Charlotte bars are feeling the pressure from breweries

Charlotte bars are feeling the pressure from breweries
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The rise of the local brewery as a community hangout is arguably the biggest trend in Charlotte’s social scene over the last half-decade.

Bars in town have been forced to take notice.

The Agenda spoke with numerous local bar owners to find out how breweries have affected their business. The bar owners all were complimentary of Charlotte’s breweries and said they’ve been good for the city. But all have had their business impacted in some way.

Bars that used to pack people in on weekend afternoons for large-scale events have been forced to change their business models. These patrons are now more likely to be relaxing at Olde Mecklenburg Brewery’s massive Biergarten or listening to live music at Sycamore Brewing.

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Weeknight traffic, too, is affected.

“There’s not a bar in town that has 500 people doing yoga on a Tuesday night,” one industry source said.

And as local beer has become ubiquitous across Charlotte, customers have become more price-sensitive. Fewer people are willing to pay premium prices for local beer at bars when it can be had for cheaper in the brewery’s taproom a few miles away.

This could ultimately lead Charlotte bars to offer fewer Charlotte-made beers on tap, bar owners say.

“It is difficult to ask a customer to pay 50 percent more for the same product,” said Britton McCorkle, CEO of Bottle Cap Group, which operates bars including the Oak Room and Ink N Ivy.

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This dynamic is a new one for bars. After all, Yuengling and Coors never set out to create their own bars in local markets. They just sold to the ones already there.

Some bars haven’t been able to keep pace. In the last year or so, BONZ Smoke & Taphouse, Kennedy’s, Bar Charlotte and Philosopher’s Stone Tavern have all closed their doors. All these locations differ greatly, and none of the closings are attributable to breweries. But the landscape is much more unforgiving to a local bar owner.

On a Saturday afternoon at 4 p.m., the volume of people at bars on Montford Drive is only half of what it was a decade ago, industry sources say.

Some bars are able to make up the difference with the late-night crowd, since bars are generally open later than a brewery taproom. Some aren’t.

When’s a local beer worth $6?

One issue bar owners face is one of price. Bar owners buy kegs directly from the breweries and have to charge a markup to make the economics work.

So a pint of Charlotte beer at the brewery might run you $4 or $5, while it will likely cost $6 or $7 (or more) at a bar.

Several bar owners told the Agenda that customers have pushed back on the higher prices. Why should they pay more at a bar in South End, when the brewery is only a short walk away?

This price sensitivity is only becoming more common as the reach of local beer grows. Once, Charlotte beer was a novelty. Now it’s a staple.

“People actually used to come in and ask, do you have any North Carolina beer?” said Jim Foster, owner of Selwyn Avenue Pub. “We had Natty Greene’s.”

Over time, customers started to demand beer specific to Charlotte. That request rarely comes anymore.

“The sizzle is gone,” Foster said. “Everybody has it.”

Bar owners are adapting in different ways. Some are reserving fewer taps for local beers, dropping the seasonal varieties, or increasing the marketing on national craft beer brands. Selwyn Avenue Pub, for example, does a great business in Ballast Point beer. It’s a necessary shift, they say, when Charlotte customers are no longer willing to pay premium prices for local beer.

“When people stop thinking an Olde Mecklenburg Copper is worth $6, we’ll throw it out and put something else in there that is worth $6,” Foster said.

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Bars embrace the competition.

Bar owners aren’t just sitting around grousing, though. They’ve embraced breweries as a new type of competition.

“I believe that we are all in competition for the same customers at certain times,” McCorkle said. But he was quick to praise breweries for what they’ve done for the beer culture in Charlotte.

“We have been a long-time supporter of the local breweries, always believed the competition is healthy and we are all in the same business to provide people a place to enjoy themselves,” he said.

Foster of Selwyn Avenue Pub echoed the same sentiments.

“Breweries have been so good for Charlotte,” Foster said. “The last thing you should do is be afraid of competition.”

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