Pizza Today - October 2016 - 22

with KEITH COFFMAN

on tap

Why Craft Beer?

Editor's Note: On Tap is a new monthly series by Keith Coffman, owner of Lost River Pizza Co. in
Bowling Green, Kentucky. Throughout the series, Keith will discuss the ins and outs of successfully
selling craft beer in your pizzeria.

any of you sell the big, light
beers at your restaurant, and
some of you may offer a small
selection of craft beer. However, most of
you don't sell craft beer. Maybe you don't
know much about craft beer or don't have
a draft beer system. Adding 20 to 30
percent to your bottom line is definitely
worth installing a draft system and educating yourself about craft beer though!
It's no secret: the big, light beers are
the market leaders. They made up
71.8 percent of the overall U.S. beer
market in 2015. The companies that
make them spend a lot of money on
advertising and these beers are available
everywhere. From an economic perspective, you should sell both the big, light
beers along with craft beers.
You're probably asking yourself, "Why
should I sell craft beer?" There are a
number of good reasons, but for the
sake of this article, I'll give you three

2 2 / P I Z Z AT O D AY. C O M / O C T O B E R 2 0 1 6

reasons why you should be selling craft
beer. First, you'll significantly increase
your revenue and profits. Secondly, the
craft beer market is growing and doesn't
appear be slowing down anytime soon.
Finally, you'll be able to differentiate
your restaurant from your big-chain
competition and entrench yourself in the
"support local" movement.
From a revenue standpoint, you'll
make more selling craft beer. The cost of
a half-barrel keg (15½ gallons) of
domestic beer is going to be $100 to
$130, depending on your location. A
half-barrel keg should yield between
115 and 120 pints. The fair market value
price on a pint of domestic beer is
between $2 and $4. If you sell 115 pints
at $3 each, you'll gross $345. Subtract
your beer cost of $115 and you'll make
$230 and a 200-percent profit margin.
Now let's run the numbers for craft
beer. The cost of a half-barrel of a good

India pale ale is $180. Let's say you sell
115 pints at a fair market value price of
$5.25 each. You'll gross approximately
$604 and make $424 after subtracting
your keg cost. For the IPA example,
you make a 236-percent profit margin
- and $194 more profit than what you
made off of the keg of big, light beer.
Granted, depending upon your customers, you may sell twice as much of
the big, light beers as you do craft beer.
But keep in mind this paradigm is shifting in America. More people are drinking craft beer, especially millennials (who
account for 57 percent of weekly craft
beer drinkers, according to the 2015 U.S.
Yankelovich MONITOR Survey).
The case for selling craft beer gets
stronger when you look at data from the
Brewer's Association, which shows that
craft beer volume growth was up
12.8 percent in 2015 alone in the U.S.
The segment's market share jumped
from 5.7 percent in 2011 to 12.2 percent
in 2015.
Tap into the marketing opportunities
of craft beer. Differentiate your pizzeria
from the chains by selling craft beer. A
few chains have embraced craft beer, but
most still haven't "figured it out." Their
weakness is an opportunity to offer your
customers something the chains don't!
Advertise that you offer craft beer. The
"support local" movement is a huge
marketing opportunity for you as well.
As of December 2015, there were 4,269
breweries in the U.S. There are probably
breweries brewing craft beer near your
restaurant, and Brewer's Association
Data shows that two-thirds of craft beer
drinkers prefer beer brewed locally.
There's so much to talk about in the
coming months. Who's ready to take the
journey with me? ■
KEITH COFFMAN is the owner and operator
of Lost River Pizza Company.

By JOSH KEOWN

http://www.PIZZATODAY.COM

Pizza Today - October 2016

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