Does the arrival of behemoth beer bars mean danger for smaller craft-centric pubs?

The Happy Gnome // Photo by Joseph Alton

As more beer-focused national franchises set up shop in the Twin Cities, are independent beer bars like The Happy Gnome in trouble? // Photo by Joseph Alton

What makes a beer bar? Is it simply featuring dozens upon dozens of tap handles? Focusing on local-beer-only menus, or other carefully curated selections of specialty beers? It’s a big question, and one that isn’t easily answered. What is clear is that beer is booming and more bars are taking note that selection matters.

But it isn’t just local bars changing over tap lines—out-of-state franchises and restaurants are also setting up shop in Minnesota’s burgeoning craft beer scene. Yard House opened in St. Louis Park in 2014 with a whopping 140 beers on tap. City Works in downtown Minneapolis followed suit this past March. And a World of Beer franchise—which boasts “a database of more than 28,000 beers from around the globe”—will be coming to Lowertown St. Paul later this spring. This influx raises the question of whether the encroaching chains are a threat to local establishments, or a healthy sign of a prosperous beer economy.

“Every bar and restaurant is competition, in a sense,” says Emily Brink, general manager at The Happy Gnome in St. Paul, one of the Twin Cities’ oldest craft beer hangouts. “You’re all looking for a piece of the pie in food and beverage.” New entries to the market will undoubtedly siphon a few drafts off their overall sales, Brink admits, but it’s part of the scene’s evolution, one where unique elements and established relationships are key to keeping a leg-up on the ever-changing craft beer environment.

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City Works in downtown Minneapolis // Photo via City Works Facebook page

Located in Mayo Clinic Square, City Works opened with a total of 90 taps. It’s is a sibling to the Old Town Pourhouse chain (not affiliated with The Pourhouse Minneapolis), both operated by Chicago-based Bottleneck Management. While the space features a different theme than its sister restaurants—more industrial, less of a tavern feel than Old Town—City Works offers an identical food menu. A local beer buyer handles the beer list, which rotates and focuses on a mix of 70–80 percent of familiar national crafts and around 20–30 percent of local breweries.

While beer is a big part of business, it comes second to restaurant scouting, says City Works’ Mike Jettner. “I would say we go for a demographic package. We put that first,” he explains. “The first package is to make sure the demographic fits our restaurant, and then the beer follows.”

This is because of how dynamic the overall craft beer environment has been, Jettner says. Marketing the restaurant side of the business, City Works is able to cater to business lunch groups, Target Field and Target Center event goers, and a wide range of customers beyond the beer connoisseur. That mentality is also reflected in their beer menu, Jenner says, which features familiar national brands as to avoid decision paralysis. “They’re gateway beers so we can get them into something that’s uber-local,” he adds.

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Bottle selection at World of Beer // Photo via World of Beer – Appleton Facebook

World of Beer has more than 75 locations nationwide and follows a different concept. They first opened in Tampa, Florida, without a food menu. As they’ve grown, so too have their offerings. Locations now feature a full kitchen and bar, although beer makes up the majority of their sales, says Steve Parr, World of Beer’s market development manager.

Parr credits the growth of Lowertown in choosing the new bar’s location, which will be next to Mears Park and feature 52 taps and over 500 bottle options. “We think this market will be very strong for lunch crowds,” he says, a safe bet given its proximity to downtown offices and the park. Nightlife from CHS Field and other venues will also draw a different crowd to round out the evenings. Beer selection at World of Beer is handled locally by a certified cicerone. With three locations already in Wisconsin, Parr envisions St. Paul as the first of multiple Twin Cities locations for the franchise.

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Matty O’Reilly at Republic // Photo by Aaron Davidson

Matty O’Reilly, owner of Republic, says it makes sense that corporations are embracing beer now, given its relatively newfound, and still growing, popularity. It’s a mark of growth for the industry, he says. It’s also just part of any business. “It’s going to happen, it’s inevitable,” he says. “If more people are doing what we’re doing, it’s better for the category.”

There are areas where larger companies have the advantage, such as their purchasing power and national relationships, but, O’Reilly explains, those relationships can also work against corporations due to company girth. “We’re buying from 24 unique sources,” he says, noting that he makes the decisions himself and isn’t bound by any restrictions. “It’s worth it because I can make changes on the fly.”

Related Post – Four Years on Seven Corners: A profile of Matty O’Reilly

Nuanced position, price points, and other details, he adds, are easier in an independent company, and they are important distinctions when selling harder-to-find styles like sours, Belgians, and ciders, which come with higher keg prices and lower sales and make them a relative gamble from a business perspective.

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The Happy Gnome // Photo by Joseph Alton

“We used to be one of the only options and we’re not anymore so we have to stay on our game,” Brink says of The Happy Gnome, which opened in 2005. “We have no interest in dying on the vine. We want to maintain our top-beer-bar status.”

After all, competition is a healthy part of the industry, and independent businesses like The Happy Gnome and Republic are confident in their focus on quality, avoiding trends, and their carefully crafted food menus. Plus, the competition is nothing new. “There is always someone out there attempting to do what you’re doing better than you all the time,” O’Reilly concludes. “I think it’s healthy to bring more awareness to craft beer in general.”

 
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