How tough is the restaurant business? According to research by Dr. H.G. Parsa in 2007 while at Ohio State University’s Hospitality Management program, very tough. Looking at 2,500 restaurants in Columbus, OH, Parsa found that one in four closed or were sold in the first year. After three years, the total closed or sold was 60 percent. And most of these businesses didn’t have the added complexity of a commercial brewery on premise. With these kinds of odds, Las Vegas starts to sound like a better place to invest money.
Even with these daunting odds, brewpubs became the backbone of the craft beer movement. According to the Brewers Association, 59 percent of the 1,759 breweries in operation in 2010 in the U.S. were brewpubs. While they may not match industry giants on quantity, the existence of these breweries enables the Brewers Association to point out that the majority of Americans now live within 10 miles of an active brewery.
Consistency and Scalability
Brewpub chain would appear to be an oxymoron. Operating a successful multi-unit food service business is all about systems, procedures and manuals. Not exactly the sort of behavior of most early craft brewers. Interestingly, many of the habits that result in great beer–including consistency and quality control–are vitally important to a successful chain restaurant.
According to data from the Brewers Association, more than 60 brewpubs in the U.S. have more than one location. The scalability of a brewpub concept depends on a great many things, including strong management, the talent of the brewing team and the ability to attract and retain talented kitchen and wait staff. It is a simple fact of life for anyone wanting to open a brewpub that poor management, subpar beer, bad food or lousy service can quickly sink the business. You have to do them all well to have a ssuccessful brewpub chain.
The Brewers Association considers a company to be a brewpub if at least 25 percent of beer sales are done on-premise. In 2010, 55 new brewpubs opened and 33 closed.
Mike and Brian McMenamin trace their roots in the restaurant business back to 1974, but it was not until they opened the Hillsdale Brewery & Public House in 1985 that they started brewing. Now they have 60 locations, including brewpubs, pubs, hotels and movies theaters. Brewing actually takes place in 24 locations in Oregon and Washington. Besides brewing beer, McMenamins also runs two distilleries, a winery and a coffee roaster.