Brewery bars are helping craft brewers fight back

Last year when 4 Pines then Feral then Pirate Life all were sold in quick succession to beer corporations, Australian beer’s competitive landscape seemed under threat.

These sales removed what was often the only independent competition in retail stores like BWS, and muddied the craft beer waters further by snapping up some of the most loved craft beer brands.

But there is one way independent beer can stand up to the might of the giants and established craft beer brands – by selling direct to beer drinkers through their own brewery bars.

On-premise sales are becoming essential for independent brewers looking to thrive and survive in today’s landscape. Not only can it be a nice revenue stream with fatter margins that aren’t being squeezed by corporate retailers or driven down by furious keg price competition, but they serve as an important marketing and branding tool for brewers.

Black Hops nicely outlined the key role their taproom plays for the business. And it’s been no surprise to see some of the savviest operators in the industry push into this area.

Stomping Ground Brewing, a brewery bar and restaurant, was opened by industry stalwarts of the Local Taphouse bars and GABS festival fame: Steve Jeffares, Guy Greenstone and Justin Joiner.

The venue has already become an iconic venue in Melbourne and the owners sold the Local Taphouse bar in Sydney, in part to increase their focus on Stomping Ground.

This shift from beer bars towards a brewery bar was a forward-thinking move. The taproom revolution is coming with breweries spreading across the country to fill any areas with a market for a local brewery bar. This trend is already in full flight in the US with taprooms now described as the “engine of craft beer growth” in a market that is slowing down some after years of rapid growth.

Stockade, a savvy fast-growing well-regarded brewer, announced that they would be opening a brewery in Marrickville. This is despite owning a sizeable facility in a regional location that would surely be a lot cheaper to rent. This signals that the move is more about getting a distribution foothold into the hottest area for Sydney’s craft beer boom.

And in QLD, Newstead have already established brewery bars in two locations across Brisbane to grow their customer base, and Ballistic Brewing recently followed suit, building on their success as a suburban brewery by opening an inner-city bar to expand their audience and open up their distribution channels. According to founder David Kitchen:

“Competition is growing because more craft breweries are opening every month,” he said.

“That competition is going to get more and more fierce so if we purchase our own outlet, it means we have guaranteed outlets for our own beers.”

“If we purchase our own outlet, it means we have guaranteed outlets for our own beers.”

Perhaps the most successful exemplars of this strategy of establishing bars to distribute their beer are Scottish craft brewers BrewDog, who have opened up bars across the world and will now be entering the Brisbane scene themselves soon with their own Brisbane brewery set to attract visitors.

They have also now announced their intentions to open BrewDog bars in capital cities across Australia, focusing initially on locations in Brisbane and Sydney, with Melbourne and Perth also in their sights. They’re set to hand out a $1,000 finder’s fee for anyone who can source a bar location as part of what they’re calling the Great Australian BrewDog Bar Hunt.

BrewDog bar in Sao Paulo, Brazil

While the strategy may be leading to success for brewers, the brewery bar revolution does potentially create some friction with beer bars who now may find themselves competing with the breweries they’ve been promoting . For the most part, this should be healthy competition that forces each side to differentiate to win the drinker and also hopefully createa mutual benefits if they can grow the market of craft beer and make an area a destination for good beer.

Why brewery bars are better

While big beer may be able to quickly ship bottles and cans nationwide, push retailers for premium placements and promotions and work their way into restricted areas like sports stadiums, they can’t easily replicate the experience of an actual local brewery bar being manned by people who actually know the beer because:

  1. Local is best
  2. Fresher is better
  3. Breweries are authentic
  4. Brewery bars can be accessible for all audiences
  5. Brewery staff can make excellent ambassadors

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