We learned a valuable lesson during our recent Brew Talks event in San Diego: if you give three bar owners enough beer and ask them about the local beer scene, duck and cover.
Slater’s 50/50 founder Scott Slater joined O’Brien’s Pub owner Tom Nickel and Scot Blair, the founder of Hamilton’s Tavern, for a spirited and boisterous conversation about the challenges of owning a beer beer bar in one of the country’s hottest craft markets.
The hour-long conversation featured plenty of diatribes about competing with brewery tasting rooms, increasingly difficult buying decisions, escalating beer prices and the importance of strengthening relationships with craft suppliers. Through it all, however, it was Blair who passionately shouted the loudest.
“If I just talked about how awesome everything was, it would just not be prudent,” he said during the talk.
That’s why Brewbound asked Blair to share some additional thoughts on SKU proliferation, his expectations of brewers and the state of craft in San Diego.
The following is an edited record of his responses.
Brewbound: What is the most difficult part of being a bar & restaurant owner in San Diego?
Scot Blair: Growing pains. Back in the day, the sample spectrum was much smaller. There was a large stock of great beer and a very small amount of places that wanted it. The relationships, the community, the partnerships were tight. We were always viewed as “vital.” With the expansion of “crafty” places and the final change of direction from large distribution, craft is now another SKU. We have the same amount of beer, but many more places asking for it. So you can imagine the struggles we have maintaining those well-built, older relationships. It can be a challenge.
BB: And how about the amount of craft options you have to choose from now?
SB: I think the more SKUs the better. I’m always looking for a different flavor, a different style, something interesting or outside the box from a brewery that may not typically produce a certain style of beer. Out-of-stocks can be an issue, but with the sheer volume of brands there is always something to replace it with. It’s only an issue if you’re desperately trying to build a following for a particular flavor.
BB: What style trends are you noticing in San Diego? What is the consumer gravitating towards?
SB: “Anything” IPA. Amber, White, Brown, Black, Red, Session. People love IPAs. Sour beers are trending and a new affinity for Belgian ales is surging.
BB: So how do you make your buying decisions? What are you looking for when you put a new brand on tap?
SB: Buying decisions start with the quality of the product, first and foremost. Then they move towards need, typically based on flavor and style, availability (limited, flagship, specialty etc.), and then to distributor and brewery relationships. With relationships, we try to ask ourselves a few questions: Do we have one? Are we trying to build one? What’s the perspective of the company and their business philosophy? Do they understand my brand?
BB: How do you strike a balance between cache, velocity and higher priced items?
SB: Each of these decisions comes into play. You want to make customers happy but at the same time, you need to have an understanding of the valuable role that you play in educating the customer in today’s expanding market. This is vital. Price matters but the idea with 28-to-30 handles is to have a balance in pricing and a variation that allows “Peter to pay Paul.” Variance in pricing on an elite tap list is status quo. Super expensive, high-end “flagship” items that are always in stock are a difficult pill to swallow.
BB: How do you view stalwart craft flagships like a Stone IPA or Sierra Nevada Pale Ale? What is their role on your taps? Does the consumer want to see brands, on tap, that they know they can get at the grocery store or is on-premise all about the hard to find stuff?
SB: It really is a balance of both. At Hamilton’s they (consumers) want rotation. They want new and they want to have something they haven’t tried, but that has to be healthily intermingled in with some good ol’ staples (Russian River Pliny, Green Flash West Coast IPA). We’ll bring in some of the old stalwarts to remind these people of our roots (Sierra Nevada Pale Ale, Anchor Liberty), but these days it’s about innovative flavors and brands at a bleeding-edge place like ours.
BB: How committed are you to building strong, long-lasting, local flagship brands? What are some ways that you are doing it?
SB: I’m very committed but only in a way that works with my business model. So the way to get behind these brands, for me, is to do events. I’ll bring in a broad range of flavors for a special event, that way I can pepper in a brewery’s flagships as part of a total story for the company.
BB: Are there any other considerations you make when purchasing? Does geography play into your decision-making?
SB: Local is always a focus but it’s not the “end all be all.” Again, the quality is most important and of course the relationship is key. If I need an IPA and I have 10 breweries to choose from four different distributors, many factors will go into that decision for me. Relationship and what have I done for them lately (for me lately). Maybe I’m on the outs with neglect from my distributor and I’d prefer to scale down on their brands because of it. Maybe I have an event in two months and I want to start building momentum for a brand. Maybe I just saw a friend from the brewery at another event and I’m reinvigorated about the brand. You know they say: “the squeaky wheel gets the oil,” and there is truth to that. Relationships are so important in our industry and a good beer from a GREAT person will always win over a GREAT beer from a person who cares less about your brand or an “OK” beer from a disingenuous owner.
BB: Once a craft brewer gets on tap, what is expected? What types of service are you looking for once a new brand hits the draft lines?
SB: If it’s new to the market, then well-thought and supported launch events are critical. We do a lot of rotation, but we also host a lot of events. We say under-hype and over-deliver. It’s my charter and it leaves an indelible impression on the consumer in a very positive way. Give them more than just a glass of beer and a nod.
BB: Rotation is a concern for many brewers around the country right now. What scares you about all of the rotation out there right now? How can craft brewers survive the rotating handles?
SB: Breweries need to understand that there are multiple tiers in the game today.
- Tier 1: The Elite on Premise accounts. There aren’t many — maybe 10, if that. These places sway to the beat of a different drummer but they lead our industry and it’s everything tier 2 bars want to be, but won’t have the conviction to be. Make these guys happy, continue to build strong relationships and be patient. If your liquid is top shelf, these guys will want it. Figure out how to value their brand so they can value yours.
- Tier 2: These are the gateway guys. This is on-premise “bread n butter.” They don’t need the same attention or variety that Tier 1 bars do and they are happy with a little love and some flagships. Make sure you and your distributor are doing them right. Tier 2 is kind of like a cat. They are independent, but they still need fed. Tier one is more like a girlfriend.
- Tier 3: They don’t know if they want it yet. This is the hardest challenge. Focus some attention to this but remember, this can be an exercise in futility. This is where you focus your distribution partners’ time and bring in your guys once you have a bite.
BB: What are craft brewers doing right? What are craft brewers doing wrong?
SB: Making beer and caring are what the majority is doing right! The wrong — new guys are getting into the business for the wrong reasons. Proliferation of these “pseudo tied house,” monopoly tasting rooms is an ugly precedent. If you want to be a bar, open a brewpub. If you want to manufacture, then focus on better beer and better relationships with your retail partners or don’t open a manufacturing facility. Don’t manufacture then compete with your retail market and justify it. Focusing more on your type set and can design rather than the quality of the product is wrong. Hyping to fleece is a wrong. Forgetting the roots and the traditions and not putting enough emphasis on building relationships or maintaining relationships is struggling.
BB: How are San Diego wholesalers?
SB: To be honest they can be a pain in the ass. I wrestle with these guys all the time. How can I get information in a timely fashion? How can I be notified when folks are in town? How can they send folks to us who may be in the dark? How can we get proper allocation of the beer we want? How can we get them to send the folks, into our business, when we are doing events with the brands we’re purchasing from them? How can we have them meet proper delivery timelines? How do we have them remain flexible for the tier 1 accounts, when they are built to box everything into a one size fits all program? These days, wholesalers obviously see the money, so its not as challenging. There are still challenges and they have A LOT of mouths to feed. But they need to remember to respect history and tradition.
BB: Anything else to add?
SB: As I said earlier, we were here in the beginning and we will be here in the middle and at the end or we will be no more. Beer isn’t a fashion or a trend. It’s our way of life and we will find a means to overcome any obstacle to bring the people the best, most interesting and unattainable offerings while always paying the homage to where we came from. Supporting those brands that are supporting our mission. That’s a “Blair-antee!”