Brewery Setup - Poll on preferences - Tasting Room or No Tasting Room?

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jdlev

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Well...we've got investors considering us now here at Hob Knob...so we may be hitting the big time sooner rather than later - and have some very big decisions in front of us :ban:

My question is a simple one. We're considering either finding a location with a tasting room or without a tasting room. What do you guys think (feel free to the pros/cons lists below)?

Tasting Room - Pros
*Big revenue boost - in visiting other breweries, they say around 50-60% of their revenues come from their tasting rooms & indoor sales
*Greater exposure
*Would enjoy watching people enjoy my beer and interactions with the customers
*May have better presence in the media since there would be a location people could visit
*Increased revenues from paraphernalia sales (mugs/tshirts/etc)


Tasting Room - Cons
*Limits locations - you need a highly visible location
*Upfitting costs & rental costs go through the roof
*Additional licensing
*More employees
*It would only be open 3 days a week - fri/sat/sun
*Increased costs would dictate an investor be brought on board or I'd have to go all in with an SBA loan.
*an additional 1000sq ft minimum space would be required for the tasting room
*DRAM shop laws are a huge consideration - you can be sued for up to $500k if you fail to police peoples intake of your brews and they end up hurting someone. (What a joke...I'm a brewer, not the police!)

No Tasting Room - Pros
*More locations available - you can get a 1500 sq ft hole in the wall for $800/month w/ water. Retail - you're talking $2k+ for rent.
*Less risk - you're not diving in head first, and instead can start and grow at your own pace.
*You can put more funds into production rather than outfitting a location.
*Less hourly requirements.
*Startup costs would be around $20,000 versus 5x that for a location with a tasting room
*More time for brewing since you don't have to open a tasting room for 20+ hours/week
*More time with family
*No need to worry about DRAM shop laws (where you can be sued if one of your patrons injures someone because you failed to cut them off)


No Tasting Room - Cons
*Decreased revenue stream
*Less contact, interaction, & feedback from customers
*Reduced profit margin since you aren't selling directly to customers
*Decreased sales from paraphernalia like t shirts/growlers/mugs/etc

DANG IT! Forgot the poll...just post your vote below - Tap room or no tap room?
 
Go for the tasting room. It will help with distribution and people will find you regardless of location. Get a hold of southern oregon brewery. Great location for a brewery. Bad location for visibility. They have a great and active tasting room. Mt. Taber is currently moving to vancouver, wa and is adding one as well to help out with self distribution.
 
I think the pros are worth it, one of the main ways people come to really like a brewery is through visiting, tasting great fresh beer, and having a fun time with the employees.
 
I vote tasting room. IMHO - all the pros of having one, especially revenue and exposure, far outweigh the negatives.
 
Good product and promotion > prime location. Especially starting out.

One of my favorite breweries is in Williamsburg, VA. Williamsburg Alewerks.

They are on the backwater end of town near the trailer parks (no offense meant to anyone in a trailer, just not high traffic or money area) and in an industrial park next to a brick wholesaler.

They do tours of the brewery, which is in a garage next door, and have tastings and retail.

We visit every time we go, including this coming weekend!
 
With location, I think it all comes down to costs...if you can be in a high traffic area for <$500/month more in rent...I'd probably go with it...
 
Oh sure. If you can swing it, do that.

Just saying the beer crowd will seek you out if they like your product and you promote it right.

Williamsburg Alewerks is served pretty prominently in the nicer restaurants in town. They have brochures up front at some of them that say "BREWERY TOURS" in big friendly letters. That's what got my attention at first.
 
One of the brewerys near me, Flying Fish, does not have a tasting room per se, but does brewery tours on Saturdays. They are in a comercial building in an industrial park. After the tour, they give out samples in the lobby. The one thing is that they have shirts, hats, glasses and other stuff for sale and seem to sell a lot of those items after the tour.
 
I don't think people are introduced to new breweries by driving by it. They see it in the store and buy it. When they like it, they do a google search for the brewery and see from your website that you have a taproom. It's not like a typical restaurant where if you aren't seen by passers by, you don't get much business. Your taproom advertising is on your bottles. At least that's my take.

IMO do the taproom and don't worry that much about the location. Just make sure it's easy to get to and not in a run down industrial area.
 
I'd say go for the tasting room. Here in Bend, Boneyard sells a ton of growler fills out of their miniscule tasting room. They don't serve food, so they only give out small samplers, and people buy growlers to go. They also do cheap growler fills on Wed. night ($6). Almost impossible to move in there.
 
seabass07 said:
I don't think people are introduced to new breweries by driving by it. They see it in the store and buy it. When they like it, they do a google search for the brewery and see from your website that you have a taproom. It's not like a typical restaurant where if you aren't seen by passers by, you don't get much business. Your taproom advertising is on your bottles. At least that's my take.

I'll respectfully disagree. While I have sought out some of my favorite breweries, seeing one I'm not familiar with (particularly when traveling) makes me hope I've stumbled upon a new and undiscovered gem!
 
Cigar City brewing is in a prefab steel building on the edge of an industrial park in a low-rent area of Tampa. Their tasting room is really just some drywall, a few bathrooms, and a 15 seat bar in the corner of the prefab metal building, nothing fancy. Nice, but nothing a home DIYer couldn't do for about $3-5K over 3-4 weekends.

And they have one employee that pours the beers, unless they have a special event. I would assume that this guy has other responsibilities around the brewery, since the tasting room is only open 18 hours a week.

You couldn't drive by this place if you tried, yet the brewery tours and tasting room are always full during their open hours Wed-Friday, 11am-5pm.

So for about 75% of your cons, the answer is MAKE GOOD BEER, AND THEY WILL COME. It doesn't have to be easily accessable, visable, fancy, open alot of hours, expensive, or labor intensive, just make good beer!
 
Yes to the tasting room. Location doesn't matter, if the beer is good they will come. Many of the best small breweries in the country have their tasting rooms in warehouse districts.
 
Agree with seabass7. If the purpose of the tasting room is to be a bar, location us critical. If the purpose is to showcase your work and tell your story the people will come to you. A nano here in Denver, 1 year old just moved to a 5bbl from a 1bbl system. Tasting room has almost always been packed. Only one or 2 servers and typically 8 to 20 patrons. Location is an industrial park. No one finds it by being in the neighborhood
 
You could always start off without a tasting room and just do brewery tours with samples. Add a tasting room later when your beer is better known and people will seek you out.
 
Eagle rock brewery is down right hard to find. Back street in not so great area with no sign-age and very little parking - it is still standing room only on most Fridays/Saturdays/Sundays. I have owned a few retail businesses and you should base the rent you pay on the foot traffic of the area. The extra $1200 a month is nothing if you are selling $2000 more in beer per month than you otherwise would. If you could swing it - opening up in a highly trafficked mall or the cool moneyed retail districts would almost guarantee a certain level of tasting room business - perhaps enough to subsidize the brewing that happens in the back. Lots of breweries start that way - when they get the wholesale business to support it, they open up a dedicated brewery in cheap space.
 
Go with the tasting room.

You can still be in a cheap industrial park, your customers will come to you if your beer is good. You don't really need a large space -its a tasting room, not a bar. I think the biggest reason for a tasting room is that your customers will appreciate being able to come in and try your new beers and talk to your staff about beer.
 
More exposure = More patrons...

With location, I think it all comes down to costs...if you can be in a high traffic area for <$500/month more in rent...I'd probably go with it...

Must have a tasting room! I "met" Surly brewery in its tasting room, never hearing of it in Michigan. I'm now their biggest fan, and keep hoping for a wider distributorship than Minnesota. I talk about their beers all the time, even on this forum. The word-of-mouth is huge. I might not buy a six pack of a new beer, but I'll surely go to the tap room once. If I love it, I'll go often and buy the beer in growlers as well.

A tasting room is ideal for small start-ups. Location is NOT really important- all beer geeks know each other, and tell each other and we actually like going to out-of-the-way places. For example, there is this garage brewery in St. Paul that only sells growlers, and only between 3-6 PM weekdays. BUT.......they have a tasting room. And I have been there, and so have many, many other beer geek friends. That's 300 miles away from me! A sub-optimal location is fine, unless you want a brewpub with walk-in traffic. Beer lovers will go to where you are. (The Hideout in Michigan is another great example- you can barely find it when you're looking for it- but it's always crowded!)

Of course, a high traffic area is not a bad idea! But remember parking as well. If you're in a high traffic area, and I just want a growler to go, I'm not wanting to park a block away. I want to run in, buy a growler, say hello, and go out. If it's a high traffic area where it's congested, and I can't get in or out easily (especially if I'm staying and having a couple) I will skip it and just drink a beer or five at home.
 

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