Since opening in 2010, Breakside Brewing in Portland, Oregon, built its business model around distributing kegs of beer to restaurants and bars. Prior to the pandemic, draft beer accounted for some 70 percent of Breakside’s production, complemented by bottle sales and three Portland taprooms. “We’re fundamentally a distributing brewery,” says Ben Edmunds, the cofounder and brewmaster.
After 2020, however, Breakside adjusted course by increasing its volume of packaged beer and adding cans, in addition to opening two satellite taprooms around greater Portland, plus one in Astoria, Oregon. These brick-and-mortar taprooms have added a steady and essential income stream, accounting for 10 to 15 percent of annual sales by volume. “It’s a really valuable amount of dollars for us,” says Edmunds, helping “spread out the risk of being a growing brewery.”
With pinched shelf space at supermarkets and draft sales still struggling, breweries are opening additional taprooms to increase and diversify revenue streams in a difficult economic moment. Hi-Wire Brewing in Asheville, North Carolina, operates a dozen locations as far away as Birmingham, Alabama. Last year, Denver Beer Co. debuted its fourth and fifth Colorado outpost, while Dust Bowl Brewing in Turlock, California, opened its fourth California taproom. Brewery taprooms have officially entered their chain era.
Don’t miss the latest drinks industry news and insights. Sign up for our award-winning newsletters and get insider intel, resources, and trends delivered to your inbox every week.
Opening Taprooms Can Increase Wholesale and Retail Profits
Conventional wisdom holds that taprooms can jeopardize local sales at restaurants and bars. Customers become competitors overnight. “The pandemic scrambled all that,” says Edmunds. “There’s no such thing as a permanent handle anymore.”
Instead of relying on fickle placements at bars and restaurants, Breakside is finding that its taprooms can boost local can and bottle sales. After opening in Astoria last spring, Breakside saw a five percent increase in sales, not including the taproom sales. Breakside is aligned in the approach with its wholesale partners, who view taprooms as a valuable marketing and brand-building tool. “It would be really difficult if they saw these small taprooms as competition,” says Edmunds.
In 2009, Clay Robinson and Dave Colt opened Sun King Brewing in Indianapolis as a production brewery. At that time, “the taproom was ancillary,” says Robinson. Over time, however, the value of selling pints over the taproom bar became apparent—namely, higher margins and connecting with customers—and the brewery added a Fishers, Indiana, taproom in 2015. Since then, Sun King has opened four more taprooms across Indiana, seeing sales lifts in cities like Mishawaka, where Sun King opened a family-friendly taproom in 2022. Sales with the brewery’s northern Indiana distributor, Indiana Beverage, have grown around 20 percent since the taproom opened.
The memory of good times at Sun King taprooms resonates when customers are “choosing a beer from the myriad options that are available,” says Robinson. “Our goal is to run taprooms that create positive cash flow so that over time they pay for themselves and help put money to the bottom line, all while bolstering our brand in the marketplace.”
Taprooms also help a brewery become local. Sun King began selling wholesale beer in Florida in the mid-2010s, finding success and confusion. “People assumed it was a Florida brewery from the name,” Robinson says. “We needed to have a real presence and become part of the community.” In 2022, Sun King opened a Sarasota taproom and brewery to produce Florida-only beers. Robinson also relocated to Sarasota with his family. “Turns out Sun King and the Sunshine State are a really great fit,” he says, while the brewery maintains its presence, sales, and production in Indiana. From 2022 to 2023, sales in Florida increased more than 60 percent.
Blanketing Your Backyard Can Pay Off
Instead of spreading wide, Trophy Brewing is going deep in Raleigh, North Carolina. The brewery opened in 2013 with a tiny three-barrel brewing system, soon adding pizza. Since then, the Trophy team has built a hospitality portfolio that serves its beer within a range of distinct concepts. The main production facility features dog-friendly seating and food trucks, while State of Beer in downtown Raleigh is a bottle and sandwich shop. Young Hearts Distilling & Pizza partners house spirits and cocktails with Trophy beer. Customers will visit different locations depending on their daily needs, says co-owner Chris Powers. “Our goal is to be the brewery that people think of for Raleigh.”
The company is currently working on a 22,000-square-foot taproom and restaurant, and turning a trio of old houses into three concepts, including a bar. Why travel far for a Trophy beer when Trophy beer is coming to you? The projects help Trophy become bigger parts of new neighborhoods, says Powers.
New York City has ample demographically distinct neighborhoods. Since women-owned Talea Beer opened its brewery and taproom in youthful Williamsburg, Brooklyn, in 2021, it has added taprooms in well-off Cobble Hill, Manhattan’s neighborhood-y West Village, and the tourist-and-worker Midtown. “We’re always deepening our footprint in New York City,” says Tara Hankinson, the cofounder and co-CEO.
Taproom Design and Operations
Building a satellite taproom demands careful design consideration. Having connective visual elements across multiple locations is important, but cookie-cutter aesthetics are impersonal. Talea provides architects and designers with guiding principles—pastel-heavy brand colors, preferred furniture firms, lighting styles—and the freedom to create a “vision for the space that matches each neighborhood,” says Hankinson. For example, the Midtown taproom features high-top seating to facilitate “a more transactional drinking experience after work,” she says.
Sun King curates each taproom’s distinct look and feel, from design to menu offerings to staff attire. This helps Sun King avoid the identical experiences of brewpub chains like Rock Bottom, where Robinson began his brewing career in 1999. “Each location has a life of its own,” says Robinson.
Design might deviate, but breweries must ensure that taprooms deliver consistent service across all locations. Pure Project Brewing operates five taprooms in and around San Diego, and the company invests in staff education to keep employees current on beers and the company’s environmental values. “We try to go above and beyond with onboarding,” says cofounder Mat Robar. “Employing people who care about our company’s ethos has gone a long way for us.”
Expanding taprooms provides front-of-house staff with pathways for career advancement, helping breweries retain valuable employees. West Sixth Brewing opened in Lexington, Kentucky, in 2012 and now operates four Kentucky taprooms. Some employees have been with the company for more than a decade. “People will leave if they don’t have spaces to move up,” says Jesse Brasher, the director of retail operations.
The Potential Pitfalls of Creating a Chain of Taprooms
Becoming a chain, however, won’t always bring a brewery into the black—especially as breweries build further from home. In 2022, Modern Times Beer of San Diego closed five of its eight locations, including an ambitious Anaheim, California, outpost with a swimming pool, and Colorado-based Oskar Blues closed its Austin, Texas, taproom last November. The challenge is retaining authenticity and resonating with a new audience without becoming a craft beer Applebee’s or accruing debt.
Edmunds says it took Breakside roughly a month or two to break even and another 18 to 24 months to see a true return on their investment, but there obviously are numerous variables at play depending on the build-out and the business model.
In the late 2010s, making money with a taproom was simple. A brewery just had to open one.
Quality beer remains vital, but events, food options, and design choices are important, too. “At the end of the day, you’re turning into a hospitality-focused group that makes beer,” Brasher says.
The spaces that succeed have been executed with care—and enough capital investment, especially if built from scratch rather than developed from an existing taproom. Pure Project has turned a former auto repair shop into a taproom and installed a living moss wall. Memorable? Yes. The easiest, quickest, and least-expensive path? No. “But we think long term that the investment will pay off,” says Robar, “because these are places where people want to hang out.”
Dispatch
Sign up for our award-winning newsletter
Don’t miss the latest drinks industry news and insights—delivered to your inbox every week.
Contributing editor Joshua M. Bernstein is a beer, spirits, food, and travel journalist, as well as an occasional tour guide, event producer, and industry consultant. He writes for the New York Times, Men’s Journal, New York magazine, Wine Enthusiast, and Imbibe, where he’s a contributing editor in charge of beer coverage. Bernstein is also the author of five books: Brewed Awakening, The Complete Beer Course, Complete IPA, Homebrew World, and Drink Better Beer.
