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Multiplying the Taproom Effect

As taprooms continue to play a central role in the success of breweries large and small, some brewers are orienting their entire business model around a network of interconnected outlets.

Tom Wilmes Jul 25, 2017 - 10 min read

Multiplying the Taproom Effect Primary Image

Figueroa Mountain Brewing Co. opened in a nondescript industrial park in Buellton, California, in 2010. Founders Jaime Dietenhofer and his father, Jim Dietenhofer, were fastidious in their research. They worked on their business plan and brand building in earnest for at least five years and began thinking about the business much earlier. The plan was straightforward: make great beer and sell it through a distribution model. Grow the brand and slowly extend its reach.

Shortly after Figueroa Mountain opened its production facility, however, it became apparent to its owners that a fundamental shift had taken place in the way consumers preferred to purchase craft beer. It wasn’t enough to pick up a six-pack from store shelves. Many wanted to taste the product in the place where it was brewed and enjoy a more personal experience with the beer and the people who made it.

“We originally said, ‘We don’t need a taproom because we’ll just make great liquid and have a great brand to get it out there,’ ” Jaime Dietenhofer says. “And then people started knocking on the door at the industrial park and saying, ‘Hey, we want to come in and taste the beers,’ so sooner rather than later we built out a taproom, and that became the model.”

Today, Figueroa Mountain (at top) operates six taprooms along California’s Central Coast, in addition to distributing to retailers and restaurants throughout the state. Most of the beer is brewed at the original production facility in Buellton—which recently upgraded to a 60-barrel BrauKon system—but brewers at each taproom also produce taproom-only beers to round out the twenty to twenty-five taps at each location. Several of Figueroa Mountain’s production beers originated as taproom-only offerings.

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“We see these other locations as a testing ground where our brewers can dream big and think outside the box,” Dietenhofer says. “We want to continually try new things, and we’ve been able to retain really good brewing talent because of that.”

In addition to serving as an incubator for new production beers, taprooms also offer a much higher retail margin and allow brewers to remain in direct control of their beers from kettle to sale. The benefits with regard to brand building, direct consumer feedback, and customer relations are also numerous.

For these reasons and more, taproom-only distribution remains a very viable model for hyper-local breweries, and even the largest craft brewers are remiss to open a new facility without including a taproom or onsite restaurant. And, increasingly—as Figueroa Mountain and California-based Fieldwork Brewing Co. demonstrate—some brewers are centering their entire business plan on a network of dispersed locations.

A Matter of Quality and Context

For Alex Tweet, owner and head brewer at California’s Fieldwork Brewing, the decision to organize his business around a constellation of satellite taprooms comes down to quality and context.

Taproom-Effect-Fieldwork

Fieldwork Brewing’s Napa location (left) within a mixed vendor marketplace shares some common design elements with its taproom counterpart in Sacramento, California (right). Suni Sidhu, courtesy of Fieldwork Brewing.

Fieldwork operates standalone taprooms in Berkeley, Napa, and Sacramento, with additional locations set to open in Monterey and San Mateo in Spring 2017. In addition to an ever-evolving tap lineup, the brewery offers to-go beer in growlers and crowlers, as well as a limited-release can program and distribution to select tap accounts.

Focusing on a diverse and constantly changing lineup of well-made beers and self-distributing them within a tightly controlled regional footprint is the only way to ensure quality at every step of the way, says Tweet, who previously brewed at both Ballast Point and Modern Times Beer in San Diego.

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“I’d fly out to Philadelphia for Philly Beer Week, and people would be freaking out over [Ballast Point’s] Sculpin. I’d taste the beer and think, ‘this just does not taste nearly as great as it tastes at the brewery in San Diego,’ ” Tweet says. “That’s not a knock—it was still a fantastic beer—but it was not the same animal.

“That was one of those things where we realized that, if we really want to be quality focused, it’s not possible to also distribute long distances,” he says. “All too often breweries stretch themselves thin selling to so many accounts, and you know their distributors can’t always keep a close eye on things. We wanted to self-distribute 100 percent of our beer so that we have our own people going in every single day to check the lines and to make sure that our beer is fresh and is being stored and served properly and that it’s being described in the ways we’d like it to be. And that’s what led us to open all the tasting rooms.”

Out of Sight but Always in Mind

This is not to say that operating multiple locations of the same brand doesn’t come without unique challenges. Outlets can be separated by hundreds of miles, in some cases, with each located in a distinct community with its own demographics, competition, and peculiarities.

Turnover is notoriously rife in the hospitality industry, and with dozens of employees spread among multiple locations, it can be a challenge to foster a strong sense of company culture and participation. And then there are the multilayered logistics that come with ensuring that each location has the raw goods and materials—not to mention the constant supply of fresh beer—it needs when it needs it.

“That’s the hardest part,” Tweet says. “Not only are we self-distributing to all our draft accounts, we’re also distributing to all of our tasting rooms, which in turn means we’ve got to manage the supply chain really tightly to make sure that each location is supplied with the right amount of beer and not sitting on beer longer than it needs to. If we’re getting a new beer release from Berkeley, it’s got to be in Sacramento or Napa within a day or two. That takes a lot of people and a lot of work.”

To help bridge any gaps, both Figueroa Mountain and Fieldwork have employees who travel between the various locations to ensure that operations and the customer experience are consistent across the board.

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Bringing People Together

Successfully managing multiple locations is a complicated equation that requires strategic foresight and strong leadership, not to mention a great degree of trust in the people who help run your business, say both Tweet and Dietenhofer.

“We’re sometimes working sixteen hours a day, six or seven days a week,” Tweet says. “We’re exhausted, and there’s only so much we can do. We can’t hire pretty good. When we hire someone, they have to be out of this world.”

Tweet worked as a program manager in Callaway Golf’s human resources department before he entered the brewing industry. He can’t stress enough how critical it is to hire people who exude the qualities and values that align with your company culture.

“It’s a very important utility of a healthy business, and not being able to spend face time with all of our employees very often was a big concern with regard to retention issues,” he says. “Thankfully, we’ve been outstanding on that front with very little turnover, and what we’ve had has been positive turnover. We don’t want transactional hires. We look at employment as a relationship.”

To help foster that relationship, both Fieldwork and Figueroa Mountain offer competitive employment benefits and regularly bring together employees for meetings and events.

For example, Figueroa Mountain purchased and retrofitted a National Parks bus to shuttle employees between its various taprooms and accounts, as well as to take them on excursions, such as group hikes, and to sporting events. The company also offers a monthly opportunity for any employee who likes to join its brewers on the brew deck and learn about the brewing process.

“It’s extremely important to us that everyone at any of our locations has a voice in what the brand is and who we are as a company,” Dietenhofer says.

That goes for customers, too. Figueroa Mountain created a Mug Club where its most loyal clientele can enjoy discounts and new releases at each of its locations as well as participate in special outings and events.

“Those guys are the best marketers of all because they’re the ones who believe,” Dietenhofer says. “They’re the ones who taste the beers for the first time and give us their feedback and help keep the lights on. That’s a huge part of our business.”

PHOTOS AT TOP: COURTESY FIGUEROA MOUNTAIN BREWING

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