Take, Countertake: Are Custom Tap Handles a Waste of Money?

While attending my college roommate’s wedding at the Bronx Zoo in 2017, I was introduced to his friend named Chris McClellan, aka @thebrewenthusiast. Chris worked in Field Marketing for Guinness at the time, then went on to build out the Marketing function at Manhattan’s first craft brewery Torch & Crown. Now, the Vermont-native has a couple fascinating entrepreneurial ventures aimed at the craft beer space. Chris and I chat beer marketing a lot and sometimes we agree, but when we don’t, the sparks fly and interesting banter results so we decided to recreate that through a new recurring format. Here’s a look into Chris’ 🌶 takes on tap handles and my 🧊 counter-takes.

TAKE: Custom-branded tap handles are incredibly expensive (Chris)

“Production, marketing, sales, and operational costs are invisible to the end consumer, who only incur the cost of the pint itself. The actual cost of tap handles, even purchased in large quantities, is incredibly high, and the burden of that cost falls almost exclusively falls on the brewer/supplier of the beer in most circumstances. This is especially true if the brewer lacks any sort of distribution network or significant cost-sharing mechanism with their distributor partner, who will often bear some of the expense of tap handles to help build the brand in the market.

The average tap handle is between $30-$50 per handle, depending on how elaborate a design you have and how many you order from your provider, and that cost adds up fast when you look at the lifespan of your average point of distribution in the market. $35/handle x 500 handles...you can do the math. If you had to ask a small brewer whether they'd like one more person on staff helping to build the brand or spend 18 grand on tap handles, you get a quick answer. If a brewer is required to supply a tap handle to support on-premise points of distribution (PODs) in the market, and that POD only yields a couple of BBLs of volume in the year, or your beer gets rotated off even more quickly than that, then it's hard to even breakeven on the sale, let alone make a profit. Tap handles become a cost of doing business that's simply too high for most local breweries to pay.”

COUNTERTAKE: Compared to what? (Doug)

Self-distributing breweries love to tout the benefits of doing so. Positives include greater flexibility over logistics, the direct interactions with the account, and of course the superior margins. Buried inside those savings however are hidden costs, including full responsibility for point-of-sale (POS) like tap handles and signage that would otherwise be shared with a wholesaler. Of all the variables and challenges to be frustrated over, to focus on the cost of a physical tap handle is short-sighted in my opinion.

Selling one sixth-barrel of draft beer is generally an unprofitable exercise if it’s going to be immediately rotated off. Add a $30-50 tap handle to the cost, which may never be seen again, and the margin is completely wiped out, so I agree with Chris there. But there’s a term I heard for the first time in 2017 (shout out Steve Carnes) called “glueing the tap handle on” which is a relationship-driven approach to selling draft beer. By focusing on delivering consistent value to the account, you ensure that you never get rotated off, making the relationship’s “start-up cost” of the tap handle a drop in the bucket.

TAKE: Custom-branded tap handles are cumbersome, finicky, and inconvenient (Chris)

Add "tap handles" to the list of stuff that someone has to schlep around, along with other branded merch, the beer itself, sell sheets, etc. Selling beer requires moving a lot of physical items from point A to point B. Tap handles are a burden on someone to deliver successfully to an account, and often they don't show up in perfect condition for any number of valid reasons, from shipping issues to bad manufacturing. Once they've landed at the account, it's on the account owner to take care of the tap handle, make sure their staff doesn't abuse it too much, and keep it safely tucked away from grabby hands (people love collecting tap handles, and it makes sense, as they're usually some pretty fabulous design pieces). If a tap handle was purchased by the account directly, they would obviously take care of it, but that realistically almost never happens.

COUNTERTAKE: Deal With It (Doug)

Maybe if I’m on foot and subway in New York City where Chris lives, then carrying (3-5?) handles with me become a bit of a schlep. In most areas where sales team members travel by car, it’s a non-factor compared to the feeling of gaining a new draft opportunity for your brewery. A well-designed tap handle serves as a visual aid in the sales pitch and a point of pride for both the sales rep and the bar owner/buyer supporting your brand. Remember on MySpace when you would show off your “Top 8”? A bar’s tap handles similarly shows off the beer brands that they love and have decided to feature in their business. I can’t imagine not wanting to be a part of that.

TAKE: Custom-branded tap handles aren't really the brand-building tool you think they are. Menus work great. (Chris)

The idea of encouraging brand recognition through great tap handle design sounds appealing, but the reality of ordering beer flies in the face of the perceived value. When you think about ALL of the occasions that you order beer at a restaurant, bar, etc...how many of them are realistically happening when you're staring at the draught tower? It happens much less frequently than you think. Most of the time, you're either looking at menu, or a chalkboard, or some version of that, when you order your beer, so the "brand recognition" effect is greatly minimized.

If you're the owner of a bar/restaurant, I have great news for you - your customers can read a menu and order a beer. Just keep the damn menu up to date eh? Then you don't have to worry about managing 150 different branded tap handles and you can focus on making the customer experience around ordering beer perfect. Unbranded tap handles work great, are easier to manage, never need to be changed or swapped, and keep your customers eyed glued to the menu and not the draught tower. It also gives all the beers on your list a fair swing at being ordered and doesn't elevate one over the other, which means you're kegs move more consistently. There are no studies that point to branded tap handles selling more beer than unbranded tap handles in the long run.

COUNTERTAKE: They’re Even Better Than You Realize (Doug)

Tap Handles are considered “breweriana” serving as a beloved piece of industry culture and expression that fans and many bar owners love. Each unique design has the opportunity to make a bold statement about the brand and grab the consumers’ attention from the moment they walk into the bar. When I tell someone outside the industry that I work at Revolution Brewing, more than half the time their response includes a mention of our distinctive fist ✊ tap handle. If I’m at the airport or a sporting venue, I can see from 500 feet away that they carry Anti-Hero thanks to the bright green handle standing out like a sore t̶h̶u̶m̶b̶ fist.

I understand Chris’ take when it comes to breweries who made the decision to design a more subtle, wooden tap handle that requires a close up examination to know who it belongs to. In that situation, I more so blame the missed opportunity for the barware to act as a marketing tool. Last weekend I was at a massive Sports Collector’s convention and each time I’d walk past the kiosks, I’d proudly see Anti-Hero standing tall among nationally distributed brands like Coors and Blue Moon. For all the visitors from around the country looking to try something local, imagine the missed opportunity from not having this handle to draw their curiosity. And imagine not being willing to invest the $30-50 for that chance. I cannot.

Tapped Out

Chris: I like branded tap handles as a tool in the creative arsenal of a brewery, truly, but there are plenty of other branding opportunities that are less expensive, more impactful, and more scaleable for most breweries in this country. Let's abolish tap handles as the norm and make it all about the beer list moving forward.

Doug: If anyone is going to decide that tap handles should be abolished, it’s the bars, not the breweries, and it would be a slow cultural shift over a couple of generations. We definitely see more and more new concepts for craft beer bars preferring their own consistent tap handle aesthetic over using the individually branded ones. These tend to be bars with either modern decor or heavy rotation, focusing on always offering their regulars something new to try. For a beer list to serve as an alternative, unless it is fueled by tech like Untappd, or the bar has a creative artist on staff, the branding that makes craft beer so distinct gets completely lost in the on-premise. Tap handles are the simplest solution around that.

Who do you side with? Chris’ Take or Doug’s Countertake?

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Even if Chris’ proposal is a long shot, it still sparks a fun debate that makes both sides smarter and more aware having gone through the exercise. I want to thank him for going out on a limb and facilitating this back-and-forth. You should check out his two exciting entrepreneurial ventures in the craft beer world:

Resin is a full-service, fully customizable ERP/CRM platform designed for small-to-medium-sized beverage companies.

The Draught Shop is a draught beer education and quality initiative that gives bars, restaurants, distributors, breweries, and consumers the resources, visibility, and accountability they need to pour and enjoy the best draught beer in the world.