Near Beer

The fad fades, but brewpubs survive

Beer occupies a spot of heady importance in our lives. It accounts for 88 percent of all alcohol--by volume--consumed in the United States. We bowl "beer frames," see through "beer goggles," and develop well-rounded "beer bellies." We drink, on a per capita basis, about 340 bottles of the stuff each year.

Yet the James Page Brewing Co. in Minneapolis, Minnesota, may shut down soon. Fort Spokane Brewery, in Spokane, Washington, closed last month. Trout Brook Brewing Co. in Hartford, Connecticut, shut its doors as well. And in Dallas, Routh Street Brewery ceased to exist last year. According to the Institute of Brewing Studies in Boulder, Colorado, brewpubs and microbreweries sold 5.7 million barrels of cold brew in 1999, just slightly more that the previous year. It looks like tough times for brewpubs.

But looks can be deceiving.

"It's really going to come back," says Baine Brooks, corporate general manager of Two Rows Restaurant & Brewery in Dallas, of the brewpub industry. Throughout the first half of the last decade, as many as 200 microbrew establishments opened each year. By 1998, however, the brewpub craze faded--just another fad, like cigars, seaweed, Tang, and fondue. Yet the Association of Brewers expects final numbers for 2000 to show a modest increase in growth, maybe as much as 3 percent.

In fact, the craft beer industry, which includes America's 1,023 brewpubs, has settled firmly into a niche. "Right now a lot of the guys who don't know the food industry are out of the business," Brooks points out. He believes a number of operators jumped into microbrewing when it became hot in the early 1990s. These opportunists, like 18-year-olds, lacked the necessary staying power. "We're getting the non-players out of the game," he says. Market share stabilized at 2.9 percent in 1998 and 1999 and half of the top 50 craft breweries experienced double-digit growth last year. "I think you might see a couple more dwindle out," says Dawn Fabian, manager of Rock Bottom Restaurant & Brewery in Addison, "but you'll always have people who want to try brewpubs."

No longer new and exciting, craft beer and brewpubs have become a normal part of the restaurant landscape. Small-batch beer just sets the brewpubs apart from other restaurants--a part, but a small part, of their attraction. "A lot of our success has to do with food and service," Fabian says. "Customer service is the No. 1 reason restaurants fail." Industry analysts indeed claim that the normal boom and bust cycle of restaurants, business errors, and competition stifled the brewpub boom. "I think it's the food and service more than the beer," Brooks agrees. He stresses that successful brewpubs must concentrate on the restaurant aspect of the business. Of course, every damn brewpub in the country apparently offers Buffalo wings and oven-fired pizza, for some reason. But Dallas brewpubs provide full menus and service. "Bottom line, it's good service," adds Fabian. "That's the only way to stay in business."

Small-batch beer makers rarely expect to beat the big boys. "We have struggled because a lot of people go to name brands," Fabian says. Beer sales at the Rock Bottom chain--27 brewpubs nationwide--actually grew 13 percent in 1999, but the metroplex location added a line of bottled beers (Miller Lite and such) to appease patrons. "Beer is not held in the esteem here that it is in other countries," says drinking man Mike Cantrell, who makes the whole thing sound like a tragic cultural flaw.

Sure, the U.S. consumes more beer than any other country--23 million kiloliters, according to foreign reports issued in the incomprehensible metric system format. (That's more than 6 billion gallons, or something on the order of a gazillion trips to the porcelain god.) Per capita, however, the Czech Republic tops the beer-drinking world, followed by Ireland and Germany, or so says a study by Kirin Brewing Co. in Japan. Each Czech citizen pounds down on average roughly 500 12-ounce bottles a year. Either Europeans are just a bunch of drunks, or they really respect good beer.

By contrast, Americans chug about 340 bottles per capita--mostly mass-produced, pre-packaged swill. (The numbers on consumption come from various sources and may not add up exactly. The point is, we're a thirsty bunch.) Anheuser-Busch accounts for 48 percent of the U.S. market (96.8 million barrels of beer), Miller 22 percent, and Coors 11 percent. Imports attract a more adventurous 9 percent. Craft brews rarely capture more than 3 percent of all beer drinkers. "It's an acquired taste," admits Mike Kraft, award-winning brew master at Two Rows. "But their beer is processed a bit more," he complains. "My beer doesn't have to be processed and stabilized. That stuff changes the flavor."

So apparently Americans appreciate the delicate blandness lent by pasteurization and the subtle metallic taste produced by the canning and bottling process. We also fall for that born-on dating crap. Most mass-produced and microbrewed beers live within a certain age range. Only a few beers--Thomas Hardy's Ale, for example--actually mature in the bottle.

Hence the importance of food and service in establishing repeat business at a brewpub--there are no brand names or beer birthdays to promote. Still, it costs roughly $300,000 just to start up the brewing side of a brewpub, and establishments that fail to hold onto skilled brew masters suffer or die. Brew masters are a part of the atmosphere of brewpubs, along with the conspicuously visible fermentation tanks, pipes, and other brewing paraphernalia. The masters maneuver through the restaurants, oblivious to customers, constantly checking equipment and instruments. They brew beer. They are more important than the rest of us. In order to produce a single batch of beer (about 60 kegs), brew masters must first mill about 1,500 pounds of malt, then perform the precise alchemy of beer-making: mixing, mashing, sparging, adding yeast and hops, boiling, cooling, and probably chanting a few incantations. It helps, also, to learn German pronunciation. It takes two weeks to brew ale, six weeks for a lager.

It's a precarious thing, and despite management's concern for food, the beer clearly matters. "You make one mistake and everybody knows about it," admits Fabian, for once acknowledging the importance of beer to a brewpub. Rock Bottom, by the way, once lost a batch when the cooling system failed--not a problem fatal to business, but a temporary setback peculiar to the industry. Brooks tends toward conservatism at Two Rows. "We've got 220 recipes, but we run three beers all the time," he says. "I think brewpubs have a problem with going outside the dots and brewing what they want rather than what the customer wants." And the customer wants only what's familiar. To capitalize on American tastes, Rock Bottom created Dallas Light, a craft brew comparable to Miller Lite.

Despite temporary setbacks, branding problems, and a rash of closings, brewpubs cling to a niche. The craft-beer fad may be over, but demand for beer remains strong. The remaining brewpubs plan to focus on food and service, while adapting to the mundane tastes of America's beer-drinking crowd.

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