Houston Beer Industry Responds to Hurricane Harvey

As heavy rain from Hurricane Harvey continues to fall, causing massive flooding in the Houston area, the local beer industry is in a state of flux.

The tropical storm, with its record-breaking rainfall, has caused several breweries, distributors and retailers in the Houston area to temporarily shutter. Others have attempted to open, serving as donation collection centers and offering beer to first responders.

Texas Craft Brewers Guild executive director Charles Vallhonrat, who lives in the Houston area, told Brewbound that most of the group’s members reported being in “good shape.” So far, Vallhonrat said, only City Acre Brewing in Houston had reported flooding inside its brewery. On its website, City Acre said the damage would shut down its operations “for the next few days.”

As of Tuesday, other craft breweries were attempting to restore operations, including Saint Arnold, Texas’ oldest craft brewery, which reopened its taproom Tuesday afternoon to host a supply drive.

The world’s largest beer maker, Anheuser-Busch InBev, which operates a manufacturing plant in Houston, is also stepping up with relief of its own. A-B InBev spokeswoman Gemma Hart told Brewbound that it would offer company resources and disaster-relief funding to employees affected by the storm.

So far, employees at A-B’s brewery — as well as at subsidiary companies Longhorn Glass Corporation and Karbach Brewery — were all safe, she added. Those locations have not suffered any significant damage, Hart said.

Images shared via social media revealed some of Harvey’s destruction, including photos tweeted by Dickinson-based Texas Beer Refinery, which showed the company’s taproom surrounded by high flood waters. Brewery officials did not immediately return requests for comment.

Meanwhile, members of 8th Wonder Brewery used the company’s camouflage-painted high truck to help rescue people throughout the area. A spokesperson from 8th Wonder told Brewbound that employees of the company have continued to offer help to stranded individuals.

Heavy bands of rain causing streets to flood also forced Galveston Island Brewing to close its taproom today, marketing director Charday VanOrstrand told Brewbound.

“Hopefully tomorrow we’ll be back open,” she said.

Galveston Island, which self-distributes in Galveston and sends product to other parts of the state via Del Papa Distributing Company, has stopped shipping beer.

“It’s impossible to get anywhere,” she said.

The Texas Department of Transportation advised against travel in the affected areas due to “rapidly changing water levels and unsafe driving conditions” on Tuesday. More than 500 roadways in southeast Texas were under flood conditions as the storm was expected to continue through Wednesday with “substantial rainfall, dangerous flooding and high winds continuing to threaten” the Houston area.

That’s a major complication for wholesalers such as Del Papa, which scrapped plans to send its sales and marketing teams back into the field in most of its territories.

“I don’t think we’re going to be having much success at getting back on the streets until tomorrow — Wednesday — as the storm begins to lift out of our area,” Peter Williamson, Del Papa vice president of corporate relations and communications, told Brewbound. “The freeway, which is I-45 south, heading from Houston into Galveston, is impassable in a couple of places where major bayous and creeks flow underneath it.”

Del Papa, an Anheuser-Busch wholesaler, delivers beer to 17 Texas counties stretching from the Texas-Louisiana border near Beaumont and Port Arthur down the coast to Victoria. Williamson told Brewbound that about 30 of the company’s 375 employees have been impacted by the storm.

After assessing the toll the storm has taken on its employees, wholesalers such as Del Papa will need to determine which retail businesses will be ready for beer deliveries once the roads open and employees return to work, Williamson said.

“As days go on, it will ramp up very quickly,” he said.

Del Papa, which has distribution centers in Texas City, Beaumont and Victoria, has power at all of its facilities, Williamson said. Victoria is being powered by an emergency generator after losing service yesterday.

“We’ve been able to keep our draft malt cold,” he said. “We’re making some deliveries in the Victoria area today, but it’s one of those things where your people need to get out there on the streets and find out which retailers are open and are ready for a delivery.”

As of Monday, most grocery stores, retailers and restaurants were closed in the Houston area, according to the Wall Street Journal. Walmart had reportedly closed 96 stores and distribution centers, and Target had shut down more than 30 stores.

Grocery chains Kroger, H-E-B and Whole Foods all announced plans to open some of their stores in the region today. Still, many of these chains’ outposts remained closed on Tuesday.

Meanwhile, Gasoline prices reached a two-year high on Monday due to shutdowns of at least 10 Texas oil refineries in the Houston and Corpus Christi areas, according to CNN Money.

National Beer Wholesalers Association (NBWA) chief economist Lester Jones told Brewbound that it’s too early to tell how the market will be affected — and a lot depends on how quickly refinery capacity is restored. However, Jones pointed out that the industry is “well positioned logistically” to withstand a temporary shock.

“It’s not the first storm for industry and won’t be the last,” Jones said. “Yes, there will be a short-run increases in fuel prices that will impact distributors, retailers and consumers across the board. This may or may not lead to higher final beer prices to consumers — all depending on the overall beer market and where displaced residents end up.”

Several large brewing companies have announced plans to send clean water to the region. A-B InBev will ship a total of 155,000 cans of water to the American Red Cross in Arlington and Baton Rouge. MillerCoors, meanwhile, said it would ship 50,000 cans of drinking water to the American Red Cross. MillerCoors also pledged to donate $25,000 to relief efforts.

Colorado craft brewery Oskar Blues, which has an Austin location, announced that its CAN’d Aid Foundation was donating 88,000 cans of water.

Other Texas breweries have also offered aid or worked to raise money. Austin-based Family Business Beer Company has raised more than $136,000 for people affected by the storm via Crowdrise, and Independence Brewing Company announced plans for a toy, clothing and supply drive at its taproom this weekend. Lorelei Brewing Company will collaborate with several Corpus Christi breweries on a Hurricane Harvey Relief Ale, with all proceeds going to relief efforts.

“The great thing is the city is coming together,” said Vallhonrat. “And there are a lot of people out pitching in and helping the community and their neighbors out.”

The toll on Texas breweries won’t be known for days, Texas Craft Brewers Guild Deputy Director Caroline Wallace told Brewbound.

“The whole Texas Craft Brewers Guild community is standing by to help in any way we can once those needs have been identified,” she said.

Once damages are assessed, brewery owners with flood insurance will begin filing claims. However, many Houston breweries seeking to protect their businesses may have already had a hard time finding an insurer.

Paul Martinez, a program manager for Brewery Pak, which offers insurance packages to breweries nationwide, said the risk of wind and flood damage in Houston is especially high and breweries may be unable to obtain coverage.

“We get tons of submissions for breweries in Houston, and most of them we decline,” he said. “On a standard package policy for Houston, no carrier is going to offer flood coverage.”

Brewery Pak does not offer wind and flood coverage in the Houston area, Martinez said, noting that coverage for catastrophic events such as floods and windstorms can be obtained through specialty insurers. He added that many breweries in Houston would need to obtain coverage through the National Flood Insurance Program, administered by the Federal Emergency Management Agency, due to the city being in a federally designated flood zone.

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