Heartland Takes ManhattanJuly 6, 2009 By: Michael Harrelson Night Club and Bar Magazine
Manhattan’s Heartland Brewing is more than a scattered survivor of the micro-brewing trend of the 1990s, when brewpubs opened by the hundreds, if not thousands, before losing steam.
Heartland’s heart and soul indeed belongs to that earlier era, when the coming of microbrews and craft beers unleashed a demand for better beer that consumers had pent up since Prohibition times.
And the well-worn, classic look of the six Heartland locations themselves, with their ceiling fans, beer posters and old wood and brick facades, does little to suggest otherwise. Yet for both the brand and its founder and CEO Jon Bloostein, whose brewpub concept is currently one of the few remaining in a city that once boasted 11, a more apt description might be that Heartland is victorious in a friendly game of Last Man Standing.
While there may be an element of luck involved in the competitive shakeout, Heartland and Bloostein’s sweet success in cornering nearly an entire market segment is as here and now as it gets in the tough terrain of the Big Apple’s hospitality trade. It is readily apparent in a bottom line that has increased more than fourfold, from $3 million to $33 million in sales, in the past 11 years.
Annual production volumes of Heartland’s popular and proprietary light, lager, amber, pale ale, wheat and stout beers — some 17,000 barrels or 1.8 million pints — put the 14-year-old operation in a class with of some of the country’s most respected regional craft breweries. The brews also give its choice restaurant locations, including Union Square, Times Square and South Street Seaport, a marketing angle that no other casual dining venue in the city can claim.
The operation boasts six brewpubs in its on-premise portfolio, including its HB Burger location, which opened earlier this year on 43rd Street in Times Square, and five other storefronts with names such as Heartland Brewery & Rotisserie, Heartland Brewery Chophouse and Heartland Brewery & Barbecue.
The different expressions add variety to the casual dining concept, although Heartland beers remain the foundation of each. Heartland may well represent a hospitality industry standard of how to reap the benefits of micro-brewing, a segment that continues to outpace the commercial brewing industry as a whole.
All About the Beer
Bloostein considers all six of his carefully vetted locations to be restaurants that happen to make their own beer, and not brewpubs that also serve food. However, it’s the emergence of craft beer and microbrews onto the retail scene some two decades ago, and their recent comeback, that the former acquisitions consultant and Fordham University MBA credits with putting him and 400 other Heartland employee/owners at the top of the brewpub heap.
“Without the resurgence of crafts, there would be no sales,” Bloostein says. “Our beer is what defines us. We sell a ton of food, but beer is a strong identifying character. It gives us an opportunity to relate to our guests and to talk about products only available in our restaurants. They ask, ‘Is this really apricot?’ We tell them ‘Yes’ and offer them a taste.”
In a time when flat is the new up and down is the new flat, Bloostein says crafts grow stronger by the day; the segment’s double-digit increases are expected to continue, according to industry observers. Yet on the down side, he adds, they no longer revel in the novelty status they enjoyed when he cobbled together $1 million from savings and business loans and opened his first Heartland Brewery location in Union Square in 1995.
Along with seasonal favorites such as Smiling Pumpkin Ale, a fall brew that consistently outsells Heartland’s top selling Cornhusker Lager whenever it is on tap, Heartland’s burgeoning beer equity among New York City’s sophisticated malt- and hop-heads includes year-round standards such as Farmer Jon’s Oatmeal Stout, Not Tonight Honey Porter and Kelly Irish Red Ale.
“We have light, lager, amber, pale ale, wheat beer and stout,” Bloostein says. “They represent a very full array of beers with different character and flavors. Somebody is bound to find something they like out of those beers. I don’t care if they like all seven, but I do care if they don’t find anything they like.”
At any one time, Bloostein says his customers can find 10 or 11 different Heartland beers at the various locations. The brews accompany equally high-quality cuisine such as HB Burger’s Heartland Tuna Burger that goes for less than $8 or the Tater Tots appetizer specialty, a combo involving bacon and jalapeño jack cheese.
“We like to try two or three different beers a year that we have not done before, and if we don’t get it exactly right, we keep trying,” he says.
Guests can always expect quality at Heartland, and they also can expect that the Heartland team is constantly tinkering, working to keep things fresh. Not even favorites such as the Cornhusker Lager or Wildflower Wheat summer brew are sacrosanct to Bloostein and Heartland brewmaster Kelly Taylor. Just last fall, Taylor went through Heartland’s house beer offerings one by one, noting ways that each could be improved through the use of a different yeast or some other change to the brewing process.
“Consumers’ palates have gotten more educated,” Taylor says. “My job as brewmaster is to keep up with the consumer’s evolving palate and keep the beer evolving flavor-wise without changing the flavors and alienating the customer.”
In seeking the greater food and beer synergy that may be as critical to gaining the competitive edge in a down economy as food and wine in better days, Bloostein leaves little left undone through the creation and nurturing of an ultimate beer culture for customers and employees alike.
Arlene Spiegel, founder and president of New York City’s Arlene Spiegel & Associates, is a respected food-and-beverage consultant who has advised Bloostein and Heartland Brewery on organizational and infrastructure development and site criteria issues for many years. She says it’s nothing for Bloostein to get on a plane and traverse great distances just to buy a beer poster for one of his brewpub venues.
“The thing about Jon that distinguishes him is his passion for his brand,” Spiegel observes. “He really goes deep into trying to deliver a special experience to his guests.”
Before a new beer or food item appears on the menu at Heartland Brewery, Spiegel says you can bet that Bloostein has done his homework.
“All of his beer recipes are engineered. An item does not go on the menu because it sounds good. It has to meet some very rigid requirements to see if it can be executed throughout the restaurant chain.”
To Spiegel, another example of Bloostein’s business acumen is his most recent HB Burger expansion — a start-up venture that, as a burger and shake joint, marks a clear departure from his other Heartland units. “Many of the folks in the community he serves are looking for comfort food at a lower price point. At HB Burger, they can enjoy the dining experience and still get all of the beers.”
Next to the venues themselves, which range in size from the 3,400-square-foot Seaport location to the 15,500-square foot Heartland Brewery & Rotisserie venue housed in the Empire State Building, the most salient example of Bloostein’s total emersion strategy for guest satisfaction may be the brewpub chain’s 12,000-square-foot brewery in Clinton Hill, Brooklyn.
While the logistics of supplying the six existing Heartland Brewery locales via the Brooklyn brewery are more complicated and less sexy than the old way of brewing the beer on-premise at each individual location, the move goes to the core of product integrity while bowing to the realities of the New York City marketplace, Bloostein says.
“For quality control, we decided to consolidate brewing operations,” Bloostein says. “With a brewer in each store, the beer was turning out a little different from location to location.”
Just as critical in weighing the decision, however, was the cost of rent in Manhattan.
“You cannot pay New York City retail rates and manufacture there. You will go out of business. As a result, we have a much better product today.”
Through the use of BevNet computer technology, Bloostein says Heartland beverage managers go online and determine from past sales records how much beer they will need for a given week. A full-time staff driver then delivers the kegs — no easy task in Manhattan.
“On any given day, my driver is delivering 150 kegs weighing 130 pounds each, so he has his work cut out for him,” Bloostein explains. “At the Empire State Building, the loading dock is two blocks away from the restaurant.”
The same BevNet technology also is put to use in tracking inventory and preventing waste and shrinkage, he says.
“The system reconciles the ounces we are supposed to have sold with the actual number of ounces that were poured. If there is a variance of 2 percent, that’s okay, but if it reaches 15 percent, we have a troubleshooting protocol we go through.”
Additionally, Bloostein and his brewpub managers insist on a half-inch head for each beer poured.
“It does not always happen, but that is our standard,” he notes. “The reason is to control portions and provide the most pleasing beer we can serve to customers. We tell our servers that if they waste 10 percent of our product, that creates six more weeks of work for our brewing operation each year.”
At Heartland, Bloostein goes so far as to require servers and hostesses to earn the right to speak to guests by undertaking comprehensive beer training.
”We have a beer test called Beer 101 that we give to everyone who comes in contact with a guest, and unless you get a 90 on the exam, you have to go back and study harder before you are allowed to make contact with a customer,” Bloostein explains.
Well-publicized increases in the price of brewing ingredients such as yeast, malt and hops recently forced Bloostein to raise the $6.95 price of a pint of beer at Heartland by approximately 45 cents per glass. It is not a decision that the self-described beer geek, who learned about microbrews and craft beer through visits to cities such as San Francisco in the 1980s and early ’90s, takes lightly. Yet thus far, he says, such last-resort price spikes are being mitigated, if not offset, by a value-added philosophy that provides everyone who walks in the door with liberal numbers of 3-ounce beer tasters at no charge.
“I could lower the price and take the tasters away,” Bloostein points out, “but that would be inconsistent with what we are trying to accomplish, which is to share our beer, educate our customers and keep beer fun.” NCB