More important with startup: Location or Seats?

[einhorn]

We have 64 seats, we also sell kegs in three sizes as well as growlers no food. Our first year we sold 485 bbl, second year 655 and this year looking at 740bbls. About 80% of sales are through the taproom the rest in kegs.

Those are impressive numbers - or do you all consider this normal sales for a taproom situation?

[jwalts]

Keep in mind that hank's sales percentages are probably for dollars and not barrels, and that there's a big price difference between the two types of sales. Hank, would it be in the right ballpark to say that you sell 400 barrels on tap and 340 barrels in kegs? That's impressive, and it speaks volumes about the importance of location.

I've been using National Restaurant Association data to estimate my expected pub/tap room sales. To compensate for selling more beer and less food than most places represented by the NRA, I adjusted the numbers with this equation (based on two NRA data points):

Sales per Seat = ($9,859 - $8,961)/(85.4% - 72.1%)*(FoodSales% - 72.1%) + $8,961

For a place with no food, the calculation results in $4,093 per seat. At $4/pint, that's about 4.1 barrels per seat. It's a huge generalization, but it's a place to start. You'll never know for sure until your doors have been open for a while.

Joe

[brew4you_]

We have 64 seats, we also sell kegs in three sizes as well as growlers no food. Our first year we sold 485 bbl, second year 655 and this year looking at 740bbls. About 80% of sales are through the taproom the rest in kegs.

And you do that in Billings, Montana?! Now that is impressive! What's your secret? I'd love to learn more about your setup/etc as this sounds a LOT like what my goal would be.

[brew4you_]

Keep in mind that hank's sales percentages are probably for dollars and not barrels, and that there's a big price difference between the two types of sales. Hank, would it be in the right ballpark to say that you sell 400 barrels on tap and 340 barrels in kegs? That's impressive, and it speaks volumes about the importance of location.

I've been using National Restaurant Association data to estimate my expected pub/tap room sales. To compensate for selling more beer and less food than most places represented by the NRA, I adjusted the numbers with this equation (based on two NRA data points):

Sales per Seat = ($9,859 - $8,961)/(85.4% - 72.1%)*(FoodSales% - 72.1%) + $8,961

For a place with no food, the calculation results in $4,093 per seat. At $4/pint, that's about 4.1 barrels per seat. It's a huge generalization, but it's a place to start. You'll never know for sure until your doors have been open for a while.

Joe

If you put those projections against Hank's size (64 seats) you only come up with 264 BBL's. Hank's would work out to closer to $7517 per seat year one.

[jwalts]

I saw a review online that said Hank's charges $3 per pint, and I assumed the business self-distributes kegs for around $110 per half-barrel. His numbers are much better than what I've seen at other brewpubs, so I decided to use more conservative assumptions for my own projections.

Joe

[beauxman]

I (Black Raven) just opened what you are proposing. PM me for more info. We are on track to do at least 500 BBLS in year 1, most all in taproom (38 seats + overflow into brewery area makes about 60). We have no kitchen. Pick location over seats in my opinion. I am not sure about your labor projections either...

Small taprooms can work but they are market and location specific. Of course, this assumes you make good beer and the place is inviting with good service.

You are smart to estimate sales volume low for planning purposes. Be careful also that they are not too low and you were not ready for your success if things go well. Prepare a low, middle, high projection for your pro forma and think about how the brewery would work/flow.

-Beaux

[hank]

The 80% figure is for barrels through the tap room not sales numbers. We do charge $3.00 per pint which is less than most places around us. We are in a converted three bay gas station right in the middle of the down town entertainment district. Packed all the time, even I am amazed at how much beer we can sell. We do self distribute.

[jwalts]

Wow! Fantastic!

[brew4you_]

The 80% figure is for barrels through the tap room not sales numbers. We do charge $3.00 per pint which is less than most places around us. We are in a converted three bay gas station right in the middle of the down town entertainment district. Packed all the time, even I am amazed at how much beer we can sell. We do self distribute.

Ahhh... this supports me belief that having the place in close proximity to other bars, retaurants, and the like will help not hurt us. Another point for location.

What did you look for in a location?

Oh and Hank I just looked you up. Open from 4P-8P Mon-Sat? Another interesting point here - you are selling lots of beer with not being open long hours. And in reading a review of your place I also learned that Montana has a 48 oz per person per day law??? I assume this is for breweries? So if this is true, you only sell beer for a total of 24 hours a week with a max of 3 per customer and STILL have that sort of success!!! OK, what is the secret... seriously.

[hank]

Good location, good service, consistantly good beer and clean bathrooms. We only do beer and only our beer. No wine, no guest beer etc. No entertainment (if allowed to, people do a great job of entertaining each other). No food except popcorn. All of this coupled with the three pint limit make for huge turn over of each seat and therfore our ability to sell alot of beer in a short period of time. Seat and table turn over is the key it's that simple.

[brew4you_]

Ok, so how do you define the perfect location?

The one I was thinking about I am having second thoughts on. It has lots of money, but that might equal an older croud who want fancy. It has good bars/restaurants along the street, but instead of bar hopping - they might choose to hop right over the taproom since there is not a focus on food.

So what should I look for in a location for a brewery taproom - not a restaurant that serves beer. Will we have food? yes. Will it be the place you go for dinner? Doubt it.

So - any advice on the definition of a perfect location?

[jason.koehler]

If you're doing a 70 seat venue in an area with a lot of foot traffic, I'd cut seats in favor for more bar space and bar tables with barstools, standing room with ledges to put your beers, etc.

If there's a lot of nightlife in the area, you'll get more people wanting to stop in for a few pints at the bar than sitting down for a meal, especially on weekends.