you pick which craft beer to carry? “Each individual restaurant is allowed to carry brands that are popular in their region or even in their city or from a local brewer,” Helmerick says. “This strategy gives a great balance of nationally popular brands as well as locally available beers that a guest can enjoy along with their fire-grilled burger or chicken sandwich.“
Says Kirk, “We look at the national landscape and see what beers are popular overall, based on what our demographic is. Then we pinpoint draft selections by market, state by state. We look at trends, look at sales data, and we try to mesh it all together and see what beers make more sense for us.”
And, of course, the customer has a say. “They kind of demand that we carry those types of brands,” Barry says.
PROMOTING THE DRAFT
Marketing and promoting drafts can be as easy as pulling a handle. “A lot of companies are coming out with wacky tap handles,” Barry says. “People are looking at how crazy that tap handle is and they’ll often buy a draft beer because the tap handle is interesting and they say, ‘I’d like to try that. It looks crazy enough.’”
Another good tool is to offer beer in sizes larger than pints. Most guests seem to prefer the larger pours, restaurant executives say. In July, Red Robin changed its pricing structure so that its mondo (22-ounce) is just $1 more than its 16-ounce pints. “The reason we decided to structure pricing this way is to make it easier for team members to sell mondo beers and to make our mondo beers less expensive than our 16-ounce beers,” Helmerick says.
The Greene Turtle began a “Beef Up Your Beer” program in 2009 where customers could up pints for 22-ounce pours for $1 for domestics or $1.50 for imports and crafts. The promotion is still available, although not actively promoted.
And educate your staff. “The more familiar and less intimidated each team member is with talking about beer, the better opportunity there is to begin a conversation with a guest and provide a recommendation to him or her,” Helmerick says.
The future for draft beer continues to look strong. “I can say that there’s going to be more variety and styles available to my kids,” Radnich says, “than I had when I was in college.”