Brewery taproom sales at expense of bar sales?

Over the past two years, taprooms and satellite retail outposts have emerged as both lucrative profit centres for craft brewers and opportunities to deliver unique experiences to thirsty consumers, says Brewbound in a recent post.

But, as the number of taprooms has grown, so have concerns about their impact on the Three-Tier System, which regulates the production, distribution and sale of alcohol in the United States.

According to estimates by the Brewers Association, presented at the Craft Brewers Conference in Nashville, 2.7 million barrels beer (3.2 million hl) were sold directly to consumers from taprooms or retail shops in 2017. Based on a members’ survey, the BA estimates further that taproom sales grew 19 percent last year and accounted for about a third of the segment’s total growth.

Craft brewers may cheer this development but critics believe it merely cannibalises other sales channels. Lester Jones, Chief Economist for the National Beer Wholesalers Association told Brewbound that in his opinion taproom visits do not create additional occasions, merely draw consumers away from existing drinking establishments.

His evidence? Well, total ethanol consumption per capita (that is beer plus wine plus spirits) has remained relatively stable at 2.5 gallons (9.5 litres).

There is also a more worrying development to be noted: consumption of spirits and wines have risen in recent years. This has been to such an extent that, based on total ethanol consumption remaining flat, spirits could soon overtake beer as Americans’ main source of ethanol intake, forecasts Brian Sudano of the Beverage Marketing Corporation.

For bars this could mean that they will have to sell more cocktails to make up for declining beer sales.