Craft Brewery Financial Training Podcast
Craft Brewery Financial Training Podcast
How to Build a Profitable Brewery Membership Program
In today's podcast, Ross Stensrud from Tapwyse shares how craft breweries turn memberships, flash rewards, and push messages into recurring revenue and reliable taproom traffic.
Real data from 100+ brewery apps shows why monthly loyalty programs outperform annuals and how simple offers can drive measurable visits.
Key Takeaways
• Monthly memberships outperform annuals for recurring revenue
• The $1 weekly beer case study
• How to use flash rewards to move slow inventory fast
• $5 locals program for weekday demand shaping - loyalty programs go beyond beer
• How to leverage push messages: High read and engagement rates
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Welcome to the Kraft Brewery Financial Training Podcast, where we combine beer and numbers to provide you with tips, tactics, and strategies so that you can improve financial results in your brewery. I'm your host, Carrie Shemoy, a CPA, CFO for a brewery, and a former CFO for a beer distributor. I've spent the last 20 years using finance to improve financial results in our beer business. Now I'm helping other craft breweries to do the same. Are you ready to take your brewery financial results to the next level? Okay, let's get started. Just a quick note, we'll be right back to the podcast. I want to let you know about a new network for beer industry professionals. It's called the Beer Business Finance Association. It's an organization of financial pros, just like you, looking to improve financial results, increase profitability, connect with your peers, and share best practices. So I'd love to tell you a little bit more about this. If you are interested in learning more, please email me, Carrie at Beer Business Finance.com. That's K-A-R-Y at BeerBusinessfinance.com, or you can visit BBFassociation.org. That's BBFassociation.org to learn more.
SPEAKER_02:Okay, thanks for being here. And everybody else for joining us. We'll get started now. So um for those who know who don't may not know me, I'm Carrie Shenway, and I'm a former uh CFO for a brewery of your wholesaler, CPA Love numbers. And so that's kind of what I do in the world is you know trying to help people uh learn and understand your numbers so you can run a more profitable brewery. And you know, along the way, you know, financially you can only do so much, you know, we can track everything and try to do everything analysis, but at the end of the day, we've got to implement certain projects and strategies and tactics to really move that skillfully, increase marketings, decreasing sensors, and improve profitability. So Ratha and I think it was probably been a couple years or we were connected and really from the beginning, it was just what you what you guys do at halfway is really resonated with me because we work with a lot of you know our business community pretty seasonal, you know, depending on where you are. Um and one of the ways to kind of through that the sort of has a loads of your skills is to have these sort of recurring revenue memberships and loyalty programs. Like you always get on my fillbox where I go into so many cat rooms and I want to join the micro and they're like, I want to fill down like I want to give you money and room for your money, like I don't care what I mean, like you know, please I want to preview, I want to live the virtual limit. Um that's really where kind of just the kind of thing you like this kind of feature is like reimagining the mic, like how can we think about it a different way, and how can we you know really sort of drive that revenue, but also give our customers things that they really want. Like I when I go to it, I'm like I want to engage, I want to wear your version. So that's how we're gonna talk about things. So again, thanks for everybody for joining us. I know your time is valuable. So we want to give you value. We want you to ask questions if there's things that if you know Ross is gonna go through a presentation questions. I'd say by all means, you know, jump in and ask, because that's that's really the most important. Um so with that, Ross, why don't you introduce folks uh about you and uh give us a background on tablets?
SPEAKER_05:Yeah, yeah. Thank you, Carrie. Um, and to just echo what you said, um, I don't particularly like talking or hearing myself uh talk too much. So um as I'm going through this, please by all means um shout stuff out. Um if you've got a question, I'm sure that um everyone else in the room probably has the same question because I'm doing a bad job of describing something. But um, anyways, yeah, and I just want to echo what you said before we get into it and give you a shout out, Carrie, for uh the good work you do at Beer Business Finance. You know, just really quickly, uh I've dabbled in other industries, and this is by far the best, um, both in terms of people and I think our mission, right, as an industry to bring people together, which is even more important these days than I think it has been in the past. Um uh and the way we can continue to do that is with a savage focus on profits. Um, and that's really important. It helped it keeps us afloat and lets us do what we do best. And so um I just want to say thank you for bringing your perspective and your expertise and uh services to the industry. Um and uh I hope I can contribute in my own small way to that conversation today, uh, specifically on how to build a profitable brewery membership, um, and also getting into uh on the profit side some new marketing strategies to put more butts in bar stools as well. And um I'll get into this just really quickly. Um, here let me go back once one second here. Um The way I've structured today is we'll look at kind of the high-level data first that we have access to and some of the trends we're seeing. But then I want to get into three really specific programs that are working really well. Um, the idea being hopefully all of you guys at the end of the today, if you want to, can go back to your bar tomorrow, your brewery tomorrow, and put some of these ideas into in place and into practice if you want to. Um, so that's the the kind of overview of how I've laid it out here. Um, really quick, uh before we get into it, how did I get here uh today on the screen with you all? This kid with this mullet. Um basically I'm the co-founder of Tapwise Carrie, as you said, um, but it didn't always, I wasn't always that way. I grew up in San Diego during the craft beer boom. Uh I was in college, it was a great time to be alive. I remember my first uh really good beer. It was an arrogant bastard. Uh I fought, I liked it so much that I followed it up with a double bastard, and then that's all I remember from that particular night. But luckily I did graduate a few years later. I started working in golf, uh, doing marketing software for the golf industry. Left that, went to work for a bike company, uh, met my beautiful wife, had two rad little dudes uh who are proudly carrying on uh the Stenzard family mullet tradition, uh, as you can see here. Um so that's a little bit about me. But I'm talking to you today uh as the co-founder of Tapwise. And so, how did I get here from the bike industry? Basically, what happened was um we had a great product, but we picked the wrong market. We were selling into commercial fitness. And a few years back at a time that I'm sure we're all too familiar with that I'm not gonna talk about on this uh on this call, um, that industry went away and with it went the business. And so um I found myself um spending a lot of time in local tap rooms um uh figuring out what I was gonna do. And uh one of those tap rooms had uh launched a membership program. And the the bar is called or the brewery is called Dog Leg Brewing, and they're a golf slash beer, uh golf themed brewery with a simulator in their tap room. Um and they launched this program and I joined it, but it was a complete mess. It was a total disaster when I joined. I had to sign up online, I had to show poor Kelly, the bartender, my uh you know, email receipt. She then went behind the bar and created an index card with my name on it and all my rewards, and then she filed it with all the other ones behind the bar. And then every time I came in and I wanted to get a beer or get my, you know, use the simulator. She was supposed to check that off on the index card, but inevitably what happened was it didn't happen. And so I ended up getting a lot of free beer and a lot of free simulator time, which was great for me. Um, but I was talking to the bartender, I'm sorry, the owner, Nick, and he said, you know, this program's awesome and it's bringing a lot of people in, but I can't scale this. And I said, Nick, I might be able to help you. Um, and so I went back to my friends who we had uh formed the golf software business with, and I said, Hey guys, I I need a job. Um and they said, Well, Ross, we've got a lot smarter people doing what you used to do. Um, so if you want a job, you need to start a new business. I said, I think I have one for you. Um and so TapWives was born with the idea being to uh deliver membership and marketing software to breweries. Um but the way we do that is a little bit unique in that we the each brewery we work with, we build you your own uh app uh that that delivers that experience to your guests. And so um what I want to look at today is kind of the what we've seen uh from our perspective in terms of memberships and marketing. Um, and then like I said, get into three really specific programs. So big picture high level, um, kind of what are what have we seen? Um the data set that we're looking at today, we have 135 breweries in that data set, and that means that there are 105 different, 135 different um brewery apps in the App Store that we have launched with the breweries we're working with. Those 135 apps have been downloaded 95,000 times. Uh they have driven into tap rooms 85,000 uh visits that we know about that we can track. Um it's actually probably a much higher number, but that's the ones that we can track. We have 1.7 million push messages that have gone out through these 135 apps to users, uh, to brewery guests. And then we uh over the next 12 months uh will collect at least at minimum$839,000 in membership revenue for those 135 breweries if no additional memberships were sold between now and 12 months from now, which is not gonna be the case. That number will go up quite a bit between now and uh and next year. Um, and so I'll let's do a quick, we'll do a quick rundown on the trends for these numbers and then, like I said, get into the the very specific programs. Starting with uh the dollars, right? Uh, because that's uh one of the big reasons we're all here today.$839,199 in membership revenue. Um, and so what do I mean by that? I'm sure Dave at Long Tab could could uh talk about this, but um basically the way this works from our end is that um the memberships are managed through the breweries app. And this is an example of what that looks like. Carrie, is that coming through that video? Okay, cool. Yeah, so this is an example of a brewery called 105 West in uh Colorado. Uh they offer uh multiple tiers of memberships. Um you sign up directly through the app to join. Um, and the breweries can uh set this up kind of however they want. Um, you know, uh I know Long Tab does a one annual payment for their mug club, which is an option that a lot of breweries do. Um there's also you can set this up to recur either monthly or annually if you want to as well. And what we see on our end is prices of these memberships range from$4.99 a month on the very low end of the spectrum up to$750 a year, kind of on the high end of the spectrum. And the cool part about this is that both of those programs actually do quite well. Um so um that's what I mean when I'm talking about membership revenue. Um, and so what are the trends we're seeing there? Um, this is kind of cool. So about I've done this, I ran this number these numbers about six months ago, and they were reversed. Um, but I've ran them, I ran them again recently in the last couple weeks, and this is what they look like now. So, of that$839,000 that of annual membership revenue that's coming through the brewery apps,$342,000 of that is annual memberships. So those are what those are memberships where you pay once a year, you get all your benefits for the duration of the year, and then you pay the next year. Um, on the other side of that is$480,000,$438,000 of that uh total is from monthly memberships. And six months ago, this was flipped. So there was more annual memberships than there was monthly. But actually, what we're seeing is that more breweries are moving to that monthly membership. And I think the reason for that is because generally those monthly memberships are more profitable. Um so if you look at kind of the average spend that a guest is spending on an annual membership through uh this through Tapwise, through it's through an app from Tapwise, it's$126.74. But if you look at the amount of money being collected from a uh guest who's used who's on a monthly membership, it's$202.80 over the course of the year. Um so you're making about$75 more per member uh with that monthly membership versus the annual. Um and that's I think why kind of we're seeing that that trend moving towards the monthly.
SPEAKER_02:I think the other thing, Ross, just to jump in, is like the monthly is just it's more affordable for the consumers here. I mean, that's just sort of how we're programmed. It's like, you know, Netflix doesn't come in and say, hey, I need 300 bucks on the choice, like 20 or 25 bucks. Okay, that's and this I think is a good just to underscore what you're saying is you know, for those that are listening and thinking about differently. So I like this as sort of optionality, and furthermore, it's it is a hack for a program that consumers electric bills every month, you know. Yeah, so um I but it has that other benefit of yeah, depending on how you structure it, it can be more profitable for the brewery. So I kind of look at it as like a win-win, sure. Um yeah, yeah.
SPEAKER_05:I think you're exactly right. A$20 a month um ask is a lot easier than$200 up front and a lot more palatable in a lot of cases. And so I don't want to discount the annual program either because there's a lot of benefits to that. You particularly in finance, I'm sure, know that cash in hand is great. And when you when you sell a big brewery, a big annual membership, that's awesome because you have that cash for the rest of the year. Um, whereas the monthly memberships are spread out throughout the course of the year. But um, if you do have the luxury of being able to kind of extend your lifespan uh out or your cash flow out, um, that monthly option can be really good. And also it can really help too, kind of through the winter months, if you've got that kind of baseline um membership revenue coming in repeatedly, um, is another thing that uh we see. So cool. Uh yeah, so um let's see if I can keep going here. Let's see if I've uh oh hold on. There we go. Got it. I don't know what happened to my mouse there. Um yeah, and so just one other quick uh thing that I wanted to show here is these are the this is the revenue coming in from the top earning breweries, and we're gonna talk about a couple of these, um, Pure Project and Lake Tahoe Aleworks, uh, and also um uh 105 West. And what the point of this slide here is that seven of the top 10 are running monthly programs in terms of our total earners. Um, you got to get down to uh to Beechwood Brewing at number uh seven, which is actually has a quarterly program. They set theirs up, uh it's a bottle club and you pay quarterly, so that's the why they're there kind of that other color there. And then Mass Landing and Dog Leg, the one that I talked about at the beginning, are uh at nine and the nine and ten spots, and they do yearly programs. Um, so there that's that's kind of the way that the breakout is in terms of top um earners with the programs that we we are helping with. Um yeah, so any carry any other thoughts on that? I'm gonna get into tap room visits here too. Butts and seats.
SPEAKER_02:Yeah, no, I think it's a good way to tee it off. And I love how you have the data and kind of support here's what you know mostly. But I do again think it comes down to optionality because you want to give people you're gonna go into kind of options for what a what a loyalty program could look like in terms of what do I get, right? Because it has to be compelling to but first let's start with well, what is the cost and how do I have to pay? And do I really have X amount right now? Um to kind of leave people where they are. I think that's yeah, it's a great idea.
SPEAKER_05:Yeah, yeah. Cool. Uh very quickly, we'll go through this tap room visits. How do we track this? Um, so this is an example of a tap room visit. Um, what happens is uh rewards can be set up in your app as part of a membership, um, or they can just be given to anyone who uses your app. Um, but the cool thing about this is that in order to use a reward, you have to use it in the tap room. Um, so when that happens through the app, we consider that a tap room visit. Um, and this is an example here, if this video is coming through, of a reward where it's a$1 beer that Pure Project does as part of their brew crew program. And we'll get into this specific reward. It's a really good pro it's a really good program for them. Um but the way it works is I tap that reward, I say, um, okay, I'm ready to redeem this reward. Um and it says, Great, uh, are you sure? And you say, Yes, I'm sure I'm ready to redeem it. And then what it does is it timestamps that reward. Your bartenders treat it just like they would any other transaction. So they have an equivalent comp in the point of sale or whatever um you have set up there. They don't have to learn anything new. It's all managed by the guests and everything like that. And it will work with any point of sale. So, um, like I said, when that happens, we know someone came into your uh bar. And so we consider that a visit. Um, cool thing about what we're seeing with this um six months ago, the average brewery using this uh was averaging 81 tap room visits per month, uh, with these, you know, where a reward was redeemed. That number has gone up to 98. Um, so breweries are getting better at kind of using this uh technology to bring people back to their bars. Um, some of the top uh breweries that we work with in terms of visits, uh Orange Hat Brewing out of Knoxville, Tennessee, um, they have a uh they have a mug club that is large pours. And you when you go into the the uh the brewery, you actually you get you you redeem that each day. Um and so this is a testament to Dave, your club at Long Tab, and kind of what you do with your special mugs and the big pores. Um, that can be a really effective program. Not all breweries track uh that specific um action, but Orange Hat does, and they're a top earner as a result of that. Pure Project uh is one we'll talk about. Local Roots is another local San Diego brewery that has been around with us for a while and gotten good at this. And then Lake Tahoe Aleworks as well, we'll touch on in a minute. And then a couple other quick big stats, and then we'll get into it. Push messages, 1.7 million push messages, uh just about coming through the app. What do I mean by that? Hopefully, uh you've you've all probably received push messages on your phone. This is what they look like when they come from a brewery. Uh it's branded for your brewery, it's coming from your app, so there's no question about whether it's spam or anything like that. It's going to reach your guests instantly on the home screen of their phone. Cool thing about push messages, they have a 95% read rate, which is awesome because they show up right there on the phone's home screen. You can customize what they do. So if you tap, you can say if I if a guest taps that message, what I want it to do is either open up my app, go to a specific page on my website, go to my social feed, whatever you want, you can customize that action. You can also target uh specific uh specific guests. So if you want to just send a message to members, no problem, you can do that. You can schedule messages out ahead of time if you're more organized than I am, um, and you uh have the capability of doing that. And you can send an unlimited amount. There's no um additional fee for um for usage or anything like that. It's just all included as part of the program. A lot of breweries are using this in really cool ways. I've got a couple examples here. Um, you know, dog leg, one of the rewards they have is a monthly beer. If you if I haven't used that uh by the a week before the end of the month, I'm gonna get a reminder. Um uh we have Steel Bonnet last year did a really cool 12 days of beer miss uh promotion. So every day leading up to Christmas, I was getting one of these, one of these specials. Common House does a lot of music uh out of South Carolina, so like clockwork on Fridays, I'm gonna get their their lineup for the weekend um so I don't miss anything. Um and my favorite uh example of a push message, which uh is Pike's Peak, uh, which I got this on at like 348 on a Wednesday, and it said, uh, if you're looking for a sign to drink today, this is it. And if I lived in Colorado, I absolutely would have been there in a heartbeat. But uh sadly I was stuck in San Diego. Um, so yeah, um, trends with push messages. Um, you know, breweries are getting very good at using them. Um there's 1.7 million that have been sent uh out to brewery guests, but the point that the the number that I really like here is the 348,897 engaged responses. And what that means is that a guest has tapped on that message or they have opened up the app as a result of receiving that message within a short time window. Um, and what that means is that 21% of the guests who receive these end up engaging with them, um, or one in five. And that's just an incredibly strong engagement rate. And it just goes to show that your guests want to know what's going on and they want to engage with your brewery and they want to come back. Um, so um, that's exciting to see. And um, that 4,315 number here, that just is the number of unique messages that have been composed. You know, composing of push messages is not hard, it's kind of like composing a text message. Um, so easy to do.
SPEAKER_02:Yeah, can I have a so one of the things that maybe you can elaborate on is um yeah, is kind of dual purpose, right? So you so you you have a loyalty program and people can buy into it right. You don't have to necessarily get the member in order to get the app, right? So you can theoretically download it and be notified of these messages. Um maybe you want to speak to that a little bit just so people are thinking, oh, because the goal here is get more people into your tap room, get them to come back more often, whether they're whether they're members or not.
SPEAKER_05:Yeah, that's exactly right. Um, breweries do use this as a great way of communicating with their membership base. Um, you can send a message specifically to members, but a lot of breweries, and we'll touch on this too, um, do a great job of engaging with just general taproom guests through their app. Um, there's things, uh flash rewards that we're gonna look at from 105 West and Pure Project, where um they just sent a sent a message with a reward out to uh their entire user base and saw great results from that. So that's exactly right, Carrie. Yeah, thank you for clarifying. Um all right, bear with me one second here. I'm gonna I'm having trouble moving forward in the slide deck, so I'm gonna bounce out and bounce back in. There we go. Um cool. So um another thing that we can look at here is downloads, 95,000 downloads. What does that mean? How is how do you download a breweries app? Um basically what you get is you get one QR code. It's gonna work whether you're on Apple, whether you're on Android. Um, and we provide a package for you, um, a launch package uh that's gonna look something like this. It's got taproom signage, social posts, et cetera, et cetera. Um, you know, it's very simple to download an app these days. Everyone's kind of familiar with how that works, and this is how it works in the brewery space. Um and the trends that we're seeing with this, um, you know, if you take a step back and you kind of just think about the world at large, apps have become really the preferred way for consumers to interact with the big brands that they know and uh and uh you know, that they know, right? Your targets, your your Duncan's, your um, your Starbucks, your insurance company, you name it, right? Um and crafts beer is no exception to this at this point in time. What we've seen is that um the increase in the number of uh app downloads over the course of the last 12 months has been 408%, um up to 95,000. Um and that's really exciting. And I think it shows, again, that people care about your brewery and your brand and they want to know what's going on. Um and they don't want to miss out.
SPEAKER_02:So um Ross, a quick question here from David. Um he's asking if the push messages can be integrated with things like Instagram, Facebook, or other platforms.
SPEAKER_05:Um Yeah, yeah. Uh great question. Um, so yeah, the the I talked a little bit about kind of the action you can attach to the message. And what all that means is that when someone taps that message, what does it, where does it take the person? And um every time you put up an Instagram post or a Facebook post, there's a special URL that that post has. And so what we see a lot of breweries do is um they will put up, they'll you they'll continue using their social media. Um, and then um kind of as a way of getting around the algorithms and like cheating the system, um, they might send out a push message to all of their uh app users that just links directly to that the information that they put up in that social media post. So you don't have to, you know, I know Zuckerberg has kind of been tightening the reins on who sees what you send out. Um, and this is a way of kind of making sure that when you've got an audience and you put all that work into getting followers and things like that, that they actually see what you have to say and what you're putting up there. So yeah, we do see that a lot.
SPEAKER_03:Um sorry, this is that was my thought thing. It's probably a lot like cleaning tags on mashing in. Uh but I was curious if like we post on Instagram or Facebook and send out an email uh via Clavio. Uh is there a way to automatically queue up that sense message on the app? Or the excuse of the push application?
SPEAKER_05:Uh so no, it doesn't it's you can't send a push message from Clavio um or um or anything like that. You do uh you do you you go into the manager, the tapwise manager, and you you basically do the do it there. Yeah, you've got a manager that's uh that and it takes five seconds to do it, but yeah, it's uh it's you you have to go to um to the tapwise manager.
unknown:Yeah.
SPEAKER_03:Okay. And with the the manager, is there uh like an API on the back end that we could use credentials or login or API key to automate that process?
SPEAKER_05:No.
SPEAKER_03:Not yeah.
SPEAKER_05:There's not. Yeah, we don't we don't um we don't have an API. Um, like I said, composing a a um a uh push message is not hard. It's like composing a text message, it's not like um a big you know effort or anything like that. So it's um you know it's uh it's you can do it from your phone. Um a lot of breweries do. Um but no, it doesn't, we don't have um ties into Clavio or um anything like that. On the flip side, what you can do is you can take all of your data um from your app and you can bring that into whatever other system you have. Um so what you get when you when someone downloads your app is you get the person's uh name, phone number, email, um, and you can take that and you can do whatever you want with it. Um it's accessible to you 24/7. Um you can export, import, whatever you need to do. Um, you know, that's one of the things that I think is important to us is that we're here to help you strengthen your relationship with your customers. We're not here to um, we don't have any interest in your customer data. It's your it's your customers, it's your relationship, and we're just here basically, you are our customer. Um, and we want to facilitate that um uh that relationship, if that makes sense.
SPEAKER_03:Okay. Yeah, I was thinking of trying to do like uh so if we have uh so my wife manages the social media side of things, right? So if she has uh a way to and I can build that side of the app on into different integrations and saying, hey, this is the Facebook post, this is the Instagram post, this is the content going out to the radio email, this is the stuff going to uh, and then just build it out with all the APIs, and then it just goes into one of those platforms, okay. Similar time exactly um trying to build up as well. This is the marketing class all the platforms. I guess maybe that's a future, um kind of building those things in that be pretty cool. Um building out like a marketing dependent thing is dependent on I guess intentionally automated.
SPEAKER_05:David, I think uh I would consider you kind of a brewery unicorn uh if you are able to uh to write your own um programs to automate all of your um your content creation and social media. Um uh maybe uh we need you we need to bring you into Taplise. I don't know. Um because that sounds pretty cool. But I um, you know, and the other we we do we're we're we are uh continuing to launch new features and things like that. And generally the way we operate is um we listen to customers and we try to we try to work on the things that are uh the most requested. Um and so um so uh you know this is one of the reasons why we've launched the gifting um ahead of the holidays this particular year is we wanted to make sure that that got out and brewers could take advantage of that. But um but yeah, um I hear what you're saying. And yes, I would love for everything to be automated and for me to not have to do any work or anything ever, but uh the nature of the reality of the situation at the moment is um to send a push message, you do have to log into the the tapwise manager and just um compose it. Um you can do that kind of from your phone or wherever. But you can, you know, if you are doing a scheduled um, you know, kind of curated content uh program, um you can schedule them out ahead of time. And a lot of breweries do do that. Um, the ones who are organized do do that. Um it just you just have to do that from the manager ahead of time.
SPEAKER_03:Okay. And is is manager available like uh be it like laptop as well, not just like iOS or Android F? Okay.
SPEAKER_05:So yeah, yeah. It's it's a web-based manager. Um you can sign in from tapwise.com on your desktop, on your laptop, wherever you uh um um from your phone, wherever you kind of uh are at the moment.
SPEAKER_03:Okay, cool. No, appreciate it. Thanks. Yeah, you bet.
SPEAKER_05:Cool. Um all right, cool. I'm through the big high-level numbers and big data stuff. Um, so uh now we get into the real stuff, the the fun stuff. The in real life, what are the programs that are working, some of the programs that are working best, and uh how did how are they set up? And I've got three for us today. Um, Pure Project uh out of San Diego, 105 West out of Colorado, and Lake Tahoeworks, um, which is out of the Lake Taho area that borders kind of California and uh Nevada. So um let's get into it. Cool. So um just a quick little background on Pure Project. They are a San Diego-based brewery, um, they have five regional tap rooms. Um they and so and they have uh kind of they brew great beer. Um they had for many years an established um bottle-aged beer club called the Seller Syndicate. Um, but the membership in that um particular program was starting to drop off. And so they wanted to launch something that was more accessible to their general taproom guests. And so we worked with them to launch their brew crew. Um and the way the brew crew works is uh it's$20 a month, and what you get as for joining the brew crew is you get your first beer of the week is a dollar, you get$5 off once a month for a pack of to-go beer, um, and then you get uh 20% off on member Mondays because they're a little slower on Mondays, and then you get a birthday beer. So it's a pretty simple program, um, but it's also very effective. Um, you can see they have uh when I ran these numbers at$20 a month with 167 members, that's about$40,000 in revenue that is coming in just from the membership fees. Um, and so um this has been really good for them. Um, but what I want to touch on here and dive into a little bit more closely is the$1 weekly beer reward and kind of what they've been able to do with this. So this data is about a year, a year's worth of data they've been doing this. Um, and so what you have here is you can see that$1 weekly beer has been given about$5,000, a little more than$5,000 times to tap room guests. 48% have gone unused, 52% have been used. And the other thing we know about this reward is when someone comes into the tap room and they get that$1 weekly beer, they don't just get one beer. Um they spend an average on of$18 every time someone comes in and redeems that reward. One thing I should say about Pure Project is that they do not have food. Um, they're beer only. Um, so this is about three beers that someone is coming in and uh and getting uh as part of this reward. Um I am probably a good example of this. Um Peer Project is close to me. Uh what happens with me is I and I am a member of the brew crew. Um what happens with me is that uh I want to go in and get my weekly beer. Uh my wife uh doesn't think she likes beer, um, but she wants to come with me, so she does. And Peer Project has a smoothie beer uh that they sell that she really does like. Um so she gets one of those, and then of course I get another one. And then uh sometimes we we keep the party going, but sometimes we don't. But that three kind of beer uh total is uh about what we uh we land at, probably most of the time. Um and just to get in a little bit into the numbers a little bit more, uh with an average beer price price of eight bucks, this is a no-brainer for people who uh for members, right? Because what they're getting is$34 in value with that with that uh brew crew membership, um, but it only costs 20 bucks. But then for Pure Project, um that what they see is there's that 48% breakage point. So they're actually only giving away$16.32 worth of beer as part of the program. So they're actually making a little bit more than they're giving away in beer with that one dollar beer reward. Um, and also I'm coming in more often. The average member is coming in twice a month. Um, so that spend at 18 bucks, a little more than twice a month, is about$40.11 a month in spend just with this reward alone. So you're talking about about 60 bucks a month per member just from this one dollar beer reward. And I know I've kind of gone through a lot and dissected a lot there. So, Carrie, did that make sense? I don't know. Sometimes I question whether this all makes sense.
SPEAKER_02:Oh, I think it I think it does make sense. I mean, I think some of the the I think the the big point is we have to give people compelling reasons to come back more frequently. And that's sort of the third leg of the school, right? Is we want receipts, we want them to spend more when they come and we want them to return more frequently. Yeah, this is this is just a demonstrative way to do that, and your results will vary. I mean, these are everybody's gonna try and still put a concept. You know, the breakage rate I only want you know, half of people are redeeming or half of the potential window of views are gonna have to be reading. Yeah, it's not like a full you know, and I think your point is well, when people are coming in, you know, most people are not coming in in one window view and going, oh, they're gonna have to bring in a free, they're gonna stick around for that. So I think it's I love it. You know, it's one reason what I kind of like about this because you get really creative with these offerings, uh, where the mic code would be like you know, you get uh a dollar equal four and a three year and you're gonna fight anymore. But this this can be, and then you can play around with this stuff too, right? It could be a one dollar, I don't know, menu item that you guys know that's like so conceptually I love it. I think it's really cool. I mean, it just demonstrates what we're trying to do to get people to come in.
SPEAKER_05:Yeah, yeah, yeah, absolutely. Um okay, cool. I'm glad I'm not talking speaking gibberish. Okay. Um, cool. And then there was the question earlier, too, about um can these uh is this applicable to not just members, but everyone else that uh general guests. And so Pure Project does a really good job of um using this to bring their general guests back as well, not just their brew crew members. Um and I've got a couple examples here. These are what I what we call flash rewards, and these are the examples that um of what Pure Project used this for. This is a reward that they sent out to all of their app users, and um, these are some of the rewards that they did kind of early on as they were growing their base of users. And so what you can see here is that uh Merkland's that first reward had 56 people redeem it, um, all the way up to the Crowler BOGO, had 142 people redeem it, and that tracks pretty closely just to the number of users that they have using their app as they were growing that user base. Um and what they've gotten really good at here is so that you can see there were six flash rewards that they sent out that drove 568 visits over the course of six months. They do this about once a month, once every three weeks is kind of the sweet spot that they've found. Um and what's what the other thing that's cool about this is they've gotten really good at kind of moving the beer that isn't moving by using this particular program. So uh if we look at that liquid illusion reward, that 81, um, this was the sales spike that they saw, um, the sales spike from this particular reward. So normally what you see here is you've got this kind of natural cadence to the way beer sells. When it's launched, there's a bump and then it kind of long tails out. Um, and this wasn't moving as fast as they had wanted to. And so what they did was they they um needed to get it off the shelf to bring their next beer in. They did this flash reward and they sold out that weekend. So this was a Saturday and a Sunday, and they saw this sales spike. Um, this blue is the are the sales that came through that uh that flash reward. And then they didn't have any, they got rid of it. Um they made room for the next one, they didn't have to dump it, they didn't have to wait, you know, uh, for it to kind of long tail out over time. And um, we looked at the tickets that um were part of that 81 visits. They added another thousand dollars in tap room revenue on top of the um just the um uh purchases of that that uh liquid illusion four-pack, if that makes sense. Cool. Yeah, all right. Um so that's it for Pure Project. Uh the next program I wanted to talk about here was 105 West. Just a quick background on 105 West, they're in Castle Rock, Colorado. Um it's about 85,000 people, I think, in Castle Rock. And at one point they had 13 breweries, um, which is insane. It's a huge, it's it was very dense. They don't have 13 anymore, but um 105 West is still thriving. Um they were one of the early ones there in Castle Rock. And um 105 West has set up their program a little differently, and I do like the way they've they've done this. It's a combination of your yearly programs and a couple monthly programs as well. And um uh so you can see here I've kind of broken it down the way that they've set this up. Their base mug club is$150 a year, which includes large pours. But then they've added their Cub Club, which is a monthly program at$37 a month that includes your large pours, but it also gets you a free monthly pint and two four packs every month. And so what I like about this is that if you like that to-go beer, it just makes sense to sign up, right? So if you're gonna get two four packs, you might as well sign up because it's about the cost of two four packs and um and then you know you're good to go. And then they've got their Grizzly Club, which is their their, you know, their real uh diehards. And that's the same thing as the Cub Club, but you get two bonus four packs every month. So it's about a four-pack every week. Um, and that's$59 a month. Um, I did the math on this recently, and I don't think people who sign up necessarily do the math, but it's a little north of$700 a year for those Grizzly Club members. So it's a very big win for um for 105 West. They also have a wine club, um uh, but that is um$45 a month, and you get a glass of wine um and two bottles. And so how does this break down for 105 West? Um I don't have the dollar figures um for you here today, uh, just because I don't have permission to share those, but I did want to share with you kind of the breakdown here of their membership base. So you can see kind of the number of members that they have uh is split between mug club members at 42% and cub club members a little bit more at 53%. Those are the two big tiers that they have. But if you look at the revenue breakdown, um you can see that Cub Club and that Grizzly Club really start to kind of dominate the pie chart there at 69% in terms of the revenue, the total membership revenue. Um, my takeaway from this, again, I'm not saying that the mug club's a bad idea. Um we know it works, we know that that big pour brings people in from the um orange hat data that we have. Um, but I am saying I would strongly encourage you to offer a monthly membership too, just because of the revenue implications of that, if that makes sense.
SPEAKER_03:Um, quick question on that. So 105 West and Pure Project. Google real quick, it's like peer projects on that 15 barrel brewhouse. 105 less, I can't find any information. Um with peer project in, I think it was 101 members. I think is what I think so. Um either way. Um do you have like suggestions for what kind of volume you need to do?
SPEAKER_05:Um so um the what do you mean by volume? You mean just the size of the brewery?
SPEAKER_03:Or yeah, so we're a fibrous or super small, right? Trying to get distribution hard, membership hard, in-house hard, uh trying to figure out what volume of beer we need to do. Like it all sounds absolutely fantastic, right? Um I don't want to piss off numbers either. Like, oh we're supposed to get a four pack every month, and well, you just send I don't know 50 cases out to uh the local country store with yeah.
SPEAKER_05:Um well um the so I I guess what I would say about that is we have we have um breweries that we work with that are in really small towns as well, um, that are on small systems. Um, and it's all relative. So um there's um Devil's Club in Juneau, Alaska does really, really well with the$5 a month program. Um that's kind of like modeled off the one we'll look at here, the Loyal Locals um program, the next one that we'll look at. Um, and there's another brewery in um uh I'm trying to think, there's a rural Pennsylvania brewery um that has, I think 10% of the town's population is signed up for their mug club. That's awesome. So yeah, there's there's definitely it can work across the spectrum in terms of bare uh brewery size, in terms of kind of uh location, everything like that. It really it the the programs are flexible and it's just about coming up with the right program for your particular audience, I think is the most important thing, David, if that makes sense.
SPEAKER_03:Yeah, absolutely. Yeah, thank you.
SPEAKER_05:Yeah, you bet. Um so uh the other thing, so I wanted to highlight three flash rewards that 105 West had sent out. Um, and what I particularly like about this in this case is that um the it the connecting of the dots um between I did this and it brought in this many people. Um so what we have here is 105 West as part of their flash rewards, their first one again, it kind of goes from uh their earlier rewards up to their more recent ones in terms of the audience that they sent this to. Um so starting with the first one at the bottom here, the free IPA glass today and tomorrow with any pint. While supplies last, it's already in your rewards in your app, just show the beer tender. That was sent to 340 uh users or guests. Uh they had 243 people engage with that particular message, and then they had 37 people come in and redeem that reward. So what we know is I did a free glass giveaway, it brought 37 people in. And it for me, as someone who works on the marketing side of things, this is so exciting to me. Um I don't know if you guys get as excited about this as I do, probably not. But for me, being able to say I did this and it brought in this much, this many guests is really cool. Um, the other thing that I see here is the second one was a free four-ounce pour. Um they had a bunch of new beer releases, and you could come in and get a free four-ounce pour of whichever one you wanted. Um, and so they sent that to 437, had 182 people engage with it. So not as quite, not quite as many people engaged. But the cool part is far more people came in and visited as a result of that. And that's a four-ounce pour. Um, and they had 62 people come in and take advantage of that. And that's that I that's a great people love a free four-ounce pour, um, is my takeaway from that. And then the the last one here, um, free whiskey glass with any pint or wine purchase today only. It's cold and we know you need some of that brown water this week. 605 people were were sent that message, 370 engaged with it, and they had 50 people come in and use that reward. Uh, little secret, uh, they only had 50 glasses. Um, they actually had more people come in, but they ran out of glasses. And so, David, to your question about do I pick can I will I make people mad if I give away all the beer and or you know, send all the beer out for distribution. Um no one was mad. Uh, they understood. Um they had to be first uh in line to get the glass. It was just um it was kind of a good thing. But they they had more people come in than than that um with that reward as well. So um just kind of for me, I love this because it connects the dots. Um and that makes that that gets me excited.
SPEAKER_02:Well, this is the ultimate proof in the pudding. It's like if you know the goal is to get more people to come in, and you can demonstrate it like it was a push notice, and this is how many people read it, and this is how many people. I mean, that's that's that's the name of the game, I think.
SPEAKER_05:Yeah, that's the that's the um that's the objective. So definitely. Um cool. So last program that I want to touch on today, uh Lake Tahoe Aleworks. So these guys have three spots in the Lake Tahoe area, two that are up in the mountains, and then they just opened one in the Reno area. Um they do have full uh restaurant, um, and they actually started as a restaurant and then started brewing beer. Um they also do events and things like that. So um they set up their program a little bit differently. Um, what they did like so we have Pure Project, which is just the brew crew, one simple option. Um, we had uh 105 West, which has the kind of like uh how much liquid do you want? Well, what what Lake Tahoe did here is they said what uh they kind of sliced and dice their audience by what do you like to eat when you come in or what do you like to do. So they have a beer lover, a pizza lover, and a cocktail lover membership that are the$15,$20, and$25 a month. But they also have a$5 loyal locals program. And they did this because they are in an area where the weekend traffic was high and the weekday traffic was not as high. And so they wanted a program that brought people in on uh on the on the Monday through Thursday um days that they weren't as busy. Um little kind of just quick story. I didn't think this was gonna work when they did it. This was the first kind of low-cost program that ever launched with us, and I thought these guys were crazy. I was dead wrong. Um their loyal locals program at$5 a month has been their best program. Um, they have 290 members signed up for it. That's$17,400 in annual recurring revenue. And we'll dive into the um rewards that they set up for that here on the next slide. And just the breakdown in terms of um these memberships and how they're working for them. That's their best one. Uh, next is going to be that pizza lover at about a little north of 10k in uh annual recurring revenue, followed by cocktail lover at 8,500 or 8,400. And then their beer lover um has 11 members and brings in about 2,000 a year there. Um and so total of about 40,000 that they're doing through their membership programs. Um, the loyal locals program, like I said, they're in a touristy area. They wanted to bring people in Monday through Thursday. So this is what you can get uh with that loyal locals program. Uh, it unlocks a secret menu for the loyal locals on the days that they're not busy. Um, and so what you can get when you come in Monday through Thursday is a$7 four-pack of housebrew beer. Uh, you can get a$20 pizza and beer, uh, you can get a$20 burger and cocktail, and that's their big winner here. And then you can get a$40 family meal. And so you can see the breakdown of revenue just from those rewards. This doesn't include total ticket revenue. Um, it's just the reward revenue here. Um, and again, this is about one year's worth of data. It's 12 months here that we have. So you can see here um they're doing, as part of just this Loyal Locals program, more than 120, 130 visits a month on Monday through Thursday on the days that they're not busy and have driven about$40,000 in revenue on top of the$17,000 that's coming in from that$5 a month recurring payment as well. Um, so I just thought this was a cool program to highlight. I like the way they did it. Um, like I said, that kind of$20 burger cocktail is the big winner with$23,000 in revenue just from that reward, um, excluding the additional ticket revenue. So um cool. Um yeah, and so Kerry, that's kind of what I wanted to talk to talk today about. Um just quick summary of kind of my takeaways from this when I is uh, you know, memberships can be a great way to drive revenue and loyalty. Um and if you're gonna put it set up a membership, consider the monthly option. Um, it's non-traditional, it hasn't been the way that the industry has operated for a lot of years, but it's proven to be quite profitable. Um, apps aren't just for multi-billion dollar corporations anymore. Um, in fact, I would say they're more useful for uh local businesses and craft breweries. Um your guests want to engage, uh, and push messages are kind of your secret weapon for doing that, the big takeaways from the big trends. And then the specific um programs that we looked at today, just quick recap here. So Pure Project does a great job with their monthly membership, the brew crew. Uh, the weekly beer,$1 weekly beer has been a big win for them, and the way they're using flash awards uh is good. Uh 105 West, again, the way they set up their membership tiers based on the amount of liquid that people want. Um, and then push messages and flash rewards and the way they're using those to connect the dots between I did this and it brought this many people in. And then lastly, Lake Tahoe Aleworks, slicing and dicing their membership base based on kind of what they prefer to eat and drink. Um, and then that low-cost, loyal locals option at$5 a month is driving a ton of business and a ton of um you know recurring revenue for them with that members only menu. Um so yeah, that's uh that's it for the stuff I have today, Carrie. Um, any how are you guys all doing out there? Any more questions on anything that I can help with? I know, I was so proud of them. Never been quite as proud as I was when they decided they wanted a mullet. I got a quick question for you.
SPEAKER_00:Yeah, Dave. So um, you know, we like you said at the beginning, you know, we do these um, you know, these cool mugs every year, and that's kind of the the driver for you know why we sell out of these things every year, you know, they're custom, they're unique, they're not just you know a branded thing that you find on um uh whatever. Um so I am I'm pretty intrigued by the monthly thing. So have you seen a scenario where there's a brewery that offers both a yearly and a monthly where like the like the yearly might be like a mug, like a numbered mug or something like that that they take with them at the end of the year, but then they also are offering like a monthly thing. So yeah, uh, so is the monthly thing just you know that's just soft draft beer. Um, you know, it doesn't have anything to do with the mug and sort of like runs alongside it or had us. Yeah. Yeah, yeah.
SPEAKER_05:Yeah. I so there I think there's we have a couple breweries that do something similar to what you're describing where they've got a they've got their premium membership, which is kind of what I would consider your mug club, Dave, because you've got those awesome mugs, right? That you guys put together every year. Um coolest ones I've seen uh anywhere. Um and then what they do is a lot some breweries will use their monthly as almost like their waiting list um for the following year. Um and so you can sign up for the monthly. You don't if you miss the window, if you don't get in at the time when the uh you know the 200 mugs are available, you can still sign up for something. And then um you become the first people uh to have the option to join the next year for the members who don't uh sign up, if that makes sense. Um for and if you have anyone that drops out. Um and you get some type of benefit. Maybe you get the big pour that the the members get, but you don't get it in the special mug. Um, you just get it in as part of a house mug or something like that, um, is one way of kind of approaching that. Dave, if you want to, you could talk to Natalie about that too. Um, she's the one that works with um, you know, the the majority of the breweries that we work with and um probably has some other really good examples of of um people who are doing kind of what you're describing.
SPEAKER_02:All right. Other questions that are out there. Um I just think it makes a lot of sense, right? I mean, the thing that we're trying to do is an industry is getting people getting left. Uh probably we're trying to find as an industry. There's a lot of competition, there's a lot of choices. It's not just use which happens, I think you you can go anywhere. We're now in the as we know hospitality business. So we need to give our customers new and all the reasons to come in. You know, again, I think it's just where they are where they where the customers are to give them different creative ways to come in. And I even I love how you were kind of describing that lastly that we can have because again, we think about a traditional network that's really, really like whatever it is. You can create a real people in the food, and that's gonna like resonate with the people filling the data and feeling like when you're using a hacking, what criteria you're using the food is like really accurate. So I think it's like the year for Apple or then food and so combining those, and I guess for the meaning customers really love that the flexibility of it.
SPEAKER_05:Yeah. Yeah, awesome. Um, well, thanks, Carrie, for the opportunity uh to hopefully contribute in my little way to the profitability of uh the breweries uh that are out there. And uh thank you all too for um for listening in. And David, Dave, if you want to uh like I said, talk to Natalie, we'd love to uh help you out with uh maybe a uh waiting list uh um program for you or something like that. Cool. Awesome. All right.
SPEAKER_02:Thanks everybody for joining Ross. Thanks so much for the information and the time. Really appreciate it, and have a great rest of your day, everybody.
SPEAKER_05:All right, thanks, guys. Thanks, everybody.
SPEAKER_01:Thank you for listening to the Craft Brewery Financial Training Podcast, where we combine beer and numbers so that you can improve financial results in your brewery. For more resources, tools, guides, and online courses, visit Craft Brewery Financial Training.com. And don't forget to sign up for the world famous Kraft Brewery Financial Training newsletter. Until next time, get out there and improve financial results in your brewery today.