Brewbound Podcast: Guild Leaders on Advocating for DTC Sales, Protecting Privileges

[00:00:00] Justin Fonte: A new year means new brewery legislation. We'll chat with a couple of Guild leaders next on the Brewbound podcast. Hello and welcome to the Brewbound podcast. My name is Justin Kendall and I'm the editor of Brewbound and I am joined by Justin Fonte, the managing editor of Brewbound. What's up, Jess?

[00:00:27] Texas Craft: Hey, not much. How are you?

[00:00:29] Justin Fonte: living that Super Bowl hype life. How about you?

[00:00:33] Texas Craft: I'm also living the Super Bowl hype life, though I have to admit I'm not particularly hyped for the Super Bowl, but that's just me.

[00:00:40] Justin Fonte: You're never hyped for any sports ball, so.

[00:00:44] Texas Craft: Sadly, no. Yeah. I respect those who are.

[00:00:47] Justin Fonte: Well, speaking of one who probably is, how's it going, Zoe?

[00:00:52] Brewers Guild: I'm okay. I'm not super hyped about the Super Bowl, honestly, because as a Patriots fan, I don't really like either of these teams. As a Patriots fan, I can't stand the Eagles, and then the Chiefs are just kind of getting annoying, and I don't want the whole, like, Chiefs vs. Patriots, who's the next dynasty now thing. And it's all annoying. So other than that, I'm doing great.

[00:01:17] Texas Craft: I mean, Zoe, for like, the vast majority of your life, the Patriots were dominant, right?

[00:01:24] Brewers Guild: Yeah. So I'm a spoiled sports fan. And I'm now dealing with like, having to give that to other people. And I'm bratty about it.

[00:01:34] Justin Fonte: Yeah, you're salty.

[00:01:35] Texas Craft: Yeah. You know, one thing I noticed, and I apologize in advance if this comes out offensively, but the only teams that could beat Tom Brady and the Patriots in the Super Bowl are teams whose fan base is half New Jersey, the New York Giants and the Eagles. And I think personally that this means that pork roll must be Tom Brady's kryptonite. It's my theory.

[00:01:59] Justin Fonte: Do you think he's ever eaten a pork roll?

[00:02:02] Texas Craft: Never, never. Absolutely not. It could kill him.

[00:02:06] Justin Fonte: This is the part in the podcast where I think we're going to ask you all to like, rate and review us and subscribe for more of this in-depth conversation on sports.

[00:02:16] Texas Craft: Or hot takes on sports, New Jersey and breakfast meat.

[00:02:20] SPEAKER_??: Yep.

[00:02:21] Justin Fonte: Let's get into this week's episode, though, and this dovetails a little bit into where we are in the industry, and that's the major manufacturers are releasing their Super Bowl teasers and in some regards their entire commercials. And there's a lot of hype, and this year is a little bit different because the floodgates are open, Anheuser-Busch has relinquished its exclusivity over alcohol advertising rights to the game, and so that means lots of other folks can advertise, and there's a lot of hype around those. But I don't know. I'm not feeling it. Are you all feeling it? Because I'm just not there with this. And maybe it's just, this has been built up by a few companies like Molson Coors for a time. And now it's in that overhype stage and they have to deliver on this and we're not going to see it for a couple of weeks. I guess, you know, we'll find out. I don't want to bet against Michelle St. Jocks and the team over there, but it's a lot of hype for something that, you know, is going to be what, 30, 60 seconds.

[00:03:33] Texas Craft: Yeah, and nothing we've seen already has really wowed me from really anybody. You know, I don't know when the tradition to release your Super Bowl ads early started. I guess it makes sense. You're spending so much money, so you might as well get more ROI for it. But I kind of miss the days where you had to watch in the game to see what was going to happen.

[00:03:53] Justin Fonte: Molson Coors, to their credit, is taking that tack. They're not releasing the ad beforehand, but there is a lot of hype. It's gonna be a Coors Light, Miller Light ad, and they're partnering with DraftKings to allow 21 and up consumers to place their bets on what happens in the commercial.

[00:04:13] Texas Craft: Which I think, Joey, correct me if I'm wrong, just became legal in our state of Massachusetts today, right? Today as we are recording, yeah.

[00:04:21] Justin Fonte: 49 states that you can bet on this ad, well, for free.

[00:04:26] Texas Craft: Oh, I didn't realize we were that far behind. Yeah.

[00:04:29] Justin Fonte: I think Virginia is the only state where you're not able to do it. Anyway, enough about an ad that we haven't seen. What we have seen is Boston Beer's regional ad and they're pushing the cousin again. But surprisingly, The beer they're pushing is Samuel Adams, Boston lager. And I guess surprisingly is probably the wrong word given Jim Cook's affinity for Boston lager, but they have not pushed that beer in previous years. And now they have an ad for the quote unquote remastered Boston lager. And it's a fantasy world of Boston in which people are nice.

[00:05:13] Texas Craft: So you had so many thoughts.

[00:05:16] Brewers Guild: I do have lots of opinions, as I always do with anything related to our lovely region. I understood what they're doing, and it was admittedly a little funny. They have Kevin Garnett promoting a book about anti-trash talk, which is like, that's beautiful. Not so happy about a Red Sox fan, a Yankee fan, hugging and them being like, oh, I love New York. I understand it. But even in the satire mood, it hurts my heart a little bit. But I'm fascinated that this year, not just with Boston Beer, but with most of the companies we've seen so far, they're really focusing on their traditional beer brands and their longstanding brands, rather than, I feel like last year was all about innovation and some of those Beyond Beer offerings, and they did a complete 180 this year. I don't know very many people who are like my age demographic who are drinking Boston lager right now. And this might reintroduce them or get them hyped about it because we're watching the Super Bowl. But it's an interesting strategy, for sure.

[00:06:20] Justin Fonte: It feels like everybody's turning their flagship offering into a introduce new drinkers to the category type of beer at this point.

[00:06:29] Texas Craft: Yeah, it seems like we've come very full circle on this whole craft beer experiment. Like the past two years really were big on innovation products and Super Bowl ads. We've seen a few years where Anheuser-Busch doesn't give Bud Light its own spot and instead just, you know, includes it in various other things like for Bud Light Seltzer.

[00:06:48] Justin Fonte: And that was last year with Bud Light Next, that fever dream of a commercial that I don't know anyone who related to it. And this year, they seem to be going for a lot more relatability and Heisler Bush, that is. Budweiser, it's this Bud's For You is back, the tagline is back, and you can tell that they're going after a multicultural consumer base. Bud Light, they're going for relatability and less humor. I think it's kind of a cool ad. A woman, like a very cool woman in a leather jacket is carrying like five beers through a crowded bar. She's weaving through the bar. She's, you know, spin moves and she winks at the end. She sets the beers down. She gets an applause. I kind of like it. The simplicity of it. I mean, I'm always going to miss those bud ads that were sort of funny, but I thought that was really relatable. Bush light. They got Sarah McLaughlin and a wolf. I don't know.

[00:07:53] Texas Craft: I have a lot of thoughts about that one. Obviously a send up of Sarah's past commercials for animal shelters where, you know, her song Angel plays in over a montage of sad animal pictures. And I don't want to spoil it for everybody, but it connects, but it's just kind of weird.

[00:08:09] Brewers Guild: Also, like, I remember those commercials vaguely from when I was a young child, but I'm not sure that people much younger than me are going to understand the reference. We don't know what she looks like, first of all. They're not going to recognize the connection. These commercials are easily 25 years old.

[00:08:28] Justin Fonte: And they play to this day. They are still going. I mean, they're, they're like the cars for kids. You know, those kids are probably graduating from college now. And then, you know, the other ad that's out there, ads plural, are the Michelob Ultra Caddyshack themed ones in which you've got Tony Romo, who's been spirited away from Constellation Brands and Corona. He's no longer on the hotline, I guess. You've got Brian Cox from Succession, Serena Williams, Canelo Alvarez. So I don't know where this is leading. Hopefully it's funny if it's supposed to be funny.

[00:09:08] Texas Craft: I would love to know what their talent budget looks like.

[00:09:11] Justin Fonte: Ridiculous.

[00:09:11] Texas Craft: Make Ultra and Subway.

[00:09:14] Brewers Guild: Yeah, a lot of money. I'm going to start a petition to no longer see Tony Romo on my television screen. I can deal with barely deal with having to hear him in his weird commentary during football games. I don't want to see him in any more beer commercials. He's had his time.

[00:09:32] Justin Fonte: Then someone else who will be running a regional ad is Juneshine for their canned cocktails and hard kombuchas. And we'll have a story up on that sooner or later. And that's an ad we haven't seen yet.

[00:09:46] Brewers Guild: Yeah, I'm excited for that one just to see because without giving anything away from that conversation that we had, they just seem to have put a lot of thought and excitement into this. I mean, they released their first commercial was at the end of last year is when they put their first like TV ad up, but they're trying to bring a more fun. fun, exciting approach to alcohol advertising while still showing like who they are as an identity of their brand and some of their sustainability efforts and stuff. So excited to finally see that one.

[00:10:21] Justin Fonte: Yeah, let's get to some other headlines from the week that was in Georgia. There is a labor fight, I guess. I'm not going to say brewing playing out between Creature Comforts and the Brewers Union of Georgia, otherwise known as Bug. And Jess, you got some comments from Creature Comforts on that. And you've also talked to the union. What is going on there?

[00:10:49] Texas Craft: Yeah, so BUG, the Brewing Union of Georgia, announced that they were organizing mid-January. They had a big rally at the time. They said that they had the support of the vast majority of workers at the brewery. What's unique about BUG is that they're not connected to a larger labor union. And that's what we've seen. It's very rare for craft breweries to have unionized workforces. And in a few cases like Anchor, they're part of the International Longshoremen Workers Union. And in Minnesota at Ferris State, they're part of Unite Here, the local chapter of Unite Here, which is a hospitality workers union. So what's different here is that BUG is homegrown. It's a strategy we saw play out on Staten Island last year, where Amazon workers founded their own independent union, which has fought to exist and passed and won its election. So where we are right now is that there's going to be a hearing first week of February. After that, that should clear the way for BUG to start scheduling their own election. Secret ballot election, pretty standard in most of these unionization efforts cases. What did happen late last week, though, is that members of BUG filed complaints against Creature Comfort with the National Labor Relations Board. They have filed two charges saying that, you know, the brewery that employs them has engaged in unfair labor practices. One is that there was a meeting run by brewery supervisors on January 26th, in which I'm going to quote from BUG's press release about the charges. management quote held a seemingly mandatory captive audience meeting with several tabroom employees allegedly to prohibit them from voting in the union election and from participating in union activity. So that's one. A second one is that a creature employee who has been engaged in bug efforts was quote unlawfully threatened with termination. So that's before the NLRB right now. Creature Comforts has retained the legal services of Littler Mendelsohn, which is a pretty big national labor law firm that's been engaged in representing Amazon and Starbucks, two companies who have been engaged in pretty high profile labor efforts where employees are attempting to unionize and these companies are kind of doing a lot to stop it. We're seeing the Starbucks thing play out here in Boston where, you know, one of the busiest Starbucks locations in the city, Boylston in Berkeley, which is the heart of, you know, where downtown meets Back Bay. That location's closing next week and I've never seen that place without a line. So an interesting choice of legal partner for creature comforts.

[00:13:39] Justin Fonte: Yeah, this could have went a very different way if Kreacher had just voluntarily recognized the union like Fair State did.

[00:13:47] Texas Craft: Exactly.

[00:13:48] Justin Fonte: But it's not going that way. It's going more, I guess, for, you know, what we've seen, you know, to a degree similar to Surly.

[00:13:57] Texas Craft: Yeah, exactly. The fair state and surly played out right around the same the same season. Yeah. Summer into fall of 2020. And, you know, fair state recognized immediately surly did not that election lost by one vote. If you want to hear more about both of those situations, we've got a Frontlines episode from November of 2020. That should be free to watch now in the archives on Brewbound.com. So check that out.

[00:14:22] Justin Fonte: And you gotta wonder if they succeed, if that opens the door for other workers at breweries in Georgia to join Bug, and if this ends up playing out in craft breweries across the country. We don't have any knowledge of whether that will happen, clearly, but they're just a handful of examples. And for whatever people wanna say about the larger beer manufacturers, a lot of them do run on union labor.

[00:14:52] Texas Craft: Yeah, they do. And I have a question out to the bug organizers about whether or not they hope to expand to other breweries in the state. I feel like their name would imply that they do, but it's early days, so we'll see.

[00:15:04] Justin Fonte: Well, another story that is out there and the trend lines that we are seeing within craft and played out in craft in 2022, Brewers Association, chief economist, Bart Watson shared his packaging report. And there are a few takeaways there and the two big ones. Single serves and variety twelves.

[00:15:25] Texas Craft: Yeah, which shouldn't be surprising to anybody that's been following along the past couple years. But, you know, Bart, in his report, you know, he parcels Iowa Brewers Association defined independent breweries, and then the larger craft segment on IRI, which does include things like New Belgium, which is owned by Lion Little World Beverages. So it's interesting to see that when you separate BA defined and just IRI, that the growth of share in single serves, mainly 19.2 ounce cans in the group that includes New Belgium is higher, which we know. New Belgium's really been using that format to their advantage with the Voodoo Ranger family.

[00:16:08] Justin Fonte: Yeah, and we're seeing it play out. We'll have a story up this week on Night Shift Brewing, which is adding variety 12 pack cans and single serves. Another one is Rogue, which is expanding its brand family while making Dead Guy a brand family, adding a West Coast IPA and a couple of other styles. And they'll be releasing a variety back here this spring. And then another story we have is New Belgium and Bells and how those Those breweries did last year, which is, you know, New Belgium did really well. Bell's is now the largest craft brewery in Michigan, you know, even in a down year.

[00:16:48] Texas Craft: Yeah. One stat from your story that astounded me was that Michigan accounts for like almost half of Bell's sales. Yeah. Which, I mean, Bell's sells a ton of beer. So they're selling Michiganders a ton of beer. Another thing I'm real excited about is that Oberon variety pack that they will have this summer. So.

[00:17:05] Justin Fonte: Yep. And a hearted pack that's already out now. But yeah, I mean, that's the other trend that we are seeing is as we enter the year and we've seen in past years, you know, this isn't anything new, but it's more and more brand families, more and more to get that variety pack. That's where we are.

[00:17:25] Texas Craft: Yeah. I mean, that's what the people are buying.

[00:17:28] Justin Fonte: Yeah. Another thing that we're seeing is a lot of distribution moves and Zoe Schillinghard Cider, who was Brewbound's Beyond Beer Company of the year last year, is moving to the Molson Coors Network in Colorado and they're leaving Crooked Stave. And this is the second, at least by my count, and there may be more, uh, major producer that is leaving Crooked Stave lately as Two Roads has moved to Eagle Rock in Colorado as well.

[00:17:58] Brewers Guild: Yeah, Chile, it's not too much of a surprise. I kind of knew that they were going to continue to make distribution moves to kind of deepen their presence in existing markets. They did it in California. They moved to raise beer division there, but Stave didn't cover the whole state and it the Molson Coors Network does. And so that is kind of Schilling's move is, you know, we want to be everywhere in those markets. And they've worked with the Molson Coors Network before. They've made similar moves in Arizona and last year in like Idaho, Montana, they've been really going for larger networks. And so Colorado was the next choice for them there. And previous conversations we've had with Colin Schilling, their CEO, he's been very clear that they're not trying to be a national brand. They don't want to be everywhere, but the places they are, they really want to have a strong presence. Colorado, they already had a pretty good hold on some of the cider market. just some of the numbers that they sent over to us specifically for Colorado. They were the number one Kraft hard cider brand family in IRI track channels last year and had three of the top five hard cider six packs and then doing really well in Colorado liquor stores too. So they increased their dollar sales there in the state 51% in 2022. They've already had a pretty good presence, but this is just kind of emphasize and expand a little bit more as far as they can.

[00:19:32] Justin Fonte: And getting back to New Jersey, because we always go back to New Jersey here on this podcast. Kate Mays from New Jersey is entering Pennsylvania.

[00:19:43] Texas Craft: Yeah. So Cape May is, I want to say they're the largest craft brewery in New Jersey. They are located down on Cape May, which is the tiny little point at the bottom, lovely Victorian shore town. And they were distributing in the Philly area, but they are now pushing further into the Keystone State by signing on with a whole bunch of distribution partners to cover the counties that surround Pittsburgh, Scranton, and Harrisburg. So they're not going to be quite statewide, but they're going to be hitting all the biggest population centers. And I spoke with Cape May President Frank Stempen, who told me that he expects this expansion into their neighboring state to help them get back to double-digit growth, which they had seen most years since opening, except for last year. Last year, they were down about 5%, which isn't terrible when you look at the broader craft landscape, but should be a big year for them. They're leaning more into their hard tea and hard lemonades for the summer. So I look forward to trying those down the shore.

[00:20:44] Justin Fonte: Well, we're going to talk all about the legislative sessions in a couple of states and some themes that are going to play out on a national basis as well. We also have a story up on Brewbound.com about self-distribution in Virginia, which is advancing. So Brewbound Insiders can go there, read all about that and more. But let's get to that featured interview now with Noreen Otto from the Iowa Brewers Guild and Caroline Wallace from the Texas Craft Brewers Guild. The start of the new year brings with it the return of legislative sessions in many states, and with it, new agendas for states Brewers Guild. Joining us today are guild leaders from two states, Noreen Otto, the Executive Director of the Iowa Brewers Guild. Noreen, thanks for joining us.

[00:21:31] Caroline Wallace: Absolutely. Thanks for having me.

[00:21:33] Justin Fonte: And Caroline Wallace, the Executive Director of the Texas Craft Brewers Guild. Thanks for being here, Caroline.

[00:21:39] Iowa Brewers: Thanks for having me. Excited to talk.

[00:21:41] Justin Fonte: So Caroline, I'll start with you. The Texas legislature meets every two years, and 2023 is an on year. So what's at the top of your agenda this year?

[00:21:52] Iowa Brewers: Yeah, for better or for worse, right? For our industry and for the people of Texas, it's combined every other year. But this legislative session, we are really focused on direct consumer delivery and shipping rights for Texas breweries and brew pubs, as well as cleaning up some of the privileges around transferring beer between commonly owned facilities.

[00:22:12] Justin Fonte: Awesome. And Noreen, you had a lot of big victories last year.

[00:22:16] Caroline Wallace: We did.

[00:22:17] Justin Fonte: How are you going to follow it up this year?

[00:22:20] Caroline Wallace: Well, first and foremost, yeah, we had some really great success during the 2022 session. And so, you know, we always want to keep an eye on those privileges we've gained so that we keep the industry moving forward in the state, make sure we don't slide backwards and have any of those privileges reexamined or revoked. But like Caroline and our friends in Texas, we're also going to start the conversation about direct-to-consumer shipping here in the state of Iowa. that's something we really want to start working on. Our friends in the distilling industry have filed legislation the last couple years and so we're keeping an eye on that and filing our own legislation this year as well. But other than that, we are also working on cleaning up some legal language to allow for alternating proprietorships here in the state. And then looking to divert a little bit of the barrelage tax paid by our licensed group hubs to help support a promotional fund that's run by Iowa Tourism that supports our industry and outreach.

[00:23:19] Texas Craft: Cool. I mean, you both mentioned that DTC shipping is important this year, and I want to press on that a little bit. Do either of your states have anything in place right now, or is it completely forbidden in both Iowa and Texas?

[00:23:31] Iowa Brewers: happy to start. So in Texas, it's not illegal to ship beer necessarily, it's just that everyone else except breweries and brew pubs can do it. So wineries in Texas, like a lot of states have had decades of shipping privileges. In 2019, every retailer in Texas except for brew pubs, got the ability to work with third party delivery apps to be able to deliver their products directly to consumers. And then of course, like a lot of states during the pandemic, restaurants got and temporary privileges, restaurants, bars, liquor stores, grocery stores, to deliver alcohol that were then codified in the 2021 legislative session. Again, for every retailer in the state, except for brewpubs. So brewpubs, breweries, and our distilleries in Texas are kind of the only industry players left out at the moment. So we're just kind of asking for common sense things that both manufacturers and retailers have had a track record of being able to do in Texas. And the sky hasn't fallen, so. That's just rude, Mike. Right. It's pretty par for the course.

[00:24:30] Texas Craft: Noreen, what's the situation? Anything?

[00:24:32] Caroline Wallace: Yeah, parody is the name of the game, right? I mean, like Caroline articulated, wineries have had this privilege for quite some time. and the world is still standing. And so we'd like to start that discussion about our Native and group hubs being able to ship to consumers outside the state. And, you know, being here in flyover country, it's important for us both that we get to send product out into the world from folks who have had a chance to maybe try it at a festival or somewhere else, or for people who've always wanted to. and don't, sadly, don't anticipate crossing into Iowa's borders anytime soon. So we just see it as a really important marketing tool and market penetration option for our small businesses.

[00:25:16] Brewers Guild: Zooming out a little bit and we, in this new year 2023, what are, as you guys are talking to your members in each of your states, what are kind of the big issues that you're hearing from them? What are they tackling right now? What is really hitting breweries at this moment in time?

[00:25:32] Iowa Brewers: Yeah, probably no surprise from what y'all have heard talking to breweries around the country. It's supply chain issues, rising inflation, rising costs of goods, high interest rates, those kind of things. We're in an interesting position here in Texas because we're grappling with all those same things, just like all the breweries across the country. But we are 47th in breweries per capita. So at the same time, Texas is a really big state with a very high population, and there's still a lot of room to grow in a lot of pockets across the state. So we are still seeing a healthy amount of brewery openings as well, which is really great and cause for optimism, but definitely grappling with all those same challenges as breweries across the country, iRing being another one.

[00:26:13] Caroline Wallace: Yeah, and I would say, you know, a similar feeling here. Every single one of our members is a small business. So that comes with that whole laundry list of challenges that Caroline laid out. We have a pretty big employment crunch here in the state. We really need some population growth here in Iowa, especially members who are in areas where either there's a couple of breweries and so you're competing maybe for some similar employees and then also in our small towns you know those breweries are struggling to find people and re-evaluating how they can best continue to operate effectively when maybe it's hard to participate in a festival because you only have you know a couple people that stay back and run the tap room so that's a very real challenge here right now.

[00:26:58] Justin Fonte: Caroline, I was glad to hear that you said that the number of breweries are ticking up in Texas. And, you know, we've seen across the country the number of closures have also ticked up, at least on a national level. And PPP money's gone, all that government assistance is no longer there. So I guess I'd ask, you know, are you seeing closures also on the rise?

[00:27:21] Iowa Brewers: Yeah, we've definitely seen some closures over the last year. I think we anecdotally saw more closures in 2022 than we saw in 2020 or 2021, right? Probably a lot of breweries kind of taking on some unhealthy debt, barely keeping their heads above water during the pandemic. as costs start to go up, supply chain issues start to happen, hiring issues, you know, all those things kind of compound, just led to a lot of folks, you know, unfortunately thrown in the towel in 2022, for better or for worse, right? We had a lot of owners that were just, it was time to move on, maybe really small breweries, something personal in their life happened where they got a better opportunity to do something else, or they just decided to do something else with their life. But there were also some really, really devastating ones, right, where they put everything ahead of that business and didn't want to see it fail. But yeah, I think largely our openings have kind of kept up to pace, if not outpaced closures over the last couple years. And we are starting to see kind of that. We've had several breweries announced they were closing only to have a regular or an investor kind of come in and want to continue the brand or a new brewery come into that kind of purpose-built facility, right? That was something we just didn't have a lot of even up until the last 10, 15 years, because there were, I mean, you know, 15 years ago, there were 30 breweries in all of Texas, you know, it's just been a huge growth in the last decade, decade and a half or so. So that's been heartening to see at least that when some breweries have folded, that there's opportunity to either continue the brand or for a new business to come in and take over that facility and give it kind of new life as a new brewery.

[00:28:53] Justin Fonte: We love a good hermit crabbing around here. Noreen, I've seen some small breweries close here recently in Iowa, but also a lot of breweries are opening up second locations, third locations, fourth locations in the Des Moines area. So how would you describe the health of craft brewing in the state and also, you know, the opening and closure rates?

[00:29:18] Caroline Wallace: Yeah, I think it's been pretty steady. You know, we've seen some really sad closures and folks moving on for a bunch of different reasons. But we've also seen some players, both small and large, look at second locations. We just had a member, I think in the last 10 days, open a second location that's almost kind of a unique structure. It has like some gaming and it's almost more of a family-centric space. So I think some of those more mature, long-time players are really taking a careful look rather than just opening another taproom. I think they're really evaluating the purpose, the community, the location to really perfectly craft the space for the community they're coming into. And I think that's where we're seeing a lot of success is we're really a maturing, it's just starting to be a maturing industry here in Iowa. And so folks are really finding how they fit in their community and finding a niche, not just with their brew lineup, but also the role that their space plays in their community. We have a lot of breweries in small towns. And so they're really finding their way in and doing a great job of it. But yeah, we've seen probably opening enclosures kind of keep pace. Every couple months we have a new brewery join the guilds which is really heartening as you hear a lot of difficult economic news and you know continuing inflation and supply chain pressures. We're still seeing some of those emerge and by and large they are in small towns so they're finding their niche and finding a space in a community that has room for them.

[00:30:50] Texas Craft: That's great. And we're certainly going to double back to membership and things like that. But before we leave the legislative portion of this conversation, you know, one thing that we see both at the state level and the national level is there's always a little bit of tension between brewers and wholesalers, but a lot can be achieved when you work together. And I'm sure you're seeing it with the DTC issue, but you know, in Massachusetts, where Zoe and I live, the Guild and the wholesalers were able to compromise and negotiate. to achieve franchise law, which is huge. So, you know, how would you describe the relationships that your organization has in your state with the local wholesalers? And is there anything on the table that you all work together on? Caroline, let's start with you.

[00:31:29] Iowa Brewers: I would say we are always open to working together. Unfortunately, a little bit of the track record has been that it's typically by kicking and screaming across the finish line and kind of these late in the game negotiations. Once we've clawed our way to some kind of victory in sight, we get a little bit of help at the negotiating table. always open to negotiating and talking earlier in the process. Texas is unique in that we have two different wholesaler trade associations. And like a lot of states, I think our breweries individually have, a lot of them have really good relationships with their wholesalers, right? But you kind of see some of these things come to a head at the Capitol on the association level. So always open to negotiating, always hope to be able to have open and honest conversations. I really do think there are a lot of things for the betterment of our industry that could be mutually beneficial to discuss and we'll see how the how the chips fall this session we just got into session in the last two weeks or so committees haven't been assigned in the house yet our ledge council that is responsible for drafting legislation is seems to be also short staffed, just like a lot of breweries, I guess. And so the bills are coming out, the languages are coming out a lot slower this session than in previous sessions. So even though we've been in it for a couple weeks now, it feels like things are off to a little bit of a slow start, but it'll be late May before we know it. So we'll see what happens.

[00:32:50] Texas Craft: Yeah. And you guys had a pretty big win a couple of years ago with beer to go, which I always will have like a little bit of a fondness for because it was my first ever brew bound story. So amazing.

[00:33:02] Iowa Brewers: Yeah.

[00:33:02] Texas Craft: Yeah. Yeah. That was a big one. Uh, Noreen, what's, what's going on in Iowa? How, how's your relationship with the wholesalers group there?

[00:33:09] Caroline Wallace: I would say it's pragmatic. We try and chat with them, you know, we're at a legislative reception, I think, maybe 10 days ago and, and started, you know, literally both had a beer and stood together and said, what are we working on? Where can we find some places to work for? Because, you know, I think typically the two trade associations have been frankly, almost diametrically opposed on some issues, but even that willingness to stand, you know, socially and say, where can we find something because everybody wants beer to grow in Iowa. And I will give them credit when, you know, especially in press and media, they always say, you know, we want to work together, right? And we try to do the same thing, really acknowledge that both our industries need each other to succeed and to grow and to bring Iowans the product they want. And so even just trying to be cordial in the press is important to us. But yeah, right now we're monitoring a piece of legislation that they're working on to codify some federal rules here in the state. We're really trying to get to a place where we can support that and hoping they'll look at maybe the alternating proprietorship language. We think that actually provides some clarity in contract brewing and in those relationships and hoping maybe we can gain some support on that.

[00:34:22] Brewers Guild: So we've talked about how BreEZe themselves are looking for, I mean, we don't have PP loans anymore. They've also are looking for money in other places. But you guys as a guild, you need to fundraise and have financial support for yourselves as well. And a big way to do that has been events, which haven't really been an option for a couple of years and have finally started to come back. I feel like 2022 is the kind of experimenting with them coming back and 2023 feels like people are actually returning to business as usual. How are each of you approaching them now in your own states and how are you using those as a resource?

[00:34:59] Caroline Wallace: Yeah, I'm going to jump in. We're really excited. We feel sort of back in full swing here in the States. This last weekend, we had a winter beer festival called Burr Fest. that's put on by the city of Boroughville here. And we support that. And actually it's a big financial resource for us. And then later this week, we are actually announcing and tickets will go on sale for the Iowa Craft Brew Festival, which is the largest festival in the state of Iowa. And last year was our biggest one ever. We anticipate that growing even more. So we think the enthusiasm is there for sure. That's an outdoor one. So we only had to take one year off with COVID. And yeah, we're excited to be back in full force. And we see that one kind of pulls in folks from a couple of surrounding states. Iowa Brewers really, really enjoy it. And we make that one Iowa specific. And so it's really become a showcase event for us. And one of our largest revenue streams for the year. Keeps the pressure off membership dues, which is something we really want to do for our members. That's incredibly important.

[00:36:04] Iowa Brewers: Yeah, similarly, 2022 was a really big year for us. It was our first time in, you know, two years having our full annual slate of events back. 2020, we had our annual meeting about a week and a half before the world shut down, probably. And we were literally brewing the conference beer for Texas Craft Brewers Festival that was supposed to be held in San Antonio, literally the day that the world shut down. And so 2020 was a tough year for us. 2021, we came back. We never canceled an event, but certainly moved several virtual. In 2021, we came back with a limited-capacity Texas Craft Breweries Festival. So 2022 was really big for us to be able to come back with a full-capacity Texas Craft Breweries Festival in the fall. That's our largest fundraising event. It's a 5,000-person beer festival in Austin where we feature about almost 90 Texas Craft Breweries. So it was really great to have that back. And then we brought on a new event last year, which we actually literally just wrapped up yesterday for the second time this year, which is our Texas Craft Brewers Cup beer competition. So that was a really exciting thing to launch in 2022 and then get to see move into its second year this year. 750 plus beer entries in our first year and just wrapped up this past weekend judging over 850 beer entries. So to see that grow and bring a lot of excitement to our industry has been really cool. And two weeks from now we'll have our annual meeting and the award ceremony where all the breweries will find out who gets to take home our coveted Bolo Thai medals. So really excited for that. We've also grown our staff. Our former executive director, Charles, retired last May. That's when I moved into the executive director role. I was previously our deputy director. So we took the opportunity to do a five year strategic plan to look at our staff. And actually, instead of just kind of backfilling our existing roles, we brought in two new team members. So really fortunate, I think, to be a little bit, one of the little bit more mature guilds have a larger, I put that in quotes, staff of four people. But as far as guild staffs go, that is actually pretty large. And so that's been really great for us to be able to grow our event presence. We're actually adding on to our annual meeting weekend, Iowa Brewers's Disc Golf Tournament at Live Oak Brewing Company. That was an event that was really popular with brewers pre-COVID that the supporters in our industry put on that we're able to tack on to our annual meeting and bring back for the first time in a couple years. So excited for that. So yeah, events are a big part of what we do. And definitely, as Noreen said, keep the pressure off of membership dues to fund us as a trade association entirely. And also just, you know, I think as guilds, all of us really have like a three-pronged mission, right? It's education Iowa Brewers on how to brew better beer and run better businesses. It's promotion, promoting beer tourism and the products that are brewed in our state. And then right, advocacy, which is a big one. depending on the size of the guild, maturity of the guild, how good or bad the beer laws are in the state, you know, that ratio might shift a little. For us, I think, after having some really significant legislative wins in 2013 and then 2019, as you mentioned with Beer to Go, we're excited to kind of move into an era, hopefully, where those three prongs are a little more balanced and we can pay a little more attention to all three of them equally.

[00:39:12] Brewers Guild: Since we had those years of, you know, there was virtual events and people have prioritizing more things of what I'm actually going to go to in person. Have you noticed any changes either on like the organization side or the hosting side of like what you need to do now to either draw people in or things you want to include in your events that you may not have before?

[00:39:32] Caroline Wallace: Two things come to mind. We're really trying to grow and expand our annual education conference. It was usually sort of one day of seven, a couple of seminars. And we've really grown it to be kind of a day and a half and provide more networking and almost round table discussion opportunities. A lot of our smaller members said, you know, the seminars are great, but I didn't expect how much I would learn from being with my peers. I'm fairly new to Texas Craft brewing industry. I've only been in this role for about a year and a half. And I'm just constantly blown away by that collaboration. And so we're really trying to provide more opportunities for collaboration as part of like, that educational prong, like Caroline mentioned, that's really important. So we're looking to expand that and then. Really, another thing we're looking at with our craft brew festival, which is going to be in its 14th year this year, is taking care of the breweries, providing just a little more support and comfort for them. They get invited and asked to participate and give and give and give in so many communities and at so many events. So we want to make it as easy as possible for them to be at this big festival in June. So that's a priority for us as we mature, you get to do some of those bigger, nicer things. And, you know, we're starting to really survey our membership more frequently to make sure we're meeting their expectations, both with individual events and with our, we did strategic planning this fall as well for the first time, and just constantly listening that feedback so we can pivot to meet the needs of a maturing industry.

[00:41:05] Iowa Brewers: Yeah, I would say speaking to like the public ticket holders for festivals and stuff, you know, we run one large flagship festival rather than a series of like regional festivals across the state. And we're really fortunate in that we have had, I want to say, probably seven or eight years running at this point of selling out our festival every year and in advance of event day. So feel very fortunate for that. So haven't really gotten to since like, the winds have changed too much as far as consumer preferences. I do know, anecdotally hearing from other folks or members, even just a couple day difference of when we sold out our festival, that people do seem to be waiting a little bit closer to the last minute these days to solidify their plans for the weekend. So I felt that a little bit. But yeah, in terms of our internal kind of educational events for members, we run our annual meeting, which is really focused on kind of state of the industry, how you can get involved in your guild, what we've been up to, those kind of issues. And then we have a summer conference that we retooled a little bit last year and gave it a fun new name. It was the Education and Safety Summit. Now it's Texas Brewery Roundup. Much more fun. Yeah. And we merged that. So we used to run three conferences actually and a third was specifically for breweries and planning, kind of a smaller conference. We tacked that on to Texas Brewery Roundup as a lead-in day and got a lot of great feedback last year from those brewery and planning folks about just feeling more included kind of throughout that week, getting that kind of dedicated time on a day of their own focused on startup issues and then kind of moving into that full conference. And yeah, just like moving into more of a multi-day event, we got to tack on a lot more networking events than just like an opening night happy hour. And those always, when we survey our members, tend to rank as some of their favorite things, right? Just opportunities Iowa Brewers to get together, pick each other's brain. That's really what we try to be. Our whole industry is already about collaboration, right? And sharing ideas. And I think guilds really are kind of that, I've heard it said, organized embodiment of that, right? We help facilitate that. That's been great. And then another thing we do is we have monthly member-only happy hours and I think we are up to seven or eight regions of the state now. A couple of the more far-flung regions do quarterly or every other month, but as a result we have like over 70 internal member happy hours throughout the year that we call guild gatherings. So seeing those local communities come together for those, it's been really exciting. A different brewery hosts every month in the region. In October, we do a huge sign up and we get the whole calendar set for the next year. And so it's been cool to see those and just the different regions kind of take on the personality and enthusiasm. We have seen like in Houston, for instance, some of these monthly guild gatherings are drawing over 100 130 industry folks. So that's been really cool just to give our members more opportunities to connect and to come together.

[00:43:55] Caroline Wallace: That's awesome. I keep taking notes from you, Caroline. That's fantastic. I was going to say the guilds too. We all collaborate too. I mean, I think I was 10 days on the job when I attended my first CBC in Denver and I had represented a private company in lots of trade associations previously. And so I was like, yes, a round table with all the other people who do my job. That's fantastic. And just, I can't emphasize how much the guild leadership and executive directors, they mimic that same level of collaboration. And there's a Slack channel where people ask questions. I just put something out there about a vendor wondering if anyone had worked with them. So, yeah, a lot of shared success and shared ideas throughout the industry.

[00:44:36] Texas Craft: You both, as well as your fellow Guild leaders across the country, do so much for your members. It's really impressive. I know, Noreen, you mentioned a few new members coming on this year, but have you both been able to expand Guild membership in recent years? And how much of your membership is made up of affiliate non-brewery organizations? Is that an important constituent group for you?

[00:44:57] Caroline Wallace: Yeah, one of the first things I noticed, the role was empty when I joined the guild. And so one of the first things I noticed is our allied membership had really fallen away. And I think it was one of those we did it because every guild did it, and didn't really have a good plan for how to engage equipment companies and, you know, providers and finance companies who We're part of the guild, but on the fringes. And so this year, that's one of my big projects is creating value so that we can bring in more of those allied members. And we've had good success with finding actually educational partners. So substantive experts on manufacturing and distribution law and things like that to bring in and give them an opportunity to present to our members. But also we're just trying to invite them to more of the informal networking events. So we always do a bottle sharing in conjunction with our membership meetings. afterward, and so we said we're going to open that up and invite these allied friends, because really what they want is time with the brewers. They want to get to know them, they want to know who they are, they want to see them face to face, that kind of thing. So we are definitely working on that actively here. Awesome.

[00:46:06] Iowa Brewers: Caroline, how about you? Yeah, absolutely. So we have, I think it changes every day, but probably something like 340 or so active brewery and brewing planning members combined right now. And we have probably about 180 something allied members. So it's a really healthy contingent of our membership. I feel very fortunate that we're in a big state with a lot of breweries that people want to do business with. And we do work really hard to provide value for all of our membership types, including our allied members, but do feel really fortunate that for a lot of them, like they just recognize that There are almost 400 breweries in Texas, and we have two large trade shows and a large festival, which supply them with very direct access to all of them every year. They're really active parts of our community that come to those monthly guild gatherings I mentioned. But yeah, we've seen really good membership growth in the last year too, primarily among brewery and planning members, some new operating members. A trend we've seen recently a bit is distilleries or wineries adding on a brewery component. And so we've gotten, I think a good number of our new members are folks that have been in operation for a few years as a winery or distillery, but they're very new to the brewing game. And then of course, on the other side, we have, you know, established members of our organization that are starting to branch off into winery spirits as well. But yeah, it's been good growth. It obviously took a little bit to stabilize coming out of COVID. Definitely saw some allied members either fold or kind of scale back their operations or have to cherry pick just a few guilds to get involved with or that kind of thing. But we pride ourselves on trying to provide good value and frequent communication and that kind of thing while also being really cognizant of our members attention spans and data, you know, and those kind of things and, and not inundating them with too many sales pitches or, you know, selling their information or sharing their information or anything like that. So it's a balance.

[00:47:56] Caroline Wallace: It's definitely a balance.

[00:47:58] SPEAKER_??: Yeah.

[00:47:59] Justin Fonte: Well, we've got one last question for you all. And Caroline, I'm so glad that you brought up companies branching out into wine and spirits, because on a national level, we've seen the major trade groups push back against spirits groups' efforts to equalize tax rates and gain greater market access for ready-to-drink canned cocktails. And so I'm curious, you know, has this been an issue that's arisen in your states? And do your members see this as a threat like the national trade groups do? Or do they view this more as an opportunity for their businesses?

[00:48:37] Iowa Brewers: I think like most issues that would vary member to member, I will say it will definitely be a legislative issue this session. We already know that there are coalitions forming kind of with packaged stores, wholesalers, and big beer on one side of this debate in Texas, and then you'll see your C-stores and retailers, groups like Discus on the other side of this debate in Texas. You know, I'll say this, our members really know what it feels like to have another member of the alcoholic beverage industry kind of put their thumb on the scale and try to influence policy that doesn't directly impact them. And so most of our members kind of have, when I've talked to them about this, and certainly when we talked with our government affairs committee about this, have kind of wanted to take a backseat approach to this. This is kind of, it's not our rodeo, you know. Some of our members are expanding into these products, so I do think there are some that see opportunity. I think there are some that are clear-eyed about the fact that there could be shelf space concerns, but also feel like they really want to fight this out on the merits of their own products and not kind of arbitrarily limit competition. So a lot of our members have kind of unique points of view on this, and I know this is probably the one issue where I know our guild is probably not in lockstep with the Brewer'Brewers Association, frankly, but certainly it's something we're monitoring and if there were ever to be legislation that would raise our taxes as a result or, you know, directly take a right away, just like Maureen said, our number one legislative priority is to lose no rights, right? So if anything were to come out in this negotiation process or if that bill has movement that were to hurt or restrict rights of breweries, then it's certainly something we would take a more active role in. But at the moment, you know, it's something that I think reasonable folks can disagree on, and we kind of want to stay in our lane on this one. Because again, we know what it feels like when someone tries to get in our lane on an issue that really doesn't impact them very much. So probably an unpopular answer to some, but that's kind of where, as I've continually talked about it with our members over the last year, that's where most of them have shook out on this.

[00:50:34] Caroline Wallace: Yeah, I'm not sure I can add a whole lot to what Caroline said. We work really closely in the Capitol here with our friends in wine and distilling. And so I think it's one of those where sometimes the political reality on the ground in the individual state houses is a little more nuanced than on the national level. You know, you have to find your friends and pick your fights. We're a pretty small trade association and, you know, we need those partners supporting us and our priorities in the Capitol. And so we've always want to make sure we're picking the right fight. So this is something we're not terribly engaged on, to be honest, at the present. We're really lucky in the state of Iowa that the legislature has generally been pretty open to expanded rights, cocktails to go. You know, C stores have a lot of rights for selling alcohol that they don't have in other states. We've gained significant rights over the last year. And so, you know, I'm not sure it's something where we want to start limiting markets when really opening up markets and expansions has worked in our favor over the last few years.

[00:51:37] Iowa Brewers: Well said, Doreen.

[00:51:39] Justin Fonte: Well, thank you both for doing the show and sharing what's going on in your states. We really appreciate it.

[00:51:45] Caroline Wallace: Thank you for the invitation. I appreciate you guys always sharing everything going on in the industry. It's really helpful. Absolutely. Big and small states.

[00:51:57] Justin Fonte: Our pleasure. And that's our show for this week. Thanks to Jess and Zoe for hanging out. Thanks to Joe, our one-man audio team. And thanks to all of you for listening. We'll be back next week.