The Emerging Tasting Room Model
Does a tasting room help expand and grow your brand and brewery? According to the latest numbers from the Brewers Association, there are over 7,000 breweries in the US. With the ever-expanding craft beer market, breweries are taking to a newly emerging tasting room model. With this change, they’re looking to increase profit, define their brand and interact directly with customers. Is the new tasting room model defining the new business of craft beer? What can breweries do to leverage this updated idea?
Emerging Tasting Room Model
So, what exactly is the emerging tasting room model? It’s a shift toward keeping things local, and leaving the power of sales, marketing, and reputation in the brewery’s own hands. Currently, 83% of the population lives within 10 miles of a brewery and openings will continue to increase at an average of 2 breweries a day. This means locals are choosing to skip the bar and instead head to a brewery. With that, breweries are offering new ideas and events to draw in crowds and sell beer at a higher profit margin.
In recent years, microbreweries with a tasting room producing between 1,500 and 5,000 BBLs a year have seen a greater growth rate than breweries without a tasting room. Profitability has been a major factor in breweries ditching major distribution companies. Instead, breweries are relying on taproom sales through draft taps and cans in order to build their business. Selling beer in a taproom can be 4 – 5 times more profitable than selling beer to a distributor. This is causing start-ups and smaller breweries to shift their focus from large distribution, to a more focused and limited distribution in their tasting room.
Recent Trends in Tasting Rooms
In addition to draft sales at a taproom, recently there has been a trend towards to-go beer sales in the tasting room. Breweries like Other Half and Trillium are almost strictly selling their packaged beer from their tasting rooms. This shift allows for better profitability and control over distribution. Breweries are also seeing some serious hype leading into a release day. Breweries are generating an online buzz beforehand, with lines forming hours before the tasting room even opens.
Microbreweries with tasting rooms have seen a growth of about 15% more than breweries of the same size without a tasting room. In addition to sales and awareness, breweries are also enticing consumers into their tasting room with special events and weekly activities. Breweries are hosting yoga classes with beer, animal adoption events, and trivia nights. These new ideas are in turn drawing new audiences, thus building loyalty with those that aren’t just going to a brewery for beer.
Laws and Limitations
Since the days of Prohibition there have been laws that have placed limitations on tasting rooms. For instance, New Jersey requires anyone visiting a brewery tasting room to take a tour before purchasing a beer for onsite consumption. A bill to remove this requirement has passed the NJ Committee, but still has some ways to go before being passed into law. Texas is currently the only state that does not allow direct to-go sales from a brewery. It’s a law that breweries in Texas are actively trying to change. New Jersey and Texas are just two states with stricter regulations, however progress is being made in order to benefit this new tasting room model.
Higher Profitability Makes the New Tasting Room Model Sucessful
Tasting rooms are becoming a valuable asset for breweries. Allowing better profitability, establishing and building brand awareness and receiving direct feedback from consumers. Profit is any brewery’s bottom line. It can be hard to directly see the profit being driven from sales in the tasting room compared to the sales in distribution. OrchestratedBeer gives you the ability to easily see the profitability of taproom sales in any beer and the ability to account for anything in your tasting room. This allows you to see the direct correlation of sales and profit, thus enabling you to succeed in the emerging tasting room model.