By Joe Bonadio

In San Francisco, a city known around the world for its independent spirit, North Beach nonetheless manages to stand out. Case in point: the formula retail ban, which has kept our corners free of Starbucks and their corporate like for decades, began here in North Beach before it spread to Chinatown and Hayes Valley. The reason for the ban was simple: to protect our small businesses from being squeezed out by big corporate players, typically companies from far outside the city.

Now a similar struggle is playing out in our neighborhood, and it has to do with something we’re all too familiar with: bar crawls. You might not realize it, but many of the companies that sponsor these ubiquitous drinking events aren’t based in San Francisco–or even California, for that matter. That means the money these crawls are making doesn’t stay in our community, and in a tight market like this one, that means pain for our small bar owners.

Teague Kernan, who co-owns both Tupelo and Belle Cora  here in North Beach, is taking steps to remedy this situation–and he’s got an event coming up this Saturday from 3:00-9:00 PM. This week Teague took a few minutes to give me the details, and edited for length and clarity, our interview is below.

Joe Bonadio (JB): Thanks for taking the time, Teague. 

Teague Kernan (TK): My pleasure.

JB: We’ve always been about as hyperlocal as you can get here in North Beach. So it’s really cool what you guys are doing. Tell me a little bit about it. 

TK: Well, bar crawls in general have always been, for the most part, additive to bars in terms of increased visibility. They bring new customers in, ideally bringing them in at times when we’re not necessarily at or near capacity. So they’re helpful to the bottom line. However, recently we’ve seen an influx of pub crawl or bar crawl companies that aren’t based in San Francisco. These are companies from New York, people from Florida. There’s one out of Chicago.

Their business model is to use social media to promote, with minimal interaction with the actual brick-and-mortar businesses that are involved. And they’re driving people to these bar crawls based on the promise of discounted drinks–which means less revenue for bars, but it’s still better than not having customers.

Teague Kernan in front of Belle Cora, one of two bars he co-owns in North Beach. | Photo: Joe Bonadio

JB: Especially when it’s slow.

TK: Right. So bars have been signing up with these companies left and right. The problem is most of these events are occurring on times when we’re already busy, sometimes at capacity or close to it. The Saturday before 4th of July, the Saturday before St. Patrick’s Day, New Year’s Eve, times like that. And when you’re slammed like that, the last thing you need is people coming in and getting $3 drinks. And a lot of them are requiring fixed drink pricing, and guaranteeing that to their customers.

The bars have been compliant up to this point, but I did a pricing model recently based on the way these things work. It turns out that if we continue to do this, it actually becomes negative in terms of revenue. Because as these bar crawl companies continue to grow, our bars will be filled with predominantly people who are there for discounted drinks. They’re signing up for them. So on our busiest days, like St. Patrick’s Day, for instance, we’ll be jammed with people that are only paying $4 or $5 for their cocktails.

JB: You’ve got to push back.

TK: Yeah, and if you’re going to resist, this is the time to resist. We’re at that precipice where if these companies continue to grow, and we don’t give bar owners in the neighborhood another option…

So that’s what we’re doing. It’s called North Beach Bar Crawls, and it’s effectively a conglomerate made up of all the bars that become involved.10% of our gross ticket sales go to a local charity, and then after our costs–marketing, printing, wristbands, social media–the rest of the proceeds are split 50/50 between the company and all the participating bars. We’re trying to keep more of the money from these events in North Beach, so that bar owners can continue to operate our businesses profitably.

JB: I think we’ve seen enough of the Amazon and UberEats-type parasitic business models. 

TK: I mean, speaking of that, Starbucks had a really effective business model where they would open up right next to the local coffee shop. They had enough revenue on the back end, so all they had to do was get 40% of that local shop’s business–then they’d be out of business, and Starbucks would have100% of that market share. If you look at middle America, in some of the smaller towns, if there’s a Walmart within 20 miles, there’s no local pharmacy anymore. There’s no local grocery store anymore.

North Beach is one of the few neighborhoods that understood this a long time ago. It’s important to not let these outside entities come in here and just pull money out of the neighborhood. And most of these people, they’re not giving back. They’re not working hard. They’re not trying to build community here.

JB: I couldn’t agree more. I like what you’re doing, Teague, and I’ll help out in any way I can.

TK: Thanks Joe.