FOODSERVICE IN RETAIL

TAPPING Into In-House Foodservice

FOODSERVICE IN MUSEUMS

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FOODSERVICE IN ENTERTAINMENT VENUES

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In this excerpt from Restaurantowners.com, industry experts discuss the latest data & developing trends:

“ ‘Like many large towns in North Carolina, Charlotte has blossomed with breweries. We have more than a dozen. And I've noticed something important to the business -- the number of competitors has all but eliminated the opportunity to make any money from distribution (to retail grocery or other bars). As a result, the breweries are putting more and more into their 'Tap Rooms' in a bid to attract larger and larger crowds. To keep up with the competitors, that means adding a full-service restaurant concept…”’

According to the Brewers Association for Small and Independent Craft Brewers, there were 6,266 craft brewers in the U.S. in 2017, with 2,252 classified as brewpubs, where the microbrewery can sell drinks directly to customers.

Food goes with beer, and an increasing number of independent craft brewers are considering whether they should operate kitchens. Brewpubs have proven to be a vibrant independent restaurant sector and popular among a demographic cross-section of patrons. Why some brewpubs are bringing foodservice in-house, the pros and cons, and words of advice and caution.

The category is growing. Between 2016 and 2017, there was a 10.3% increase in the number of brewpubs. In many cases, these establishments single-handedly revive lackluster urban and suburban locations.

…a number of states that have a rapidly growing craft brewing sector. In RS&G editor's hometown Cary, North Carolina, Bond Brothers Beer Company turned a once sleepy section of town by the railroad tracks into a vibrant gathering spot.”

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Food naturally follows beer, and food trucks have followed breweries and their guests. At Bond Brothers and many other brewpubs, food service has meant food trucks. Brewpub operators watch their guests’ queue for food truck fare. So, it is only natural that craft brewers are considering whether they should open their own kitchens to capture that revenue and increase guest loyalty.

That said, starting a brewpub restaurant from scratch, or adding foodservice to an existing brewpub concept, is more complex than your average restaurant startup. In addition to the additional cost/debt of building out a brewery, a brewpub offers more opportunities to fail than a traditional restaurant. Not only does an operator have to nail the same types of factors as any restaurant, they must get the beer right as well, and manage the two sides of the business at the same time.”

That’s where we come in with our plug-and-play foodservice integrations…but Restaurantowner.com goes on to discuss the impact adding foodservice has on overall ambience:

“Expanding Beyond Pub Food Ambience

"There are literally thousands of brewpubs in the country, making every type of cuisine you can imagine, at a variety of price points," explains Bart Watson, Ph.D., chief economist for the Brewers Association, a Boulder, Colorado-based not-for-profit group dedicated to small and independent American brewers.

If you think brewpub food means burgers and fish and chips, think again. Brewpubs have "definitely expanded beyond the 'pub food' ambience," he adds. There is even a Michelin-starred brewpub called Band of Bohemia in Chicago that offers bison tartare and duck breast, among other items.

Brewery Bhavana in Raleigh, North Carolina has scallion pancakes, steamed pork buns, and other dim sum items on the menu. Name a type of cuisine and there is probably a brewery that makes that type of food, says Watson. Beer pairs with a variety of cuisines. The owners of Brewery Bhavana note on their web site, We started dreaming together about a small craft brewery, one that would emphasize grace, nuance, intention and the sort of generous hospitality we long to experience at beer bars.

About 35% of the breweries in the country are brewpubs (in other words, they sell their beer directly to the public and sometimes serve food as well), and there are certainly additional production breweries with foodservice, either in the form of dedicated kitchens, or via partnerships, like food trucks, says Watson.”

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“Gavin Fine, co-founder of Jackson Hole, Wyoming-based Roadhouse Brewing Co. says the number of craft breweries with food options is quite high and increasing. It's a natural fit for beer and food to be served together, for both the overall pairing experience, as well as the benefit of not drinking on an empty stomach…”

Stay Just a Little Longer

“What was once a place to 'tour and taste' is now a place to meet, eat and be entertained; the craft brewers tell me it's a win-win, says Chris Tripoli, FCSI, the principal of A' la Carte Consulting Group in Houston, Texas.

Back when they were featuring various food trucks, they were simply providing their visitors with something to eat. But with a successful branded restaurant as a part of the property they receive additional revenue, increase ability to promote their craft brew using various beers in recipes on the menu, and continue brand recognition - probably the most important.”

“Often…They think of more reasons to meet at the facility. This helps take a satisfied customer and make[s} {them] a loyal customer, Tripoli adds. Guests will inquire about hosting private events at the brewery's restaurant.

Rocky Gupta, the owner and president of Chef Luciano Kitchen and Chicken in Chicago, sees the trend gaining momentum because of a need to keep patrons in their seats longer. If you don't have food, you aren't as much of a destination; you are more of a stop. We certainly saw that at our establishment when we added food. People stayed much longer, and check averages went way up.”

The craft beer world is growing increasingly crowded, Gupta notes, and you need a way to stand out from the pack. Food helps with that. We would see people on mini brewery tours, and we would be the stop they made for food. Everywhere else they just got a beer or a sampler. They stayed longer and spent more at our place.

Gupta partnered with a craft brewery called Baderbrau in April 2016 to implement a food program for their tap room. Other pluses, he says, included lower beer costs, stronger marketing for the brand, and high demand for logoed products…

Craft breweries serving restaurant-quality food will continue to proliferate, primarily because the total number of breweries is going to rise in the future. A secondary reason is that beer and food go great together, as they have for thousands of years, and we'll continue to see creative people looking to find new ways to pair them, Watson believes.

Veteran foodservice consultant Rudy Miick, CMC, FCSI, the founder and president of The Miick Companies, LLC in Boulder, Colorado…has found, blending the art and science of brewing and food production is difficult. (They) are two different skill sets and really two different business models. Finding the fit of both is not simple. The best way for brewers to gain the necessary foodservice expertise is also the most direct. He advises: "Hire a proven restaurateur, not just a chef."

Gavin Fine, co-founder of Jackson Hole, Wyoming-based Roadhouse Brewing Co. says "the number of craft breweries with food options is quite high" and increasing. It's a natural fit for beer and food to be served together, for both the overall pairing experience, as well as the benefit of not drinking on an empty stomach.

His company is slated to open Roadhouse Pub & Eatery this fall, which will be a brewery, pub and eatery with elevated gastropub fare, as well as a test kitchen where diners and drinkers will have the first taste of beers that the Roadhouse team will potentially distribute nationwide…

Today, guests want the complete experience - the craft beer, the service, the food - in a marriage of sorts that contributes to the overall experience. Craft breweries with a culinary side to their operation have the opportunity to deliver this complete experience that foodies and craft beer enthusiasts are looking for.

Fine finds that craft breweries that have a focus on the culinary side face the same challenges traditional restaurants do. Perhaps one of the most wide-spread, unique challenges they encounter is making the beer and food meet in the middle, but stay strong on their own, as well. The challenge is to prevent each from overpowering the other, and on the flip side, to prevent the beer and food from not living up to the quality of the other. You want each element to strengthen the other, but to stand strong on their own, too.

Most small craft brewers add foodservice as part of an expansion, according to John Reed, CEC, CCA, AAC, the owner of Customized Culinary Solutions in Skokie, Illinois, and Chairman of the Board Chefs and Culinary Professionals of Chicagoland. Reed says he "likes the fact that, on average, establishments like this tend to be casual and child-friendly" with approachable food and fun and feature simple service with brand recognition generated from retail presence.

High on the list of challenges they face, he continues, is defining themselves clearly in consumers' eyes as either a brewery with food, or a brewery and associated restaurant on property.

Brewpubs offer a casual environment that is inviting to a wide variety of guests. They also tend to be lively and social, which appeals to younger patrons who tend to dine and drink in groups.


Experienced Required

They’re right! “Foodservice experience is required to start a successful restaurant. Brewers that hope to create onsite foodservice need to develop certain knowledge and skills. Fine advises on-the-job training at an established restaurant.

‘Step one is solid training,’ Fine advises. That said, I think the best way to gain foodservice experience is to work in a restaurant. It's the fastest and most efficient way to get a piece of the action. Many of the best hospitality professionals he knows have worked everywhere in a restaurant - bussing tables, bartending, cooking, cleaning dishes, serving and hosting. Having hands-on experience is crucial.”…

Gaining the necessary foodservice expertise can be as simple as engaging a restaurant consultant or chef who can help develop a program. The kitchen equipment needed will depend on the menu program. Some craft breweries are wisely partnering with food trucks. Says Reed, for smaller microbreweries who don't want to be restaurants, they provide creativity, change and require minimal investment by bring added value. This is great for tap rooms.

An additional challenge, says Reed, is going from a tap-room mentality of generally serving only beer to restaurant/foodservice. You must adjust for a more general audience. Some of the issue’s operators may need to ponder for the first time, he says include:

  • Not everyone likes beer, and now you have to offer other beverages.

  • Will you allow minors after certain hours?

  • Adding a different service mentality - from bartenders taking draft orders to servers knowing how to wait tables and provide different services.

  • Space for service ware, food storage, kitchen, etc.

  • Understanding that food and draft beer run at different margins, and their effect on profitability.

  • Trying to maintain the ambiance of a tap room while creating a dining environment that is seamless.

  • Trying to be too ambitious with a menu program.

  • Trying to grow business outside of the traditional hours of these types of establishments, which may close to the public on certain days for cleaning, maintenance, packaging, etc., and then trying to run a lunch and off-hours business that is different from the brewing cycle.

The composition of the kitchen will be 100% space-, menu-, and cost-driven, Gupta notes. "At Baderbrau, we went with a hoodless kitchen due to the location of the space and to limit the initial investment. We were able to design a menu around that. But that's not going to work for everyone."

Watson feels the equipment chosen really depends on the model and the goal. Is the food first, or the beer? Are they equals? What type of foodservice are you hoping to have? It's essentially the same choices any restaurant would have to make.

Miick advises craft brewers to add whatever kitchen equipment they need to produce the products they choose. Hoods are expensive; be prepared. Those who partner with food trucks do so for an eminently practical reason: To forgo these issues.

What's on Tap for the Future?

…Fine also believes we will see more craft breweries adding restaurants in the future. Guests are becoming more sophisticated about beer and food pairing.

When craft breweries started gaining popularity, their patrons geeked-out over the science behind the beer, says Fine. Now, there's a whole new wave of craft beer drinkers that are geeking-out about how the beer tastes certain ways with different foods, how the beer makes the food taste a certain way, and how the beer and food together create a completely different experience. This creates an onus on brewpub operators to make pairing recommendation that will enhance their guests' experience. But even beyond the pairing experience, Fine adds, who couldn't use a bite of food when they're drinking an often high-octane beer?

Gupta warns operators against taking on too much at once, whether it is debt to build out or expand the kitchen or trying to tackle foodservice without an experienced partner. I can tell you a couple of things from my experience: we were stretched too thin on debt, and my partner, the brewery founder, didn't understand fully how much work adding foodservice would be.

 KEEP ON TRUCKIN'… OR NOT

In many cases, it's a marriage made in heaven. Brewpub partnerships with food trucks has proven successful, says Bart Watson, Ph.D., chief economist for the Brewers Association, a Boulder, Colorado-based not-for-profit group dedicated to small and independent American brewers.

Nevertheless, he continues, it isn't a universally good or bad decision. Food trucks offer the opportunity to have food offerings without the additional cost and complexity of a kitchen buildout. One challenge is that you have less control, and if you rotate food trucks - a common model - some guests may only want to come on certain nights.

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Craft brewers are very passionate about their craft - beer, notes Jeffrey Kingman, marketing director and chef in residence for Camacho Foodservice Design & Consulting in Norcross, Georgia. While they may also be passionate foodies, and rarely former culinarians, often they come from non-food-and-beverage industries, starting as home brewers.

A good example is Greg Lieberman, the founder of 26 Degrees Brewing in Pompano, Florida, who was a six-figure engineer home-brewing in his bathtub. He developed great beer, built a following, got significant financing, and constructed a 4,600-sq.ft. brewery two blocks from the beach.

His beer is outstanding, and he chose to not include foodservice, Kingman continues. Instead, partnering with neighboring restaurants and local food trucks, a different one each night. The point is that most brewers will not have knowledge of how to plan, open and run a foodservice operation. Solution: hire consultants from the beginning to help design, plan, open, and launch the foodservice. Also, hire a very experienced foodservice manager."

For restaurants that can't include food, joining forces with a food truck is a good option, says Rocky Gupta, the owner and president of Chef Luciano Kitchen and Chicken in Chicago. Due to restrictive food truck rules and lots of lousy weather in Chicago, it hasn't worked as well as people have hoped. Ideally, I think it is better if they can include a food program because then it is their revenue. Also, it helps keep the brand more cohesive, and gives the brewery further control over the menu.

PROBLEMS AND SOLUTIONS

Brewers who transition into restaurants often make the same mistakes - and all of them are avoidable. According to Jeffrey Kingman, marketing director and chef in residence for Camacho Foodservice Design & Consulting in Norcross, Georgia., some of the most common include:

Problem - Inappropriate facility design, driven by lack of knowledge. "Often, when putting in a kitchen, the operators rely on equipment dealers for design. The dealers offer the design service for free, or for a minimal charge, and that can be attractive to the operator. The problem is that the dealer will only sell the lines they carry, and they will absorb the design service fee into the cost of the equipment and install.

Solution - Hire an independent FCSI (Foodservice Consultants Society International) professional consultant, whose professional ethics state they will serve the client's needs first. FCSI consultants cannot buy/sell/trade/install equipment - this brings professional objectivity to the project.

Problem - Inappropriate facility and menu design, driven by personality and ego. "We often see situations where either the owner or the chef tries to put in a menu concept that is not appropriate for the target or local market - meaning they either don't research the market opportunity, or they don't listen to the market opportunity facts," says Kingman. "This leads to menu development that will not be the most efficient in capturing revenue and sales per square foot."


Solution - Again, hire an experienced consultant, an experienced hospitality manager - or both -- in the beginning of the project.

"Bring them on when you hire the architect/interior designer."

Problem - Not enough market research.

This, Kingman feels, is a key issue. "Any good business expansion strategy has to rely on facts and figures, not on emotions - and the food-and-beverage industry is rife with emotion and passion, by necessity. We wouldn't work this business if we weren't passionate about it. Not thoroughly examining the market from a foodservice perspective will reduce or damage the opportunity for the foodservice to be a legitimate revenue driver for the brewery."“

The best solution, in our opinion, is a UBIQUITY GROUP INITIAL ASSESSMENT & FEASIBILITY STUDY.