What Strategy for Distributing Beer in Bars? Part #2
Article written in collaboration with Alexandra Berry.
Brewers’ contracts.
Your biggest obstacle to getting your beers listed in bars will be the brewery contract. This means that the draft beer system at the point of sale was financed by a brewery (often an industrial one like Heineken, AB InBev, Kronenbourg, etc.) in exchange for listing their range for several years, until the financing is recouped.
This means the bar is contractually obligated to purchase beer from this brewery until its draft beer system is fully financed. Breaking the contract risks having the system removed. This amortization period is often calculated over 3 to 5 years.
Upon entering the bar, you’ll immediately see if it’s a chain: if all the taps belong to one of those large industrial groups, you’re definitely in a chain. But don’t be discouraged!
In this case, first make sure that the buyer is genuinely interested in your products and ask them to check their contract and the progress of their amortization.
Very often bar owners have little or no knowledge of the volumes sold and remaining to be amortized on their contract.
A highly successful bar can recoup its contract in 2 or 3 years instead of 5. Furthermore, the amortization is calculated based on the number of kegs sold. If a bar significantly exceeds the contracted volume across all its taps, it is within its rights to reserve a draft beer tap for you while still fulfilling its contracted volume.
It’s always worth asking about contract volumes, durations, and finding a way to sell your beer, or at least be present on the day the contract is fully paid for. Often, owners keep their own draft beer for convenience. If you demonstrate that you’ll be an easy, local, perhaps cheaper, but certainly high-quality and distinctive choice, it could tip the scales in your favor 😉
If it’s truly impossible to sell kegs, offer bottles or cans. The owner and his customers will get used to seeing you on the menu, and you’ll be the first brewery that comes to mind when he recoups his investment.
How to build customer loyalty at a point of sale?
Beyond the taste and success of the beer, a bar owner first and foremost needs consistency: a keg that foams, that blocks the taps, that is infected… this kind of incident can completely disrupt a service during its “rush” and will guarantee that your beer will not return to the tap.
Of course, there may be incidents, sometimes even those that are not your responsibility (a plastic keg stored in a warm place during a heatwave, a beer left plugged in for two weeks, lax sanitation of the lines…) In this case, be sure to make a commercial gesture to cover the inconvenience, the beer spilled down the sink etc.
It is always useful when listing your products to give the team a tutorial on the storage of kegs and bottles (out of light, in a cool place) and the importance of regular sanitation of draft dispensing lines.
If there’s a problem with the beer, be proactive and offer discounts or attractive solutions.
Once the manager has been reassured about the quality and consistency of a brewery, you need to make sure that you will not be replaced by the next salesperson or brewer who comes to do a tasting.
How can this be ensured?
- Collaboration and support.
Offer a few regular beers, but be proactive in “livening up” your drinks menu with limited-edition or seasonal brews to create a constantly changing and appealing selection. The bar needs to stand out from the others in the area, so help them achieve that!
If you can, offer tastings and tap takeovers , not only to help them but also to introduce your product range to their customers. After all, they are the ones who will ensure your long-term success!
Your servers and bartenders are your brand ambassadors, so make sure they know your beer, appreciate it, and know how to serve it . As we’ve seen, it’s always beneficial to hold a tasting for the team, to review the basics of beer styles and how to present them properly. This will equip them to talk about your beers, taste them, ensure the product is always fresh and good, and that the beer is poured correctly.
You can have the best product in the world, but if it’s served lukewarm in a dirty glass by a waiter who doesn’t know how to talk about it, it will never win over a customer!
- A financial interest.
Even if they’re passionate, a bar manager or owner is still a businessperson! Make sure they have a good reason to stay with you and promote your establishment over another bar. As we mentioned, if you have the resources to finance the draft beer system for a new bar or the renovations of an existing one, this can create a long-term contract with the business.
If you don’t have the cash flow for this type of operation, a very simple solution is to offer a discount per hectoliter on an annual basis. Calculate your costs and selling prices, and rather than offering promotions from time to time, guarantee a discount at the end of the year based on sales volume.
You can offer increasingly attractive discounts based on the volume tiers reached. (100 HL = €x discount per liter, 200 HL = €X discount, etc.) The owner will therefore have every incentive to buy all their beer from you, promote it to their customers, and so on. Furthermore, this will also allow them to rotate your selection and offer different beers without being penalized. The bar will be able to become a true brand ambassador for you without constraining or restricting their choices. In the long run, this will also save you many hours of price negotiations.
How to differentiate yourself from other breweries?
- Access to limited edition beers.
For a selection of bars you’d like to work with, take the time to inform them of upcoming new products so they can become your ambassadors. Are you launching a new passion fruit TIPA for the summer? Offer a launch party at the bar so they can feature it! Are you collaborating with another brewery? Offer a double tap takeover featuring both of your breweries at the bar.
Be proactive in proposing and organizing activities to not only build loyalty among your points of sale, but also to create true brand ambassadors.
- The Collaboration or Bar Beer.
For those who can afford it, propose to your partner bars that you create a beer together for this point of sale. Make sure they can guarantee good volumes, and develop a recipe together that you could potentially sell them at a lower price but in large quantities every year.
If they are involved in the creation process, the boss (and the team) will be proud to present the result of this collaboration and to carry your brand.
If that’s not possible for you, make sure to organize a tasting evening for the team, have them participate in a brewing day, so they can discover your brewery and your beers.
- Visibility.
No, we are not advertising agencies, nor manufacturers, but unfortunately, promotional items work.
Having beautiful glassware with your logo, original coasters, collectibles, and a team behind the bar wearing stylish brewery T-shirts… all of this helps you stand out in a very saturated market. If you also have a unique and distinctive brand identity, you should leverage it to the fullest.
The Beavertown brewery has done a phenomenal marketing job to ensure the visibility of its brand.
Once again, remember to reward your loyal customers who support and grow your business. Staff will always appreciate receiving nice T-shirts/sweaters, glasses, or other goodies. Even better, drop off samples of each new brew you create as a sneak peek.
And what beer will they then recommend to their customers?
In conclusion, once you’ve overcome the challenge of securing a brewery contract, the next challenge will be building loyalty among your retail partners. This is achieved through support, understanding the financial needs of the managers, and simply by providing them with the best possible service. The more valued a team feels, the more they’ll want to promote you. Involve your customers as much as possible so they naturally—and enthusiastically—become your best ambassadors.
