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The problematic relationship between small brewers and new restaurants

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Starting a restaurant is a risky and expensive endeavour. In Toronto especially where there is a plethora of great places to eat and a handful of new places opening (and closing) every week, it’s exceedingly difficult for new restaurants to set themselves apart from the crowd and even if a new restaurant manages some modicum of success, it’s likely that for the first little while their profit margins will be razor thin.

Accordingly, restaurateurs often look for places to cut costs and rely on innovative marketing techniques and partnerships to get themselves known. Many restaurants in Toronto start their businesses as pop- up shops or food trucks hoping to build a reputation for their food so that they might either save up the capital or seek backers for the larger financial investment required to start their own restaurants.

To anyone with any involvement in the craft beer industry, this story might sound fairly familiar.

With Ontario’s backward liquor legislation the way it is, starting a brewery is a risky and expensive endeavour, too. If and when brewers start to turn a profit, they too face margins that are slim. The overhead on a new brewery is crazy and many fledgling brewers opt for different approaches to entering the business, such as contract brewing and/or working with established companies in order to build their brand and save up the capital or seek backers for the larger financial investment required to start their own breweries.

Aside from the obvious connection that those who like to eat out often like to drink beer, craft brewers and restaurateurs, then, would appear to have a lot in common by way of a similar struggle.

So it might shock you to learn how often one of these groups seeks handouts from the other.

Yes, with a regularity that would shock you, owners and management of Toronto’s new restaurants are reaching out to the city’s craft brewers in order to ask for free shit to help get their businesses started.

Here, for example, is one such request that was sent to Jason Fisher, the owner and operator of The Indie Alehouse. The email came from the bar manager at a recently opened fusion restaurant hoping to get Indie’s beers on tap.

Hello,

Congrats on your shiny new beer award!

I’m the general manager of a new restaurant opening soon in Toronto, called [XXX]. I’m interested in the Zombie Apocalypse, in 30L kegs, and to be able to buy it, the price per 20oz pint needs to be $2.50 or below or the chef/owner won’t agree to it. A lot of specifics, I know. [XXX] (the owner) is particularly interested in getting a stout on the list, so I hope we can work it all out!

Could you send me pricing information? I prefer to work via email so that I already have all the information written down and ready to present to [XXX], but you can call me at [XXX]  if you’d prefer. We will have 4 taps in total, one of which the owner has promised to [another local brewer], but that leaves 3 open if you have any other incentives or deals you’d like to discuss.

[XXX] is going to be a really fun, exciting new restaurant and I really hope we can arrange to sell your product!

[A person with no soul]

Now, if you’re a brewer or work for a small brewery, or have in-depth knowledge of craft brewing and the hard work that goes into creating and building a small company around the merits of your beer, you’re probably already waist-deep in a puddle of your own rage-induced blood vomit from reading this solicitation for a super duper new opportunity(!), but in case you’re not, let me break down why this email is a perfect example of everything wrong with the relationship between small brewers and new restaurants:

Congrats on your shiny new beer award! – This condescending greeting is in reference to Indie having recently taken home silver in the Imperial Stout category at the Canadian Brewing Awards and it nicely sets the tone for the general level of respect the author places on the craft of brewing in the email that follows.

I’m interested in the Zombie Apocalypse, in 30L kegs, and to be able to buy it the price per 20oz pint needs to be $2.50 or below or the chef/owner won’t agree to it. – This bar manager has just asked for a beer he/she knows and has acknowledged is an award-winning imperial stout and he/she has just asked for it at a price that means Jason would practically be giving it away for free. If that sounds outrageous, it’s not the manger’s fault. It’s that darn owner. He’s so stingy!

Could you send me pricing information? – Even though I just told the exact, insultingly low price I’m willing to pay for your award-winning beer?

I prefer to work via email so that I already have all the information written down and ready to present – I basically copied and pasted this email and sent it to six other local brewers and if you all respond by email, it’s much easier for me to compare your responses and I can easily pick the brewer that’s most willing to jeopardize their integrity.

We will have 4 taps in total, one of which the owner has promised to [another local brewer] – We barely even had to try with this other guy! They’re practically giving it away. We really bent that guy over a barrel.

…that leaves 3 open if you have any other incentives or deals you’d like to discuss – …so the more free shit you’re willing to give me, the more likely I am to give you this account. I don’t know anything about your business, but if you have some t-shirts, patio signage, stickers, fridge magnets, table talkers, chalk boards–I literally want all that shit in order to consider whether or not I will basically take your beer for free.

This email would be shocking were it not disgustingly common. Every brewer I’ve spoken to has fielded requests like this one and, as is often the case when it comes to all things soulless and shady in the world of beer, I’m inclined to blame the massive corporate brewers.

Yes, it’s a dead horse I’ve been flogging for some time now, but it’s still very much true that big brewers in Ontario tend to treat draught lines in bars as just so much easily purchased advertising. By flooding bars and restaurants with deeply discounted beer, backing up truckloads of free shit with logos emblazoned on it, and often simply paying cash for draught lines, the big guys mostly just hope to maintain name recognition for when you head to the Beer Store. In doing so, they have devalued draught beer so much that even fledgling restaurateurs–who should know a thing or two about struggling to make a profit in an industry dominated by shitty, corporate franchises–now literally see no problem with simply asking for draught beer handouts outright (a practice that is still, by the way, technically illegal).

I don’t want to negatively affect anyone’s business, so that’s why I’ve opted to remove all the names in this exchange. And the truth is, the bar manager probably doesn’t even really realize how wrong what he/she has been doing is. It’s likely that every restaurant he/she worked at previously also conducted business the same way: You send out an email to find the brewers who will provide you with the cheapest beer and you enlist the ones willing to play ball. That’s the way restaurants do business.

Well, it needs to stop.

One assumes that this restaurant, which has already garnered some fairly decent reviews, didn’t choose their chicken based simply on which farm was willing to throw in the most free breasts and, presumably, they didn’t choose a fish monger because he threw in some patio umbrellas.

So why is it OK for their beer?

Craft brewers have a lot in common with small restaurants and rather than parasitic, the relationship should be mutually beneficial–and yes, that means paying for beer.

To the new restaurant owner looking for “help” from a local brewer: Next time you’re about to send an email asking about “any other incentives or deals you’d like to discuss,” I propose you consider your reaction if the tables had been turned. Would you be willing, for example, to offer up free seared scallops with jalapeno vinaigrette or pot stickers at cost simply for the privilege of being associated with an “exciting fun new brewery?”

Probably not, so next time, don’t hit send and, instead, invest in some beer because it tastes good and works with your menu, not because it came with a fucking t-shirt.


For the record, and not surprisingly for anyone who knows him, Jason Fisher doesn’t actually need me to respond to these types of mind-numbingly insulting requests that are often sent to legitimate small business owners. In addition to sharing the incoming email with me, he was nice enough to share his response.

Hi [XXX],

Thanks for the email and your directness in your request.

I get a lot of these, as do most breweries and rarely do I respond, however I thought this might be a chance to educate you on the way it works at the Indie Alehouse and hopefully other places as well.

Most of the newer craft breweries like us, tend to view their beer as a premium product – and the prices reflect that care and effort that went into making the beer. Part of that view is that we don’t offer discounts, or “incentives” to buy our products. Aside from lowering the value of our brand and being a very bad practise for the industry, it is also illegal in several ways. Breweries stand to lose their production license and both the brewery and bar also face significant fines and potential loss of liquor license for engaging in these types of activities.

I know they go on, I know most breweries engage in this and it is bad for everyone. I could go into detail on why its a terrible practise for all parties but I suspect that’s not what you are after.

Also – the beer you requested from us, if you did a little homework you would find is a 10-12% abv imperial stout, which would never, ever be sold at $2.50 a pint. It costs almost that much to make. I suspect at any cost it would not be the beer for you. It seems you are just trolling craft brewers for free-bees and cheap beer. You would not be alone, I get several request a week as do most of the newer, hot craft breweries. The thing is, a lot of breweries like us are starting to not do business with bar owners looking for kickbacks and incentives. Either you want a top quality product and are willing to pay the price for it, and provide that kind of experience at your establishment, or you don’t. We are very selective in the establishments that get our beer, it is part of our brand.

I suspect we are not the place for you, and vice versa.

Thank you,
Jason

 

Photo by Paul Aihoshi.

Author: Ben

http://www.bensbeerblog.com

19 thoughts on “The problematic relationship between small brewers and new restaurants

  1. Bravo Ben and Jason. A really nicely crafted response. It’s so easy to remain silent about this side of the business and thank God that you are putting this out there. Interesting enough, John Molson once said: “An Honest Brew Makes It’s Own Friends” and I find myself quoting this more and more frequently these days. Is it still on a bottle of Canadian?

  2. HEAR HEAR!!!! And THANK YOU for speaking out. We too, find ourselves in this situation all too often. If we all stick together on this one, maybe we can break the cycle.

  3. To draw another comparison, it is like bloggers being asked to do free stuff for the exposure. There is probably room for in kind contributions, maybe. I.e. catering open houses, co-branding, exclusivity for one offs that may reduce wholesale costs but that is a business move and not a “gimme something for free or well below market with no return”. The response was great.

  4. Delightful!

  5. Great Article Ben – the best part for me is to have two supporting voices from Mike and Michael, two of the best brewers I’ve ever had the pleasure of meeting. Which further makes me believe, the world should be run by brewers, and have fewer sales people in it.

  6. Thank you Ben and Jason. My favourite request is the “the ask is 1 keg for every 8 sold”. I look at them and say — “Oh, well – we tried that with our suppliers and the funny thing is they want to get paid for the full amount.” Or “does that mean for every 8 days your staff works, they come in and work for free for one day?? No?! They want to get paid?! That’s crazy talk.” You quickly realize that if they are in it for the price – and not the product – then it is a good sign that you shouldn’t do business together since they will drop you for the next shady deal that comes through the door. Also – whenever someone mentions “exposure” in my head it translate as “I don’t want to pay full price”… I wish I could say “if I want exposure, I’ll go jogging naked in January.” Thank you again for ‘exposing’ this issue.

  7. It is something I talk about quite often. It needs to stop the second it stops and quality is bought for quality not for incentives things will be better. Jason as well as many of the breweries out there have some awesome products, and some of the personalities in the mix now, Jason included, will help drive these points home in the future.

  8. What this province needs is the legalization and control of wholesale beer pricing for bars and restaurants and strict enforcement of the law. The stories I’ve heard about free shit and kickbacks in my almost 25 years on this beat are multitudinous and extraordinary, involving breweries both large and small, BTW. Oh, and we could also use some new draught importation licenses, but that’s tangential to this issue.

  9. Fantastic article Ben. Thank you for writing it and thank you Jason for sharing the letter. We will be standing shoulder to shoulder with you once we start producing. Integrity is non-negotiable.

  10. Great article. Jason rocks.

  11. Great article. Kudos to Jason for bringing this into the public eye.

  12. Dear restaurant owner

    Thank you for your email, you are just the shiny new restaurant business we are looking for. We have 10 employees who need a substantial lunch to allow us to make our fine craft beer. It would be a good incentive for your new venture if you could deliver lunch to us for $1.50 a head, and perhaps you could throw in a dessert or some home made cookies as an extra incentive for us to sample your food. We could put flyers on our staff notice board that are bound to get you extra business at weekends.

    Regrettably we can’t give you any discounts as our award winning beer is so expensive to make, but we know that our beer will make your business successful, whereas your food is a bit of a gamble with you being a new venture and all that. Send us the lunches and we will let you know how we find it, in fact perhaps you could spare us a little cash for this valuable feedback service.

    We look forward to a mutually beneficial arrangement between our two companies.

    Regards
    Your A1 Craft Brewer.

    Feel free to copy and paste my reply to the next idiot that writes to you and let me know if you get a reply 🙂

  13. Beautiful. Simply beautiful. I feel I need to visit Indie Alehouse soon just to raise a pint and cheer to their response and integrity.

  14. So it seems that there is very wide support for Jason’s point of view and the stand he is taking. Now the next question is – what are we all prepared to do about it? What are the next steps to take in order to “break the cycle”? I was recently told, in response to my explanation of why I wouldn’t give “1 for 6” support, “Yeah, it’s illegal, but who F$#@ing cares – this is the way it goes in this industry”.

    And while all of this nonsense is going on with licensees, the provincial government is doing exactly what? I’ll tell you:
    1) Failing to enforce it’s own Liquor License Act
    2) Letting the LCBO fail to provide adequate service to one of the only rapidly growing industries in the province (by not providing timely service to craft brewers looking to sell products) even though it is an effective monopoly on shelf space for craft beer
    3) Allowing TBS to exist – period.

    I’m angry, frustrated and at times speechless save for these frightening words: “Thank you sir, may I have another”.

    • enduring frustration while getting continuously beat down for maintaining and encouraging integrity is our daily routine. Persistence and creativity churn it into motivation and the hope for that one day. . . . . that one day soon. When people will forgo the greed for a better experience.
      Hold your head up high and blow your brains out…

  15. Reblogged this on Schoolhouse Craft Beer and commented:
    Kudos to Ben and Jason for coming out and saying what needs to be said about these sorts of business practices. This might be wishful thinking but if all craft breweries had this same sort of integrity, the practice might disappear one day.

  16. Yup – great work team. This topic needs more attention, as others do, but change will come. Not without effort like this though. Well said, and well answered.

  17. Pingback: 42 liens du 15 septembre 2014 - 42 Bières

  18. Pingback: Ontario’s potential ‘off sale’ beer problem | Ben's Beer Blog

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