The profitable business of brewing your own beer

26 November, 2020 by Vanessa Cavasinni

The brewpub offer isn’t just enticing from a marketing and customer capture standpoint – it’s also quite profitable.

The idea of what a pub offering entails is constantly evolving, and encompasses so many different possibilities that we now reference different categories of pub: the gastropub, the gaming pub, the destination pub, the live music pub and more.

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The brewpub has been on the radar for some time now, but has started to build momentum and appeal with the huge growth in popularity of craft beer over the course of the last five years. Breweries have begun creating their own on-premise offerings, and pubs have started brewing their own beer on-site.

There’s been a huge boost in the former proposition of late, with the likes of Mountain Goat opening its first brewpub outside of Melbourne in over 20 years, with open of an inner-city venue; while Sydney’s Sauce Brewing has announced it’s heading for the tropics by opening of an outpost in Cairns. Meanwhile, UK brewer BrewDog, having opened its first Australian brewery in Brisbane last year, has just announced it’s planning to open several more BrewDog bars in Sydney, Melbourne and Brisbane in 2021.

“It’s a statement of confidence in the way that Australia has dealt with the [COVID] crisis. We operate bars all over the world and have seen the full range of outcomes depending on various internal policies. We think Australia will head into 2021 in a strong position, and that’s why we want to push on with our primary ambition of getting our beer into the hands of as many Aussies as possible, as fresh as possible,” states Calvin McDonald, BrewDog’s head of Australian operations.

This massive influx of brewpub propositions is clearly in response to consumer appetite. And while there are indeed some fantastic established brewpubs from hoteliers – think The Lord Nelson Brewery Hotel, The Australian Hotel & Brewery, and The Wheatsheaf Hotel – why aren’t more publicans getting in on the act?

Many operators cite a lack of space, expertise and labour as the main issue, as well as start-up costs as the main hurdles to entering the brewing space. But Spark Breweries and Distilleries (Spark Brew) has disrupted those notions for the past few years with a brewing system that can take up as little as 15 sqm, with processes that are automated enough that with some initial training on the system, a pubs’ staff member can take on the project as their own.

But with so many craft breweries in the market, hoteliers can easily position their venue as a pub for craft-beer lovers by simply offering an ever rotating tap list covering multiple breweries and beer styles. So if you can do that, and tap into that customer preference, why go to the effort of setting up your own brewing system?

There are two reasons. First, to capitalise on the cultural and marketing opportunities that come with an Australian consumer who is looking for more local provenance and a bespoke offer more than ever. Second, because it is not only a huge profit generator, but can also increase the value of your pub asset.

Want to read on? Check out the entire article below, as published in Australian Hotelier November 2020.