By: Alison Burdo, Digital Producer
Philadelphia Business Journal
Out to disrupt the way bar-goers choose their beer, a local entrepreneur and a West Conshohocken technology company have created a “smart tap” that has the potential to upend beer companies’ traditional marketing models by influencing the consumer right at the moment the bartender takes an order.
“There has been no technology innovation in the beer tap since prohibition,” said James Robinson, the co-founder and CEO of TAPP Technologies.
Jamie Robinson (far right) holds TAPP Technolgies' hardware, which will be in 80 bars next month. From left to right, Neel Shah, director of hardware; Doug Spodak, vp of product management and development; Joseph Callahan, TAPP co-founder and Ciright CEO; Nigel Herr, director of product innovation; and Chris Blackman, TAPP board member.
“Our technology platform will allow beer brands to defend their tap position and acquire new taps,” Robinson said in an exclusive interview with the Business Journal ahead of TAPP’s November rollout in 80 bars.
Smaller and lighter than the latest smartphone and priced at under $500, TAPP is a cloud-based, battery-powered, mini-computer that lives within the beer tap, turning it into a media distribution device.
That means the intelligent tap handle is able to collect data for beermakers on when and where customers are drinking their product – a boon in the roughly $300 billion U.S. beer industry that often still uses site visits to track consumption preferences.
“Is it the beer bought with dinner or at the end of the night?” asked Doug Spodak, TAPP Technologies’ vice president of product management and development. “We can measure and timestamp the velocity of sales in real time.”
“The whole supply chain benefits from the data,” added Robinson. Admitting he is “not a data guy,” Robinson says the greatest value TAPP brings is “engaging the consumer with contact and interactivity.”
“We can get that consumer to buy our brand over any other brand that doesn’t have our technology,” he said. “Using technology, we created the solution to the age old problem of standing out in this crowded on-premise environment.”
Along with the intelligent tap handle, the 80 participating bars receive a content stick that plugs into their TV. Together the two pieces of hardware communicate and create an opportunity for bars to incorporate gamification.
“This is the first FCC certified beer tap in the world,” said Joseph Callahan, co-founder and CTO of TAPP, and CEO of West Conshohocken-based Ciright Systems.
Breweries that pledge to donate to the local fire department for every beer sold, for example, can use the TAPP platform to put a pint glass on the TV screen and have it fill with every pull of the tap handle. It shows customers, as it happens, how much closer they are to the fundraising goal.
And consumer engagement doesn’t stop at cause marketing campaigns. Beermakers could tie the platform to Eagles gear giveaways, or “whatever the beer companies want to distribute to engage the consumer,” Robinson said.
For some, the appeal created by the technology drums up questions of whether TAPP spurs binge drinking, but the creators say that is not the case.
“We’re not promoting overconsumption, we’re encouraging a shift in preference," Robinson said. “If you are going to have a beer, do you want a beer from a dumb tap or a beer from a smart tap that gives you some sort of added engagement?”
The idea for TAPP came to Robinson in 2013 while waiting in an Ardmore bar for his takeout order. Three years later, his invention will make its debut in 30 bars in San Diego and another 50 in New Orleans through a pilot program with a premier national light beer brand, he said.
During what Robinson refers to as his “three-year walkabout,” he connected with Ciright’s Callahan.
The tech company leader said of the approximately 100 pitches he hears each year, Ciright typically moves forward with around five.
“We get hit with a lot of ideas,” Callahan said last month. “I may have used some profanity in there, but I said to Jamie that is a really good idea.”
After several months of back-and-forth, Robinson and Ciright officially teamed up to launch TAPP.
The impetus behind the partnership lies with two patents, one already owned by Ciright and another issued to Robinson earlier this year.
“This is a case of a patent launching a business,” said Robinson, who has pared down his role in Alliance Marketing Partners, the full-service marketing company he co-founded nearly 20 years ago, to bring TAPP to fruition.
Robinson put in just under $1 million of his own money into the company, while Ciright dedicated nearly 850,000 man hours to the new business.
Now Spodek and TAPP’s director of product innovation, Nigel Herr, are heading to San Diego and New Orleans to install TAPP and train local representatives of the premier national light beer brand on the technology. Afterwards, the TAPP team can provide tech support and updates virtually.
While TAPP continues discussions about scaling with its current beer brand partner, which declined to speak on the record about the pilot, the new company already has its next evolution in the works.
“Ultimately as there is market demand, we will build apps,” Robinson said, “or more importantly partner with other apps.”
A future TAPP app could let customers track the gamification on their smartphone, not just on the bar’s TV.
Integrating other companies into the platform also has potential, Robinson explained, because TAPP is potentially tapping into a massive group of millennials at 1 a.m.
“What if Uber wanted to send a message out to these millennials like, ‘Hey, it is late at night, here is a discount,’” he suggested.
He also envisions potential partnerships with soda brands since one of the patents applies to the distribution of any beverage, not beer in particular.
For Philadelphians intrigued by TAPP, Robinson has other ideas in mind.
“We are at a point in our trajectory [where] I haven’t given away any exclusivity. So right now is the time when I can do deals with local Philadelphia beer stakeholders that I may not be able to do two or three years from now,” he said, conveying a willingness to work separately with the local craft beer industry.
As beer drinkers in San Diego and New Orleans get to know the new intelligent tap handle, TAPP leaders are shifting their attention to funding and the potential for global expansion.
It is taking steps to secure its IP in other parts of the world by filing the appropriate intellectual property claims in the Europe Union, Russia, India, Japan, Australia, Canada, Brazil, Israel and Mexico.
“I’m so confident that we have a working product, strong intellectual property and a massive market that we’re beginning to raise outside money,” Robinson said.
The team has had conversations with venture capital firms from Philadelphia, New York and California.
“It’s the biggest risk I’ve ever taken,” said Robinson, a long-time angel investor himself, “but I’m that convinced TAPP can be successful in the $300 billion beer industry.”