The Trouble With Taprooms

If you have visited a brewery taproom lately, this finding will come as absolutely no shock to you (bold mine):

“Gen Z prefers different drinking environments from older groups. Experiential bars and high-energy venues hold much higher appeal and may offer the strongest opportunity to introduce them to craft. While casual dining restaurants, neighbourhood bars and sports bars remain important to the wider craft drinker base, Gen Z is markedly less likely to visit taprooms and brew pubs, which limits the impact of traditional brewery-led spaces.”

That comes from Drinks Business, which in turn is reporting on research from CGA by NIQ. Though DB is a UK site, the findings are focused on the US market, which reports that the youngs are losing interest in craft beer.

“Craft beer may still command loyalty in many US on-trade settings but its grasp on younger drinkers is weakening. According to new research, craft’s rate of sale has fallen by 10.3% year on year and the segment has surrendered 1.5% of share to competitors, including imports.”

Trends change; we all know that. But step back and what is so shocking about this shift is how quickly it has come. Only once drinkers did not return post-Covid did this development become evident. Even during Covid, as pubs and restaurants sat empty, breweries were continuing to open taprooms. It wasn’t optimism, but rather a calculated plan to invest in the highest-margin outlet they had. During the pandemic, five breweries agreed to write regular reports about their experiences to help us understand what the industry was going through, and four of them opened new taprooms.

What happened?

This post can function as an invitation for your thoughts—please do weigh in—but I’d like to pick up where Drinks Business left off. It is becoming clear that a lot of the “lessons” the industry absorbed during the Great Expansion were wrong. Flagships were not dead. Hazy IPAs were not going to supplant clear hoppy beers. Erstwhile craft breweries, fueled by national distribution and big beer ownership were not going to become the new Budweisers. And for the purposes of this post, taprooms were not always going attract large audiences merely because they sold beer.

The Great Expansion: In 2010, 1,800 craft breweries made 10 million barrels of beer. By 2020, 9,000 breweries made 23 million barrels of beer. By contrast, in the previous decade, brewery growth stood at just 250 (from 1,566 in 2000).

Part of this is a trend thing. During that great expansion, a bunch of related fixtures of craft brewing got white-hot: hazy IPAs packaged in four-packs with bright, geometric designs; ultra-fruity, sweet beers that would attract huge lines; and spare, industrial taprooms. At the time, those taprooms seemed cool and futuristic in their minimalism and were full of 20- and 30-somethings. They were highly specific in the way that white-hot trends get, and that means they perfectly captured a moment. Unfortunately for an industry trying to capture young drinkers today, that moment happened a decade back, when Gen Z were kids on dad’s expeditions to tick off a few more beers on Untappd. And now, for a lot of 20-somethings, taprooms don’t seem cool and futuristic; they have the vaguely cringe feel of dad’s old passions.

Important caveat: much like not every hazy IPA was a slightly unpleasant beta experiment back in the day, not every taproom—maybe not even most of them—were or are uncomfortable and industrial. Yet enough were that the term “taproom” carries a lot of the baggage of that image.

There’s something more objective in the problem with taprooms, too: absent that feeling of being at the center of the cultural zeitgeist, and compared to a lot of other bars and restaurants, they’re just not that fun (again, see the caveat above). Customers have a lot of options, and going out has gotten a lot more expensive post-Covid. Younger people with less money to spend are going to visit places that optimize their fun. That may mean live shows and dancing, or games, or good and cheap food. And given a choice, people are always going to be drawn to a place with great ambiance rather that great beer (Oregonians will understand immediately when I speak the following word: McMenamins.)

The taproom model, that very specific 2016 thing, has become about as cool as [please fill in an appropriate 2016 reference—I stopped following cultural trends in about 2003]. It’s not a fatal problem, but it is now emerging as a real one. Breweries are going to have to adjust.

One final, related comment. The beer world is incredibly diverse, especially retail locations. So many people who have these discussion on social media and blogs do so from larger cities. One thing I have learned in following every brewery in Oregon on Instagram is that in rural communities, brewery pubs and taprooms are incredibly important civic institutions. We’re about to go into #PubJanuary, and I’ll talk more about this, but it has been incredibly heartening to see the photos of small breweries hosting knitting or yoga groups, teaching fly tying, or serving as a venue for groups to gather. I’ll leave you with a photo Deluxe Brewing posted of their Monday night accoustic jam—and which I reproduced in the Celebrate Oregon Beer Newsletter. (Subscribe, I tell you, you’ll love it!)