World of Beer Finds Strength in Diverse Offerings

According to the company, 85 percent of customers visit for more than a drink.

January 25, 2022 Ben Coley

Paul Avery joined World of Beer as CEO in 2013, and back then, the chain was completely franchised, with a couple of cheap wines, craft beer, and no food program or spirits lineup.

The 48-unit concept looks quite different now as it heads further into the new year. In 2021, food sales mixed 49 percent and have improved 300 basis points for the past four years. The brand also leverages a “progressive and innovative” spirits program that accounted for 17 percent of sales last year. Additionally, World of Beer is 50 percent company-owned, and future growth is expected to skew toward corporate expansion.

But that’s not to say the chain hasn’t stuck to its roots. It began with 500 craft beer choices, but over time the tavern learned it was too much inventory for what consumers demanded. World of Beer found 350 to be the sweet spot, with some locations having as many as 400.

Fifty drinks are on tap, and 70 percent of those are local. Employees are even required to attend a “comprehensive beer school” to ensure they’re knowledgeable about everything World of Beer has to offer. The restaurant created its own beer in 2018, called Secret Llama, which consistently outperforms branded products.

“If you wanted a craft beer experience, you pretty much went to World of Beer,” Avery said at the ICR Conference held earlier this month. “They were it. And it’s still it.”

World of Beer is located in 18 states, primarily in the Southeast. The chain earns $2.5 million in AUV—an increase from pre-COVID—and notched $90 million in sales last year. The brand’s same-store sales grew 7.9 percent in 2021, compared to two years ago, and adjusted EBITDA exceeded $5 million.

The target demographic is college-educated men and women ages 25–44 who are discerning, informed, experimental, and have household incomes of at least $75,000. World of Beer boasts more than 200,000 active loyalty users who spend $3 more per visit and visit 23 percent more often. In 2021, loyalty members represented more than $6 million in sales among the top 20 locations.

Average check is $32, a number that’s “increased significantly” in the past couple of years, thanks to premium cocktails and in-demand culinary items. Sales growth can largely be attributed to growth in average check; customer traffic isn’t below industry standards, Avery said, but it has been challenged. In the past period, about 20 locations were up in traffic.

During COVID, World of Beer has experienced 15 percent attrition, but Avery said those locations were vulnerable, not financed properly, executed at a low level, and based in “C” sites—all of which were “real challenges they could not overcome.” Many were franchised, but a portion was company-owned, too.

World of Beer

Seven stores are under construction and scheduled to open in 2022.

Though the footprint has shrunk, the CEO believes World of Beer is “stronger today than we ever were in many ways.” As an example, the chain earned $308,000 in off-premises sales in 2019, but that grew to $1.35 million in 2020 and $2.1 million in 2021.

“This is a healthier brand today with a lot of momentum, and 48 locations is a powerful entity,” Avery said. “ … We’ve got some strong unit economics that we’ve been working on for years, and it’s become a very defined concept.”

The latest prototype is 4,000 to 5,000 square feet, and aims for $3 million to $4.5 million in AUV, 14-15 percent in restaurant-level EBITDA margin, $400,000-$500,000 in restaurant-level EBITDA, $1.6 million in building costs, and 30-35 percent in cash-on-cash returns.

Seven stores are under construction and scheduled to open in 2022. Of that, four are company-owned and three are franchises. Additionally, five units—three corporate and two franchises—have signed leases for 2022 and 2023.

“We are on a pretty strong growth trajectory at this point,” Avery said.

Avery referred to World of Beer’s food as a “powerful, driving force for our business.” The menu features a variety of categories, including tacos, bowls, burgers, flatbreads, handhelds (Chipotle Chicken Sandwich, Crispy Buffalo Chicken Sandwich), Fresh Greens (Asian Chicken Salad, The WOB Cobb), and fork and knife (IPA Salmon, Ribeye, Steak Frites). For weekend brunch, there’s the Chicken & Waffle Sandwich, Applewood Bacon Benedict, Steak & Egg Breakfast Bowl, Sweet Cream Pancakes, and more.

According to the company, 85 percent of customers visit for more than a drink.

“It’s definitely above what people expect,” Avery said. “All the time, I didn’t expect this kind of quality, flavors, and these prices. The food needs to continue to evolve. And we have what is a manageable pace of evolution and innovation. We constantly keep tabs with our operators to make sure that we’re not pressing the level of complexity in too hard of a direction.”

In addition to food and spirits comprising two-thirds of sales, draft beer mixed 25 percent, followed by bottled beer (6 percent), wine (2 percent), and other (1 percent). Happy Hour is the best-selling daypart at 36.7 percent. Next on the list are dinner (24.8 percent), lunch (20.7 percent), and late-night (17.7 percent).

Because of COVID, World of Beer has seen a drop in late-night sales, but those decreases have been offset by notable increases in happy hour, dinner, and the strength of weekend brunch, which takes advantage of restaurants’ sizable patios.

Avery said World of Beer is not a “downscale, cheap furniture, fixture place” or a “polished, intimidating environment.” He thinks the brand is positioned right in the middle, and accessible to most.

“We’re not so reliant on craft beer and the ups and downs and the innuendos of craft beer,” Avery said. “We’re used for multiple occasions throughout the day and for various products.”