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A PUBLICATION OF THE OREGON RESTAURANT & LODGING ASSOCIATION | MAY/ JUN 2015

Craft Beer To-Go

GROWLERS MAKING NOISE IN THE RESTAURANT INDUSTRY

Plank Town Brewing Co., Springfield

also in this issueBalancing the Bar with Profits

Proposed Business Regulations May Stunt Job Growth

Collaborating With Regional Marketing Organizations

Craft Beer To-Go

GROWLERS MAKING NOISE IN THE RESTAURANT INDUSTRY

also in this issueBalancing the Bar with Profits

Proposed Business Regulations May Stunt Job Growth

Collaborating With Regional Marketing Organizations

hree flights of shot glasses lay emptied in their wooden paddles at Plank Town Brewing Company in Springfield, as the waiter makes his way back to

the table with a growler topped off with the brewery’s Blue Pils. Satisfied with a diligently thorough taste test that ran the gamut, from the refreshingly crisp and translucent to the lingeringly thick and

coffee black, it’s time to get ‘out of dodge’ with the evening’s haul of hops. The large airtight bottle of craft beer will make a great companion for tomorrow’s backyard barbecue.

Growlers are yesterday’s invention, first flowing onto the scene in the 1880s, trickling through Prohibition, and ultimately resurfacing with the blossoming craft brew business in the 1980s. Historians

and etymologists debate the word’s roots, but many believe they can be traced back to “rushing the growler,” when children in working class neighborhoods were hired to fetch beer in steel pails from local taverns. Some have also tried to attribute the term to the sound of gas escaping the beer container or to the rumble of a metal can full of ale sliding across the bar.

Colorful turn-of-the-century tales

GROWLERS MAKING NOISE IN THE RESTAURANT INDUSTRY

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aside, Oregon’s brewers are authoring their own modern-day success stories with new twists on the craft beer-to-go concept. Today’s multi-pint-sized growlers are making considerable noise in the Northwest’s foodservice industry.

In fact, a virtual river of craft beer is flowing from Oregon taps into 32-, 40- and 64-ounce glass and metal growlers. Intense demand for regional beers drives

a supply line of 220 in-state breweries that crafted more than 1.6 million barrels of beer in 2014. In April, the Oregon Brewers Guild reported that Oregonians bought a whopping 585,000 barrels of beer produced in Oregon in 2014, a 14.3 percent increase over 2013. According to the Guild’s report, Portland is the largest craft beer market in the U.S. by dollars and share with a 39.3 percent share in 2014.

The Northwest is at the epicenter of craft beer production, which now represents 11 percent of the total volume of beer brewed in the United States, so it’s no surprise that growler mania has taken Oregon by storm. “There are still growler places opening up everywhere,” observes Plank Town Brewing Co-owner Bart Caridio, who sells his hoppy creations around the state. “You go into one of the

PLANK TOWN BREWING CO., SPRINGFIELD Left: Beer flight tray of four 4 oz tasters,

Right top: 64 oz Growler and 32 oz GrowletteRight bottom: Co-owner Bart Caridio

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growler stations, and a lot of them have 30, 40, 50 taps and they're from breweries all across Oregon. Most of them tend to rotate their taps, so they don't always have the same beer on. One week they'll have an IPA from Plank Town, the next week an IPA from Boneyard, and it makes it interesting for the clientele coming in there. I think most people want something new and different, and the growler stations are able to provide that variety. When they find one that's really popular, I think they tend to keep them on because it makes economic sense.”

Northwest brewers like Plank Town are doing their best to offer affordable options. “The range of what's available in bottles off the shelves is fairly limited,” continues Caridio. “People really love variety right now. When I go out to eat, I want something new and different. I want to taste something that I haven't tasted before, some chef's creation of something different. I don't want the same old thing. It's the same thing with beer. People come in and get little samples and then decide on which one they want. We've had people bring in up to five or six growlers to get filled.”

Nick Arzner, who launched Corvallis-favorite Block 15 with his wife Kristen in 2008, enjoys being able to offer their patrons a regularly rotating selection of quality beers that inspire loyalty and future visits to the restaurant. “Before it was widespread, you were limited to what beer you could enjoy by what you could buy in the grocery store,” remembers Arzner. “That would limit you to larger brands of packaging breweries. With growlers, now your choices just blew up. You can get beer from a small brewery like Block 15 and enjoy that at home, at a barbecue or whatever you're doing. Oregonians, especially, love supporting craft breweries, and they love variety. Rather than just buying a six pack of brand A at the grocery store all the time, they're going, ‘Hey, I want to go to Block 15 and get a growler of Ridgeback Red. Next time I want to go to another brewery and grab a growler or go to one of these growler fill stations, and I have 20 options.’ So I think the maturing craft beer market and to have that opportunity to enjoy so many more styles of beer, flavors of beer, brand of beers, it's a really neat thing.”

“I think most people want something new and different, and the growler stations are able to provide that variety.”

Bart Caridio, co-owner PLANK TOWN BREWING CO., SPRINGFIELD

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PAN-FRIED STEELHEADwith crispy stone-ground polenta, wilted spinach, manchego cream sauce

PLANK TOWN BURGERwith tomato, lettuce, pickled onion, aioli

Even visitors driving to the coast via Corvallis have stopped at Block 15 to explore Nick’s latest concoctions. “If you're traveling and you've got a couple growlers in your trunk, you can go and fill up a few growlers at this brewery you've never heard of, take them home, and share them with your friends,” suggests Arzner, who says it happens all of the time. “They’ll sample our beers, decide on a few growlers, and take them home.”

It’s a safe bet that growlers are fueling conversation on porches and patios from Ashland to Portland and all points between. “Craft beer is meant to be shared,” believes Annie Pollard, owner/brewer at 7 Devils Brewing in Coos Bay. “A growler holds 4 pints (other bottles hold more) and must be consumed all at once, otherwise it loses its CO2. So, when people enjoy growlers they usually enjoy it with friends, partner, family etc. A growler of delicious beer is a celebration of camaraderie.”

Lisa McArthur, owner of Untapped in Portland, loves bringing her patrons together with the best brews that the Northwest has to offer. “It's a very exciting time for craft beer across the country, and in Portland in particular!” says McArthur, who offers a rotating variety of beers on 36 taps. “Last year the number of breweries increased at a rate around 19 percent, and most of those were small craft breweries. The increase of taprooms and growler fill houses are a direct reflection of the increased craft beer offering. Taprooms, such as Untapped, are becoming neighborhood hangouts for craft beer lovers to taste a variety of beer offerings and talk about them with other

beer enthusiasts. Who wouldn't want to be a part of that?”

Growlers full of beer like Aboriginale or Farmer’s Gold have stimulated more than conversation at Block 15. They have had an effect on the bottom line. “There are two ways to look at the impact,” explains Arzner. “About 5 percent of our in-house beer sales are growlers – not a huge percent, but if you're talking about opening up that revenue stream for to-go sales, that's good. What you don't see in that number and the reason why I started with Happy Growler Sundays is you take a day that's maybe normally not as busy, and what we would find is about half the people would bring the growler in, have lunch, and fill it. Not only do you have those sales to-go, but you're bringing people in.” Those patrons often stay for a bite to eat, and leave with a growler.

Despite increasing competition in the area, the restaurant-brewery continues to fill not only seats, but also its Block 15-branded to-go bottles. “We've seen sales be strong and maintain, which says a lot considering now there are a lot of new places to fill up growlers, where we used to be the only game in town.”

Indeed, legions of growler-toting consumers have access to fill-up stations from downtown Corvallis to the coast, where 7 Devils Brewing pours specialty ales like its Spring Seasonal IPA Trillium and Shipwright Vanilla Stout. The practical Pollard looks at growlers as steady stream of revenue that supplements 7 Devils Brewing’s sales. “Growler beer is great for us because we already have the infrastructure to fill growlers, and it’s just one more way

to get the beer to the people,” she explains. “The markup is such that we make a bit more on growlers than keg sales, and it’s much easier than selling beer by the pint, which generally requires food availability and carries more liability.”

Customers who carry their ale and pilsner prizes out the door also help promote Oregon’s craft beer brands. “It's something that we identified right away, especially for a small craft brewery that didn't have the money to invest in a lot of packaging material,” explains Arzner. “We can buy these growlers, and it’s great advertising. You take a growler to a barbecue and people say, ‘What is this?’ We've got our logo on there, and you're able to advertise our business and get another sales mix.”

Plank Town Brewery beers are often featured in growler stations around the state, which has helped spread word-of-mouth about silky smooth lagers or special ales like UnObtanium, a hearty double IPA brewed with six varieties of hops. “It's really good advertising for us, to get our beer on at the growler stations,” says Caridio. “People try it, then they start asking for it at their local bar or their local restaurant. We're really supportive of the local growler stations.”

McArthur markets growlers in her social media and other campaigns, a strategy that has been critical in helping Untapped realize its potential. “Growlers are almost 50 percent of my sales, so they definitely help promote the brand,” she emphasizes. “We always include them in our advertising, especially to promote ‘fill up for the big game’ or ‘great host/hostess gift’-type thing.”

“... A growler of delicious beer is a celebration of camaraderie.”

Annie Pollard, owner/brewer,7 DEVILS BREWING, COOS BAY

Plank Town growlers

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It helps that the entrepreneur knows her growler demographics. “Our target customers are generally in their 30s and 40s, often with young families, who spend less time in the bar scene, love good quality craft beer and like to entertain at home,” according to McArthur. “It's also been fun to see how many 20-year-olds are coming in, and couples and groups in their 50s.”

Few are immune to the irresistible charm of a growler full of craft beer. An older generation with plenty of spare change and an urge to serve something other than a six-pack in a cardboard holster is helping bolster growler sales at 7 Devils Brewing. “In our area, we tend to target baby boomers,” says Pollard. “They buy growlers for potlucks and family dinners. During the summer it’s people on vacation of all ages who come buy growlers. They bring them camping or to the beach. Part of travel is experiencing the local flavor, and growlers facilitate that in a cost effective way.”

Pollard admits that her company is not making a fortune selling beer-to-go, but it’s still worth the effort. “The money we make from selling growlers is not huge, but unlike my pub, which requires a delicate balance between the labor required to produce quality food/service and the gross sales required to pay the bills, growler sales require minimal labor and pretty much have a guaranteed profit margin,” she explains.

Growler fills often make up a more significant share of sales at pubs like Untapped. In fact, McArthur’s business model is built on a foundation of glass. “I created my business plan around growler sales,” she says. Unfortunately, not everything has gone according to plan. “As a new business, it's hard sometimes to get the new, limited run seasonal beers from the breweries,” she points out. “These are small batches that can't meet the demand, so of course the newer bars have a harder time getting our hands on those.”

Breweries like Block 15, which stores in the neighborhood of 170 barrels of aging beers in its cellar, face their own challenges, but with a different link in the supply chain. “Depending on the beer you're brewing, in our industry, we are dealing with some ingredient shortages, specifically with some varieties of hops,” reports Arzner. “That’s an issue.”

He adds that clearly separating craft beer from the big-brand pack is another challenge. Arzner knows that as craft breweries continue to grow, so does the threat of competition and the potential to lose market share. “The more and more craft beers and breweries there are, the more important it is for you to be unique,” he contends. “I think and say, ‘What can you add to the conversation we're having about craft beer?’ That is a challenge. We really need to work on quality, education and uniqueness, but without being cute. Not just to do it because it makes us unique, but to be unique because it makes a difference, because it adds to the conversation.”

Pricing is a topic certain to stir discussion from brewers to bars operators. Arzner views craft beer as an affordable luxury. “That's one reason why it's growing in popularity,” he says. “You feel like, ‘I might be drinking the best pint of IPA I can right now, and it cost me $4. But within that realm, especially when you get into our barrel-aged beers, that does cost more money to produce. As a craft brewer, I do worry about where my prices are to keep it

as an affordable luxury and not a $12 pint.”Keeping cost at bay and prices under control can be a

challenge in an industry that constantly tempts restaurateurs and brewers with new innovative equipment and systems. In fact, a new packaging system has piqued Arzner’s interest. “There's a new technology that was developed by a brewery in Colorado that we're probably going to buy for our next taproom, and rather than a glass growler, it's a 32-ounce aluminum can,” he reveals. “You're improving the portability of it, and you're getting rid of a lot of the oxygen issues. I'm looking forward to playing around with that at our new taproom this summer.”

Brewers are often infatuated with anything that enhances or maintains the quality of their products. For instance, “We're seeing new equipment being released that keeps growlers pressurized in the fridge,” shares Pollard. “It’s exciting because it means people will be drinking fresher beer, and also it can be a more environmentally friendly way to drink beer as the carbon footprint is smaller (22-oz. bottles are heavy and have to be shipped multiple times before the beer gets to the consumer, and recycling of glass is energy intensive). I predict more and more people will have mini-draught systems in their home, which will mean a lower cost of craft beer to the consumer and higher growler fill sales for pubs, restaurants, and breweries.”

Although some have speculated that “growler” actually refers to the cranky temperament of those 19th century pioneers who polished off a pail of ale and had to return to work, McArthur suggests that tapping into new technology is apt to make today’s jovial pub patrons even happier. “There are so many new inventions happening involving growlers,” she concludes. “All have the goal to improve customer experience and satisfaction with fresher beer that lasts longer. It's a very exciting time for draft beer, in the pub and to go. I have no idea what's coming next, but I can't wait to see it!” | KIRK RICHARDSON

Bart Caridio, co-owner Plank Town Brewing Co.

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