Feb 052013
 

CAPITAL

 

 

 

Ambitious Brew – The Story of American Beer, by Maureen Ogle, is an outstanding and well written history of the American beer business. Interestingly, it was published in 2006.  Since its’ publication seven years ago, much has changed in the beer industry.  The sale of AB to InBev and the growth of the crafts have been two of the most remarkable events to have occurred.

In my early years in the business, I watched how the strong regionals gave way to the “major” brands, Budweiser, Schlitz, Miller and Coors.  Then, the rise of the line extension, “lights,” as the domestic premiums started to fade.  The early nineties brought the beginnings of crafts as Anchor Steam, Pete’s, Sierra Nevada and Boston all started to increase in sales with the Northwest breweries coming soon after.

In those early years of craft beer, what stands out to me is the fact that they all are from the west coast and Colorado.  These states were incubators for the craft industry and their states had laws which, not only allowed them to grow, but encourage the craft industry.  As we all know, crafts are up to a 30+ share in these west coast states.  The largest event in craft, the GABF, is still in Denver, and always a sell-out.

Just recently, the Dallas Morning News ran a featured article on  Dallas/Ft. Worth area microbreweries entitled, Where the Beer Flows, which reviewed over eight local area breweries.  This is somewhat remarkable as Texas doesn’t have a history of developing craft beers.

In the nineties, several breweries tried to get started.  Texas Brewing Co., Great Grains Brewing, Main St. and the Reinheitsgobat Brewery all brewed, but eventually went out of business for various reasons, mostly because the Texas state laws were not helpful to the craft industry.  Only St. Arnold’s in Houston got established, but not without tremendous effort.  Recently, in spite of the prohibiting laws in Texas, many new breweries are either now operating or are in the planning stages.  There is a concentrated effort by the craft brewers in Texas to modify and change the laws to allow them to compete with out-of-state-crafts on a more level playing field.

Just having the  ability to sell beer to visitors to their respective breweries would make a huge difference to these craft brewers.  Despite the fact that changes are occurring at the Texas capital, any changes in franchise protection will be difficult at best.  Many of these new breweries are currently self-distributing.  But as we all know, they will eventually have to go to the distributor tier to grow horizontially.  Without the middle tier, these brewers are destined be limited in what they can accomplish.  A modified franchise statue should have a provision, not unlike New York or Illinois, that provides a buy-out clause if under a distributors certain percent of business.

The growth of the crafts in Texas in recent years is truly amazing given the legal environment in which they must operate.  Imaging what the industry could experience with laws similar to Colorado or Oregon?  Until these changes occur we continue to have met the enemy… and he is us!

 

 Posted by at 8:15 am

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