SBJ/Jan. 13-19, 2014/In Depth

Tapping new revenue

Sports venues give a toast to the trend toward craft beers

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Arenas and stadiums are awash in craft beers as teams and concessionaires seize the opportunity to capitalize on the trend toward specialty brews.

The U.S. now has more than 2,500 breweries, more than at any point in history, and more than 1,600 are in the planning stages, reported USA Today. Almost all of them are craft brewers.

The lifestyle trend has extended to sports over the past three years, driven in large part by a younger generation whose tastes veer toward edgier and fruitier flavors compared with their father’s old-school domestic brand.

Blue Moon was born at Coors Field nearly 20 years ago. This season, the ballpark will open the 5280 Craft Bar, which will have 52 taps pouring craft beers.
Photo by: Colorado Rockies
Generating new sponsorship dollars, developing closer ties with local brands and sports fans, and gaining social media exposure are other factors driving the trend, say teams, food providers and craft beer partners.

For Ovations Food Services, craft beer now represents 25 percent of total beer sales at its facilities and import beers take up another 25 percent of market share, said Doug Drewes, the company’s executive vice president.

“You can see from the day that it was all domestic how much we have truly evolved in this business, which comes at a higher price point for imports and crafts,” Drewes said. “We’re giving fans what they want and it’s turned into a 50-50 mix throughout the industry now.”

Across the country, more teams and concessions firms are refreshing tired spaces at their facilities by turning them into themed destinations tied to local and regional brews. It’s all come to a head — Ovations itself is becoming a craft brewer (see related story).

Take a look at Charlotte, Detroit, Denver and Portland, four big league markets that have seen craft beer projects take over major real estate at sports venues in town. All four cities are in states that are hotspots for microbrew production. For 2012, Colorado, Michigan and Oregon all ranked in the top 10 in the country in annual craft beer production. In addition, North Carolina came in 10th in the number of total breweries with 70 companies producing about 160,000 barrels, according to data compiled by the Brewers Association, an organization devoted to craft brewers.

Charlotte alone has grown to include seven microbreweries over the past three years, said Daniel Hartis, a craft enthusiast who tracks the trend locally through his site, charlottebeer.com. The Charlotte Bobcats recognized the trend, which led to developing the new Craft Beer Garden at Time Warner Cable Arena that opened in October, showcasing nine local and regional brewers sharing a redeveloped space (see related story). Two months into the NBA season, sales are up 39 percent over last season’s old full-service bar space that offered draft beer, wine and hard liquor, Bobcats officials said.

In Denver, the 5280 Craft Bar opens this season at Coors Field, part of a multimillion-dollar rooftop project at a ballpark that was on the front end of the trend when it opened in 1995 with a microbrewery on site. Almost 20 years later, crafts have come full circle at the Rockies’ ballpark.

By definition, the Brewers Association says craft beers are produced by small, independent companies tied to annual production of 6 million barrels or less. In addition, less than 25 percent of the craft brewery is owned or controlled by an alcoholic beverage industry member that is not itself a craft brewer, the group says. In other words, the true craft brewer is not beholden to Anheuser-Busch and MillerCoors, the top two brewers in North America.

Those two companies still obviously dominate beer sales in sports, and concessionaires are respectful of their
At Denver Broncos games, a 20-ounce draft of craft beer sells for $8.25, compared with $6.25 for the same size domestic beer.
Photo by: Centerplate
partnerships with teams.

“We have to keep the peace with everyone,” said Justin Kizima, Centerplate’s general manager at Sports Authority Field at Mile High, home of the Denver Broncos.

Craft beer covers 50 percent of the total beer taps at Jeld-Wen Field, home of Major League Soccer’s Portland Timbers.

“But no matter how into the craft trend you think you are, everybody’s going to want a Bud Light or Miller Lite at the same time,” said Ben Forsythe, Centerplate’s general manager at the soccer stadium.

The key is striking the right balance among all beer makers to drive sales for everybody, vendors say, which includes showcasing the Shock Tops and Blue Moons of the world, two mass-produced brands owned by A-B and MillerCoors, respectively, and both marketed as craft-style beers.

“They understand if you get the pricing and distribution right, it benefits the entire category because you’re keeping people in the beer category,” said Andrew Shipe, Aramark’s vice president of marketing.

Still, the little guys continue to gain a greater share of total beer sales in sports. Aramark has seen the craft beer category grow significantly at its 11 Major League Baseball accounts, including Coors Field, where Blue Moon was born almost 20 years ago and is still brewed today.

“When you look across baseball, 69 percent of our consumption still comes from A-B and MillerCoors,” Shipe said. “But over the past three years, there has been a shift of 5 share points and now the craft beer category is worth about 20 percent. Ten to 15 years ago, that category hardly existed. It was a blip on the radar screen. Based on trends we’re seeing not only in our buildings but the industry data we get from our beer vendors, domestic will continue to decrease in its share.”

Fresh uses for tired space

Aramark is not alone in seeing craft beer cut into domestic sales at sports facilities. In Denver, widely regarded as an epicenter for craft beer, Centerplate’s taps dedicated to pouring crafts at Broncos games have grown from 15 percent to 21 percent over the past three years, Kizima said. The number jumps to 30 percent by adding the total number of craft beers sold in bottles and cans at the stadium.

The Palace at Auburn Hills doubled the number of craft beer stands.
Photo by: Sean Hodgson
This season, Centerplate opened two new 50 yard-line bars with a focus on crafts, part of $32 million in facility upgrades. For Broncos games, a 20-ounce draft of craft beer sells for $8.25 compared with $6.25 for the same size domestic beer.

“The allocation speaks for itself,” Kizima said. “It’s important for us to celebrate these brands that reflect the personality of Colorado.”

In Detroit, Delaware North Sportservice and Levy Restaurants have converted underperforming food spaces into craft beer destinations. The state of Michigan has become a mecca for craft brewers, reflected in new offerings provided for Lions, Tigers and Pistons fans.

This season, the Lions ran a Craft Beer of the Week promotion on Facebook, allowing fans to vote for the microbrews they wanted Levy to serve at Ford Field. The craft getting the most votes got a dollar knocked off of Levy’s regular price at the next home game. The response wasn’t overwhelming, drawing an average of 500 to 1,000 responses a week, but it got people talking about their favorite beers in a social forum, providing the Lions with a valuable customer service tool, said Kevin Currie, the team’s director of digital media.

At the Palace of Auburn Hills this season, Levy and the Pistons doubled the number of craft beer stands offering exclusive Michigan crafts and some national brands. Together, they are partnering with local distributors to promote craft tastings at a premium group space in the upper deck.

“Craft beer fans are loyal,” said Chris Quinn, the Palace’s vice president of business development and premium seating. “Our hand wasn’t so much forced [by the trend] but A-B reduced its spend with us, so it gave us an opportunity to generate more sponsorship dollars elsewhere.”

Two years ago, Sportservice started selling Michigan craft beers at Comerica Park at an indoor space in the far right-field corner that was originally a McDonald’s when the Detroit Tigers’ ballpark opened in 2000. The space later became a sliders stand but sales were “never overly impressive,” said Robert Thormeier, the vendor’s general manager. After launching the craft beer concept in 2012 with five brands in a largely unfinished space, Sportservice spent $110,000 in upgrades for 2013 with a woody, Pacific Northwest feel, and expanded its selections to 10 taps and 16 bottled beers.

The move paid off. Sportservice sold about 169,000 cups of beer this past season, more than triple the 45,000 sold over the previous year. Sixteen-ounce pints sold for $8.75, the same price for a 24-ounce domestic draft, Thormeier said. Doing the math, gross sales were about $1.48 million.

“We like the idea of having created a destination where people can go,” he said. “What we found is people go there before the game starts and buy one craft beer and go to their seat, then wait for a vendor or go to the nearest portable or concession stand and see what they have there. Pricing can affect it, but in general people are more willing to pay more for a craft beer.”

Highlighting local ties

Looking at those sales numbers, it’s obvious craft beer is serious business and no longer a niche market. In many cases, these renewed spaces are churning out sponsorship dollars for teams such as the Bobcats and Pistons to cover the cost of converting those areas.

Besides satisfying the tastes of younger fans and generating new deals, the trend also falls in line with teams and
their concessions partners that are bringing a greater number of local food brands into their venues to forge a stronger connection with fans and their hometown favorites.

In Detroit, Levy folds craft beers into its new Slows BBQ stand at Ford Field, named after a popular city eatery. The same is true in Denver, where the vendor melds Colorado crafts with locally made sausages at the Land Rover Denver Club, a premium space at Pepsi Center. In both cases, there’s a story to tell patrons behind the history of those homegrown brands that link a piece of the city’s culture with the team’s brand, said Alison Weber, Levy’s chief innovations officer.

In Charlotte, the Craft Beer Garden at Time Warner Cable Arena run by Levy has signs posted on faux-ivy covered columns describing the origins of the nine breweries participating in the program. A shiny stainless steel beer tank serves as the bar’s centerpiece, adorned with copper plates informing patrons that the giant container at one time held suds made by NoDa and Olde Mecklenburg breweries, two separate breweries that are both partners in the Craft Beer Garden.

“It’s almost like going green,” Drewes said. “That’s the difference between imports, which you’re still getting from the national breweries, and the craft business. We’re buying local, sourcing local and selling local and there’s a lot of loyalty to that.”

They’ve been loyal for at least 30 years in the Pacific Northwest, a region where enjoying craft beer is a way of life. It extends to Jeld-Wen Field, where the Portland Timbers are one of the few big league teams to have an official craft beer partner.

The team’s deal with Widmer Brothers, a Portland brewery founded in 1984, was signed in December 2010, a few months before the Timbers’ inaugural season. The agreement reflects the prominent role craft beer plays in the city’s culture.

“We’re creating an experience that really represents Portland,” said Mike Golub, the Timbers’ chief operating officer. “We have sold out every game over the first three years. Our fans arrive early and consume their beer happily.”

The biggest difference between Jeld-Wen Field, a converted minor league ballpark, and other sports venues is that every concession stand in the building offers local brews, a layout completely driven by fan demand. “I don’t have ‘destination bars’ for craft beer,” Forsythe said.

“It’s one of those things, especially in the sport of soccer,” he said. “If I didn’t have [crafts] readily available, our fans wouldn’t be happy with us. Honestly, that’s what we’re here to do, to make sure they feel they’re being listened to and give them what they want.”

The Portland Timbers have an official craft beer partner.
Photo by: Centerplate
The craft beer market locally has matured to the point that Centerplate offers a 12-ounce microbrew draft for $5 and larger sizes for up to $9. The Craft Beer Garden in Charlotte, by comparison, offers two sizes for $8 and $10. Buying two large beers, with tax added, comes to about $22.

For Centerplate, the key is providing price flexibility to fit every fan’s budget. “I know what Moda Center and CenturyLink Field [in Seattle] are doing and we always try to stay a little bit behind them in pricing because it’s important to the client,” Forsythe said.

At Coors Field, the 5280 Craft Bar is part of a major retrofit spanning 38,000 square feet along two levels down the right-field line, above the Rockies’ bullpen. In the Mile High City, it has initially been named for the distance of a mile, 5,280 feet, but will most likely have a sponsor by opening day, said Greg Feasel, the Rockies’ executive vice president and chief operating officer. The bar itself will have 52 taps pouring craft beers. About 300 ticketed seats will be connected to the bar but it will be open to all ticket holders, he said.

The project, designed by Populous, Coors Field’s original architect, was driven in part to eliminate excess seating at the 50,445-seat stadium, Feasel said. At the same time, it will celebrate the heritage of what still remains as the only big league facility in sports tied to a working brewery.

“Coors Field is the home of Blue Moon beer,” Feasel said. “We produced a 20th anniversary ale here last season and couldn’t make enough of it in the brewery. It took off. This new bar will be an iconic place where you can have your picture taken and post it. It fits that spot.”

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