Building the World of Beer
World of Beer likes to target hipster neighborhoods for its expansion plans.
In 2011 Minnesota passed the Taproom Bill, allowing breweries to sell beer onsite and fueling the growth of a local industry that’s ballooned from fewer than 30 in-state breweries to more than 100 in just five years.
That growth is mirrored nationally, with the craft beer industry showing double-digit growth for eight straight years. In 2007, just as the surge began, beer fans Scott Zepp and Matt LaFon opened a 2,500-square-foot World of Beer in Tampa, Florida.
World of Beer is betting on that rise of the microbrewery. Offering a national brand attached to a popular local beer scene, the Tampa-based chain has grown to over 80 locations and added a tavern-style food menu and full bar while emphasizing a diverse beer selection that varies from city to city. Set to land in St. Paul’s uber-trendy Lowertown neighborhood with 52 taps and 500 bottle options, it will test how consumers define local.
Lowertown has been ranked in polls alongside Portland and Williamsburg as one of the country’s hippest enclaves, so nestling a national concept amid locally owned gastropubs and a minor league ball field directly challenges the notion of locality.
“Some people might turn their nose a little,” says Steve Parr, market development partner for the Wisconsin and Minnesota franchises. “But I think once they come in and see that we are involved in the neighborhood and what we’re about, I think we can change their minds pretty quickly.”
The home office may not be across the street, but the beer list inside is specialized to the neighborhood, meaning that St. Paul’s World of Beer offers a Minnesota-heavy beer list unique to the Lowertown location.
“There are similarities between Lowertown and World of Beer,” says Minnesota franchise owner Adam Chwala. “Lowertown is up and coming over the last several years,” he says, just like his own brand. Millennial consumers, who are the majority of World of Beer’s business, may be more conscious of shopping with a national chain but, Chwala stresses, they are not averse to it. “Look at Starbucks,” he says. The key to connecting with an artistic community is be authentic and transparent.
Citing success in Austin, Texas, he says, “It really hasn’t been a challenge. They’ve embraced us, probably because we’ve embraced them so much.”
Utilizing a millennial-like approach, World of Beer markets mostly digitally, uses a mobile app loyalty program, and emphasizes the adventure of trying new things. The experience is intended to mimic a taproom visit, but with a wider selection that includes choices from Minnesota, Colorado or Germany.
“Close your eyes and envision an old oak beer barrel with a metal edge,” says Vice President of Real Estate and Development Tim Martin. “That’s what our brand is based around.” The metal band appears on company tables, walls, and bars as a connective tissue in an otherwise one of a kind locale. “It truly feels like it’s out of Colorado or Portland or Napa Valley,” he adds.
Staffed by a certified Cicerone, program managers are employed to curate the beer list in each city. “They do a lot of localization, working with wholesalers and breweries at the local level to find the right beer that customers are looking for,” explains Hannah Davis, director of brand marketing, keeping the link to community.
With most craft breweries young and minimally distributed, that connection is essential. With craft beer growing and changing so rapidly, Parr adds, “It’s a job itself to keep the cooler full of beer.” Tap offerings are in frequent rotation based on seasonality, customer demand, and variety, and having a defined role makes sense for both business reasons and relationship purposes.
Chwala says he first explored downtown Minneapolis, and his three Wisconsin sites are primarily suburban. There are factors beyond an area’s hip factor that determine location and drive success.
World of Beer’s key demographic is social, with free time and spending money. Craft beer drinkers are typified as millennial hipsters, but research shows that middle-aged and retirees are also significant consumers. In Lowertown, the arts community is present, but Parr expects office workers from downtown to frequent the tavern for both lunch and happy hour as well.
Using a research tool called ESRI tapestries, which categorizes consumers based on ZIP code, Martin explains that World of Beer identifies their top three segments as “Laptop and Lattes,” “Urban Chic,” and “Metro Renters.”
“We look across the country, then we find a market with those three buckets or analysis on their side,” he explains. “I look at competitors that are doing well above their identified national averages. So if most competitors or similar uses are over performing then there is market share to attain.”
With unprecedented growth, naysayers question if craft beer is a sustainable trend or a passing fad, but it doesn’t worry Martin, Chwala, or World of Beer one bit.
“A whole generation is embracing the different beers out there,” Martin says. Noting that he grew up in a region where Budweiser was synonymous with beer, it’s different today and he doesn’t see it going away. “Millennials probably haven’t even had macro beers, they might not ever go there,” he says. “It’s like wine in the ‘80s.
Everybody thought there were going to be too many varieties of wine,” he says. A quick glance at any restaurant list today will prove otherwise.