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Startups embrace brewpub model

July 11, 2016
Brouhaha's new Maleny brewpub

Brouhaha’s new Maleny brewpub

In spite of its inherent challenges, the brewpub model has found favour with several of Australia’s most recent brewing startups.

Brouhaha Brewery in Maleny on the Sunshine Coast is a 160-capacity venue opened recently by a group that includes brewer Matt Jancauskus, formerly of the UK’s Beavertown Brewery.

“We crunched the numbers and from my experience it takes a couple of years to build a brand and a following – it’s really hard to just hit the ground running,” he told Australian Brews News.

“Everything we did here was built around the idea that the venue would support the brewery for the first couple of years. We can build a name and find some routes to market and look at a production brewery once we’re up and established and refined.”

Opened last November, Bad Shepherd Brewery sells 70 per cent of its beer over the bar at its Melbourne bar and restaurant, co-founder Dereck Hales told Australian Brews News.

“I can see that almost flipping on its head, being 30/70 in about 18 months. And I think that’s what we thought was logical. If you’re going to invest in a brewpub, you need to ensure your brewpub is successful before you look at wholesale,” he said.

“You should have your house in order, otherwise you can be doing great in wholesale but your overheads, your carrying costs are probably three to four times what they would be in a wholesale environment, so you need the revenue to cover that.”

Bad Shepherd's Dereck Hales at his Cheltenham brewpub

Bad Shepherd’s Dereck Hales at his Cheltenham brewpub

Direct feedback
Hales said he and wife Diti both enjoy the hospitality aspect of the brewpub model, which enables them to get direct feedback from their customers.

“We know our regulars, we chat, we’re here every day because we love it. You have to have a thick skin sometimes, because that feedback can sometimes be harsh, but it can also be empowering.

“And the beauty of being able to control your quality is just awesome. We pull those kegs off and it’s straight in the cooler and then on tap,” he said.

Hales said a brewpub also gives a brewery “strength of brand” that simply wholesaling cannot.

“If they can touch, feel, see the actual people behind it or the location where it’s made then there’s a stronger connection with that brand, which I’d argue leads to more sales because you feel an affiliation and you want to be involved,” he said.

Stomping Ground's pop-up launch event

Stomping Ground’s pop-up launch event

Proven success
Guy Greenstone, co-founder of Melbourne’s new 250-capacity Stomping Ground Brewery, points to one of Australian brewing’s biggest success stories as evidence of a brewpub’s brand benefits.

“If you look at what Little Creatures did with their Fremantle venue, and then their other venues as well, it does seem to permeate the brand even in off-premise sales,” he told Australian Brews News.

More recently, Canberra’s Bentspoke Brewery has announced it will build a 50-hectolitre production brewery after achieving annual volume of 300,000 litres in sales over the bar at its Braddon brewpub.

“I think if you start off as a wholesale brewery, you’re really not connecting much with your customers. You’ve got to do a lot of events,” co-founder Richard Watkins said.

“That’s certainly another advantage of being in a brewpub. You really get an understanding of who your customers actually are and what they want.”

What Bentspoke’s customers want turned out to be a six per cent IPA, which is now set for packaged release.

“It’s our biggest selling beer. We never would have launched with a beer like that, but now that we know that’s what our customers want, it’s one of the two beers we’re going to start with,” he said.

Coming up on July 20 and 21, the Australian Craft Brewers Conference (ACBC 2016) includes two seminars related to this area: A Brewpub Brewer’s Strategy for Growth, and Brewpub Economics.

Read more:
Analysis: Dude, where’s my brewpub?

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