Arlene Ibarra/Arlene Collective

An expanded bar reflects that beer taps are no longer front and center at Project Bar & Grill.

“We’re not a brewery,” stresses Beau Schmitt.

Schmitt and business partner Mike Sill opened the Brew Project in Hillcrest in fall of 2015, converting an old craftsman home into a bar and restaurant outfitted with a patio, sports broadcasts, and second story events space. At its center was an all-local, all the time craft beer taplist, and the slogan, “A brewery tour under one roof.”

However, this month the bar dropped ‘Brew’ from its name, rebranding itself as Project Bar & Grill, emphasizing its status as a full service bar that also serves cocktails and food. The business did both from day one, but Schmitt says the word brew led potential customers to believe otherwise.

“A year ago, we realized people still weren’t getting past the fact that we were a bar and not a brewery,” he explains, “It happens every day.”

The problems with that were adding up. For one thing, customers know brewery tasting rooms tend to close by 10 pm, and don’t typically serve food. So even though Brew Project stayed open til 2 am, serving food until 1 am, misguided beer customers didn’t view it as a late night destination.

“How many people weren’t coming here because of that?” Schmitt and Sill hypothesized, “Because they didn’t know we had beer and liquor?”

Over the past year they’ve been incrementally reconfiguring the property: doubling the size of the bar, and changing the décor to make the cocktail program more visible. Schmitt says even subtle changes in the new year, such as mounting a neon Cocktail sign or hanging a Jameson’s whiskey tin on the wall, have dramatically increased the sale of cocktails, which operate at a higher profit margin than beer.

“Consumers don’t readily notice that they’re seeing it,” Schmitt says, nevertheless, “liquor has almost tripled in the past six months.” Prior to the change in presentation, spirits accounted for nine percent of Project’s sales; now it’s up to 26 percent, and rising. The bar has replaced draught wine options with draft cocktails, including a nitrogenized peanut-butter and chocolate whiskey shot, and three lemonade cocktails bolstered by the trendy, hemp-derived anti-anxiety supplement CBD.

Meanwhile, Project’s 100 percent local beer stance has softened, and it now features guest taps of out of town craft brands and imports.

Beer remains the bar’s largest seller, and the business is still proud of its “best beer selection” accolades. But part of Project’s rebrand has to do with a changing craft beer market that includes surging keg prices and a proliferation of neighborhood breweries and taprooms.

“Beer costs have been going up,” says Schmitt, noting some breweries and distributors in the past couple years have raised the price of a keg of IPA from $180 to $210, or higher. “It’s really hard to justify that purchase,” he adds, “We have a responsibility to our guests not to charge 8 or 9 dollars a pint.”

On the retail side, Schmitt and Sill don't see customers wanting to cover rising beer costs, further reducing their profit margin of selling beer versus liquor. So, up went the signs promoting specialty cocktails, away went the word brew, and with it, perhaps, the notion that promoting craft beer selection is a powerful way to improve a San Diego bar's bottom line.