Killing it with a Tap Room - Progress Brewing

I went to a college baseball game at Dodger Stadium a few weeks ago and paid $15 for a beer.  Needless to say, that was the only beer I drank and given that I was with my 3 year old who used the concourse as his personal race track, I could have used more.  Compare that with the tap room at Progress Brewing, where $15 will get you 5 (!!!) of their Bronco Belgian Pale Ales, and you can see one of the reasons why owners Kevin and Diego are killing it at their tap room.  But price alone isn’t the key to their success.  They have nailed the market in other ways at their South El Monte brewery, which has been in the black since the first weekend they opened in 2013.

Other reasons they cite for the success of their tap room :

  • Selection - Typically 10 beers on tap plus a few limited releases

  • Location - It is objectively funky, but they are essentially the only game in town

  • Atmosphere - There is zero pretentiousness, which fits the neighborhood

  • Price - Yeah, I mentioned it above, but a handful of their pints are $4 and many growler fills are $8.  Their $3 beer is a 12oz pour, which is the equivalent of a $4 pint, but having a $3 beer on the menu gets attention

  • Beer Quality and Customer Service - I’ll vouch

Another thing of note is that Kevin and Diego did (and continue to do) nearly all of the equipment fabrication on their own.  With a metric shit-ton of elbow grease, and the help of local welders, they purchased the raw materials and built their 10bbl brewery.  Their start up costs were significantly less than what I have typically seen - only $30,000 for equipment.  Couple that with zero debt, rent that is quite low for the region and a huge percentage of sales through the tap room, and it becomes clear why they are doing so well.  I, on the other hand, have no metalworking skills and Pasadena does not have cheap rent, so my road to profitability will differ quite a bit.  

As always, here are some tidbits from our meeting that most of you will find mildly interesting, but a select few will find sort of interesting:

  • Their first year, they did 600bbl of production, with ~90% through their tap room.  They hope to do 1000bbl this year with a similar percentage through their tap room.

  • The brewery occupies 3300sf, which was too small almost immediately.  They have leased an additional 5500sf in an adjacent building.

  • As I mentioned, the tap room is no frills.  It basically consists of the bar area, stools, picnic benches and a couple TVs (see the pic)

  • Their electricity is 3 phase/240 + single phase/120

  • Employees: 2 owners (who brew), 1 assistant brewer, 2 tap room (full time), 2 tap room (part time), 1 bar back (full time)

  • Initially 30bbl fermenter capacity (1 primary, 1 secondary, 1 brite), now 4 secondaries and plans for 2 more plus another brite.  Current max yearly output is 1200bbl

  • Most popular beers - Double IPA, Belgian Tripel, Kolsch, Blonde

  • Food trucks come on Friday and are typically a big hit, as long at it is low priced food and accessible fare (tacos, burgers) - It helps that there aren't many other food options around

  • Initially bought 27 kegs, now at about 250 (all ½ bbl)

  • They mentioned to be sure to check where the natural gas enters the building - the cost to extend gets expensive VERY quick for the high capacity line you need

  • They recommend against using an electric brewing system because of the higher cost of electricity vs gas and very expensive replacement heating elements

  • In the tap room, they use Willi Becher glasses with their logo printed and they look friggin fantastic. They recommend eGrandstand for glass supplies.

These guys deserve a ton of credit for what they have done.  I have talked with people that spent well over a million dollars and people that spent less than 10% of that, and while they are all producing and selling beer, not all are doing so profitably.  Many of these breweries are relatively new, but regardless, what Kevin and Diego have done is pretty remarkable.   What I am seeing consistently is that those who have weaker tap room sales do tend to be struggling more than those with strong in-house sales.  Lesson = Kill it through your tap room.