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Adding a brewing operation to a restaurant can be costly, but the trade-off is complete creative control and expanded market exposure.

Restaurants Explore the Benefits of Crafting Their Own Beer

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From collaborations with local breweries to setting up their own systems on site, restaurants find value in house beer.
By Beth Demmon October 2018 Beer

Beer is on the rise, and restaurants are taking note. Not only are chains like Uno Pizzeria & Grill betting big by boosting craft beer programs, but many establishments like Tribute Pizza in San Diego and Manresa in Los Gatos, California, are also collaborating with local breweries to create exclusive house beers. And others like farm-to-table cafe Saltbox Kitchen in Concord, Massachusetts, are taking it a step further by building breweries in their restaurant space in order to brew their own in-house.

Collaborate

“There are no drawbacks,” says Matthew Lyons, owner of Tribute Pizza in the beer-saturated North Park neighborhood of San Diego. The restaurant’s collaboration with nearby Home Brewing Co. is a 4.6 percent ABV blonde ale dubbed Your Favorite Beer that has been a permanent fixture on its beer menu for two years. “It has benefitted both of our brands, I think. We support each other and send business to each other, and our bond is only strengthening over time,” Lyons says.

George Thornton, owner of Home Brewing Co., shares Lyons’ sentiment. “Working with a like-minded business in our same neighborhood has been a great relationship to have, especially as a small brand.”

However, there are differing Alcoholic Beverage Control restrictions on these types of collaborations, Thornton warns. In California, white-labeling a brewery’s beer as a restaurant’s own is fine, but calling it a “house” beer is not if it’s not brewed on-premises. He suggests checking local and state regulations as well as state distribution rules.

While the benefits for sharing overlapping business segments are apparent, it’s also possible to acquire completely new customers with collaboration in unexpected settings. Manresa, a Michelin-starred restaurant, is the sole provider of Mercy, Mercy, a 5.3 percent ABV saison/farmhouse ale brewed by Sante Adairius Rustic Ales.

“A lot of people do not expect to get a cloudy, sour beer poured as part of their flight for an expensive Michelin-three-starred meal, so there is a major element of surprise,” says Jim Rollston, wine director at Manresa. “It frequently converts people who are not beer drinkers. We have [also] had a few dedicated Sante Adairius fans come to the restaurant to have it, knowing that this is generally the only place to experience it.” (Mercy, Mercy is almost always exclusive to Manresa, but is sporadically available in the Sante Adairius Rustic Ales taproom.)

Elevating beer to the level of wine and spirits has paid off for Manresa, introducing the business to an entirely new demographic of consumers willing to spend considerable sums on food and drink. Plus, both businesses have the potential to double their clientele without any additional marketing dollars.

Brew-I-Y

With demand for craft beer variety constantly growing, many full-service restaurants are opting to add small brewing systems of their own in order to maintain full control over the process. These brewpub-style establishments aren’t new. The early 1990s saw a boom of modern brewpubs across the country, and the growth has continued to rise in the decades since. This is especially thanks to regulations limiting the alcohol industry rolling back nationwide over the past two decades, which has led to companies like SmartBrew and BrewFirst. Their goal? To design and create custom systems for restaurants looking to add in-house brewing without the cost of a complete brewery setup.

Jeff Wilson, vice president of sales and marketing at SmartBrew, explains the value: “While restaurants saw a decline of about 2 percent in sales last year, at-brewery traffic and sales enjoyed a ridiculous increase of almost 20 percent. Customers would prefer to stay in one place to have a full restaurant experience,” he says.

Saltbox Kitchen’s 10-gallon homebrew system was added a year after opening and regularly churns out ales and seasonal taps that coordinate with the crops that the restaurant’s farm produces. Dan Gregoire, general manager and brewer, says the restaurant’s start-up cost was around $10,000–$15,000, but admits that number doesn’t include the build-out or additional fermenters Saltbox has since added. The restaurant’s system is considered a “nano-brewery,” one of the smallest available, thus one of the least expensive. By contrast, a seven-barrel system starts at around $100,000 and goes up from there. And that doesn’t factor in the space needed, ingredients, or supplementary equipment like kegs, hoses, etc., making it expensive for smaller ventures.

But the ability for restaurants to brew what they want, when they want, and how they want gives them flexibility and control to offer a full spectrum of house-made fare to customers. “Having a brewery in house is another way to spread all of what Saltbox is,” Gregoire says.