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If you only have 4 or less taps, you’ll need some bottled micro products as you don’t have room for a rotating tap.  However, five or more taps, you should have a rotating tap.  Your rotating tap should change monthly.  Every single brewery offers a brand that you can add on as a feature, even the macros have some brands that you could list.  One option is to try and match the style with the season.

• Wheat beer in the spring
• Pilsners/lagers in summer
• Oktoberfests/ambers in the fall
• Porters and stouts in the winter.

As a bonus, engage your Chef to create a feature dish that pairs well with your rotating tap.  Make sure that the menu item uses no new ingredients (only what you have in-house already) and make sure it has a lower-than-average food cost or a great margin.  Better yet, preferably both.  Get your staff involved.  Ask you Chef to explain to them why it pairs so well.

The rotating tap is completely under-utilized by restaurateurs.  This is an outstanding opportunity to make a point of difference over your competitors, allows some diversity for your regulars and staff, while providing you the opportunity to be creative with new menu items with features and pairings.

If you’re looking for some brewery folks to call to fill in that rotating tap, call anyone from:

• OCB (Ontario Craft Brewers)
• your local Molson (1-800-MOLSON1) or Labatt (1-800-268-BEER) rep
• Big Rock
• Mark Anthony Brands (Peroni, Grolsch, Pilsner Urquell)
• Muskoka Brewery
• Black Oak Brewery
• Brick Brewing

If you are a brewery and want to add your contact info in the comments field, please do so.  If you’re not from Ontario and want some suggestions, just email me and I’ll put you on the right path.

You already have the equipment, I’ve given you the how and why, you just need to make the call to the brewery rep to get in some product.  Will you make the call?

The Activist: Hates, absolutely hates the macro brands.  Calls them “Yellow, fizzy, mass-produced beer that tastes like water”.  They’ll drink water at a bar instead of a macro.  They never miss an opportunity to tell anyone who will listen how the multi-national, mega brewers are destroying the industry with their watery liquid masquerading as beer.  All this despite the fact that brands like Coors Light and Bud Light are the hardest to brew and the best selling beers in the Canada and the US respectively.  This group views beer purely as an art, not a mix of art and business.  They understand the brewing process better than most folks and may have actually dabbled in a bit of home brewing themselves.  They also understand beer and food pairing principles and are willing to share their wealth of knowledge.

This group has the potential to greatly help the entire beer industry as they are known to be beer experts; their friend’s go-to when they have a beer related questions.  In my opinion, this group would be better served embracing big brewer as the macro consumers are the future micro/craft consumers.  If the Activist wants larger micro/craft selection and growth, they’ll need more consumers and these consumers come from macro.

Is your competitor catering to all four of these consumers?  Probably not.  In my next post, find out how you can profit from this.

The Beer Enthusiast – Enjoys the occasional macro brand, but it has to be from their premium/craft segment; Rickard’s, Creemore, Keith’s Colour, Moosehead…  At the pub they will order these brands on draught if there are no micros on tap, but prefers something new or different.  Keeps a 6 pack of macro discount/mainstream beer in his fridge for his buddy the Beer Drinker who comes over occasionally, but the rest of the fridge is likely full of a half dozen or so different brands from Canadian and US micros;  Mill Street, Steam Whistle, Anchor, Dogfish Head, and McAuslan.  This group has researched brewing and can tell you the steps in the process, but is still learning to appreciate beer.

This group is the fastest growing segment and everyone knows it.  Big brewers know it because they are developing Transition Brands and buying micros to cater to this segment.  The big brewers are smart, if they’re taking notice, so should you.  I spoke about the rotating tap before in a previous post, this consumer is one of the reasons why.  I’ll cover more of this segment in two posts.  Next post, The Beer Activist.

The Explorer: Folks who don’t want to drink what their Dad drank.  A former “Beer Drinker”, but in the past few years has experimented with some craft style brands and knows the difference between a Coors Light and a Steam Whistle.  He can’t tell you why or how they are different, but knows that they are.  His friends, who are still “Beer Drinkers”, think he is a beer snob.  After rec hockey he’ll drink a Coors Light, but for the BBQ when the neighbours are coming over, he’ll buy a 12 pack of Coors Light AND a 12 of Steam Whistle or Grasshopper.  They go to the Toronto Festival of Beer, but always end up at the Molson booth.  Again, great for the industry because they introduce Beer Drinkers to Transition Brands; they help expand everyone’s ”circle of brands”.

Tough guess on the percentage of the population this segment represents and I believe it varies by region, but just throwing darts, I’ll guess about 40% of consumers fall into this segment.  Just like Beer Drinkers turn into Beer Explorers, Beer Explorers evolve to Beer Enthusiasts who we’ll discuss next.

Note: This series will come across as stereotypical.  I’m profiling.  It’s not politically correct, I know. This isn’t a scientific study; it’s just my opinion from spending a lot of time talking beer with different beer consumers.

The Drinker: Drinks whatever he sees the most ads of and drinks whatever is currently on discount.  When he’s at home, he’ll drink value brands (Lucky, Laker, Lakeport, Carling), when he goes out he’ll drink what’s on special (Tallboy’s, house brands, or promotional specials) and he thinks “all beer taste the same”.  They are somewhat brand loyal, but will change as better deals come along.   This segment is large, but shrinking.  It also is the easiest to sell beer to, because if they’re drinking, they’re usually drinking beer.  As an industry who needs volume, we need this group.

By my guess this segment represents 40% of beer consumers and they are up-and-coming Beer Explorers, who we’ll talk about next.

There are four different levels of beer consumers:

• The Drinker
• The Explorer
• The Enthusiast
• The Activist

Over the next few days, I will discuss each and then finally reveal how your bar’s draught line-up can cater to each of them and especially the one that most bars neglect.  Stay tuned…

Two reasons:

1. It allows the guest to return it if they don’t enjoy it
2. They don’t have to buy $15-20 worth of it, which they do at the store

The number one segment in Craft Beer in the US is the seasonal brand, limited releases.  It doesn’t matter if its a Russian Imperial Stout, a Belgian Wit, Winter Spice, or a dry-hopped American Pale Ale.  This segment represents almost 20% of the dollar sales of craft beer in the US.  That’s impressive.

Enter your bar.  How can you take advantage of this? Offer a rotating  tap, aka “Guest Tap”.  If you have 6 or more taps, pick one and change that brand every month or so.  Your regulars will love the variety, staff get pumped when there is something new to sell, and it keeps things fresh.  Make sure that the style fits with the season (ex: porters/stouts in Winter, Wits in summer…) and change things up.  Offer a two ounce sample to guests who have never heard of it and let them try it.  Do you think your competitor would do that?  Probably not.

Price it the same as your other beers of the same type. If it is a regular domestic, price it like your other domestics. Don’t discount it, you don’t have to.  And don’t over-charge for it because that’s just not right and it defeats the purpose.

I can see you all smirking.  Guinness Light?  How could they?  Here’s what’s surprising: Guinness is only slightly above the light definition anyhow.  Light beer is defined by 4% or lower ABV, and Guinness is only 4.1 ABV.   What is funny is that everyone scoffs at the idea of Guinness being light.  Why?  Because it’s not what the brand represents to people.  ”Light” is associated with the Light American Lager style beer, not big fuller-bodied stouts.

I suspect the same epic failure would happen today if Diageo had completely lost thier mind and decided to release it again.  Anyway you cut it, brand equity and what it represents to consumers is important. So when you are out today hoisting a pint of the good stuff, keep telling yourself it’s not a light beer.  Cheers!

PS: The video in Jay’s blog is spit-your-drink-all-over-your-monitor funny.

That’s how a bartender would describe branded glasses.  It’s how I did and the most taps I ever had to work with as a bartender was ten.  Not enough room behind the bar, glasses that don’t stack, glasses of different shapes and sizes are all issues that your bartender has to deal with.  Nobody ever told me WHY I should use branded glasses.  I just didn’t understand. I did it because I liked my beer reps, but couldn’t understand how it helped anything else.

Now I know.  Now I know WHY it is important.  It’s not just because your rep tells you, there are several reasons.  Here is reason number one:

“The Brand Is The Badge” Beer Marketing 101.  People enjoy certain beers for two reasons, one is the taste, the other reason is for what the brand represents.  Consumers (your guests) have a connection with their brand and they want other people to see which brand they are drinking.  They use labels to communicate this when drinking from bottles and they use branded glasses to communicate this while enjoying draught.

Have you ever noticed that there are two labels on a beer bottle?  When you hold your bottle by the body of the bottle, the neck label is visible.  When you hold your bottle by the neck, the body label is visible.  Branding is important, look no further than Nike, Starbucks, Apple, or ________ (insert any brewery).

Still a sceptic?  There are no neck labels on value beer brands because until recently, value had no brand recognition; people drank it because it was cheap, period.  Look at a Lucky or a Lakeport.  No neck labels.  You could of counted Carling in there until a few months ago, but now there are neck labels on their bottles.  Carling is trying to improve their image from just 24 for 24 to a great tasting beer for the lowest possible price.  Branding is becoming popular in value brands now as well.

When having a conversation with my neighbour last week, we were talking about beer (go figure) and he tells me, completely unprovoked, that he visits a certain bar because they serve his Keith’s in a Keith’s glass.  Then he proceeded to list several bars where he gets his Keith’s in a Guinness or a unbranded/pop glass.  He couldn’t tell me exactly why he doesn’t like it in the wrong glass, but said it’s much better in the right glass.  He did say he’ll never go back to the places “who don’t do it right”.

At $7.00 a pint, branding, image, presentation, and guest perception are as important now than they ever have been.

Coming up next…Reason #2 for branded beer glasses; because it makes you more money.

FULL DISCLOSURE:

#1: I do a lot of work for a macro-brewery.  My company mission is simple, “Increase draught beer sales volume through quality, education, and certification.” I know most people either sit on the “I prefer Micro” or the “I prefer Macro” side of the beer fence, but I truly don’t care what you drink, as long as it is quality beer. Increasing total draught beer volume, not share, is my mission. Your dollar sales will increase with the same share percentage IF the industry volume grows.  Want to increase profits, grow industry volume.

#2: There is NO scientific data to back my theory below, just 20 years of experience in working in the bar biz, the beer biz, with draught systems, and chatting with many owners, managers, and bartenders from coast to coast.

Glad we got that out of the way!

Almost all data, from software brand sales to favourite ice cream flavours can be basically charted using the same graph.  It looks something like this:

It’s called Zipf’s Law. I was first introduced to it in Seth Godin’s book, The Dip (must read, like all of his stuff is) but he describes it best here.  It basically says there is usually a clear number one.  The difference between number one and three, four, five…is dramatic.   That said, how many draught taps should you have?  Four, six, eight, twelve, twenty? Let’s take a look…

Two – Four taps:

Never install just one tap. It basically costs the same to install and take care of two as it does one. If you put in only 2 lines, you should probably use a direct draw unit.  You can pour four brands out of this unit if you use 20L kegs.  Most, but not all, popular brands are kegged in 20L and the cost per ounce is higher, so consider these factors before deciding. This unit fits behind the bar and is easily installed.  If you pour two lines, then you will need:

• one craft style brand (note I said “craft-style”, it can be from a micro or macro)
• one mainstream lager brand

If you chose to add another line, then add a light beer/lower alcohol beer (4%) or a darker craft

If you want to add a fourth line, add an import.

If your monthly beer sales are at least $3k (5 kegs/month), pour two taps.  If your monthly beer sales are at least $6k+ (10 kegs/m)  pour four taps. This brand line-up would fit nicely into a small upper-casual/fine dining establishment.

You should never have more than 1 mainstream, 1 light, 1 dark, 1 import, or 1 strong (6%+) beer on tap if you have four lines.  Pouring Coors Light, Blue Light, Bud Light and Bud is redundant and you are losing sales, guaranteed.  Yes, you do need some mainstream brands as not everyone has yet opened their minds to “full-bodied craft-style” beers. Johnny Budweiser will never just start ordering a McAuslan Oatmeal Stout; not for a few years anyhow. He may order a Big Rock Trad, a Rickard’s Red, or any one of the hundred awesome “lighter” craft style transition beers, but don’t push him too far or too quickly beyond his boundaries.  See the short footnote at the end for more explanation.

Six taps:

If you want 6 taps, you should add one more mainstream OR another craft and a rotating tap. So your line-up looks like this:

• two craft style brands; pick any two: lighter, medium, or darker/fuller-bodied.
• a mainstream brand; preferably a lager but could be an ale
• a light beer or lower alcohol beer (4%)
• an import
• a rotating tap

Ah, the rotating tap.  Many talk about it, few do it.  Pick a style that works with the season.  This is not the time to be brewery or brand loyal.  Your number one concern is the style of the beer; brewery loyalty is priority number two.  An easy to understand list of seasonal styles will appear in this blog the next month or so, but stouts and porters in the winter, wheats in the spring, Pilsners in the summer, and Oktoberfests/Browns/IPAs in the fall is an incomplete, very short list to get you started.

It is probably best to get a long draw system for anything more than four lines, where the beer is housed in a walk-in cooler and the beer travels through a trunk line to the bar.  This line-up fits really well in a causal themed/family/low-end sports bar kind of place.  If your monthly beer sales are $15k+ (25 kegs/m), this is you.

Eight Taps:

Notice that this is the highest number of taps?  You will want to have the following:

• A light craft style
• a dark style craft
• a mainstream lager
• a mainstream ale
• a light beer (4% or less)
• an import lager
• an import (anything but import lager: stout, English ale, cream ale, pale, ale, Pilsner,…)
• a rotating tap

This eight tap line-up works best for any concept that sells a lot of beer.  If your monthly beer sales are $30k+ (50+kegs/m), this is you.  You could pull out any of the other seven and add in another rotating tap, depending on availability.

Why Is Eight The Maximum?

FRESHNESS: You need to ensure that you are selling at least a keg per month of each brand.  Large domestic kegs are good for 60 days, imports about 180.  By the time they get delivered and then tapped, you need to sell them within a month, generally speaking.  Out of all of the draught system audits we do, past-code kegs are one of the major issues.

LINE CLEANING: You will lose about 3/4 of an ounce per foot when you clean your lines.  Pouring from 20 taps with a walk-in that is 85 feet away will cost you about $2,000 per year in lost beer just from line cleaning.  An 8 tap system will only cost $730. in lost beer.  Also, an 8 tap system will be less work for your line cleaner, so they will charge you less.

BRANDED GLASSES: You need to have branded glasses for each brand.  Yes, you do.  My next post will be on branded glasses, so just trust me for now.  Unless you have a bar with unlimited storage behind it, branded glasses for 20 brands takes up a considerable amount of room.

TRAINING: You staff should know each brand’s style, description, history, and what other brand it is similar to.  It would also be nice if they knew which of your menu items pair best (and why) with each brand.  This is the easiest way to increase sales, by the power of suggestion.

WALK-IN BEER FRIDGE: When designers plan restaurants they try to get the greatest number of seats in the footprint of the space.  This means that the back-of-the-house is typically cramped and smaller than it should be.  When it comes to the beer fridge, it’s usually the first to be made smaller when space is needed elsewhere or it’s just too small to begin with.  Trying to fit 20 tapped kegs plus 20 back up kegs in a walk-in that is 10 x 10 just will not work properly.  Your staff will curse you every day as will your draught service technicians who service your lines.  Inventory will be a nightmare.  WSIB claims will go up from your 22 year old bar back who throws his back out trying to lug a 160 pound keg into a dark, damp, cold beer fridge.

EQUIPMENT: The maximum number of beer lines in a trunk line with one set of cooling lines is eight.  Put ten lines in and you need two sets of cooling lines and a larger glycol deck to chill the trunk line.  You will need a FOB and a regulator on each line.  Don’t forget to add in extra couplers, faucets, and towers.  This all costs money.  More moving parts means more maintenance and a greater chance of downtime.  We don’t clean lines at places with 16+ lines any more, but when we did, they accounted for almost all of our service calls; almost every second day.  We rarely get service calls on 8 line systems, maybe 2 a month now, with even more accounts than before.

PEOPLE ARE NOT DRINKING DRAUGHT LIKE THEY USED TO: This kills me, it really does, but since we’re being honest, check out my other posts on declining draught sales and the new 0.05 law.

Footnote

IMHO: Peoples tastes are changing.  They are trying different brands all the time, they are expanding their “circle-of-brands”.  One only need to look at The Beer Store or LCBO product list to see that there are many options available to consumers.  However, I believe it is not changing as fast as some people think.  The majority still prefer mainstream macro brands, love it or hate it, it is true.  Just look at national sales.  I’m not suggesting that Johnny Budweiser will never enjoy a full-bodied craft beer, but they are not going to completely change brands overnight; it takes time.  Having a draught brand line up of all full-bodied, dark, craft-styled beer will hurt your sales.

Last Sip

Draught will always be around. It is a great way for brewers to showcase new brands and it helps get their brands into more people’s hands.  People can’t get draught at home and when it’s poured fresh and served properly, it is 100 times better than bottle.  However, the days of consumers buying trays of draught and 8 hour shifts sitting at your bar are over.  Several years ago you probably moved 20 kegs a week, now you move 12-15.  The key point to remember is: EVERY BRAND MUST SELL AT LEAST ONE KEG EVERY MONTH.

Draught sales as a percent of total beer volume, Jan - Sept 09 (Canada)

I have voiced my opinion on why they are slipping, but here’s why it hurts us:

Bar Owners:

• The Million Dollar Beer Marketing Secret. People drink beer in units, a beer is a beer. Sell them a pint or a bottle, it’s the same thing in the consumer’s eyes.
• You have invested in a draught system, you need to use it.
• You make more margin from draught than bottle (you should be anyhow).

Brewers:

• Your success in the industry is measured by volume. Selling an 18oz pint is more desirable than a 12oz bottle.
• You make (again, you should) make more $$ per HL on draught than bottle.
• Draught gives you a medium to introduce new brands to the consumer.  ”Never had a XYZ, try one on tap today”. Is Joe Six-Pack really going to invest $12+ on a 6 for a liquid he may or may not like?  Buying it at a bar is safe.  He can get a small sample or worst case, orders a pint and doesn’t drink/like it, he’ll probably get it taken off his bill.
• You spend a disproportionate amount of marketing dollars on-premise than on retail and you know why.  Draught works.

Consumers:

• The best beer is a fresh beer. Draught is typically fresher than bottle due to inventory turnover. This assumes, of course, that the bar is selling enough of the product.
• You get a better price per ounce on draught vs. bottle.
• Draught beer tastes better vs. bottle when served in the establishments who care about quality.

These last three reasons assume that the establishment is doing the right things and is pouring enough draught to ensure the quality.  My next post I will discuss the correct number of taps you should have in your bar; what is the right number of brands to offer and like this post, you probably aren’t going to like that either.

This article from today’s FP discusses the impact of the recession on the restaurant biz.  Again, I’m not so sure it’s all of the recession or a combination of the recession, the 0.05 law, and H1N1 in Q4 of 09.  The article fails to recognize that the Outback Steakhouse was closed here in Ontario (~10 stores) during the start of the recession. I can’t say it was the cause, but it did happen during.

It’s interesting to see how different chains and their segment were affected:

“Some of the strongest players in the casual dining sector were hit hard in the first three quarters of the year, according to company reports. At Boston Pizza, same-store sales fell 3.9%; at The Keg, same-store sales slid 4.4%; and at Prime Restaurants, operator of Casey’s, East Side Mario’s and Prime Pubs, same-store sales declined by 6.6%.”

It will be interesting to see if there is a correlation between chains with higher bar:food ratios suffering a greater decline in sales vs. chains with higher food:bar sales.  I’m sure that ESM and Casey’s have a greater impact on that 6.6 PRIME decline as they make up more stores than the Prime Pubs, but you can’t help to think that maybe, just maybe, the pub channel took a beating.  If total beer volumes are flat or up during the recession, then why are drinking establishments taking the brunt of the decline?  IMO, the new 0.05 law, that’s why.

In speaking with a handful of people over the last month or so, I am quickly coming to the realization that I am not completely sold on the fact that it is the recession and/or H1N1 that is causing bar sales to suffer.  More and more I believe it is the new consequences for drinking and driving that is the major cause of declining bar sales, hidden behind the H1N1 and recession scare.

A happy Day Bartender helps drive your sales.

Consistency. It is the one thing that all operators strive for, but a rare few can always do it.  There are thousands of things you need to be consistent with, but the one that is often overlooked, is actually the easiest.  It also provides a great reward if done right. It is a Day Bartender, the SAME Day Bartender every day, Monday to Friday.

Who sits at your bar M-F open until 4pm?  Suits. Guys with some cash, guys with good job security. Guys who want to get out of the office.  Maybe self employed guys.  If they have the same pretty face to look at everyday and she has a personality, they build a relationship with her, they feel welcome; a part of the team.

We (comfortably employed guys in our 30′s-50′s) can go anywhere to get a Canadian or a Keiths for lunch or mid-afternoon meeting. So why your bar?  Your Day Bartender.  You should easily find a female bartender who has been in the game for a few years, is tired of the night shift, and has a personality.  A female bartender in her late 20′s-30′s, knows what’s going on in the world, and remember me and my drink.  Pay her a bit more, $5+ an hour more than your other bartenders.  Challenge her to build a regular base.  Give her a tab to buy some pints every now and then.  Promo some apps for her.  Trust me it works, it will pay for itself in no time.

It amazes me how many different bartenders I see working the bar on different days.  I spend many afternoons visiting bars, mostly on sales/service calls, but also for just a pint.  It is blatantly obvious whos bar is full at 3pm.  Is yours?  We are creatures of habit, we love consistency.  Give it to us, your sales will notice.