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The East End Brewing model

This is about the East End Brewing Company in Pittsburgh. The URL is

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I went to a tasting yesterday and spoke to owner/brewer Scott Smith. Scott is brewing and selling his ales by keg only. He does not bottle his ales and he doesn't have a retail outlet, like a brewpub, to sell them. Others might have heard of a brewing business model like this, but it's new to me.

Scott told me that he is a one man operation. He got a warehouse to brew in for cheap rent and he bought his equipment from the Foundry Brewpub, which had closed (I was told at the tasting that the Foundry bought it from Meander Brewing in Morgan, OH when they closed), and he did the installation by himself, which took a year. Scott said that the margin is highest on beer served draft in a brewpub and next highest in bottles. His model, selling kegs to bars, has the lowest margin. I asked him why he didn't open a brewpub and he said that he didn't know the restaurant business and that's where brewpubs succeed or fail. He said that he also didn't want to need to brew

5 beers including a lager which would be a Bud knockoff and an amber which would be a little darker and still taste like Bud. He has gotten 20 or so bars in Pittsburgh to carry his IPA and being a local brewery is a good selling point. It's too soon to see how many will reorder, but I gather it has been moving well at beer geek bars. He said he fears running out of product which could sink as surely as not selling would.

I tasted his second ale, the blackstrap stout. It was quite hoppy for a stout, to be compared to Victory's Storm King. He isn't registered to sell it yet. What's interesting is that he said a new beer has to be registered with both the state (Pennsylvania's notorious Liquor Control Board) and the federal government, and the state process is much easier than the federal process.

Tom W

Reply to
Tom Wolper
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It was quite common in the early days of microbrewing (and, for that matter, wasn't UNKNOWN in the pre-micro days- wasn't Anchor a draft only brewery at the time that Maytag got involved?), since bottling equipment was expensive (and harder to "do-it-yourself" fabricate) and labor-intensive. One of the first micros in the East, Newman's of Albany, NY was draft-only but, like many others, he had at least one of his beers contract-brewed/bottled (by Schmidt of Phila., in the beginning, IIRC) but you could also stop in at the brewery and buy a plastic "cube" gallon of beer (these also were carried in some area grocery stores). Brooklyn, for that matter, still is set up like that, isn't it- kegging beer in Brooklyn, contract bottling at Matts?

Obviously, such a "model" needs to be in a region where draft beer is still popular and makes up a large part of the market.

Reply to
jesskidden

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brewing and selling his ales by keg only.

brewpub, to sell them. Others might have heard

cheap rent and he bought his equipment

Foundry bought it from Meander Brewing in

This sort of setup is pretty typical for a small UK microbrewery, and maybe that's where Scott got the inspiration. Many newly established microbreweries are one man operations and brew tiny amounts, initially at least. The American brewpub/restaurant setup is almost unknown here.

We wouldn't talk about beers being 'keg only' though :-) Keg = bad, cask = good :-)

Best regards, Paul

-- Paul Sherwin Consulting

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Reply to
Paul Sherwin

It seems so capital intensive, buying and installing all the equipment, buying grain, yeast, and hops, and only then seeing if anybody will buy your beer. Scott's only marketing is his website and beer tastings, with word-of-mouth from bars carrying his products. He didn't talk about any plans to sell growlers (beer cubes) or contract brew. I hope he succeeds but it just sems like a hell of a way to break into a fiercely competitive beer market.

By the way, I first read about the brewery at Lew's site. I figure he derserves the plug.

Tom W

Reply to
Tom Wolper

Thanks, Tom. I've got a more extensive piece on East End coming out in the Feb/March issue of Ale Street News. I thought the IPA and stout were nice beers indeed.

FWIW, I don't think Scott would do a lot of on-site growler business; that's a somewhat scary little corner of town he's in.

Reply to
Lew Bryson

Nothing new or unusual about this business model. Draft-only packaging is the way many small craft breweries have started, going all the way back to the likes of Redhook and Grant's back in the early 1980s. There are still draft-only breweries, especially brewpubs, in a lot of places.

The one-man-show thing isn't so unusual, either. Washington state's newest microbrewery, Iron Horse in Ellensburg, is staffed and run by its owner, founder, and only brewer, Jim Quilter. For the time being, it's his baby, and that's the way he wants it.

Reply to
dgs

The reason this model is strange to me is that we aren't in the early '80s, that is, he's trying to get set up this way in a competitive craft brewing market. If Scott went around to the bars in 1982 with an IPA, the bar owners would have looked at it as an untested style in the area. Today, if a six tap bar wants an IPA, it could take East End's IPA, or it could take Victory Hop Devil or any other craft brewer's IPA.

I didn't mean draft-only was unusual. I meant draft-only without a natural retail outlet - a tied house (if legal) or a brewpub. By comparison: the Church Brew Works sends me an email telling me they're tapping a new porter. On the same day East End sends me an email telling me he's got a new stout in distribution. If I want to try the porter, I can go to the Church brewery and taste it. If I want to try the stout, I have to find out which bars are carrying it and if they have it up yet. It seems a tougher way to build brand loyalty.

Tom W

Reply to
Tom Wolper

Even in recent years, that's not that unusual. Three Floyds just outside of Chicago sold for years as draught-only, with no pub of their own, and there were a couple other Chicago-area breweries doing the same thing when I was living there. Here in LA, Craftsman sells only kegs to other pubs, and I believe Angel City Brewing Co. is also draught-only and has no pub of their own.

Yes and no. A lot of brewpubs have difficulty expanding out beyond their pubs. A lot of successful breweries have gotten started by pretty much concentrating on draught distribution (Victory comes to mind) without having their own place for a while, or ever.

-Steve

Reply to
Steve Jackson

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