Hops Meet Hospitality at Craft Beer Cellar

When Kate Baker and Suzanne Schalow opened Craft Beer Cellar's flagship location in Belmont, Mass., in 2010, there were around 400 craft beers on the store's shelves.

"That was most of what we could get our hands on," says Mark Goodman, public beer relationist for the craft bar company. "Now, that store has between 800 and 850, and that's just a fraction of what it could theoretically carry."

That's because the American craft beer¹ industry has now surpassed 5,000 craft breweries, with more than 100 currently operating in Massachusetts. Several years of growing enthusiasm for craft beer from novices and aficionados alike has created a thriving market for businesses focused on offering craft brews; many of them, like Craft Beer Cellar's franchised locations in more than a dozen states, are locally owned.

To help set their business apart from competitors, the team at Craft Beer Cellar emphasizes the importance of providing three "amazing" products: beer, hospitality, and education.

Stout Competition

"Craft Beer Cellar isn't the only store that carries great beer anymore, so that's where the other two things really come into play," explains Mark. "One of the things that we're always fond of saying is that customer service is a handshake, hospitality is a hug. We do believe there's a difference between the two – not that there's anything wrong with customer service, but we want to try and go above and beyond any other experience you can get in any other bottle shop or tap room."

Craft Beer Cellar's brand of hospitality may mean carrying customers' purchases to their cars or spending as long as it takes talking with customers and answering questions to help them find the perfect beer.

"We try to pride ourselves on our knowledge without being snobs about it," says Mark. "Our employees are called beer geeks. We always try to maintain the mentality that we're geeks; we're not snobs. Obviously there are a lot of places that have really good beer selections, but if you walk into one of our stores, you can talk to anybody that works in that store and they'll be knowledgeable about the product they have. They can recommend a good local option but they can just as easily recommend a high-quality Belgian beer or German beer, and they know the difference between a German pilsner and a Czech pilsner."

In order to ensure employees are knowledgeable about what's on the shelves, Craft Beer Cellar requires them to pass the Certified Beer Server exam and obtain the first level of the Cicerone Certification Program² within 30 days of being hired.

"That's where it definitely starts to become a challenge," Mark says of the Certified Cicerone exam, which has increased in difficulty in recent years. "You've got to know your beer history. You're sampling beer and they give you options and you have to be able to identify them. You have to know your off-flavors, [such as] if a beer is oxidized or if it has diacetyl, or whatever other common off-flavors are out there."

One of the company's franchise owners has achieved the third level of the program, Advanced Cicerone – that's no small feat, since there are only 70 of them in the world.

True Brew

The Brewers Association³ defines American craft breweries as "small, independent and traditional," which excludes breweries that produce more than 6 billion barrels of beer annually and are more than 25 percent owned or controlled "by an alcohol industry member that is not itself a craft brewer." The craft beer industry's rapid growth has led to small breweries being acquired by "Big Beer"⁴ companies like AB InBev and Heineken, which in turn has prompted outrage, disappointment, and discussions within the craft community about what should be considered craft beer and how to respond to breweries that come under "Big Beer" ownership.

When Mark started working at Craft Beer Cellar's flagship store in August 2012, shelves were stocked with beer that had been deemed "craft" according to the Brewers Association guidelines.

"I can recall specifically, we were getting a delivery [that included] beer from Blue Point, a brewery in New York," Mark tells us. "News had broken that morning, as the delivery was coming in, that AB InBev had purchased Blue Point. We saw that on our phones and on the spot we were like, 'Nope! We don't want it anymore.'"

As that situation became more common and popular craft breweries became incompatible with the Brewers Association's definition, Craft Beer Cellar operators reconsidered how they evaluated which beers earned a place on their shelves.

"We kind of reassessed it [when Mahou San Miguel bought a 30-percent stake in Mich.-based Founders Brewing], and it became more about the quality of the beer as opposed to just who was making it or who owned the company," explains Mark. "A lot of our stores now have Goose Island, Blue Point, Ten Barrel, and a lot of these other breweries that are now in the AB InBev fold or the Coors fold. It's about assessing quality now and that's largely subjective."

Because the "buy local" trend often steers customers toward smaller, local breweries, deciding which craft beer to stock requires constant attention and adjustment to sometimes rapidly changing preferences.

"A lot of people are focusing on either local or what's new, and it's becoming a bigger challenge to sell some of these larger craft breweries [like Sierra Nevada and Dogfish Head] that are still making amazing beer," says Mark, adding that the marketplace is often dictated by customers' desire to buy local beer. "That certainly has its merits, for sure, and we're happy to carry [beer from local breweries]. The biggest challenge is trying to keep up-to-date on what the trends are and all the hot breweries that people are looking for."

Now, Craft Beer Cellar operators judge a craft beer based on the product itself, which involves trying beers from new craft breweries before they're granted a place on the shelves.

"We learned that lesson a few years ago," explains Mark, "Before we made the [philosophy] change of 'ownership versus quality,' the biggest question was: 'Are you craft? Yes? Okay, we'll sell you.' And then we started to taste some of these beers from some of these newer breweries that were on our shelves, and we were just like, 'This is not good. I don't want to recommend this to somebody.' It's a matter of making those decisions sometimes. It's not always easy."

The employees at Craft Beer Cellar's headquarters make an effort to reach out to breweries whose beer isn't quite up to par to explain the decision, trying to maintain a positive relationship and support those craft brewers a different way.

"If we try something and we don't think it's of the quality we would want to have on our store shelves, we reach out to those breweries," says Mark. "We've had a couple of instances where those breweries have reassessed their process and said, 'Oh, you're right, because we just spotted this in our brewing equipment and that's why you're getting the off-flavors you're getting.' Like I said, we don't do it to be snobbish. We want every brewery out there to be successful, so having that line of communication open like that is pretty important for us, too."

Smooth Operators

Craft Beer Cellar's first franchised location opened in 2013. Mark says the complex process to find and open new locations is still evolving, but begins with applications submitted by would-be franchisees.

"From there it's a process of talking to the applicants, assessing the market they're interested in, developing a knowledge of what that market looks like both in terms of not just the craft beer scene but also licensing, licensing availability, things like that," explains Marks. "There are markets we've been trying to get into for years and it's just not always the easiest process, so being able to advise prospective owners who may be looking at Point A, 'Well, if you look 10 miles down the road at Point B, we might be able to have better success there.'"

Mark says one of the aspects of Craft Beer Cellar that appeals to franchisees is the freedom to create a unique location, since there isn't a requirement for square footage or a standard layout. Though the average size of a store is around 1,200 square feet, some locations are as small as 400 square feet and as large as 5,000 square feet.

"In terms of store layout, while we advise the owner, that's up to the store owner," says Mark. "So it's not like we have one or two cookie-cutter store designs where you have to get this much space and this is how your store is going to look. We leave that up to the owners, and obviously there's a lot of variations depending on whether you're going to have a bar or not and all that. There's a certain amount of parameters, but a lot of it really is up to the local owner."

Because of varying state and local laws, what each Craft Beer Cellar franchise offers also varies by location. Some only sell bottled beer, while others have taps and can fill growlers; the Houston location even includes a food truck concept. Although franchised locations may look different, the company works to ensure a consistent and positive experience in part by ensuring the beer being served or sold is of a high quality. Sometimes, that means turning away deliveries of beers that don't meet their standards.

"Some of our stores will be turning away beer and we get looked at like we have three heads," says Mark, who adds that one Craft Beer Cellar location once turned away 20 percent of a delivery because that portion of the beer was out of code.⁵ "It's kind of a new concept that having 1,000 beers on your shelf may look great, but we want to be able to guarantee that they're all fresh and that they're all good. That's pretty important to us."

Mark says that receiving out-of-code shipments isn't usually a problem with smaller, local breweries that handle their own distribution, but can be an issue with beer coming from larger distributors who fulfill hundreds of thousands of orders across the country. Closely monitoring the freshness of the beer in Craft Beer Cellar locations helps protect the company's reputation, but also enables them to ensure all of the craft beer on the shelves has a chance to make a great impression on first-time drinkers.

"Someone would pick up that beer [without checking the expiration date], and it's not good," says Mark. "It's certainly not what the brewer intended, and then two things happen: either that person who's new to craft beer thinks that's what that beer is supposed to taste like, which is a challenge, or they rightly say, 'Well, this beer sucks. I don't want that.' Then that becomes a problem for the whole craft beer community because that beer has not been represented well."

Though franchised Craft Beer Cellar locations are all locally owned, breaking through to craft beer drinkers who prefer local concepts has been one of the brand's challenges.

"There are some very beer-centric cities that are fiercely proud of their local beer and their local companies that do view a franchised store as the 'outsider,' so that is a challenge we face," says Mark. "I guess you could say there's a certain percentage of people you're just never going to win over, but that's not going to stop us from trying every day. It's not enough for us to just open the store and say, 'Hey, we have great beer!' We're working hard to stay on top of the quality of beer, the trends that we're seeing, and making sure that we're being 100 percent hospitable to our customers."

With 33 locations currently open and more than a dozen in the planning stages, Craft Beer Cellar's team and franchisees will have plenty of opportunities to share their craft beer, hospitality, and knowledge with customers across the United States.⁶

References

1. State Craft Beer Sales & Production Statistics, 2020. Brewers Association. Accessed September 2021.
2. Cicerone Certification Levels. Cicerone Certification Program. Accessed September 2021.
3. Craft Brewer Definition. Brewers Association. Accessed September 2021.
4. Craft Beer, Brought To You By Big Beer. NPR The Salt. Accessed September 2021.
5. How to Reduce Out of Code Beer. Beer Business Online. Accessed September 2021.
6. Franchise Information. Craft Beer Cellar. Accessed September 2021.