Credit: flickr.com
One of the television programs I look forward to each week is Bar Rescue. Hosted by the outspoken, overconfident, seemingly fearless, tell- it- like- it- is consultant Jon Taffer, Bar Rescue is both entertaining and educational. Taffer doesn’t mince words and tells bar owners and their employees exactly what he thinks. He often butts heads with bar owners and personnel, but he ultimately has the bar’s best interest in mind and he backs up his business turnaround proposal with scientific facts and proven success formulas.
Taffer can be somewhat of a bully and a complete blowhard, but he does want bars to succeed and I like that he doesn’t make changes based on gut reactions and emotions. He searches for facts and known truths as the basis for change and this is an important component of his success. This is why I found his recent interview with Cheers Magazine rather unusual, particularly his responses about the craft beer industry, its products, and its future.
Cheers Online asked Taffer several questions about the bar business, trends, revenue generation and other related topics. He was asked just one question about beer, but he covered much ground about the craft beer business and where he thinks it is headed. Here are Taffer’s responses (in italics) followed by my response to each.
Cheers Asked “What are your Thoughts about Beer in 2016”?
“I find the whole craft-beer craze fascinating. A lot of the core beer brands in America — Budweiser, Coors, etc. — have taken a real hit from it. Some of these brands, they’ve never lost market share in their entire existence. They’re scared by it. So they panic and turn executives over.”
Taffer’s response to the heat felt by Big Brew makes sense. Yes, the major players in the business are worried about declining market share and competition from superior products. They have reacted by brewing a few semi- craft beers of their own and by targeting craft breweries for takeover. Executives at these large breweries are rightfully concerned, as they should be, and they have taken appropriate action.
“Craft beer has created a culture, not a trend. A trend grabs market share and then disappears and gives it back. A culture grabs market share and then keeps it. The craft-beer culture isn’t going anywhere in America.”
The first part of Taffer’s response is accurate: Craft beer is certainly not a trend. If it was a trend, it would have fizzled out faster than a Bud Light on a warm day. Craft beer is a culture and Taffer agrees, but then he ends by saying the “craft beer culture isn’t going anywhere in America.” I have no idea why he would have jumped to such a conclusion because the facts speak to the contrary. Craft beer as a culture is widespread and growing stronger by the day, as evidenced by craft beer dinners, craft beer festivals, craft beer bars, etc. There are even craft beer tourist boards in several large cities and designated craft beer trails. I would love to hear Taffer offer his reasons why he believes craft beer culture is doomed, as such an assertion flies completely in the face of reason and ignores the facts. It almost sounds like he simply doesn’t want the craft beer culture to succeed and through rationalization and wishful thinking, has convinced himself it won’t last.
“That said, I think that about 60% of craft beer basically sucks. I’ve been to a lot of the facilities. They’re not exactly clean. They’re rookie-run. The problem is that people are now looking at craft beer as an investment opportunity. They’re getting into it to make money. Many people don’t get into it for the love of making beer. Of course, that’s not how it began. Jim Koch founded Boston Beer because he loves to make beer. But today, it’s much more in the investment space.”
Well, well, well! Sixty percent of craft beer sucks? I would like to know, Mr. Taffer, where you have frequented and what beer you have sampled. Are you suggesting that mainstream beer doesn’t suck? About 90 to 95 percent of mainstream beer is terrible and it boggles the mind as to how anyone would still drink such generic, tasteless, bland slop water when such better options exist. But people are still buying these macro brews from companies that are most assuredly in business for the money in spite of such a high percentage of bad products.
As for the comments about craft breweries not being clean, well, we know that Taffer has serious concerns about cleanliness and I agree that cleanliness is next to godliness. But again, I would like to know where he has visited and what he is using as a basis for comparison. And to suggest that the breweries are “rookie run”, well most all small businesses are rookie run in the beginning, but they hone their skills over time. Every burgeoning business idea started this way and many are large and thriving today.
The assertion about people getting into craft beer because it’s “an investment opportunity” and not doing for the love of beer is very misguided and offensive. If Taffer had said this back in the 1990’s, I would have been inclined to agree because it did seem like people were starting up craft breweries for the wrong reasons and the low quality of the beer really showed. Some of it was no better, from a taste quality perspective, than a glass of Miller, Budweiser, or Coors so it’s no wonder that these startups in the 1990’s didn’t survive. But things are quite different today. Starting up a brewery is no easy task and takes much time, capital, and patience. It isn’t like throwing a few chairs, tables, sound system, and bottles together and opening up a bar. It takes more than that, and passion for the product is critical. If you’re getting into the brewery business solely because of the money, you have likely already shut down. Yes, Jim Koch got into the business because he loves beer and thousands of other startup brewery owners have similar motivations.
“That’s why I think there’s going to be a wash out in craft beer over the next two years. Half of the craft breweries are going to disappear. And the word “craft” will become known more for spirits.”
Ah, now here’s a statement that I think speaks volumes and I allude to my comments above that Taffer doesn’t want the craft beer business to succeed. He thinks half of all craft breweries will disappear when, once again, the facts speak otherwise. The number of breweries is trending higher and will continue to trend higher for some time. Sure, there will be some closures, but that is true in any business and it isn’t due to “lack of loving beer”, as Taffer suggested. No, it will be largely due to competitive problems, lack of sufficient capital, and other common business concerns.
Also, notice how Taffer states that the word “craft” will be taken over by the spirits industry. Again, I think this speaks to his true desires. He’s a liquor guy and something about the craft beer business seems to bother him (Maybe it’s financial, since he and others are fully aware that liquor carries higher margins in the bar business?). He would love to see the spirits business take over the word “craft”, even though the small batch brewing industry is directly for the responsible for the widespread use of the term. Interestingly enough, Taffer even goes on in the interview to talk about his love of “flavor infused spirits.” This seems like a direct contradiction of what he said about craft beer. If more flavorful alternatives can work in the liquor business, then there is absolutely no reason to expect they won’t work in beer business. Again, Taffer is going against reason and ignoring the facts. Think about other foods and beverages and how they have evolved over the years. Does anyone really think Americans are going to give up crafted, gourmet coffee and the culture surrounding it and return to the days of drinking Taster’s Choice and Maxwell House? Many predicted that businesses like Starbucks, Seattle’s Best, and other like them would be on the decline in the 1990’s, but the naysayers have been proven very wrong.
Jon Taffer is an experienced professional and his record of success speaks for itself. He knows the bar business inside, outside, forward and backward. He has stepped in and, in a reasonably short time, taken bars on the brink of disaster and turned them into revamped, rejuvenated money making machines with a new mission and new purpose. Heck, if I were a bar owner and my business was in trouble, Jon Taffer would be the first person to whom I would turn for business guidance. He knows what he is talking about and he has the facts to back up his decisions.
Running a bar is no easy task and running a brewery is even more difficult. Consulting a bar business can also be challenging and those who work as professional consultants often have their hands full as they try to grapple with stubborn ownership, outdated ideas, and misguided business culture. Jon Taffer certainly knows the challenges of improving a dilapidated bar, but he clearly lacks knowledge when it comes to the beer industry and craft beer in particular. And his lack of any scientific, fact- based backing for the claims above is puzzling, to say the least, as it contradicts what he claims each week on his television program.
Keep entertaining us, Mr. Taffer, on Bar Rescue with your outspoken style and aggressive antics, but please leave the beer industry analysis to people in the know and focus on improving bars. This is where your expertise lies, so stick with what you know best and leave the beer to rest of us.