Economic Impact of Texas Craft Brewing Industry: Drink Beer, Save Texas.

Today the results of the most recent update of the Texas Craft Brewing Industry Economic Impact Study has gone live. Below is a copy of the story, and a link to additional materials.

I’d like to thank all my colleagues in the Texas Craft Brewers Guild for helping me with this study, and a special thank you to Joanne Marino of Skematik and Steve Brand of Wasabi Creative for all their help in helping with the release and publication of the study.

Texas cannot afford to keep it’s small businesses operating at a disadvantage to out-of-state concerns. 52,000 jobs and  $5 billion of additional annual economic activity are at stake. I encourage you to contact your representatives, tell them the story of Texas Craft Beer, and point them towards this study.

Cheers,

Scott

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TX Craft Beer Impact $608 Million, Could Be Billions

 

The Texas craft beer industry is having measurable positive economic impact on local and regional economies throughout the state to the tune of $608 million, according to the Economic Impact of the Texas Craft Brewing Industry study released today by the Texas Craft Brewers Guild. Texas craft brewers are also creating jobs, accounting for 51.2 percent of all the state’s brewery jobs, a remarkable figure given only 0.7% of the beer consumed in the state comes from Texas craft brewers.

The study, authored by University of Texas-San Antonio Economics Professor Scott Metzger, founder and CEO of San Antonio-based Freetail Brewing Co., also models how the economic impact of the Texas craft beer industry could reach $5.6 billion annually in just eight years.

“$5.6 billion sounds astounding, but given what’s happening across the country with craft beer, it’s not. It’s actually conservative,” Metzger says, calling the 2011 figure “the tip of the iceberg.”

“Given consumer demand and planned increases in capacity, a tremendous opportunity exists for ongoing and future growth — provided legislation may be passed allowing Texas’ craft brewers the same access to market enjoyed by brewers in other states and by the Texas wine industry,” Metzger says.

 

“In other states, brewers can sell their packaged goods directly to consumers through tasting rooms. In other states, brewpubs can sell their beer off premises, at festivals, for instance, and as packaged goods in retail stores, not just at their brewpub location,” explains Metzger.

 

“These sales opportunities other brewers benefit and grow from are lost for Texas craft brewers — and they add up.”

Download the entire report, official press release and supplemental materials here.

Gearing up for 2013.

I get occasional questions via email and comments here in regards to if Craft Brewers will once again be active in the 2013 Texas Legislative Session. The answer is absolutely, and I believe we are more focused, driven and organized than ever.

If you hadn’t heard, Senate Business and Commerce Committee chairman, Senator John Carona, (Rep-D16-Dallas County) asked fellow committee member, Senator Leticia Van de Putte (Dem-D26-Bexar County), to form a working group of industry stakeholders to evaluate the Texas Alcoholic Beverage Code. Production, wholesale and retail tier members from distilled spirits, malt beverage and wine have been actively engaged with one another since.

On the malt beverage side, I am encouraged by an unprecedented level of openness and communication between the different tiers. For the first time since I’ve been involved, stakeholders have willingly come together and been open about their goals and concerns and, more importantly, we all acknowledge that it’s okay for us to disagree on certain points. In fact, recognize where we disagree is the first step in coming to a middle ground we can all agree on.

Some of the best news is the sense of all around agreement is that craft beer is here to stay and that it is an important part of wholesaler’s growth plans. Not only is craft beer driving all of the growth in the craft beer segment, but the success of craft beer is what drives the big breweries to continually develop new products – and those new products are the only growing portion of big beer’s portfolio. Craft beer is a win, win for everyone.

I know there hasn’t been a ton of activity on this blog, but look for things to be picking up as we advance closer to the session and then my goal is to have daily posts once the session starts.

Cheers,

Scott

 

Please do not buy Freetail beers on eBay

It has been brought to my attention that someone is selling, or trying to sell, our beers on eBay. I heard about it with Ananke (which we still have bottles of sitting on our shelves) and I found a listing for a 2011 La Muerta with a starting bid of $49.99.

Please do not buy these. First of all, La Muerta isn’t worth $49.99. It’s worth exactly $11+tax, the price we sell it for. I highly advise that no one ever pay a cent more (and there are no competitive issues with me saying that, since we are the only ones legally able to sell it).

Second of all, this is flat out f’ed up and I’m fully in support of TABC going after this person for the unlicensed sale of alcohol. If I find out who you are, I will make sure you are banned from ever buying our bottles again.

We take great pride in what we do and hate to see our hard work tarnished by someone trying to make a quick buck. I have no problem with the trading community (so long as traders don’t begin to crowd out our local customers) and in fact am very flattered to see our beers end up all over the country. But when someone buys our beers to try to flip them for financial gain, you’ve completely gone against what we are about.

Beer Reform Your City

Would you trust a high-end restaurant whose wine list consisted only of White Zinfandel out of a box? Then why would you trust the same restaurant if their beer list consisted of nothing but industrial light lagers and mega-brand imports? At least as much as wine (though I’d argue even more so), craft beer offers a wide and diverse range of flavor profiles that, when smartly employed, can greatly enhance a dining experience. The Chef who ignores craft beer is the equivalent of the Chef who thinks Prego is “good enough” for his sauces. Time to hold Chef’s to a higher standard.

As reported by Beer Business Daily, from 2009 to 2011 the number of breweries in the US increased by 22%, and the number of available packages increased by 25%. Meanwhile, shelf space increased by only 3.6%.  On-premise dining will play a huge role in the future growth of craft beer. The Brewers Association’s Julie Herz notes that in 2010, only 169 of the top 250 restaurant chains features craft beer on their menus, highlighting the growth potential available in this segment.

It doesn’t surprise me, however, that craft beer is slow to make inroads as massive chains like Chili’s. Economies of scale dictate centralized buying decisions for big chains, which in turn makes them slow to respond to trends (even if, in the case of craft beer, the “trend” has been going on for over a decade). That doesn’t mean it can’t be done. Even Applebee’s [edit: spelled Applebee’s wrong, showing how much I go to Applebee’s] is starting to take a per-location based approached to their beer list, making the effort to focus on local brands. Major win.

My beef is with the artisan chefs who are often locally celebrated. These chefs are the respected as innovators and pure representations of a community’s local flavor and terroir. Sadly, I see far too many of them with beer lists that look like an Orwellian blend of a 1970’s suburban sports bar and a college frat party. Why do we accept this as consumers? Not only do they do a disservice to their cuisine and clientele, but insofar as they are viewed as culinary leaders, they set a poor example for other restaurants in their community. Major fail.

Reform Your City

Today I’m announcing my personal quest to reform the beer landscape in my town, San Antonio. I won’t stop until all of my city’s top restaurants and most celebrated chefs are smartly featuring craft beer. If a chef or beverage program manager feels lost in the world of craft beer, I personally volunteer my services to help you establish a quality beer program. [Note, I can’t legally sell you beer from my own brewery, so there is no secret agenda here] It doesn’t have to be expansive to be respectable. It doesn’t have to require a single cent of capital investment. If you are serving ANY beer at your establishment now, we can transform your beer list.

If you want to enlist my services, or just to report your progress in featuring craft beer, tweet me @beermonkey or shoot me an email at news at freetailbrewing dot com. I’ll establish and maintain a webpage with list of craft beer-friendly restaurants and happily feature you on it.

Consumers, challenge your favorite chefs to be part of reform in San Antonio. Non-San Antonians, start a similar campaign in your city.

Together we can do this.

Cheers,

Scott

Texas Beer & The 2015 Challenge

We are Texas, and our Star shines bright.

As of December 31, 2011, Texas was home to 71 licensed small craft breweries (which, for the purposes of my analysis, include breweries less than 75,000 barrels of annual production, up from 47 just a year earlier. That number includes 34 brewpubs (up from 28 at year end 2010) and 37 production breweries (almost double from the 19 licensed production breweries at the end of 2010). in 2011, Texas small craft brewers produced 130 thousand barrels of beer, compared to 93 thousand just the previous year.

The growth of our industry has been amazing and has not gone unnoticed, yet I submit to you the following proclamation: we are underachieving.

31 Texas counties are home to a small craft brewery, but that’s out of 254. Not good enough.

That 130 thousand barrels produced by Texas small craft brewers? That represents a paltry 1.2% of the craft beer industry and a pathetic 0.06% market share in the overall US beer market. Not good enough.

Those 71 small breweries? We still rank 46th in breweries per capita in the US. Not. Good. Enough.

Since I only speak on behalf of myself and my brewery, I won’t call the following list a set of goals. Instead, let’s call them a challenge.

By 2015, I challenge Texas to the following:

• Be home to 160 actively licensed small craft breweries.
• Produce 250,000 barrels of beer from small craft breweries.
• Have a small craft brewery in 40 Texas counties (this one is admittedly harder, since breweries tend to open in more populated areas, for obvious reasons).

These three challenges are achievable, but it will take the effort of numerous parties. To be successful, I’m challenging the following groups to do their part.

• Texas Small Craft Brewers: your challenge is obvious.
• Texas beer distributors: you are our ally in the growth of the industry, and our growth cannot happen without you. Commit to carrying and featuring Texas brands.
• Texas beer retailers: you are the front line. Abandon the old school way of retailing beers and the intimidating walls of industrial light lager. Give brewers a fair and equitable display with no unfair preference to brands who kick you illegal incentives. Provide consumers easy, clear access to the brands they want.
• Texas Legislators: you are challenged with the task of establishing fair, competitive industry reforms that allow Texas small craft brewers to grow their brands. That means allowing production breweries to establish tasting rooms and sell directly to consumers on premise and allowing brewpubs to sell into the wholesale tier. There is almost $1 billion in economic impact at stake for helping Texas meet the 2015 Challenge (based on my annual Economic Impact Study – latest version to be published in March/April).
• Texas beer consumers: you have the best job in achieving the challenge. Continue drinking and supporting Texas small craft brewers.

Together, we can do this. Share the message of the 2015 Challenge with friends, colleagues, industry members, and anyone you know who cares about Texas Craft Beer.

Drink Beer, Save Texas.

AleHeads Podcast

Wanna hear me talk about stuff? I didn’t think so. In any event, if you feel like hearing my opinion on Freetail, beer trading, Texas laws, the craft beer industry and dinosaurs, you can listen here:

http://aleheads.com/2012/02/03/the-aleheads-podcast-scott-metzger-freetail-brewing-co/

Cheers.

What Are You Trying To Say?

Web traffic of this site over the last 5 days. What are you guys trying to say?

My vendors are funny.

This arrived today, unsolicited, from one of my merch Vendors. Thanks Brewery Branding!

No Really Though… I Do Not Like Groupon

For whatever reason, the people at Groupon think that repeatedly sending a different person to call/email me will eventually result in me submitting to their corrosive program that hurts small businesses. I’m tired of responding politely, so here was my latest exchange with the rep assigned to me.

And yes, before you point it out, I’m quite aware of how childish I am.

Click photos to enlarge.

To Mitch’s credit, he tried to stoop to my ridiculously low level and respond with a graph of his own:

Unfortunately I have no clue what this graph is trying to say, or if it says anything at all. I won’t bother responding, because I’m out of graphs in which I can convey “no thank you.”

One Last Word on Dinosaurs and Lawyers

I wanted to say one last thing about Dinosaurs and Lawyers, since messages keep pouring in from numerous channels about “The Letter”. I posted this to BeerAdvocate.com, and hopefully helps explain things a bit.

Warning: this response is likely to be far less entertaining than anything else you could possibly be doing.

First of all, I didn’t think the letter would get shared the way it did. I posted it for kicks on my personal twitter where I don’t have that many followers, because I’m not really that important and/or cool. My friends would agree.

I don’t have anything against Steelhead Brewery, the lawyer in question, or our mail woman who delivered the C&D letter. Actually, I don’t really like our mail woman… she refuses to deliver the mail on Mondays and she always sticks packages into a box where the key doesn’t work, delaying the delivery of said package until I can flag her down to open it for me. But I digress…

Unfortunately, I have way more familiarity with Intellectual Property law than I ever cared for. I’ve been on the receiving end of C&Ds (even one from a brewery that to my knowledge STILL has never produced a single beer), none of which I’ve ever fought because I’ve never cared enough to. I’ve also been on the sending end of one C&D for the brand we are most known for, which we issued AFTER a number of conversations with the brewery in question and before they had ever produced a single drop of the potentially infringing beer.

An important characteristic of trademark law is that trademarks are very costly to protect because IP lawyers are really proud of themselves and charge commensurately. I have one of the nation’s best IP firms representing me, but I hope to never write them another check. My IP lawyer (who isn’t the one who advised me to draw the dinosaur, nor was he ever involved in this situation) is a nice guy, but I’m no Rockefeller or even Jay-Z… I need to save my pennies to make more beer. So even if you “win” a lawsuit, it could cost you tens of thousands of dollars. As small businesses, can we even really call this winning? The money I spent on my IP lawyer the one time we got involved in issuing and C&D and negotiating the actual cessation of the use could and should have been spent on something much more productive in the brewery.

A few clarifications, just because I’m anal like that…

1) Freetail has never made a beer called Hopasaurus Rex. We have a page for Hopasaurus Rex on our webpage, but is it meant to describe a process we occasionally used on IPAs (and actually, we’ve used it on non-IPAs too). Most people don’t know much about Hopasaurus Rex because we haven’t done it a lot and even when we have we haven’t always pointed out we’re doing it. Here is the official description for what we formerly called “Hopasaurus Rex”:

“Once thought to be extinct, the Hopasaurus Rex is occasionally sighted on the outskirts of San Antonio, gobbling up IPAs as they make their way to the taps and instead sending forth a transformed version of hop gloriousness. His belly full of whole leaf northwestern hops, this beast’s mark is often described with terms like pine, citrus and grapefruit. The Hopasaurus does not discriminate in his IPA diet, so long as the IBUs quench his thirst.”

What all that mumbo jumbo really says is: Hopasaurus Rex is an inline “hop filter” of sorts. We stick a 5 gallon corny keg of whole leaf hops between the serving tank and the tap, for some extra hop character. So really Sam and Dogfish Head owe us a C&D letter too. Sam, if you are reading this, I will buy you some beers and let you slug me 10 times in the arm for “borrowing” the idea of Randall.

2) I can’t believe this thread has gone on this long without someone making fun of our webpage. That was a gimme. Anyway, we have a new one coming soon. [Shameless plug!]

3) I’m fortunate to have one of the coolest jobs I can think of – running a brewery. Someone previously mentioned this was kind of childish, and I agree. I’m kind of childish & I like to joke around. I’m lucky that being childish isn’t a (complete) detriment to my job, but it frustrates the hell out of our local Brewers News writer because he can’t tell if my updates are serious or not.

4) [Soapbox Alert] I think a lot of our country’s problems could be solved if people (especially elected officials) would sit down over a beer and interact more with one another instead of immediately resorting to legal options. In an ideal world, disputes like this should be handled as follows:

Brewery A: “Hey, you have a beer the same name as our trademarked beer. Can you stop”
Brewery B: “Sure, sorry about that.”
Brewery A: “Cool, can we get this in writing just so we have a paper trail”
Brewery B: “Sure amigo, let’s meet up at the next GABF or CBC and share a beer”

5) As we approach (and maybe have passed by now) 2,000 operating breweries in the United States, these disputes are inevitable. Especially since there is a finite number of lame hop puns to be used. Sometimes I get sad when I don’t think of them first, but I move on.

I was going to keep this list going, but I’m out of stuff to say. Thanks to everyone in this thread for supporting craft beer!

Hugs not drugs & beers instead of tears,

Scott

PS: Texas rules.

I appreciate everyone’s words of support – but I want to stress that “The Letter” was just me having a little fun. Again, I really do have nothing against the other brewery and I hope it continues to get support from visitors and its local community.

Support your local brewery, no matter where it is!

Scott