Brewbound Podcast Episode 007: Josh Hare on Texas’ Confusing Direct-to-Consumer Laws

About four years ago, Hops & Grain Brewing founder Josh Hare began the process of transitioning his Austin-based craft beer company from a licensed manufacturing brewery to a brewpub.

He wanted to take advantage of a new Texas law that allowed brewpubs to sell beer directly to consumers for off-premise consumption while simultaneously expanding his operation.

So Hare signed a lease on an adjacent space inside the building where his brewery was located and spent nearly $80,000 on the beginning stages of an expansion while he waited for the Texas Alcoholic Beverage Commission to approve the switch.

Then his request was denied.

The problem? A hallway dividing his existing brewery and the new space he was planning to expand into meant that his vision of occupying the entire building would never be realized.

“In the state of Texas, spaces under one permit have to be contiguous,” he said. “And that hallway created a non-contiguous space between what was our original space and what we wanted to be the new space.”

So Hare opted to maintain his manufacturing permit while he spent the next two years planning another attempt.

And then he was denied again.

This time, Hare learned that his licensed manufacturing brewery was located in an area of Austin that was not zoned for direct-to-consumer alcohol sales.

“Manufacturing is fine. Giving away free beer samples is fine. But if you are actually trying to transact, that doesn’t work unless you sell more than 51 percent of your revenue from non-alcohol sales,” he said.

In episode seven of the Brewbound Podcast, Hare takes a deep dive into his company’s complicated four-year process of becoming a licensed Texas brewpub, and why he feels the state’s confusing direct-to-consumer sales laws need modernizing.

Hare also discusses how he’s financed Hops & Grain’s growth, why he feels Texas beer wholesalers wield too much power and why current Texas alcohol laws make it difficult for upstart breweries to breakout.

Also in this episode: Brewbound editors Chris Furnari and Justin Kendall share the latest news and run down segments.

Listen to episode seven of the Brewbound Podcast above, as well as on iTunes. The episode is also available on Google Play, Stitcher, Spotify, and Soundcloud. New episodes of the Brewbound Podcast, which is co-hosted by Furnari and Kendall, are published every Thursday.

Episode eight, featuring Constellation Brands’ Bill Hackett, will be released on Thursday, November 1.

For questions, comments or suggestions, please email podcast@brewbound.com.

In episode seven of the Brewbound Podcast, Hare takes a deep dive into his company’s complicated four-year process of becoming a licensed Texas brewpub, and why he feels the state’s confusing direct-to-consumer sales laws need modernizing. Hare also discusses how he’s financed Hops & Grain’s growth, why he feels Texas beer wholesalers wield too much power and why current Texas alcohol laws make it difficult for upstart breweries to breakout.