Marketing and Retail and Real Estate & Retail

Location, personal touch drive tasting room growth

December 28, 2009
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Upland operates a tasting room in Indianapolis. (IBJ file photo)

After a weekend tour of Bloomington’s Upland Brewing Co., beer aficionados are all but expected to spend some time in the adjacent Tap Room. How better to get a flavor for the craft than to sample the product, after all?

The same philosophy applies at Chateau Thomas Winery in Plainfield, which draws wine lovers to its Tasting Room through tours and a variety of special events held on the sprawling property.

Now both businesses are broadening their use of the time-tested marketing strategy, leaving their production facilities behind in the search for new customers.

Last month, Upland opened a tasting room at 4842 N. College Ave. in Indianapolis—more than 60 miles from where the brewery tours end. Chateau Thomas also ventured north, opening its Tasting Room & Wine Bar in Fishers to be closer to Hamilton County connoisseurs.

“People like our wine, but we have learned that they’re not necessarily going to drive to Plainfield to get it,” said winery founder Dr. Charles R. Thomas. “The perception seems to be that we’re located somewhere around St. Louis.”

Location is important, but it’s not the only advantage of off-site tasting rooms. Setting up shop in unfamiliar territory also helps introduce the brand to new audiences—and build relationships with loyal customers.

“It’s a local presence in a bigger market—there’s a convenience factor, but it’s also a great marketing tool,” said Ted Miller, president of the Brewers of Indiana Guild and co-owner of Brugge Brasserie in Indianapolis.

Although Upland and Chateau Thomas both sell their products through wholesale distributors that supply liquor stores and bars throughout the state, establishing that personal connection can make a difference.

“It’s an opportunity to get a little closer to the community and build excitement about our beers,” said Upland President Doug Dayoff.

Take Rick and Nancy Germano, who stopped by the Upland Tasting Room on a recent afternoon. The couple tried a $6.99 flight of samples, then took home a 64-ounce growler filled with their favorite for another $12. They said they’ll be back—to refill the glass jug and to support the neighborhood business.

“It’s a neat idea,” Rick Germano said. “This has an old-town, old-time feel.”

That’s the idea. Upland’s Indianapolis operation is purposefully low-key. Although located in the shadow of the bar mecca that is Broad Ripple, the tasting room feels more like an old friend’s basement. Beer is only served in sample sizes, and food choices are limited to pretzels and cheese (albeit from local favorites A Taste of Philly and Trader's Point Creamery).

“We worked really hard to come up with a format that would not compete” with Upland’s institutional customers, Dayhoff said. “Our hope was folks would come in, try a few beers and take a growler home with some of the specialty beers we don’t bottle. The response has been tremendous.”

Upland expected to go through five or six kegs a week, tasting room employee Kristin Knapp said, but the reality has been more like 20 to 24. “It’s going really well,” she said.

Chateau Thomas is finding early success in Fishers, too. About two weeks after its early December opening—and before a permanent sign was installed over the strip mall storefront—the outlet posted $1,300 in sales on one day.

“That’s not bad for six or seven hours,” Thomas said.

The Fishers location is Chateau Thomas’ second off-site outlet. The first opened in Nashville, Ind., in 1994. The winery was drawn by the tourists who flock to the area, but the payoff wasn’t there.

“A lot of people walked in,” Thomas said. “But they weren’t necessarily looking for wine. A lot of people go shop to shop without even looking at the sign on the door. We gave away a lot of wine, but we didn’t sell much.”

Although the state’s liquor laws allow wineries and breweries to give away small samples, Chateau Thomas has started charging $1 for each one-ounce taste. Thomas has long suspected that free samples were costing the winery big bucks, but a new computer system confirmed it—to the tune of $180,000 just this year.

“We can’t do that and make money,” he said.

Upland’s Dayhoff has a different goal. Although the brewery also charges customers for samples, he sees the tasting room as a marketing initiative, not a profit center.

“We want to earn our profit in the wholesale business,” he said, and the tasting room helps that by building awareness of the brand.

The brewery is on track to sell about 100,000 cases of beer this year, up 20 percent from 2008. Central Indiana represents about three-fourths of sales, he said.

The newly established Sun King Brewing Co. has similar ambitions. The Indianapolis brewery has a bare-bones tasting room that’s open Thursday, Friday and Saturday afternoons. Visitors are encouraged to tour the production facility, and samples are still free.

“We want to put the product in people’s hands,” said co-owner Dave Colt. “Customers come in, try our beer and then go to their local establishment and say ‘Hey, we want Sun King.’”

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