Beverage Dynamics

Best Beer Practices 3 Beverage Dynamics • Digital Edition Exclusive www.beveragedynamics.com Craft Beer Cellar tries to instill into new franchise owners the importance of connecting with other businesses in the com- munity, especially restaurants and breweries. Schalow suggests that helping with local events builds relationships. She herself volunteers every year at a local brewery to chop pumpkin for a seasonal beer. Relationships with the most passionate members of the beer community, whether the beer geek customers or beer-related businesses, can be bolstered with in-store events. To the extent that the law allows, successful retailers host beer tastings and food and beer pairings. Colorado law allows a maximum number of hours per week devoted to in-store tastings. "We do Fridays and Saturdays," Bar- ton says. "That's actually a pretty great way of getting consum- ers interested and getting the word out about beer and the beer industry." The largest Craft Beer Cellar franchise, a 5,000 square-foot store in Houston, has moved beyond the stand-alone bottle shop offering bottles, cans and growlers for sale. There are 48 beers on tap, cask engines and six wines. The owner is building a com- mercial kitchen, as well. He won't take on the food duties himself, but instead will rent the space, perhaps to a food truck in need of a home. Half Time already hosts ambitious in-store events with any- where between 20 and 50 breweries, offering tastings, food and music. Soon, the store is taking full-service one step further. Jason Daniels and his father, Alan, the company's founder, have seen the appeal to enthusiasts of beers that are available exclusively from the brewer. "As we speak, we are in the process of adding on an entire brewery, brewpub and tasting room adjacent to our Westchester location. We are going through final approvals to get that in place. It will be a 15-barrel brewery, with a food com- ponent, as well." The senior Daniels began as a beer distributor before open- ing a retail store. "Now we're entering into the brewing side, so we've essentially covered all three tiers. I don't think anyone in the country has done that," his son ventures GETTING THE PRICE RIGHT Daniels sees beer retailers under pressure from two sides, from big-box stores and from breweries themselves. In its earliest days, Half Time was a destination store, unique in the region for the size of its selec- tion. "You could price products to what you think is competitive, but also are in fact fair to the dis- tributor and to yourself," Daniels says. "Now, you can buy Delirium at Costco for five dollars. There are supermarkets that are creating a loss leader and that's really hurting everyone. You have people who will come into retail stores and say, 'I could buy this at so-and-so for four dollars cheaper.' We look at them and say 'That's four dollars under cost. If you want us to sell our beer under cost, we won't be around.'" He also sees customers—particularly those enamored of the rarest beers—going directly to breweries. "The breweries are now releasing exclusive beers. Every brewery does that now," he says. "So why do I want to drink their core beer that I can get at Half Time or 30 other retailers or gas stations or supermarkets when they're producing this one-off 'clippings-of-my-beard-in-the-beer' specialty?" he says jokingly. At the Craft Beer Cellar, they are restructuring their prices, reducing the cost of packs. "We are basically selling 12-packs as a thank you," Schalow says. "We're taking a slightly better margin on large bottle format." But the best margin is on single-bottle sales. "We sell singles of anything in any store, anywhere," she says. Six-packs, 12-packs, variety packs: customers know they can always break these open and take a bottle or can, even packs that offer beers available nowhere else. "We never realized how much work it was going to be, which is why most people don't do it. But the upside is you can take a slightly better margin for the courtesy of allowing customers to do that, and for the staff time needed to keep things cleaned up." Barton sees price as only one factor of many that keep Hazel's popular with beer fans. "Our prices are definitely competitive. We do the weekly ad matching, but we don't necessarily put any ads out ourselves," he says. "Our customers sometimes come in and tell us that we are cheaper than the breweries themselves, because they do a little bit of a markup." "People come to us because of our selection, and because our staff has a huge amount of knowledge that no other store around the area has," he adds. "I wouldn't say that we are competing on price to drive people to us from other stores. I would say that it's our beer people and our selection that do that." BD JULIE JOHNSON was for many years the co-owner and editor of All About Beer Magazine. She has been writing about craft beer for over twenty years. She lives in North Carolina, where she was instrumental in the Pop the Cap campaign that modernized the state's beer laws.

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