Running a Beer Program

Every good bar and restaurant should have a decent beer program.  Your beer program, in simplest terms, is the matter of managing your beer menu, pricing, and supply.  It also involves special events, pairings, and tap takeovers.  Now that craft beer is pretty much cemented as an accepted part of American life, there are a lot better beer programs out there.  There also aren’t enough.

I say this first as just someone who cares about beer, but I also sell beer to bars.  In some aspects I also already manage a beer program by way of managing our production, since we only sell what we make in our taproom.  I try to produce the best beer I can and follow the latest trends.  The problem for me lies in the fact that there are not enough good beer programs out there to support even a small brewery such as us.  Inevitably, myself or our rep has to get in front of someone that doesn’t really know how to manage the beer side of their bar and convince him or her to put our beer on tap.  In a situation like this, which is quite common, the strengths of your beer are not as relevant.  The person may not be able to notice the quality of the beer, but they also might not be able to understand the velocity of the beer–the speed in which it sells.  We only distribute high velocity styles.  Lastly, they may fixate on the price–ours is higher than larger breweries, but not by much, and certainly not by enough to break the bank for a high-end restaurant.

I try to be as patient as I can and educate people about the beers we do.  After all, craft beer is still new to some bar managers, or they may not like beer that much, and that’s fine.  But all of this makes me long to manage my own beer program.  So how do you run a good beer program?  Here are the major problems in beer retail right now, and how to fix them

Constant rotation

Dear God, I could rant about this for several posts.  STOP ROTATING YOUR BEER CONSTANTLY.   Believe it or not, customers are not as obsessed with every tap at your bar being different each day as you think.  You might be reading this and thinking “hey, I like trying new beers.”  I do, too.  But most bars have ten taps or more, and keeping some consistent taps still gives you plenty of room to rotate.

I actually learned this myself first through our own taproom.  Once we settled on three year-round beers, they consistently became our top-selling beers each night.  Brewery taproom customers like to try new stuff even more-so than bar patrons, and yet people still choose Heart and Soul, our core IPA, enough to outsell everything else.  I promise that plenty of people want some static menu items, and I have personally experienced this.

The real issue with rotating beers is worse, though.  You rotate superior beers out for inferior ones.  By this, I mean for example, rotating one brand of a specific style for another brand of the same specific style, but not as good.  You had a good IPA on tap, but decided to change it out for one that isn’t as good.  Why?  Would a restaurant ever replace its proven roasted chicken dish with the same dish, but with overcooked, unseasoned chicken?  It makes no sense.  By all means, rotate seasonal beers, sours, experimental beers, or barrel-aged stuff, but it’s not a bad thing to pick a few cores and stick with them.

The last issue with this is it makes it all the more difficult to predict revenue, keep beer in stock, and keep your menu up to date.  All in all, it’s a way to make life more difficult.

 

Pricing

Restaurant margins are thin, and of course price is important.  But restaurants also make the most money on alcohol sales, and if you run a good beer program, you’ll reap the rewards.  This is sort of a tragedy of the commons situation, where short-term cost savings creates a stagnant, inferior beer program that fails to please customers or draw them in.

Most craft beer falls between $100-$400 for a half barrel keg.  Although that may seem like a big range, the median price lies somewhere around $160 a half barrel.  Since a half barrel is roughly 120 pints, that gives you usually around $700 in pours per keg.  As you can see, that’s a pretty wide margin, which should give you some leeway to spring for some more expensive kegs.  You can have some loss leader-esque kegs, where you spend more but don’t necessarily sell it for too much more, and some cheaper kegs that make you more money, and thusly, things balance out.

Obsessing over price, though, leads to airport bar-style taplists that ensure your beer program is only going to be minimally sufficient and nothing more.  If you’re a decent restaurant, you should have a decent taplist.  These days, your patrons are going to be expecting this.

You can structure your prices to make sense and still make you money.  Price laddering is a very effective tool.  Having a $5 pilsner or $6 IPA allows you to put a $12 imported sour on the menu, and not have that be a problem for your patrons or your bottom line.  We do this all the time in the taproom.  Our big, barrel-aged stuff costs more, but no one has a problem with that as long as there is a cheaper option.  On this note, having high prices on everything and taking advantage of what may be a captive audience is very lame and in these highly competitive times is a good way to price yourself out of peoples’ good graces.

 

Too many taps

Beer is a perishable product.  Each beer you have on tap should serve a specific purpose, and you should be selling it quickly and making money off it.  I think at this point most people have figured this out, but sixty tap bars that are not craft beer Meccas are usually not selling their beer quick enough.  Furthermore, there are “duplicate” beers in the mix–essentially two or more of a very similar beer that fulfills the same menu need, i.e. both Stone IPA, Lagunitas IPA, and Sculpin on tap.

I have seen bars with 8 taps do far more than places with three times that many.  Choosing the right beers to satisfy customers can be done at almost any size.  We do this in the taproom constantly, with a pilsner, sour, IPA, rotating IPA, double IPA, rotating session, rotating Belgian, and BA stout on at all times.

 

The good news is that more and more people are learning about good beer and things are only going to get better.  I see so many cool concept restaurants replacing chains, with educated beer buyers looking for good local stuff.  We are also currently exploring opening a restaurant and craft beer bar, and this has me very excited with the prospect of directing a beer program of my own outside of our taproom.  What would my taplist look like?  Here’s an example of something I might put together.

Year-round:

Eggenberg Pils

Crooked Run Heart and Soul IPA

Weihenstephaner Hefeweizen

Crooked Run Raspberry Empress Sour IPA

Saison Dupont (when available)

 

Rotating:

Rotating Crooked Run

Rotating local IPA

Rotating local IPA

Union Blackwing

Allagash Limited sour

Aslin Macarooned

Commonwealth Tapestry

Oxbow Cletus

Maine Beer Co Dinner

Graft Farm Flor

Charm City Meadworks Wildflower Mead

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About crookedrunbrewing

Brewmaster
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