Brigid Sweeney | Crain’s Chicago Business | February 9, 2018
Jason Klein and Brad Shaffer, buddies since their 9-year-old hockey-playing days in the northwest suburbs, started talking about opening a bar in 2009. But after assessing the competitive landscape and the capital required, they nixed the idea. At the time, Klein was a dedicated Miller Lite drinker.
Today, his drinking habits and career ambitions have shifted considerably. Klein, 35, and Shaffer, 34, own Spiteful Brewing, a two-month-old brewery and taproom next to Half Acre Beer in the city’s Bowmanville neighborhood. More than a decade after its founders opted out of the bar scene, Spiteful is one of the small, no-frills taprooms that are gaining fans and making traditional taverns and Big Beer nervous.
“The beer category has been soft the past couple of years, and on-premise (the industry term for bars, stadiums and other places people consume booze) has been down while taprooms have been gaining in prominence,” acknowledges Pete Marino, president of Chicago-based MillerCoors’ craft and import division. “It’s been a zero-sum game.”
The number of taprooms—similar to brewpubs, minus the restaurant component—has exploded over the past decade as states have amended laws, allowing small brewers to distribute directly to consumers.
In Illinois, a 2011 law gave small brewers the right to self-distribute 7,500 barrels a year, provided they made no more than 15,000 barrels annually. (It’s tough to estimate the number of taprooms in Illinois because, though they’re regulated, they’re not tracked as a separate category by the state. There are an estimated 6,000 craft breweries in the country.) The law has twice been amended to take into account breweries’ rapid growth; today, brewers can self-distribute as long as they produce fewer than 120,000 barrels each year.
That’s led to the demise of some neighborhood bars, data suggests. The national number of “on-premise drinking establishments” has fallen 6.3 percent since 2010, to 43,118 last year, per the Bureau of Labor Statistics. Traffic to these places fell 3.6 percent in 2017, according to Nielsen data analyzed by MillerCoors. At the same time, an estimated 9 percent of national bar traffic is now going through taprooms and brewpubs. In Chicago, it’s 12 percent.