Meet TapRm: The Beer eCommerce Brand That Grew 670% Without Owning A Single Brewery
TapRm Beer grew 670% last year by flipping the beer industry on its head.
How?
By not owning a single brewery.
Here’s how they’re building the beer empire of the future.
👇👇👇
The World We Live In
🚖 The world’s largest taxi company owns no cars.
🏠 The world’s largest housing company owns no real estate.
🍻 And the fastest growing alcohol eCom company owns no breweries.
Alcohol eCommerce Lags
In 2017, only 0.2% of beer sales were online.
A meagre total of 3.5 million cases.
In an industry valued at 119B+ in the US alone.
A New Player Enters…
Meet @taprmbeer 🍺 — a DTC eCommerce beer company based in Brooklyn, NY
What they realized is….most craft breweries are GREAT at selling beer.
But aren’t so good at digital marketing.
What Does TapRm Do
TapRm partners with your favorite craft breweries to help them get online.
🚚🤝🍻
Rather than own the entire supply chain, they rely on customer relationships, logistics expertise, and a consistent user experience to connect their customers to beer they’ll love.
‘The New DTC’
TapRm is part of the new wave of ‘DTC enablers’ who are more focused on connecting the right supply to the right (online) customers, instead of focusing on product.
Similar to @heyrooted (DTC + Nurseries) @tradecoffeeco (DTC + Coffee Beans)
Start with Win-Win
How do you spell DTC?
‘Win-Win’
TapRm gives breweries the ability to sell their product outside of their geography (in NY)…
… and connect craft beer brands with high-value customers who want something a step up from Bud Light.
(A high bar, I know.)
Why do customers keep coming back?
TapRm delivers a consistent user experience to beer-enthusiasts looking to support the little guy.
On their site, you can filter your search by:
- Brewery Name
- Beer Type
- ABV %
- Reviews
- Palette
It’s like what buying beer at Zappos would look like.
The eComm Benefit
With more information comes leverage…
…which allows TapRm to effectively cross-sell (try this new beer!) or up-sell (buy a larger case size!) based on the data they have in-house.
TapRm then feeds purchase data back to partner breweries, helping them predict consumption, figure out which inventory to stock, and who’s buying.
They continually invest in the partner relationship….which makes sense, as they take 50% of the margin generated on their site.
Where Do The Hops Fall?
The consumer gets a consistent eCommerce beer-purchasing experience tailored to their specific taste.
The breweries unlock a new, hard-to-execute revenue stream.
TapRm gains data ownership, pushes order volume, and valuable brewery relationships.
Sounds great, right?
But just 0.2% of beer sales in 2017 were online…
There’s one obvious question to ask.
Why haven’t more people done this?
‘Three-Tier System’ Legislation
Post-Prohibition, the US Gov’t established a ‘3-Tier System’ of producers, distributors, and retailers that split up alcohol distribution across the supply chain.
Producers had to sell to distributors
Distributors had to sell to retailers
Retailers then sell direct to consumer.
TapRm gets around this by owning real-estate in Brooklyn (ahem: the ‘Taproom’) in which it sells beer on site & for local pickup.
In addition to using it as a logistics center.
In the eyes of the gov’t, they’re both a distributor and retailer.
And therefore pass the 3-Tier System.
Many Ways Up The Mountain
Other competitors (@areyouthirstie) have gotten around this by connecting online orders to existing retailers in a geography.
i.e. Buy Dom Perignon from Thirstie, fulfilled by a local retail partner, Thirstie takes commission.
But without owning logistics…it can be a messy business.
Back to TapRm.
In exchange for their logistics & marketing efforts, the company takes 50% of the gross margin of alcohol sold through their platform.
But that’s only the beginning of their revenue opportunity.
Because they’re not just a DTC biz.
A Leveraged Business Model
With a valuable network of craft breweries + data in the palm of their hands, what did TapRm do next?
They began to broker relationships with NY bars, restaurants, and wholesalers to put together a B2B network for their partners.
And take 30% of the margin on each wholesale deal.
Basecamp Effect
TapRm builds brand relationships by serving as a basecamp to unlock the NY region for craft partners all over the US.
And feeds data back to these brands to deepen the relationship … which improves sell-through #s.
“Ok Tom”, you say, “That’s gotta be it, right?”
Data Leverage to Build Brands
If only. With all the data in-house that’s mapping alcohol consumption, they lay the foundation to own the supply chain.
By building their own brands in-house.
Which they can immediately plug into wholesale relationships, existing fulfillment, and marketing expertise.
Data Sales Opportunities
In the same vein as @RobinhoodApp, they can also sell the data to research orgs & larger players. Hopefully not as HFT flow, though…
With data leverage comes endless opportunity.
☑ Support partner brands with info
☑ Predict consumption trends
☑ Develop in-house brands
☑ Sell data packaged as research
Takeaways:
All this for a company that doesn’t actually brew beer.
🍻 Customers benefit with access to great beer.
💸 Breweries benefit by unlocking revenue opportunities.
🤝 TapRm benefits as a fulfillment & data partner.
For a company that’s just in NY for now, they’ve got a 🚀 ride ahead as they expand to new states & deepen their data resources!
Thanks for tuning in!
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Did you enjoy this thread?
I post DTC teardowns weekly on my Twitter page (@tzwor) where I study top eCommerce brands, and share the insights with you!
H/t to the founder: @jsherman1130
Check out TapRm.com if you’re in NYC for the best beers around!
