Dollars on tap: draft beer serves up pourable profits when selection and equipment are in sync

Cheers, Oct, 2006 by Lew Bryson

The one constant of the fashion industry--that everything eventually comes back into style--is also true in hospitality. Cocktails have made a comeback, fresh-prep focused restaurants are giving fast food a run for its money, and, look here: It's draft beer, suddenly getting attention again. A lot of attention.

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What's bringing draft beer out of the cooler? Is it flavor? A media trend? Some new fad? Perhaps all of those, but for operators, part of it is certainly something much simpler: profit.

Among those looking to drive the draft profit message home to operators is Anheuser-Busch, which created a Draft Sales and Technology Department in 2003, headed by Rosanne Leake. She gets right to the point. "The profitability can be significant. In the end, it's not all that complicated. Being able to serve consistently good draft beer tends to bring the customer back."

William Reed, bar manager and partner at Standard Tap in Philadelphia, Pa., knows that "there's nothing you can sell that has a better return on investment than draft beer." He's put his dispensers where his mouth is: Standard Tap is all-draft; no beer in bottles or cans there.

But wait. Bottles and cans look simple and cheap compared to draft. You put a cooler behind the bar, you take out the bottles as you need them, you re-stock when you need to. Draft is all those lines and valves and taps, not to mention moving around the heavy kegs and foamy beer spraying all over. It can't be a "great return," can it?

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"Let's clear up a few urban myths," says Jaime Jurado, director of brewing operations for The Gambrinus Company in San Antonio, Texas. He's made a close, technical study of draft dispensing (he wrote the book on it; see sidebar). "The economics are simple: a bar owner can either manage seven cases of beer or a keg. The cases take up more room in the cooler, and there is a real physical waste problem in managing all the empties. It costs a lot to empty dumpsters.

"A keg requires less physical space," Jurado continues, warming to the subject. "When emptied, it weighs about 25 pounds, and is picked up by the distributor. And the purchase cost of the beer in that keg will always be appreciably less than the equivalent in cases of bottled beer--more than a $25 difference is usual for the same amount of beer."

QUALITY MATTERS

It's also easier to get draft to the customer, Jurado points out. "The labor to un-tap a keg, drag over a replacement keg and re-tap [it] is less than the accumulated labor of managing seven cases of beer in glass. And the total weight of those seven cases is approximately 245 pounds; compare that to a full keg at 165 pounds. Sure, one can conveniently handle a case at a time, but if you have six or more bottles available, you start needing a much bigger, costlier cooler and you probably have to walk some distance to replenish cold wells with beer from the cooler. All this disappears when draft beer is exploited."

Reed at Standard Tap agrees. "The equipment is absolutely worth it. Compared to the amount of money we spend on kitchen equipment--which wears out faster--it's less. Buy the best equipment: There's less waste and the bartenders can pour faster."

The other side of draft's resurgence is the booming popularity of craft beer sales, a strong, profitable bright spot in a lagging beer market. A good example of how and why that works can be found at The Old Fashioned, in Madison, Wis., which opened in December 2005. Partner Bob Miller explains that to be the kind of place they wanted it to be, local draft beer was essential.

"We're a traditional Wisconsin tavern and restaurant, so we wanted to put as much Wisconsin tap beer on as we could. Tap beer is the way to go," says Miller. "People want to know what's on tap and they'll come back for it."

A craft draft program can be very varied. Just ask Patrick Mullin, general manager of The Drafting Room in Exton, Pa., who ran 248 different draft beers through in 2005 (he's ahead of that pace for 2006), and he's disarmingly honest about the reason. "Why? It's part of the fun. Part of the hobby is finding new beers, new breweries, new seasonals. It's really for selfish reasons: I like to drink good draft beer. More power to me!"

Mullin's sentiment is common among draft beer supporters: They like draft beer enough to mention that preference. Is it better? "Tough to say," Mullin hedges. "Draft is handled better, as a general rule. The importers and distributors know they have to keep the kegs cold, so they do. I prefer draft, but it's got to be at a place where they take care of it. Like any other business, hobby or calling, you've got to find someone who's passionate about what they do. If they don't like wine, they're not going to become a sommelier."

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That's what A-B's Leake calls a "beertender." It's all part of what she describes as "raising the focus on draught." The use of "draught" is intentional. "We've drawn a line in the sand internally," Leake explains. "When we spell it 'draught,' it's distinctly beer, not a version of a book.