We don’t have to travel far back in our beer time machine to revisit the year when Goose Island Beer Co. still had only one brewpub, its venerable but not exactly cutting-edge Clybourn Street location. That was 2014, three years after Goose Island’s sale to Anheuser-Busch InBev. Just a few years later, the brewery has seven locations including pubs and taphouses in London, Sao Paolo, Toronto, Shanghai, Seoul and one on the way for Philadelphia, with more future openings likely. Right now in Shanghai, a pub visitor could be snacking on Sofie-battered baby squid washed down Wujiang Porter while the Clybourn brewpub sits shuttered, waiting for a remodel that’s slated to be complete in the coming months.
According to Goose Island International president Ken Stout, the biggest fan of all these new outposts is brewery founder John Hall himself.
“He was out in Shanghai and Seoul this year and he came back positively stoked about the quality of the beer and food, the design, the service. He was like, ‘The new Clybourn has to be as good as Soeul.’”
Wrap your head around that. Also wrap your head around Stone Brewing’s campus in Berlin, BrewDog’s dozens of global pubs and breweries, a coming-soon brewpub in Lincoln, Nebraska from West Coast stalwart Green Flash Brewing Co.; a forthcoming Chicago brewpub from Ballast Point Brewery; and an in-planning Maryland brewery and taproom for Guinness; a joint Victory/Southern Tier brewery/taphouse in Charlotte, North Carolina; not to mention 10 Barrel’s six spots including Denver and San Diego.
In the past five years, breweries have been playing at a giant Risk board, pushing brewpubs to corners of the country and world that seem to drift further and further from their original territories.
In 2017, taprooms rule. More breweries are opting to focus on taproom sales, which usually increase profits by removing the distributor’s cut. As a bonus, drinkers who visit a brewery are more likely to buy that brewery’s beer on shelves or from a bar, too. Larger, nationally distributed breweries are realizing that it’s crucial to foster regional and local connections to drinkers, who are presented with ever more competition for their beer bucks. A brewery, even if it’s owned by a larger company, can become your neighborhood hangout, complete with a regular bartender who knows your name and remembers that you always order the chicken pizza.
“I see the larger [breweries] expanding into these spaces to make them relevant in those markets and say ‘We employ here, we’re part of the community, we give back and we’re local,’” says Kimberly Clements, a beer-industry consultant and partner at Pints LLC. “They can finally say all those things, which does make them local to that community.”
Taprooms have a dual function in 2017: They’re a source of revenue, but they’re also a marketing tool, a way to sample new customers on a beer that they might not have picked up off the shelf or ordered at a bar with 25 other options.
“The taproom is more and more becoming the focal point of craft operations, creating the ‘face’ for the brewery. Neighborhood taproom volume grew 27 percent last year and this has not been lost on the larger craft brewers,” says Joel Hueston, director of commercial strategy at brewing industry consulting firm First Key. “Taprooms are where today’s growth is in craft and a lot of players will want to jump on this train while it’s rolling.”
Goose Island’s Ken Stout calls it “making friends for the brewery.” 10 Barrel co-founder Garrett Wales calls it “localizing the brand.” BrewDog USA managing director Tanisha Robinson says the idea is to “create beacons for craft beer lovers and disseminate our spirit out into the world.” They’re all getting at the same goal: To get drinkers in a city or region to connect with their beer on a face-to-face level, setting it apart from the dozens of other options bombarding customers.
That was much of the reasoning behind Green Flash’s recently announced acquisition of the defunct Ploughshare brewery in Lincoln, Nebraska, which will be transformed into a 10,000-square-foot production brewery and brewpub by the end of the year. Previously, Green Flash didn’t have much of a Midwest presence at all; the brewery’s sales rep serving Nebraska was actually based in Denver and visited that state maybe two to three times a year.
“We sell very little beer in the middle of the country and this brewhouse will give us a nice start. We’ll be able to grow sales there,” says Green Flash co-founder Mike Hinckley. “We don’t use TV commercials or sponsor major sports teams. The way we build our brand is one pint at a time.”
He says this Nebraska expansion, which is the fifth location for the company that owns both Green Flash and Alpine beer brands, “reframed” the search for new markets.
“I’m looking specifically into places where craft is not already fully developed, looking into younger markets even if they’re smaller markets. The Mississippis, Alabamas, Louisianas, Arkansases, Oklahomas, these are now going to become my primary focus,” he says. “The long-term plan for Green Flash is to be local or at least regional in as many places as possible.”
That’s one strategy. As some breweries inevitably go out of business (the rates of which have recently seen an uptick), better-established breweries like Green Flash are well positioned to acquire their assets and real estate at a discount, says Pints LLC’s Clements.
“Breweries are closing. They need buyers; and I think it’s a good model that somebody bigger comes in and buys them for pennies on the dollar. I think that you’ll see this more and more,” says Clements. “I’m sure there will be interest out there for breweries that want to expand and get their foothold in downtowns.”
But not everyone’s looking to smaller, developing markets. 10 Barrel (also a part of Anheuser-Busch InBev’s The High End division) last year built a flashy, 300-seats-with-a-rooftop brewpub from the ground up in Denver’s popular River North district and also has pubs in beer-heavy cities including Portland, Oregon and San Diego. Co-founder Garrett Wales says the idea is to offer 10 Barrel’s beers alongside the best in the country, be a part of beer-centric communities and see what savvy consumers think.
10 Barrel and Goose Island have the resources to be able to do this. So does Ballast Point, which is owned by Constellation Brands, and is planning a 12,000 square foot brewpub with rooftop bar in Chicago’s Fulton Market District, a meatpacking-turned-nightlife corridor home to the city’s hottest restaurants and bars. It’s the eighth locations for Ballast Point, which also has a presence in San Diego, Temecula and Long Beach in California; and a production facility with a brewpub outside Roanoke, Virginia.
“There’s no other specific expansion plans on the horizon but we’re looking for opportunities to do more with this model,” says Hilary Cocalis, Ballast Point’s VP of marketing. “It just always goes back to how can we best reach our customers, give them the best Ballast Point experience and get them familiar with the brand. So far our tasting room experience has proven to be successful in that.”
Fulton Market is already a beer-soaked corner of Chicago, home to Haymarket Brewery, Cruz Blanca Brewery & Taqueria, Great Central Brewing Co., Goose Island’s Fulton Street brewery and taproom, On Tour Brewing Co., All Rise Brewing, as well as scores of bars with decent tap lists. Ditto with the area surrounding 10 Barrel’s new Denver location. Obviously the new kids on the block think they can thrive despite the competition, but how do the existing neighbors feel about the arrivals?
“It really varies. For the most part, it’s 60-40 in favor of people being positive, people that know the brand and know we make a great product,” says 10 Barrel’s Wales. “Those that are younger to the industry or don’t have a good understanding of the bigger picture feel a little threatened and challenged. But we make a point to go in and get to know those folks.”
Ballast Point said their neighbors’ reactions had been positive; likewise with BrewDog’s new Columbus, Ohio digs.
“Density creates a lot of energy in neighborhoods that’s great for everyone. A big challenge for us is just finding the right place and finding the right neighbors that feel the same way about proximity as we do; which is that it’s not a zero sum game,” says BrewDog’s Tanisha Robinson. “We also really, we want it to matter that we’re here. Half of our beers on tap are guest beers. Our mission is not to make people passionate about BrewDog but to make people passionate about craft beer.”
And consumer response? As multilocation brewpubs and taprooms pop up like dandelions through American cities, do they risk becoming stale and chainlike? Or will they become blandly ubiquitous mainstays like Rock Bottoms, BJs and Gordon Biersches?
“I definitely think this is wave two. The breweries doing this now, they’re very beer-forward whereas others kept with that restaurant model,” says Clements. “They offer consistency while still bringing something new and being a clean, friendly place to go. As long as they keep it fresh, they’ll be successful.”
Breweries cite different methods for keeping it fresh, from allowing local brewers freedom to make pub-exclusive beers or switching the food menu up in different markets. The tight-rope walk between consistency and cool becomes more challenging with every location, but with these pubs spread across the country and world, it’s unlikely that most drinkers have been to more than one or two. They still feels special, especially when the brewery is new to town.
“We don’t have an employee playbook that says ‘Here’s what you say.’ That would ruin it all,” says 10 Barrel’s Wales. “When you try to force it, you’re nothing but a chain that’s trying to be fake.”
Is there a day when we could see 10 Barrels across the world like Applebee’s?