OnTap Magazine

But even with the desired volumes and a decent distributor there is another hurdle: shelf space. Beer real estate in South Africa is not abundant and competition has become fierce with larger established players able to out manoeuvre the smaller start-ups on price point consistency oH product and reliability of distribution. So if you don’t want to scoot around your city delivering kegs from your car and you don’t want the eZtra stress and eZpense oH a distributor then what option is left? 6he third model is that oH the brewpub which was – and still is – the driving force behind what has become a sustained revolution in craft beer in America. The definition oH a brewpub is rather vague according to the US Brewers Association itos pan establishment typically one including a restaurant selling beer brewed on the premises q +n the 5tates the definition is based on volumes and the presence of a kitchen. At the end of there were over breweries in the 7nited 5tates including craHt breweries subdivided into brewpubs microbreweries and regional craft breweries. In South Africa we currently have just over breweries including contract brands with at least running Mitchens on the premises. Many more have tap rooms with a limited food offering. This model of running a small tap room has been embraced as both a place to showcase the product and a way to bring in some all important profit although these breweries still distribute most of their product. THE PLEASURES AND THE PITFALLS The true brewpub model offers a unique opportunity to combine the love of beer with a high-quality restaurant experience. It also gives you direct route to market and removes the issues associated with both self and outsourced distribution. +t s a game oH relatively small volume and high margin. The market comes to you for beer at its freshest and often are drawn by limited availability. The brewpub owner must create a compelling reason for people to come to you. This model does mean unless you intend to open multiple brewpubs that you will service a niche market and inevitably be a liHestyle business which Hor some is ideal. Brewhouse and Kitchen in the UK have shown that scaling the brewpub experience is possible. They opened their first brewpub in 2ortsmouth in in a little over five years they have eZpanded to 20 brewpubs and are still growing. 6o achieve success with a brewpub you have to maintain an outstanding experience foremostly based on quality oH produce an ever changing eZciting oHHering and eZcellent Mnowledgeable service. All of this is an incredible investment in time and money and can easily go wrong. As a brewpub owner you have to be many things a brewer a cleaner a bartender a waiter a cheH a trainer and the boss. Running a full restaurant is a whole other business and not for the faint hearted. These many hats might leave you exhausted and without time to enjoy the perceived perHect liHestyle 4ory .ancellas owner and head brewer of Aegir Project $rewery is oHten looMed to as an example of how the brewpub model can succeed but he believes some donot realise how tough it can be p+ fear that everyone is going to jump on this brewpub thing without actually knowing what goes into it. Be prepared to work seven day weeks up to 15 hours a day to maMe it worM q he warns So with such long hours and so much that could go wrong why are brewery owners turning to this model? Roscoe -leinloog who recently opened *appy &ays $rewery in the -<N /idlands cites the start-up costs for a bottling line and production of bottles for distribution as being prohibitive p6he costs that go into bottling and distributing those bottles far outweigh the cost of serving beer from a keg at your own establishment q says -leinloog *e adds that he would rather concentrate on the pbeer eZperienceq that his brewpub aims to impart on the customer. MARGINS AND SAVINGS Lancellas has ceased any form of distribution after starting out with a mix oH on consumption and oHH consumption first through selH distribution and then through a third party p9e stocMed very high-end restaurants and they didn’t look after the beers so we needed to pull bacM q he eZplains *e also notes that he now gets a lot more time to brew develop recipes and interact with customers whereas before he would be out on the road distributing and selling his product. 'ben 7ys Hounder and %'1 oH /ad )iant $rewery in ,ooburg operates a sizable brewery with an in-house restaurant but also distributes p+H + started now in this current climate + would open a brewpub and grow the brand beHore going into distribution q he says. He also observes that distribution is a long game in creating value for a brand that will likely lose you a lot of money along the way. )reg %asey Hrom #Hro %aribbean $rewing %ompany has a unique insight into both models from the vendor side of the fence. He started off as a restaurateur with a wide beer selection and now has an in-house brewery. He distributes to a very limited amount of accounts and pushes his own beers through his very popular and long- established restaurant. Casey has seen his margins noticeably increase since he began serving his own beers through a number of the restaurant’s taps. He is wary oH the pitHalls oH distribution p;ou need to Mnow your boundaries q he warns p+H you donot Mnow your beeros shelH liHe then don t put it on the shelH )et a lab or do not distribute. Rather sell your beer Hresh Hrom brewpub or tap room q &ereM 5\abo director at one oH 5#os biggest distributors of microbrewed beer 5ignal *ill 2roducts sees three options going forward. He advocates for a consolidated distribution model: It's a game of relatively small volume and high margin ontapmag.co.za | Summer 2018 | 33