Imagine this: You walk into your favorite bar for a beer. Or you walk you’re your favorite restaurant. Among the taphandles not one has the familiar name of your favorite beer – not Budweiser, not Miller Lite, not Michelob Ultra. Not Bell’s Two-Hearted Ale, not Trillium Vicinity, Not Summit Extra Pale Ale, not Dogfish SeaQuench, not Wicked Weed Black Angel, not New Belgium La Folie Sour Ale. Same thing in the restaurant as you scan the beer menu.
No, Prohibition hasn’t returned. But your favorite restaurant or is now brewing its own beer.
After chatting with Daryl Cohen of BrewFirst, we think that’s a real possibility. The craft beer model, it seems to us, has had three elements: First, it’s local. Second, usually, the first step isn’t a production brewery but a taproom. Third, freshness.
Cohen and associates has developed a machine that uses smart brewing technology of make 31 gallons of beer. It’s on wheels, so all an operator has to do is wheel it in, plus into a standard 220 lines, add water and start brewing.
It can produce a variety of flavors, including IPAs, traditional ales, strong porters, stout, pale ales, ambers, heavy bitters, golden ale and cold brewed coffee for nitro coffee.
What has inhibited restaurants and bars from getting into the brewing business? The need for large, expensive industrial-sized equipment that you simply can’t install in a restaurant or bar. That barrier to entry is gone with the BrewFirst system.
Any bar or restaurant can do this.
But, you say, the entire licensing process is too complex. No bar or restaurant operator would want to deal with this.
You’re probably right. But they don’t have to. BrewFirst has an affiliation with one of the largest groups of bev/al attorneys that will handle the TTB, state and local licensing process.
All the on-premise operator has to do is make a minimal down payment, wheel the machine into his bar or restaurant, wait for approval and start brewing. BrewFirst, Cohen told us, is applying the Gillette razor blade strategy – it’s charging just a bit over cost for its machine, but expects to make most of its money by selling the ingredients
While any commercial brewer is at risk of suffering from this new technology, we think craft beer is especially at risk. At the least, every restaurant and bar now becomes a potential competitor.
That means a craft brewer has to compete for limited shelf space in grocery, package and convenience stores. And he now has to compete with people who view themselves as restauranteurs, not brewers.
In this emerging battle, we think Big Beer has the advantage or craft beer. It has more shelf space, more taphandles than craft. Not only that, but it can advertise to build name recognition on a much larger scale than a craft brewer.
Will BrewFirst, or similar technology, put craft brewers out of business or simply cap their growth? Will Big Beer decide to come out with similar machines? Anheuser Busch InBev has already teamed up with Keurig to create an in-home brewing system. There’s no reason to think it won’t try to do the same thing with BrewFirst – unless MillerCoors gets there first.
You can hear the full, unedited interview here: