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Beer Money - A Special Message to Bar and Restaurant Owners

Nov 14, 2014 -- 1:02pm

When you own a bar or restaurant, you make decisions every day that either put money in your pocket, or take money out of your pocket. Hopefully, the money that is taken out of your pocket is the kind that falls under the “you gotta spend money to make money” kind. Having the right selection of beer for your customers can prove profitable if done right. If done wrong, sales will languish and before you know it and you’ll be thinking of your exit strategy.

I recently gave a presentation to students in a Bar Management class for the Hospitality program at Northern Arizona University. I like to think of them as the future beer buyers. We looked at data about the current beer industry sales and trends for grocery stores and different types of bars restaurants. The most important part of this presentation covers the decisions they will likely have to face when given the opportunity to be responsible for buying beer. Specifically draft beer. I start off by reminding them that it’s all about the customers. The customers they have and want to keep, or the customers they want to get in those seats spending money. That’s really what a successful business is all about.  Since beer comprises about 50% of all alcohol beverage sales, I tell them they better get it right. Their career and your bottom line as a restaurant / bar owner, depends on it.

Beer can be a highly profitable part of a bar or restaurant’s business and draft beer even more so. In the class, I explain that there is no single magic formula on what beer they should have in their draft line-up. I tell them to keep up with the industry and be knowledgeable about the current trends so they can be prepared to make the right decisions.

I run through different scenarios they might come across and I explain the positives and negatives of each.

Sports Bar - Even though I love more complex and flavorful beers, I explained that it is perfectly fine to have representation of the large multinational brewers which tend to be less complex and less flavorful. These beers are sessionable and made for the masses. In some business models, you want to appeal to the masses don’t you? Even though it is the most popular style, don’t tie up your draft handles with all light beers. Pick the best selling one in the market. There are a lot of potential customers in that group and you bring them in with special pricing or promotions, usually revolving around sporting events. If you have a beer wholesaler that supports you in your efforts with promotions, samplings and interaction with consumers, even better. A potential negative is that you are distancing those craft beer enthusiasts who might just as well want to enjoy some wings, sporting event and also have a wide range of craft beers available to them.

Craft Beer Bar Rotating Tap List - A rotating tap list of nothing but craft and special imports can be a successful model as well. The margins are great and you can develop a loyal following. On the other hand, you might be alienating the 80 percent of the population whose palate is not quite ready for those beers and maybe never will be. There is a challenge to creating a good selection of rotating craft beers. Having the right selection of styles from the right mix of brewers is one of the most difficult things a craft beer bar can do. I highly discourage the buyer for a craft beer bar putting on tap only the beers that they like. (If I don’t like it, it doesn’t go on tap.) The only repeat customers you will have are you, yourself and you. Everyone has a different palate and there are so many styles available now. Solicit feedback from your regulars as to what you should feature and don’t fall into the trap of just putting on tap the beers you got from a special deal with your distributor. If you are getting something at a deep discount, there is a reason. Maybe they couldn’t sell it anywhere else?

Local Beer Only - There are some bars that might make only local beers available. Localism is a huge trend right now. Pair local food with local beer and you get a double win! But depending on the quality of the breweries in your area, you might just be stuck with a selection of mediocre beers that have varying quality issues. Or your customers might get fatigued with the options because they are craft beer enthusiasts and probably frequent those breweries and already very familiar with their beers.

Fine Dining – Develop a beer list around your food. Make solid beer and food pairing recommendations. Have a good beer menu and have your staff trained on the proper service of beer. Fine food and fine beer will equate to a fine experience for your customers. There are no negatives to this one.

-John Gestautas, Keg Keeper
Certified Cicerone®
Master Brewers Association of America Beer Steward

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