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Day 2: This is Texas.

Today should be a relatively slow one at the Capitol.  Gov. Rick Perry, Lt. Gov David Dewhurst, House Speaker Joe Straus all held a media availability to discuss the upcoming session this morning, with the focus on Franchise Tax reform and illegal immigration initiatives.  The senate will debate governing rules this afternoon, which is always good for a fight or two, but this may be as much as a non-event as the challenges to Speaker Straus were.  It all feels like a calm before the storm.

Given the relative lack of action, I wanted to use today to provide some background on the Texas beer industry and what it looks like today.

As you might imagine, beer is big in Texas.  Only California drinks more beer than Texas – and no one else is close (Florida comes in next, about 6 million barrels behind Texas).  While California consumes approximately 24 million barrels of beer per year, Texans put down 20 million.  Taking into account the population differences in these respective states, per capita beer consumption in our state is significantly higher than in the Golden State.

So Texas is a big state.  That drinks beer.  Lots of beer. 

As craft beer has grown, so has Texan’s interest in it.  Scan data shows Texas is the fastest growing market for craft beer, by volume.  More new cases of beer are sold in Texas than any other state. 

Texans like craft beer.  Lots of craft beer.

Yet, for the most part, they aren’t drinking Texas Craft Beer.

Of the approximately one million barrels of craft beer consumed in Texas in 2009, only 7.2% was produced by members of the Texas Craft Brewers Guild.  Any even saddening number, Guild members only produced 0.4% of the total volume of beer consumed by Texans in 2009.

One explanation for these shocking numbers could be that Texans simply aren’t producing quality beer worth the hard earned dollars of craft drinkers.  But the evidence points another direction.  The two largest producers of Texas Craft Beer are expanding just be able to keep up with capacity; the medal and award count for Texas brewers increases each year (my own brewery won our first beer-specific award in 2010); and Texas produced beers have becoming increasingly sought after by craft enthusiasts around the country.

The answer to why is written in the Texas Alcoholic Beverage Code, which prohibits brewpubs from selling their ales and lagers to wholesalers, distributors and other retailers.  The only place to buy a Texas brewpub’s beer is at the brewpub – which is tough for many considering the vast size of our state.

The brewpub model has been the launching pad for some of our country’s most well-respected and successful breweries, such as Dogfish Head Craft Brewery (Delaware) and Russian River Brewing Company (California).  And just so you know, there is no law prohibiting an out-of-state brewpub from distributing their beer in Texas.  So in the case of a brewery/pub like Freetail – we could literally increase the available of our beer in Texas by simply moving out of Texas.

Sounds counterintuitive to me too.

A stat I’ve heard (but can’t verify) is that 60% of the beer consumed in Portland, OR is from Oregon Craft Brewers.  Texas won’t get there overnight, but if we want to move from the measly 0.4% we’re currently at, Texas Lawmakers must allow Texas brewpubs the right to grow.

We’ll talk again tomorrow.

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12 responses

  1. Michael Pina

    Coming from Portland, and still residing in Oregon, I believe the number of consumed beer in Portland has to be higher than 60%. If you’re walking downtown, or anywhere else in the city for that matter, you’ll be hard pressed to find any pub that has a “bud light” or similar caliber beer, especially with such staples as Deschutes, Rouge, and Widmer.

    One such resource you might want to check is Oregon Brewer’s Guild at http://oregonbeer.org/ good luck!

    January 12, 2011 at 3:00 pm

  2. Ken

    First thank you for doing this blog. I am aware of the obstacles faced by brew pubs and craft breweries alike. A new age in TABC laws needs to come about and quick if we want to keep pace with other states in this market and with the revenue craft beer can produce.

    Is there a posting of this bill you crafted? I know during the last session there was a bill trying to allow breweries under a certain barrel limit to sell an equivalent of 48-12oz bottles to the public. Is this bill being re-introduced as well? Has your bill incorporated something similar in nature?

    If you have posted your bill I am sorry I must of missed it.

    Thanks
    and keep breweing great quality beer. freetail beer rocks

    January 12, 2011 at 4:39 pm

  3. Ken,

    Thanks for your support. When our bill is formally introduced (should be any day know), I’ll post it (or a link to it) here on this blog. This bill is unlike ones in the past in that it specifically addresses the authorized activities of Texas brewpubs.

    My understanding is that the bill from last session will also be re-introduced.

    Cheers,

    Scott

    January 12, 2011 at 5:00 pm

  4. Michael, thanks for the anecdote. That’s amazing about Portland. Hopefully Texas can get there one day.

    Cheers!

    January 12, 2011 at 5:01 pm

  5. So who’s up for a march on the capitol? A Million Pint March or something?

    All joking aside, I talked my local State Rep here in Houston into supporting last session’s beer legislation using the economics angle. With that issue being the focal point of the session, I have no doubt that my conversations with him will result in at least one vote.

    Thanks again for carrying this torch. Cheers!

    January 13, 2011 at 7:48 am

    • I’m all about a Rally at the Capitol Brian. They might not be swayed to vote our way, but they definitely won’t be able to ignore hundreds or thousands of people outside of their window.

      January 13, 2011 at 10:32 am

  6. Jordan High

    I applaud your effort. I visited Portland over the summer and was amazed with the beer culture there, and the local business that resulted. I wrote both my state senator and representative today asking them to support the craft brewing industry in Texas.

    January 14, 2011 at 11:00 am

    • Thanks Jordan, support like yours is instrumental in the passage of reform!

      Scott

      January 14, 2011 at 1:45 pm

  7. Mike Graham

    Great post. Where did you find the scan data and other statistics?

    January 14, 2011 at 11:37 am

    • Mike, scan data is from IRI – but not available publicly. It’s from a presentation I sat in.

      January 14, 2011 at 1:45 pm

  8. Pingback: Why you should care about HB 602 and HB 660 | Made With Air

  9. Pingback: Absurdity of Texas Brewing Regs | dfwbeerscene

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