Brewing Additions

Established Restaurants Converting to Brewpubs

July 30, 2014 By Brandon Hernández

‘The Elbow Grease Factor’

Of course, not every brewpub yields such an unabated influx of profit and positivity. Brewpubs present a number of challenges, the likes of which owners of traditional bars and restaurants never encounter. For starters, there is the financial outlay for brewing equipment and tanks as well as construction. Then there is the issue of space. Brewpubs require more square footage, which typically equates to higher rent. And if the business is successful, increased demand will drive a brewpub to maximum capacity, to the point where it runs out of available space and has to make decisions on whether to add on, move or expand to additional facilities.

Success is actually the genesis for most potential brewpub pitfalls. Fast growth can make it difficult to control food-, brewing- and employee-related costs. Changes are ongoing, and adopting a corporate culture that not only rolls with, but also invites change is integral to long-term viability. So, too, is keeping beer flowing from the taps. “We only have a three-barrel system. It takes 21 days to make our IPA and 28 days to make our double IPA. But when we release them, they’re gone in four or five days,” says Tofte of his Wyoming  hot spot. “It’s challenging when people come in for their favorite beer and we can’t get it to them for a couple of weeks.”

Then there’s the elbow grease factor. “Operating a regular restaurant is a lot of hard work, but [brewpubs] are much harder and more physical,” says Brandon Wright, co-owner and head brewer at Hamburger Mary’s in Chicago, which acquired an abutting restaurant space in 2009 and outfitted it with a brewery. Running a brewpub is akin to operating two unrelated businesses, often with enough personnel for a single interest.

Fortunately, there is a plethora of advantages to help even things out. The most obvious have to do with the beer. Brewing house beers allows a brewpub to increases its profit margins, ensures its beers are served fresh, allows for increased quality and cost control, and saves money, time and frustration otherwise spent dealing with beer distributors as well as ordeals associated with lost or stolen kegs. There is also the opportunity to improve the food-and-beer program in an extremely customized manner for owners, brewers and chefs willing to go the extra mile of crafting a cohesive, symbiotic concept.

On the customer side of the equation, a brewpub’s clientele benefits in tandem with the business. “Being a brewpub attracts a whole different demographic of customers, many of whom visit us specifically because we are a brewpub,” says Wright. “Our customers are much more knowledgeable about beer, and those that are not are definitely interested in learning more, especially about the ones we brew on-site.”

Back at the Trapp Family Lodge, the fringe benefit that is visitor education goes beyond what’s in the glass and the mash tun. “We raise our own cattle, pigs and chickens, so the spent grain is in high demand for our animals,” Williams says. “Our guests love learning about this cycle, and with our new brewery coming online soon, we will have more spent grain for our animals as well as those from other local farms.”

Hamburger Mary’s is also upgrading its brewing apparatus, switching from a 55-gallon direct-fire system to a four-barrel electric brewhouse from Stout Tanks and Kettles that should be pumping out house beers this spring. The business is also looking to open a second brewpub in a Chicago suburb and is currently scouting locations.

Meanwhile, THAT Brewery has plans for a production facility separate from its Pine brewpub from which 2,500 barrels will be produced and canned annually beginning in 2015.

As with any brewing operation, the opportunity for profitability, growth and creative satisfaction exists for restaurateurs with the aspiration, business sense and emphasis on quality needed to make a go in the brewpub arena. Each subsequent conversion success story will open eyes of ambitious entrepreneurs to the draw of house-brewed beer, converting a number of them in the process, advancing this trend and further diversifying the nation’s brewpub class in the process.