Restaurant Bars Grow with Craft Beer on Tap | Food Newsfeed
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Courtesy of Harpoon Brewery

Crafting the Future of Draft

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Putting craft beers on tap pulls margins up.
By Lew Bryson March 2013 Bar Management

Today’s craft beer drinkers have some characteristics that should definitely interest you. They are increasing in number; they are young (more than half are in the 21–44-year-old bracket); more than three-quarters of them earn more than $50,000 a year; and almost half have a college degree. They are mostly male, though the number of women in the group is steadily increasing. Their average check is $16 more than a mainstream, “premium” beer drinker spends; and while both drinkers tip about 17 percent, the craft drinker is tipping on a higher base.

Sounds good, right? But keep in mind: The craft drinker’s first question to their server is usually, “What’s on tap?”

Drew Huerter is the chief brewer at Deep Ellum Brewing in Dallas, a brewery just over a year old, and he already knows how it works. “The people who want to spend money are going to be asking ‘What’s on your draft list, what’s new or special?’” he says, because they know that’s where the interesting stuff’s likely to be.

Don’t think that just because craft brands are small or local that they’re insignificant—craft brands are actually exploding, and taking serious share from established national brands.

“The largest 15 beer brands on-premise account for 61 percent of retail sales,” said Peter Reidhead, vice president of strategy at GuestMetrics. “This means the long ‘tail’ of nearly 3,400 smaller beer brands accounts for about 40 percent of sales in the on-premise space.”

That’s huge; and these brands skew much more towards draft.

Craft on Draft

Overall, draft accounts for about 10 percent of total beer sales nationally, but since the beginning of craft brewing, craft beer sales have represented an even higher percentage of draft sales.

“We started out selling only draft, 100 percent,” recalls Rich Doyle, co-founder of Harpoon, the large Boston-based craft brewer founded in 1986. “We’ve always focused on it; there’s always been a strong draft market in New England. I love draft beer; it’s really fresh, it tastes great.”

Is draft really that different? The folks at America’s oldest brewery, the booming D.G. Yuengling & Son of Pottsville, Pennsylvania, certainly think so. Like most brewers, they love draft.

“It provides an affordable and immediate way for a consumer to try your product,” says Lou Romano, the brewer’s director of marketing and wholesale development, “because when it’s served cold, clean, and fresh, it can be the greatest representation of your beer available.”

Does draft craft beer sell in fine restaurants, or just in specialty beer bars? That’s a question that’s largely been answered by the gastropub movement. If people want the private label Flemish red ale with duck breast salad and moules-frites at places like Monk’s Café in Philadelphia, or Russian River Consecration ale with house charcuterie and Dungeness crab and leek risotto at Higgins in Portland, Oregon, it’s clear that there’s an interest in fine beer to go with fine food.

Draft was a raison d’être for Philadelphia’s acclaimed Alla Spina gastropub—the name is Italian for “from the tap.” Beverage director Steve Wildy explains that the new wave of Italian craft beers garnered interest in owner-chef Marc Vetri’s other restaurants. “When the Italian stuff came out, we embraced it; Alla Spina became feasible when the Italian drafts started coming in. But we have an emphasis on local foods, so ignoring local beer would be wrong.” They now have 22 taps to match beer areas to food areas, including a rotating series of house beers brewed by nearby Victory Brewing.

Wildy gave credit to Chicago’s The Publican for inspiration on their carefully curated draft selection; the two restaurants just collaborated with Victory on a beer made with chestnuts. The Publican’s beer director, Michael McAvena, describes how he selects beers for their 12 draft lines: “We focus on quality draft beers that we can sell through; 12 seems to be the magic number for us. We rotate them all the time. We’ll have a blonde beer, a German-type wheat, and a sour beer. We always try to have a smoked beer, something roasty, and we usually have two IPAs. We’ve had Three Floyds’ Zombie Dust on for the past few months and it’s been the biggest-selling item in the restaurant. Not [just] biggest-selling beer, biggest-selling item.”

Pouring Profit

That kind of reception illustrates why fine dining’s slow adoption of craft beer—whether American or imported—has been frustrating to craft drinkers and, naturally, craft brewers. “Restaurant operators make huge investments to portray quality,” explains Joel Armato, sales manager for New Holland Brewing, of Holland, Michigan. “You invest in your menu, your décor, your service staff—all to portray to your customer the lengths you go to procure the best, to prepare it, to present it. You’ll have an exciting cocktail menu, a detailed wine list, there’s such care that goes into the whole thing. And then you have…some beer, you know, ‘In case you should want one.’ Why, when craft beer lines up on pricing with everything in your restaurant?”

Fair enough, but draft is a huge investment: equipment, space, cleaning, training. True, but turn that on its head. “You can put a lot more beer in the same space,” Deep Ellum’s Huerter says, noting that a half barrel takes up much less space than the seven cases of bottles it replaces. “You don’t have to have it right at the bar, either—just run a longer line.”

Cleaning and training have to be done right, but you’re not on your own there. “In most areas, there’s at least one wholesaler who’s prepared to help, especially with the training,” says New Holland’s Armato. “They’re looking to build relationships to help you prosper, not just move beer off the floor once.”

Best of all, you’ll make it back quickly. Draft is priced lower, reflecting the lower costs of packaging, and once you get your system and servers dialed in, the margins on draft are much more attractive than bottles.