Texas Brewers Report Boost from Beer-To-Go Sales Legalization

Eighteen days after Texas’ new beer-to-go law went into effect, manufacturing brewers are reporting high levels of consumer enthusiasm for the opportunity to buy and take home packaged beers from taprooms.

After passing through the Texas Legislature in the spring and being signed by the governor in June, the law allowing the state’s licensed manufacturing breweries to sell beer to-go went into effect on September 1. Prior to the change, only brewers holding brewpub licenses that produced fewer than 10,000 barrels could sell patrons beer for off-premise consumption. The new law allows customers to purchase up to one case of 12 oz. cans (288 oz.) per brewery visit daily.

Speaking to Brewbound, Peticolas Brewing Company founder Michael Peticolas said sales during the two weeks since the change in the law were the best in the 8-year-old Dallas-based beer company’s history. Peticolas, an attorney turned brewer, was a vocal proponent of changing the law.

“It was a huge team effort to get this thing from concept to actually opening up on September 1, which ultimately is the single biggest day we’ve ever had in our history,” he said.

Within the first 10 days of to-go sales, Peticolas said the company sold out of cans of its Velvet Hammer imperial red ale. Despite the uptick in at-the-brewery sales, Peticolas stressed that his company’s primary focus remains brewing beer for distribution.

“It is still the No. 1 priority to have kegged beer for our retail bar/restaurant customers,” he said.

Nevertheless, the path to having the opportunity to sell customers beer to take home has taken at least four years to accomplish. The gridlock between the state’s manufacturing brewers and wholesalers was finally broken earlier this year as the Texas Craft Brewers Guild and the Beer Alliance, a lobbying group that represents one faction of the state’s beer wholesalers, reached a stakeholder agreement in February on a compromise bill. Texas’ other powerful wholesaler lobbying group, the Wholesale Beer Distributors of Texas eventually signed onto the effort in May. The bill unanimously passed through both legislative chambers.

Austin Beerworks co-founder Adam DeBower told Brewbound in an email that the passage shows that with “a well-thought-out and executed game plan, normal people can in fact still move the needle on the laws that govern our lives.”

In early 2018, DeBower helped found CraftPAC, a political action committee advocating for Texas craft brewers that has now achieved one of its earliest goals.

“We went up against powerful and entrenched interests, interests who have been involved in the legislative process for generations, and we came out with a major victory,” he wrote.

According to DeBower, Austin Beerworks has sold 230 case equivalents (CEs) for off-premise consumption as of September 18, and he estimated that the company will sell 350 barrels’ worth of to-go beer if this rate of sale continues.

Although some craft brewers are reporting an uptick in sales, wholesalers are remaining cautious.

“I’ve heard great reports,” Beer Alliance of Texas president Rick Donley said. “They’re [brewers are] having a lot of success so far, but that was also a holiday weekend when it premiered, so I think it’s a little bit early to tell exactly how it’s going.”

Texas Craft Brewers Guild chairman Josh Hare said he expects the change will ultimately benefit wholesalers, as direct-to-consumer sales provide a testing ground for new products and sales data to provide wholesalers with reasons for taking new products to market. His brewery, Hops & Grain in Austin, plans to use to-go sales as a proving ground for new beers.

“We can build up some excitement about it, and then sell it in saying ‘Look, we sold X number of CEs just in our tasting room, customers are looking for it,’” he said. “They can feel a little more confident in bringing in a new brand, and we’ve already got at least some buzz.”

Hops & Grain’s San Marcos production brewery, which opened in July, will be dedicated to brewing beers for wider distribution, while its Austin location will serve as an innovation hub. Both are operating under brewpub licenses, but will switch to manufacturing licenses next year, Hare said.

“It’s been super cool to see across the board not only the number of people that came out in the beer-drinking public, but also hearing from our brewery members about the real impact it’s making on their bottom line,” he said.

Asked how much potential revenue had been lost by beer-to-go sales ban, Hare estimated “a lot.”

“Back of the napkin math, I think you could pretty easily increase taproom revenues by 25% to 30% just being able to sell to-go and that’s a very conservative level,” he said.

Still, not every brewery has seen a spike in sales since the law took effect. Saint Arnold Brewing Company founder Brock Wagner reported business as usual.

“Honestly, for us it really isn’t a focus,” he said. “We sell so much of our beer through grocery and liquor stores, that’s really our focus, primarily, for where we want the product to be sold.”

Still, visitors have purchased about 30 cases of hard-to-find specialty beers at the Houston craft brewery, including Saint Arnold’s 25th Anniversary Grand Cru and Bishop’s Barrel Series No. 24, Wagner said. Both had been available through traditional retailers but had since sold out.

Other brewers marked the first day of to-go sales with events and new releases. Corey Dickinson, Community Beer Company’s director of marketing operations, estimated that 1,000 people visited the Dallas-based craft brewery on September 1, and the company marked the occasion by releasing Super Mosaic IPA, a high-gravity version of its flagship IPA.

Dickinson said the new sales privilege creates opportunities for events, promotions and innovation.

“We can create these tailored events around beers,” he said, adding that Community will release its annual batch of Funnel Cake Ale next week during a Texas State Fair-themed party.

Although Community’s beer is distributed statewide, Dickinson said selling 100-case batches through the three-tier system is often unfeasible. Beer-to-go sales offer an avenue for breweries to sell smaller batches.

“It gives people the opportunity to enjoy more beer,” he said. “If they have something here that they like and they buy a 6-pack, chances are they’re gonna buy that beer out at our retail store partners or a bar.”

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