Secrets of craft sales by Nikolai Zhelagin

Read in Russian ==>

At the festival Craft Week the owner of the chain “Tsar-beer” (Moscow) and the shop “Elliuneslo” (Novosibirsk) Nikolay Zhelagin told us how and where to open a store of craft in Russia.

“There are three markets in Russia: Moscow, St. Petersburg and all the rest”

— “Tsar Beer” is a kind of a beer supermarket. At the time of my speech, there were 930 varieties of bottled beer and 70 bottles of beer. If you take the format of “Elliuneslo”, I avoid the word “craft shop”, this term is still not defined. We call it a “beer joys store”, although we must understand, of course, that the vast majority of the assortment consists of craft varieties, both European and Russian, about 500 bottles.

— Today, of course, the craft is growing in strength, and the first notes we had in 2014, we then held a mini-craft festival in our stores, collected about 95% of everything that was produced in Russia. It was called a Craft Weekend. After that the festival “CraftFest” was held in Novosibirsk, there were 3000 people, 83 breweries.

— If we take craft in general, as a market, there are three markets in Russia: Moscow, St. Petersburg and all the rest. St. Petersburg is very specific, everything went from there, we all got it, this topic. There is Moscow, which caught this bright phenomenon. There are all other regions. And, probably, in all regions the picture is the same: in each city there are 1-2, maybe 3-4-5 specialized institutions. But the correct ones there is 1 or 0.

— Most regional bars and shops sell “crafted live unfiltered”, “crafted dark / light unfiltered” and so on. In the best case, the taps have “Vasileostrovskaya”, Jaws and all! Sometimes, of course, there are some interesting things from the center of Russia, but, in general, the market there is almost empty. If we go somewhere for 500 kilometers from our capitals, then the market is almost empty.

— Moscow today is already fed up with craft shops, there are more than 80 of them. A sufficient number of good, beautiful shops. St. Petersburg, as far as I know, also has it, although it has slightly less of this market. But what can be done in Moscow and in St. Petersburg, can be also done perhaps in the regions, because they, generally, take an example from the capitals.

“You should put a craft beer shop in the center of the city, not in the district”

— Moscow is now very much satiate with this whole topic of interesting beer, good stores are opening more and more, and here are two options: you either need to take something very small “for close people”, but you can´t count on business here. That is, take a bar somewhere, and transfer this experience to the store. This, probably, can be done locally, in the district, such a small shop, which, probably, will be in demand. But, as practice shows, people who develop such a format are not very happy.

— There are of course many people who want to drink expensive beer, but if you take any particular local area, then they are few of them. And that’s why now all such bars and shops are concentrated in the center, because they can come from all over Moscow, and more often it’s interesting there.

— But if you do a store in the center of Moscow, you need to prepare for serious competition. If you are not ready for this, there is another option. Do a shop in the area, but dilute its assortment with classic beers.

“Draft beer is needed”

— Question: Do we need a “tap”? Of course, it is necessary. We take the market to which we all are oriented — this is America, where all this hysteria was born. In America, I have a friend who had 18 stores with bottling in a glass bottle a year and a half ago. The topic is very popular. People are used to taking a glass bottle, going to a brewery, pouring themselves a beer in exchange for the package and so on. And on this basis it was all born.

— So, now for a year and a half they already have 160 stores, and more than half of sales are PET. For a long time they were persuaded to put the usual Pegas, persuaded, and, as a result, more than half of the sales went from glass to PET. Because, yes, we all know the disadvantages of this package, it is short-lived, it is impossible to store beer for a long time, it will light up, air, etc., but the person who buys draft beer is a person who will drink it within the next 2- 3 days. Nothing will happen to a beer within 2-3 days.

— I can even tell you a very interesting experiment, we conducted it with our leading bloggers, Sasha Idjon, Pasha Egorov and others, invited Denis Rudenko, he is a professional sommelier. And there was such an example: we put a PET bottle for a week and a few days, the same thing was done with keg, under nitrogen and carbon dioxide. The results of blind tastings are unambiguous. First, beer, poured into PET does not differ from beer poured through the tap. Secondly — beer in PET, of course, spoils, but it is visible only after a week of storage. I thought, honestly, that there would be several days.

— First, the disadvantages of PET are obvious, but the advantages are huge. Today many breweries are not bottled in glass bottles in principle. And, let’s speak openly, there is an extra charge for draft beer more than for a bottled one, and all the bars that sell bottled beer today, at least in Moscow, for them bottles are just a way to sell bottling. That is, a small extra charge to attract a person who will come to the bar to buy two bottles of beer and five glasses of draft. In the store the principle is similar. Well, the third point. The consumer, despite all prejudices, chooses PET. I poured beer in both glass and PET at the same price. And_ I will say that the glass stood to death, and eventually I removed it. Therefore now I would recommend to any person to combine these two formats, they are well combined.

— In Moscow, I’m promoting the format of a beer supermarket. The person who comes for Zhigulevsky sees all this interesting history, prepared shop assistants who tell him something interesting, he becomes interested, he tries, takes one, the second, the third bottle, tries a complex variety and eventually turns to our , as they say, the club.

— On the other hand, there are people who do not accept, in principle, draft beer, they come for a bottle. He comes, sees that something is pouring from the taps, that this is something interesting, what is announced on the Internet, what our esteemed brewers brew today, and tries. As a result, a person understands on his practical experience that it is not worse, or even better, depends on how to store and sell it.

“In regions, only 5-10% of people know what to buy in a beer store”

— If we take the format of the regions, then Novosibirsk is an average city, both in terms of income and consumer preferences. There is our shop “Elliunessel”, we made it as a test ball. Of course, there is interest, but there is a completely different buyer, there it is absolutely not prepared. Only 5-10% of people come to the store, knowing what they want to buy.

— In many regions the situation is very similar. The person comes, because he heard the word “craft”, this is a straight word some kind of magic, there used to be the word “alive”, now it’s “craft”. But they do not understand what it is. Not long ago I was standing the stand, a man approaches and asks: “Do you have potato beer?”. “What?” “Potato.” I think: “My God, who would make beer with potatoes, it’s such a nonsense!” It turned out that he was asking about.

— This is the real level of knowledge in the regions about this phenomenon. Therefore it is very important to give the buyer to understand that he went to an unusual place. Not in the usual “tap café”, where some cloudy camp is poured, but in a really interesting place, this should be the interior and the sellers, this is very important.

— It is very important to have sellers who can talk enthusiastically about how great and tasty it is. We have a system of training, our internal lectures, seminars that we hold, and when a person goes to work, he passes the test.

— And, of course, the range and quality is important, because there is another problem here. If a person comes unprepared and tries something terrible then, most likely, will not come again. By the way, this is a rather wild phenomenon. Wherever I go, I start talking to someone, I ask if they´ve tried kraft beer — “tried it, did not like it.” I begin to ask what style, answer: “I tried the craft, I did not like it.” This ends the whole story. It is very difficult to convey to a person that he is not entirely right.

“In a large store, 100-200 varieties can stand on the shelves simply for beauty”

— Now let’s talk about the number of varieties for the store. Now in Russia you can probably find in the region of 1000 varieties that are imported, or produced by our local brewers.

— The person who comes to the store should say “wow!” Now the opportunity to advertise beer is almost zero, we can not do anything, it remains to be expected that customers will bring their friends by the hand. And this can be achieved only by a beautiful interior and a large assortment.

— Of course, we will say directly that sometimes 100-200 varieties that stand on the shelves are just for beauty, they will calmly defend their shelf life and that’s all. People are not ready to pay 200 rubles or more for a bottle, for simple Czech and German varieties, but they are ready to pay big enough money for some interesting varieties. Therefore, if you take a smaller format, you probably need 300 to 500 varieties in the assortment, but if it is really interesting varieties, non-standard, that will be sold, not written off. Although this also needs to be prepared, there will be cases of write-offs.

“Ask the supplier how the beer is stored in his warehouse”

— In the case of a bottle, it is much less likely to sell a bad beer to a person. In the case of bottling it is much more. There are a lot of details and factors that can spoil the beer, starting with simple hygiene, washing the faucets, and ending up with improper storage.

— If you decide to open a store, then at least you should have a cool room. But in fact, of course, it is better to ask the supplier or wholesaler how they store beer, how much it is in the warehouse. There is a wholesaler in Moscow, we tried to work with him, and I got complaints in stores. We ask: “How do you keep this stuff?” They answer: “We have a garage, we open a window there”.

— We all understand that most Russian varieties have a short shelf life. Therefore, to bring to the customer what the brewer conceived, of course, you need to bother with all this, if the goal is long-term work. As practice shows, people appreciate it. There are, of course, many technical moments, from cranes to bottles, but you need to at least not poison people, and give them normal drinks, so you need to build a refrigerator in the store. Yes, it requires space, money, they have their limitations, they can be cheap, they can be made on their own, and you can take an expensive cold store, it will be safer. I did both, the main thing is that it works so that the storage temperature is up to 6 degrees in order for this beer to stand properly. Of course, some beer should be warmer when consumed, but no one drinks a bottle straight from the bottle right in the store.

“The only way to learn about all new varieties – social networks”

— As for maintaining the assortment, today it is not so simple, today we have several importers who bring this, there are, of course, big importers, we know them, but there are a lot of small ones who are just starting to work with it, and, probably, they are the most interesting ones, as they have everything up to date. Today, not all this hysteria goes down, those, who first got some sort of brewery, drew attention to himself, in the social network the right people made a report, and thus works advertising and promotion of the shops. So here, of course, the only way to find out about all this is social networks. The same happens to me as well, I am subscribed and I know all importers in Russia, however novelties go through social networks, someone will launch, bring something. This tool is inevitable.

“Today I work with wholesalers only on import”

— About how to build a relationship with the plant. Today I do not work with wholesalers in principle, not counting imports, of course, but it is very difficult. No, it’s possible to work with craft plants, of course, but it is difficult in terms of organization. Usually they just do not know how to sell. Account, contract, shipping, all this is not possible to do normally. But, nevertheless, today you can directly buy beer, probably, almost from any craft brewer, and they will not refuse, we should apply to them.

— There are breweries, where everything is very difficult in terms of volume, the same AF Brew, Saldens, but not so many, all the rest will be well shipped. As for large factories, they usually work with recycled packaging, but this is the moment when, perhaps, it is worth working with wholesalers, but it is important to choose them very carefully, to watch where beer is stored, how much beer is stored, it is not uncommon for wholesalers to overheat, this is more of a norm than an exception. But there are people who, at least, try to work correctly, you should just look for them.

“The more the store works on one place, the more it brings”

— Payback period? I would call the figure from 8 months to 1.5 years. I’ll explain why. Because everything depends very much on the city and place, but we must understand that retail is so arranged, especially, specialized retail, its basis is permanent buyers. You can pay back in 1.5 years, and then pay off this year another three times. The longer you stand in one place, the more interesting it is, and the store starts carrying golden eggs. And I in my big stores do not even fear the term of two years, one of the stores required investments of about 8 million rubles. But if you choose the right landlord, conclude a long-term lease with him, try to take into account all the negative factors that, unfortunately, not everything can be taken into account, say, the opening of a school of dance, in principle, you can expect that everything will pay off, and in future will bring serious money.

“In the store with Zhigulevsky, the tasting zone is impossible”

— My position is the following: if we take a store with expensive beer, a tasting zone is possible. If we take a store with “Zhigulevsky” and all the rest, it is impossible in any way. How to cut off the fringes? To put a security guard who does not allow those who buy cheaper than 150 rubles per liter for tasting? That’s bullshit. Firstly, this is a clear discrimination of buyers, and secondly, it will not work. How many times have I watched people outwardly very intelligent, good, took beer, asked to stand in a corner for a while and leave, I apologize, completely inadequate. As a result, everything went very badly. If we talk about responsible consumption of beer, those people who know what they drink, about crafting, yes — tastings are possible, you can arrange it. But then people come with children to the store, they can come in and see here drunk people which is not very nice. Limit on consumption, by quantity, why do it? What then, if you tried five varieties, you should leave? I have not yet found the answer to this question; I think that it is impossible to combine a bar and a store that sells inexpensive beer, because it will turn into a pigsty. I saw this from my friends, who either closed up eventually, or just transformed it into a pub.

“In a city with a population of 300 thousand people, 4 schools with craft will live together”

— Unfortunately, I do not know the neighboring countries, but in a city with a population of 300 thousand, for example, two, three, four establishments and shops can get along, but hardly more. In a big city, from a million, maybe it’s 10, 15 points, but again in Moscow you can see that this is not a regional issue, it’s a central theme. As for universal stores, of course, there are no restrictions, any district, even with five-story buildings, it is quite ready for a shop with several grades of craft beer and another 30 Zhigulevsky to appear there.