2011 State of the Six Pack - Part 3: The Agenda for 2011

My fellow beer geeks:

It would be nice to think that beer is all about the brewers and their supporters. But government is a partner in this business too, for better or for worse. In 2010, the state allowed Sunday carry out sales from breweries. For some, the impact as been exceptional.

“The Sunday carryout law is huge for us. We have the only Sunday carryout in our county and our Sunday sales are exceptional as a result.” – Tom Uban, Figure Eight Brewing

“The Sunday Carryout Law has been great for Crown Brewing. Sunday sales now rival Friday and Saturday sales. Thanks to the legislators and everyone else who worked so hard to make this happen. Our customers don't have to worry about running out of beer before the game on Sundays. We have even met some new people who needed beer, but didn't feel like driving to Illinois on Sundays. This means more tax dollars staying in the State of Indiana.” – Chris Stanek, Manager/Part Owner, Crown Brewing

“Our guild lobbied the Indiana legislature for many years for Sunday carryout and thanks to Mark Webb for making it happen in 2010. Sunday carryout has brought new customers into the category as sometimes someone comes in and asks for our lightest beer, but hey it is still craft and its a start for them.” – Jeff Eaton, Owner/Brewer, Barley Island Brewing Company

“The Sunday sales have helped our carry out sales tremendously. We have been running a promotion and discounted our Sunday carry out to promote the new law. However, most people still don't realize the law has passed. How about getting all Indiana brewers and take out an ad in local papers and thanking the legislators for passing the Sunday carry out law.” – Kwang Casey, Owner, Oaken Barrel Brewing Co.

Legislation has been proposed to expand on carry out laws. While it is not believed that this will happen this year, it is certainly a topic that we have discussed. Expanded Sunday sales are viewed by many as a hindrance to smaller retailers. With the exception of border towns, sales won’t necessarily go up. Six days of beer sales will instead be spread across seven days, but costs will increase to accommodate the seventh day of being open.

“If Sunday sales become universal the cost of selling beer for liquor stores goes up to accommodate the extra time and personnel involved in operating seven days instead of six. That makes it less lucrative to be in the beer business for the smaller family businesses that often run liquor stores. The unknown here is how much the competition between liquor stores and grocery smoothes over this potential transition. Most opinions in the industry suggest that there is not a lot of overall increase in sales to cover the increased cost of operation one extra day. By and large we’d just end up spreading six days worth of sales over seven days and not picking up much or any additional volume so liquor stores are the clear loser here.” – Anonymous

Smaller retailers may go under; chains may grow stronger. But who supplies more craft beer? And how many small retailers who would be put under by the seventh day of sales would be investing in craft beer inventory anyway? Grocery store chains are the major wild card. They’ve started stocking some craft beer, but not a large variety in most cases. But would that change if they were allowed to do cold beer sales?

“Cold beer sales likely has a much bigger impact because I think it is possible that grocery and convenience stores have held back somewhat on getting into the craft category full throttle due to this issue. After all, Indiana has one of the lowest % of sales from grocery in the country where beer is concerned which is largely due to the cold beer issue. And even though it doesn’t seem that important to me personally, consumers overwhelmingly prefer to buy beer cold. If grocery stores get cold beer, they might be more interested in getting further into the craft category. However, that might not bode well for liquor stores who have been the backbone of craft beer sales for this state for years so there is certainly a downside for them. Again, liquor stores are the clear loser but there could be added potential benefit for the consumer who may have more choices from more retailers on where and which beers to buy.” –Anonymous

In the case of Sunday sales and cold beer sales at grocery stores, it looks like liquor stores lose out. Maybe it wouldn’t be a huge impact on the Kahn’s, Crown Liquors, 21st Amendments, and United Package Liquors, but what about places like Parti-Pak or Stoney’s? wonder if the playing field would be leveled more if parents were able to enter a liquor store with their kids they way they are allowed to go up and down a liquor aisle at a grocery store. That’s a law that I would personally like to see changed.

There are other laws that some would like to see changed.

“Most laws favor the big guy and I hope we are seeing that trend beginning to reverse.” – Mat Gerdenich, President, Cavalier Distributing

“Straight up: On this whole issue of mandatory “carding,” am I the only one wondering why the burden of enforcement always lies with servers and employees? Shouldn’t the 18-year-old consciously violating an admittedly asinine law bear the brunt of punishment? Anyway, as for legislation: There should be more investment incentives and calculated breaks for independent small business, whatever the field of endeavor. Add together the investment, production and employment figures for all Indiana small breweries, and incentivize them collectively. In many instances, breweries and their on-premise operations carry the ball in urban revitalization efforts. This fact needs to be touted and leveraged at every opportunity.” – Roger Baylor, Carnival Barker, New Albanian Brewing Company

“Sunday sales for craft breweries may end up being a momentary blip – billion-$ corporate lobbyists are lined up to kill off independent retailers and nationalize chain buying decisions, which is a bad outcome on so many levels. We’d love to see the prohibition against small brewers operating distilleries to be lifted – we have a 3 yr-old whiskey R&D project in the barrel and would love to turn the team loose on developing some quality spirits for commercial production.” – Doug Dayhoff, Upland Brewing Co.

“As a wholesaler the Sunday Brew Pub carry out sales did not affect us, but we were surprised that more of the craft brewers in Indiana did not take advantage of it. Now this year Sunday carry out sales and cold beer in the grocery stores will change the dynamic of beer sales considerably. This will give the grocery stores more of the beer share which will be affected by less selection. Compare your favorite liquor store to your favorite grocery store or convient store and see who has the best selection. This will mean less access to market for the smaller Indiana crafts. On another legislative front Indiana has a law that allows Indiana craft brewers to self distribute as well as sell carry out which is one of only 18 states to do it. But there is a barrelage limitation of 20,000 which means if you produce 20,000 bbls you cannot have a brew pub or self distribute. We are working with Indiana Brewers to change to 50,000.” – Jim Schembre, Manager, World Class Beverages Indiana

“Changes to add another tier to the excise taxation for micro breweries would certainly be helpful to those of us who produce under 1200 barrels per year.” –Uban, Figure Eight Brewing

“I would like to see a push for more micro-brewery specific tax and reporting forms. I feel that our industry is growing and operates quite differently that a macro brewery producing millions of barrels per year. This could save people on both ends of the forms time and money.” – Stanek, Crown Brewing

“In 2011 (the Brewers of Indiana Guild) has filed legislation that would allow us to sample and sell Indiana craft beer during the Indiana State Fair.” – Eaton, Barley Island Brewing Company

“I think it's imperative that Indiana retain the right for small brewers to self-distribute. I have not heard of any changes being considered - but it would be a huge mistake to change this law.” – Dan Valas, President, Great Crescent Brewery

Given the politics, some of these state and federal legislative desires may seem like pipe dreams. Only time will tell. Here are some other dreams and desires that the craft beer industry is hoping for in their Christmas stocking/Valentine card/Easter basket this year…

“I wish for the craft beer trend to keep continuing onward and upward! Every fizzy yellow beer drinker the learns about and converts to a craft beer drinker is a blessing to the industry!” –Gerdenich, Cavalier Distributing

“For 2011, all I want is stress reduction, and I’ll take my chances with the rest. NABC has high hopes for bomber bottling, which should be underway in January, so let’s roll the dice and have at it.” – Baylor, New Albanian Brewing Company

“Mash tun rakes would be at the top of our list for Santa – shoveling 50 tons of spent grain each month by hand is good work for new pledges but not fun for the experienced staff on a triple brew day.” – Dayhoff, Upland Brewing Company

“I think the number one thing we think about is what influences consumers choice? How can we get more information out to our consumers? Is it social networking? Tastings? What can we use to make your beer buying decision? And then our question is how can we influence it? If we can get into the heads of the beer drinkers and see what where and why they want their beer we would all win. So if you can tell us that we would be very happy.” –Schembre, World Class Beverages

“I hope to see continued growth and public awareness of our locally crafted, full flavored offerings.” –Uban, Figure Eight Brewing

“I would like/need a larger brewing system. I could also use a larger bar.” – Stanek, Crown Brewing

“A production brewery; definitely running out of space!” – Eaton, Barley Island Brewing Company

“I hope for patience personally, growth for our company and maturity & cooperation for our Hoosier craft beer community.” – Blackman, Cavalier Distributing

“I would hope to find in my stocking that all Indiana breweries had a successful year. I've had best year in 16 years and hope to continue the success. I believe Indiana will see a continued growth, since we were so far behind other midwest states. Our time has arrived! For myself, I need to be more active in Indiana Brewery industry. There are improvements I would like to see, and I promised myself to be more involved instead complaining about lack of changes. I would love to see a beer stand at the Indianapolis airport featuring Indiana beers. We could provide brochures listing Indiana breweries along with Indiana beers. Tomlinson's tasting room is good idea, but we need to think big.” –Casey, Oaken Barrel Brewing Co.

“Health for all the brewers and craft beer supporters in Indiana. Healthy, happy beer brewers and beer drinkers would be the best gift we can receive. Cheers to all.” – Valas, Great Crescent Brewery

And with that, I would finish with my wish that Hoosier Beer Geek continue on its path of global domination. And a kegerator. I really want a kegerator at home.

Thank you, my fellow beer geeks, for your attentiveness. Good night, cheers, prost, and hop bless America.