Dallas

Craft beer is evolving. So is craft retail.

| Paul

BTBF-2016_logoIt’s no secret that American craft beer changes with the times. The beer in your glass responds to consumer demand and brewer creativity as well as the unseen influences of ingredients, costs and regulation. But the end-product is not the only thing changing.

The many and various ways that craft beer is retailed and ultimately sold to the consumer evolves along with changing market forces and demands. Just as environment shapes the organism, consumers are collectively and unknowingly shaping the craft beer environment.

Think about buying a craft beer back at the turn of the century (for the kids, barely 20 years ago now). Craft beer was a commercial novelty, enjoyed and supported by a strange but loyal following, and the only places it could be purchased were licensed brewpubs or a few dedicated local, so-called “beer bars” such as The Ginger Man, multiple Flying Saucer locations, or a couple of independents. At inception, it was mostly a closed craft market with few access points.

A new business model has arisen from a maturing population fueling suburban sprawl: the “growler-fill station.”

Compare the situation today: It is difficult to find any larger restaurant or bar, even national franchises, without a selection of 30 taps or more. Where years ago a “craft beer” tap may have been grudgingly reserved, most likely for the brewery in the immediate neighborhood, now it is not unusual to find the latest seasonal or limited offering from distant states. Where once only premium liquor stores carried bottles of craft beer, now every major grocery chain has a dominant craft beer section.

Certainly, distribution and legislation have played their parts. Major distributors consolidated and local zoning laws relaxed, which greatly improved the availability of packaged products. Taprooms were legalized just a few short years ago, turning breweries’ sterile manufacturing facilities into vibrant social destinations. Even right now, another effort is moving through the Texas legislature to allow off-premise sales direct from brewery locations.

The consumer end is still reshaping retail as the demographics shift. A new business model has arisen from a maturing population fueling suburban sprawl: the “growler-fill station,” an economic strip-center location with a presence between retail store and beer bar. Patrons can conveniently fill their glasses or their growlers from dozens of taps without trekking farther to an established craft beer destination and retailers get to close at 9 PM, avoiding the expense, hassle and risks of operating a nighttime bar or pub.

We are watching the latest retail phenomenon develop as what may be described as the hybrid or “crossover” business model for craft beer. Retailers are combining other consumer businesses or entertainment venues with the standard growler-fill, reclaiming something closer to the original brewpub model of restaurant plus brew-on-site. These places build premium craft beer bars within or alongside an unrelated product such as a movie theater (Alamo Drafthouse, Flix Brewhouse), an arcade (Free Play, Cidercade) or even a more traditional coffee house (Civil Pour, Golden Boy and a few others).

Obviously, the motivation behind this latest retail model is to play to another market besides craft beer—which is a smart move while costs and competition continue to rise. So far, consumers seem to be embracing these creative chimera businesses, and most seem to be doing well. What’s next for the craft beer retail sector? Stay tuned and find out. SD

Originally published for 8th Annual Big Texas Beer Fest (2019 program).

Timing is everything, and CraftPAC’s time is now

| Paul

BTBF-2016_logoThe last thing you would expect to read at a Dallas beer festival would be an article about the Oklahoma craft beer scene.

Most of the nation has always regarded Oklahoma as a little backward, a rural conservative state with few major industries beyond farming and natural gas. Their outdated alcohol laws do not help this reputation—to North Texans especially, as our proximity has made us somewhat familiar with Oklahoma’s legendary backward beer laws and regulations. As arcane and prehistoric as Texas beer laws can be, we could at least take some comfort in knowing that Oklahoman craft beer fans had it worse.

In only a few short months, Oklahoma will have less restrictive beer laws than Texas for the first time ever.

This is about to change in a very significant way come this October. In May 2016, the Oklahoma legislature passed SB 383, which included the most sweeping updates to their alcohol laws since Prohibition. It modernizes if not eliminates many pointless statutes and “blue law” restrictions, and effectively restructures the ABLE Commission (Alcoholic Beverage Laws Enforcement, their state’s version of the TABC).

No more stocking shelves with warm beer, or the infamous “3.2” limit. No more ABV caps for brewpubs, or ridiculous restrictions such as no persons under the age of 21 (which can impact modern craft breweries and gastropubs eyeing a family demographic). No more sales restrictions or special permitting at festivals. An expansion of homebrewing rights, wine and beer licenses for grocery and convenience stores, and broader operating hours/days for retailers. The new laws even allow for direct sales from breweries and stronger brewer rights with regard to distributors.

The law was intentionally given a distant two-year effective date (2018) to allow all the players in Oklahoma—breweries, retailers, distributors, even counties and municipalities—time to react to changes and update their own needs and practices accordingly. (Eighteen counties in the state are still dry.) Since that time other changes have followed, just about all of them progressive and beneficial to the craft beer indutry, including a statewide referendum (State Question 792) validating the aforementioned bill. Oklahomans are warmly embracing the craft beer movement.

Why is any of this relevant to Texas? Earlier this year, the Texas Craft Brewers Guild launched CraftPAC (www.craftpac.org) specifically as a lobbying body to advance the business and industry needs of the state’s craft beer movement. Its sole purpose is to educate Austin lawmakers and support candidates and legislation who will act for the needs of independent Texas brewers both large and small, hopefully moderating the influence of the more powerful wholesale lobby. With our state’s brewing industry maturing rapidly, it is unlikely we will see a public referendum; therefore, CraftPAC has to be the voice at the legislative table for consumers and small brewers alike.

In only a few short months, Oklahoma will have less restrictive beer laws than Texas for the first time, including the coveted direct sales rights that our state’s brewers have fought so earnestly to change. Less regulation means more competition, with Oklahoma set to instantly become a strong competitor located just beyond the Red River (and their craft brewers are just as good as ours). Texans do not like to consider themselves second to anyone, so now is the time to throw our support behind CraftPAC and their efforts if we, brewing and selling as a state, do not want to be left behind. SD

Originally published for 7th Annual Big Texas Beer Fest (2018 program).