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Brewpub disadvantages

IMG_0996 (400x267) (200x200)Last week I talked about some of the benefits of owning a brewpub. To make this dream of mine a reality I also need to address the drawbacks of a brewpub as well. Granted I am no expert in any of this, I am purely posting my thoughts and what I am able to see, so if you have more suggestions please let me know. There are a number of disadvantages to owning and operating a brewpub vs. a brewery. Some may seem small and insignificant but they all add up to something that matters.

The first disadvantage that I am able to find is that you have a much more limited audience. A brewpub can realistically pull people from a radius of about 20-30 miles at a maximum. While I have personally traveled much greater distances to get to a good brewpub, that is not what the average consumer will do. A brewery can distribute in a large area and be in many places at once whereas a brewpub can only be in one spot. The advertising, marketing, and branding have to be completely different in order to bring in a crowd. I also believe that a brewpub must advertise to help stay alive, while most craft breweries do little if any advertising.

Another disadvantage is that a brewpub cannot focus only on beer. While the beer provides a nice profit margin and an additional source of income, food is more important. Nobody goes to a restaurant that doesn’t have good food. The restaurant market is much larger than the brewpub market, therefore food has to be exceedingly important. Customers can go to a number of restaurants to get food (and a commercial beer) if that is what they are looking for. So everything from beer to food needs to be quality as consumers have a number of choices.

The third disadvantage is that you are not just running a brewery. There are a lot of other factors to think about and be worried about while running a brewpub. A whole extra list of expenses comes into the mix as well. No longer do you have to worry about brewery equipment, you also have kitchen, bar, and restaurant items that need to be addressed. A brewery has no need for a flat-top cooker or bar stools or booths, but a brewpub certainly does. The decorum also needs to be more dressed up than what a brewery has. A brewery, while magical to most of us, is an industrial facility that makes a product. A brewpub is a commercial product that makes a product(s) and delivers an experience. You also have additional staff that need to be qualified for the job and trained on beer knowledge, service, and a number of other things.

The final disadvantage does along with the theme of a brewery being industrial and a brewpub being commercial. Breweries can lease space in places that don’t get a lot of foot traffic because they are not looking for traffic, they are looking to produce and distribute beer. A brewpub has to lease in a place with high foot traffic, ample parking, and be in a desirable location. Needless to say, rent is much higher in a brewpub than what a brewery would ever be.

Let me know if I missed anything when analyzing the disadvantages of owning a brewpub in comparison with a brewery. Thanks for reading and I will be back soon with more ideas for my brewpub.

9 thoughts on “Brewpub disadvantages

  1. Sounds like you thought it through quite thoroughly. Have you spoken to anyone who owns/manages both to see what you’re missing? It seems to me that the brewpub would have to be a bigger operation in the sense that you would have to get someone with restaurant and kitchen experience to help, but then a lot of brewpubs don’t even bottle and distribute their beer – its just served in house.

  2. I haven’t really spoken to anyone in the industry yet, that is one of my next steps. Yes the brewpub does have a lot more in the way of staffing and I would need to find someone skilled in the restaurant business to go in with me on this venture before I ever did it or at least hire some serious consulting.

    And I don’t plan on distributing beer outside of the doors of the brewpub. I would love to use it as a testing ground to develop beers that could be used in a production brewery down the road.

  3. A few observations: craft breweries definitely have to advertise. In fact, since they don’t have nearly the amount of walk in business, sometimes they need to advertise more, I suspect. Size is important here, and product placement. A large craft brewer has different concerns since they really need to go beyond what is often referred to as their “backyard.” There are a lot of mostly local craft brewers in New England like Berkshire, whose brewers told me they’d rather stay local. However someone like Thirsty Dog in Akron, OH has a bigger market to service.
    With a brewpub word of mouth often turns into walk ins and, depending on the state, growlers add even more. Some brewpubs; again this depends on the state and regulations, are both craft and brewpub.
    The restaurant/brew biz mix is the main problem, as you observed. Management often simply doesn’t understand brewing. I know a brewer who was the first brewer at a brewpub that opened in 88. Up until a couple of years ago he was still there until the owner got a bug in his bun about having a Bud clone. The problem is they don’t have the capacity to do a lager and serve the public. The owner could have solved this easily: put in a Bud tap. To this day he eventually grows dissatisfied and goes through yet another brewer who tweaks their light ale, then eventually, tells him what he refuses to hear.
    You’re right about the space issue, though some craft brewers need walk in too, as I mentioned.
    The restaurant business and brewing will always be an awkward marriage at best, but when done right it’s marvelous.
    We have a lot of articles like this at professorgoodales.org. My own column which appears at Professor Good Ales, The Score and other brew/homebrew publications is Brew Biz: Werts and All. If you’re interested in contributing, feel free to contact us at theprofessor@ltsaloon.org …our sister site.

    Ken Carman

  4. Don’t kid yourself; when you are running a brewpub, you are running a RESTAURANT that also happens to make its own beer. When I opened my pub, I thought I had this covered by hiring an experienced, enthusiastic chef. However, since he had no ownership, he left after 2 years (family issues), and my wife and I were left to run the kitchen.
    You are going to have to sell at least 50% food, based on licensing requirements by state. Additionally, when running a restaurant, you have to keep constant hours, if you run a small brewery, you can always take a day off to go fishing.
    I would reccommend you get a group of people who have various strengths: brewer (not just homebrewer); restaurant manager (he can hire cooks); financial/bill paying guy; and promotion/PR. It greatly helps if these people are good at fixing things: from glycol piping and sanitary valves to grease traps and refrigerators, since these things WILL break and they usually will break when servicepeople aren’t available. Make sure ALL of these core people are owners/managers, i.e. they don’t get paid hourly, they get paid based on the profitability of the place.
    I’m not telling you not to follow your dream, I did and despite losing a boatload of money, it was a memorable experience during which I made a lot of friends, made some good beer, learned alot about dealing with people, and finally learned alot about myself. Feel free to contact me via e-mail if you’d like to continue this discussion.

  5. Alex thanks for all of the thoughts. I am getting a better and better understanding of what I am getting into. I know that a brewpub is always going to be a restaurant first and a brewpub second. I plan on getting a manager who knows the restaurant industry and also a financial person to take care of the books.
    I don’t think my wife would allow me to dive into this dream without doing all of my homework and making sure that I knew what I was doing. I will absolutely be getting in contact with you and seeking some advise. Thanks

  6. Thanks for taking the time to put this together. While I love seeking out a new brewpub, I love everything beer, operating what is basically a restaurant is not that appealing to me. This issue has been the cause of some procrastination in ever developing a business plan that I really believed in that does not involve a restaurant to accompany my beer. I would be interested to know if anyone can list a brewery(s) that has been founded in the last decade, that has been able to grow into a viable business and does not have a brewpub. My favorites – 3 Floyds, Dogfish, Stone, Schlafly, etc – all incorporate the restaurant. Are there any examples of breweries with no restaurant element that could be emulated?

  7. Nick,

    I know of one: One Guy Brewing in Berwick, PA. It was started by Guy Hagner. He set it up so that his food offerings just barely satisfied the legal requirements. (Think hot dogs on a spinning warming rack, which you were discouraged from ordering.) Seating is at a minimum as well.

    He’s since grown and changed the name to Berwick Brewing Company.

    This is the model that I have in mind for my brewery. I really have no desire to run a restaurant, and I want to keep the focus on the beer. With the support of a good local beer culture, I think this can work.

    -Bill

  8. Hey Bill thanks for stopping by. I would love to go just brewery but I really do love food as well. For a brewpub approach I think that food, and good food at that, is essential to success. People have tons of choices for restaurants and, while I hope to produce great beer, that market is much more limited. Good luck on your endeavor and let me know how your progress goes.

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