Menu Innovations | November 2012 | By Barney Wolf

How to Stay Crafty

Operators are finding that microbrews can add a local touch.

Craft beer options at quick service restaurants expand customer beverage choice.
Shake Shack's beer options. Shake Shack
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Wine connoisseurs for years looked down their noses at beer, considering the latter, better-selling beverage as a drink of the “common man.”

That view is slowly evolving, however, as an increasing number of Americans become fans of the many craft beers being brewed all across the country. And it’s an evolution that’s starting to impact quick-service restaurants, too.

While overall beer sales have declined in the U.S. in recent years—shipments slid 1.3 percent in 2011, according to industry statistics—craft beer has soared. Last year, craft breweries, which account for just 6 percent of the U.S. beer market, recorded an increase of 13 percent in volume and 15 percent in dollar sales over 2010, reports the Brewers Association, the craft segment’s trade group.

Similar growth was reported the first half of this year.

As of June, the nation had 2,126 breweries, 350 more than a year earlier. According to the Brewers Association, all but 51 of these are craft brewers, which are independently owned, traditional breweries that produce fewer than 6 million barrels of beer annually.

“There are 95 million beer lovers in the U.S., and millions upon millions of them have dabbled in [drinking] craft beer,” says Julia Herz, craft beer program director for the Brewers Association, based in Boulder, Colorado.

Among them are professionals “who are apt to splurge and trade up to the luxury of drinking craft beer,” she says. “That includes going out to eat with their families.”

Beer—which is made with water, malted grain (mostly barley or wheat), and hops for flavor and bitterness—hasn’t always been embraced by the limited-service restaurant scene. A few locations of chains like Sonic, White Castle, and Burger King have experimented in serving beer, but most U.S. quick-service restaurants want nothing to do with the beverage at this time.

That makes sense, says Warren Solochek, vice president of client development for The NPD Group, a market research firm.

“Restaurants may want to figure out how to serve beer because of the great margin implications,” he says, “but there are a number of limitations with it.”

Consumers go to quick serves “for food that has a lower check, and if you have beer, you’ve got to charge market prices for it,” he says. “So the beer may cost more than the food.”

Combine that with staffing issues and training—to check identification and observe how much is being consumed, for example—and serving alcohol can be a costly enterprise.

White Castle offers beer at a central Indiana restaurant where the company is also testing a barbecue menu, one of three new restaurant concepts. The beer includes some large domestic brews, plus a rotating microbrew.

The venerable chain is getting ready to open a second unit for each of its new concepts, but beer may not be part of the next barbecue store because it isn’t selling well.

“Beer is not something we’re aggressively pushing or pursuing,” says Jamie Richardson, vice president of corporate relations for the Columbus, Ohio–based chain.

He acknowledges that serving beer creates big challenges.

“For one, every state and county has different regulations,” he explains. “It also creates complications to the work schedule, because you need to make sure there’s at least one person behind the counter who’s 18 (the legal age to serve in Indiana).”

Starbucks has experienced different results with alcohol. As part of its growing Evenings program, which looks to provide options for customers to relax in its stores after working hours, the Seattle-based company has brought beer, wine, small plates, and snacks to select locations in several markets.

The program began in 2010 in the Pacific Northwest, expanded to a few Chicago locations this year, and will be in some Atlanta and Southern California units by year-end. It features three styles of microbrewed or imported premium bottled beer. Company officials say the development of an evening daypart is part of Starbucks’ brand evolution, and stores with the new program
have recorded increased evening sales.

Evening is a busy daypart for fast-casual chains, which have pricier menus than quick serves and provide settings geared more toward adults and relaxed family dining.

According to statistics from Technomic Inc.’s MenuMonitor trend-tracking tool, most limited-service restaurants serving beer are in the fast-casual space. And the number of fast-casual concepts doing so has grown in recent years.

Smashburger is one fast casual that has served beer, and microbrews in particular, from day one. Both draft and bottled varieties are on the menu.

“Smashburger was born with beer,” says Tom Ryan, managing partner and chief concept officer. “Before we opened the first store, we took an ‘occasion’ approach; what would be the occasions to come to Smashburger? One is for a burger with a beer.”

As a way to differentiate itself, the Denver-based company localizes its menu, creating a sandwich for each market. Offering local craft brews enhances the connection. Smashburger is taking that a step further by pairing certain burgers and sandwiches with local beer. The first market for that was Colorado, where the chain has a strategic relationship with New Belgium Brewing Co. of Fort Collins, Colorado.

“New Belgium beer is being paired with every burger,” Ryan says. A similar program is planned for Chicago with Goose Island, with pairings such as the Classic Burger with the brewer’s 312 Urban Wheat Ale.

Pairing beer with food is something more restaurants are considering, says Ray Daniels, director of the Craft Beer Institute’s cicerone certification program, which trains people to become beer experts.

“You definitely want to have a beer that is compatible with the food you’re serving,” he explains. “With a burger and other menu items that have a rich food base and umami flavor, you want a beer to cut the fat.”

In that case, a good pairing would be beer that has some bitterness, good carbonation, and a certain amount of roasted malt or barley flavor, he says, like a pale ale. With other sandwiches, a toasted grain–flavored beer offers good resonance. That means a brew that has less bitterness—perhaps a wheat beer—would pair nicely.

Smashburger isn’t the only limited-service company to serve New Belgium brews, which include the flagship Fat Tire amber ale and Somersault seasonal. Other chains serving the beers include fellow Colorado operator Noodles & Co., as well as San Francisco–based Boudin SF.

“Our beer plays well with a wide variety of menu items,” says Bryan Simpson, media relations director for the brewery. “In fast casual, I think you want a beer that is approachable. Fat Tire is perfect to start people down the path of craft beer exploration.”

At Noodles & Co., beer provides an “adult experience,” says Dawn Voss, head of research and development. “It enhances the experience for those who want it.”

Noodles & Co.’s beer selections differ from market to market, and the suds are selected from 20 different brewers. Each restaurant typically has a local or regional craft beer, a foreign offering, and a light one.

“Here in Colorado, we probably use five different beers from New Belgium, with four of those rotating, depending on the season, and Fat Tire all year,” Voss says. “In Iowa, we have Peace Tree [Brewing Co.] beer, Goose Island in Illinois, [and] Great Lakes in Ohio.”

Several pan-Asian fast casuals sell Asian bottled beer such as Sapporo or Tsingtao, while many Mexican restaurants offer Corona, Dos Equis, and other south-of-the-border beers.

Mexican imports are among the top sellers at Freebirds World Burrito, but the Austin, Texas–based chain also sells Texas favorites Shiner and Lone Star, plus local craft beers.

“We love to support local breweries,” says Peter Gaudreau, vice president of operations. “In Fort Worth, it might be Rahr & Sons. We sell a great amount of St. Arnold in Houston. In Austin, we have several really cool brewers, like 512 Brewing Co.”

Freebirds, with more than 80 units in four states, offers up to eight beers in a restaurant, with draft making up some of these.

Other chains also give a nod to their roots. At J. Gumbo’s Cajun and Creole Cookin’ Co., locations that sell beer are asked to carry several varieties brewed by Abita Brewing Co. of Abita Springs, Louisiana.

“Abita provides a little bit of New Orleans, and it’s a natural pairing,” says Ronnie Dingman, president of operations for the Louisville, Kentucky–based J. Gumbo’s. “Take Abita Turbodog (a dark brown ale). With spicier entrees, it helps give the palate a break.”

Beer also goes well with pizza. A number of quick-service and fast-casual pizza places, like Uncle Maddio’s and MOD Pizza, offer a variety of brews.

But craft beer is more likely at restaurants geared toward more upscale offerings. When Boudin Bakery launched its Boudin SF concept with a more extensive menu and kitchen than its bakery units, wine and beer became options, says Gayle DeBrosse, executive vice president of business development for the company. “We were now able to compete in the dinner business,” she notes.

The eight SF units feature a San Francisco local favorite, Anchor Steam, along with Fat Tire and some others. “Anchor Steam pairs well, because of the sourdough bread [in the sandwiches] and the fermentation of the brewing,” DeBrosse says.

Another small Bay Area chain, Gott’s Roadside, initially only offered half bottles of wine, but later determined that “draft beer was a natural extension,” says company project leader Matt Anderson. “And we are big fans of American microbrews.”

The four-unit business added bottled and canned beer a few years ago.

Anchor Steam draft has been on the menu since the chain began selling beer around 2000, and Sierra Nevada Pale Ale is another favorite. “These are the granddaddies of the California microbrewing revolution,” Anderson says.

Other local craft brewers selected by Gott’s include Lagunitas Brewing Co., Anderson Valley Brewing Co., and Trumer Brauerei. The chain regularly rotates seasonal beers, and beer amounts to about 8 percent of sales at Gott’s.

A place like New York’s Shake Shack embraces the concept of burgers and beer to the point that each of its 17 locations along the East Coast includes beer from a local microbrewery, as well as a draft beer crafted for the chain.

“We always have at least three taps at each location, and one is for our Shackmeister that was created with Brooklyn Brewing Co.,” says Mark Rosati, culinary development manager. “It’s delicious and designed to pair perfectly with a Shackburger.”

The beer was developed after Brooklyn Brewing’s brewmaster tasted Shake Shack’s burgers. The beer includes a specific amount of bitterness to cut through the burger’s sweetness.

The other two taps host an artisan root beer brewed by Abita and a local craft beer.

“Having a local beer is a way of adding dimension to the menu,” Rosati says. “Whether you’re local or a tourist visiting, that local beer tells you something about the area.”