You may have heard rumblings of a new law trying to be passed in Georgia regarding craft breweries. You may have even been asked to sign a petition or two. Do you know what you were supporting?
Georgia is one of the few states left in the U.S. that doesn't allow for limited retail sales for off-premise consumption from a microbrewery. In fact, there are more than 40 states in the U.S. already allowing for this in one form or another. What exactly does this mean? If you drive to any of the states around us like South Carolina, North Carolina or Florida, you can take a brewery tour, fill up a growler and head home.
For those of you who aren't familiar with the growler concept, it's a glass jar or jug that you fill with draft beer to go. It must remain sealed to retain carbonation or the beer will simply go flat. In Georgia, you can visit a growler station (that has no ties to the brewery producing the beer) and fill up a growler of whatever tasty brew you choose to enjoy later. However, the brewery creating that beer isn't allowed to take a single drop off their property. This even includes the people who brew the beer!
We've mentioned before that wineries in Georgia aren't treated in the same manner. They can have people visit the winery, taste their products and purchase wine by the sample, glass, bottle or case. We tend to ask, "Why is it different for breweries?" Wine and beer are both fermented beverages, packaged in various containers, sold via distributors and third-party retailers, yet have different on-site limitations.
Two years ago, two bills were introduced to the Georgia House and Senate, HB 314 and SB 174. These bills simply mimicked the recently updated South Carolina state laws allowing for limited retail of beer for off-premise consumption. Year one was a bust and the bills were sat on. This past year, we experienced some movement. A Senate study committee was formed to hear all sides of the argument. Brewery and Brewpub owners traveled from across the state multiple times to share our stories. We talked about economic impact of helping small businesses in a growing industry, the impact on tourism, job creation and ultimately, brand growth.
For months, the presentations went on and the committee came back with their recommendations. They were completely silent on production breweries and only provided a recommendation for brewpubs. This means a tour of Terrapin Beer Co. or Southbound Brewing would still have you leaving empty-handed. The recommendation given by the committee would limit the consumers to only one 64-ounce growler purchased at a brewpub (Moon River, Twain's, etc.). This growler must be partially consumed on site. The remainder can then be taken home if it is wrapped and sealed in a plastic bag.
The idea of this is based off the current "merlot to go" law in Georgia. A consumer can purchase a bottle of wine at dinner. If unfinished, it can be packaged within a plastic bag, sealed and taken home. There are a few significant differences and issues that are being overlooked with the current recommendation.
It indirectly promotes having to drink more on site to get a growler to go. There are multiple side topics, from drinking and driving to over-indulgence, that could spin off from this restriction that we won't get into.
Beer and wine are completely different. Forcing the consumer to drink a portion of beer within the growler means the beer will be flat and oxidized before they return to their homes. This essentially makes bringing the leftover beer home pointless. The idea is to be able to contain the carbonation by properly sealing a full growler, limit oxygen pickup (major beer spoiler) with proper filling techniques, all in order to enjoy the freshest beer possible in the comfort of your own home.
Finally, why did the recommendations leave production breweries out completely? In Georgia, production breweries aren't allowed to participate in any form of direct alcohol sales to a consumer. Yes, you can tour the facility, sample the brews and learn about the production process; however, it is illegal to purchase beer at the brewery directly. Tours and tastings are a huge opportunity for breweries to market their brands, yet they result in very little income.
The current law states samples during tours must be free. However, you can purchase a souvenir pint glass to have those samples served in if you like. On the wine side, wineries with or without restaurants attached to them are able to sell in many forms on site. Some may argue that a production brewery should then start selling food and become a brewpub. The issue with this is that brewpubs are limited to how much beer they can produce and sell outside of their facility. Many breweries in the state have already passed this set limit. By transferring licenses from production to brewpub, the production volumes of the brewery would have to be decreased.
We recognize the fear that the three-tier system (manufacturer/distributor/retailer) will simply unravel if small changes are made. But looking at the track record of the other 42 states across the U.S shows this is unrealistic. The likelihood of Joe Smith driving from Statesboro to Savannah to fill his growler at Southbound instead of Southern Growlers right next to his home is slim to none. The ability to have these limited sales would boost brand awareness and serve as a sales tool.
Say Joe Smith has some friends in town from Atlanta. They come to Savannah and take a tour at Southbound. Those friends fill a growler to go and take it back to Atlanta to share with more friends. They've experienced the tour and learned about the brand firsthand. They can then go out to restaurants, stores and bars and ask for the beer to be put on tap or on the shelf. This could create a snowball effect of sharing and promoting a new brand in different areas, meanwhile increasing manufacturer/distributor/retailer sales altogether.
We experienced this when visiting Colorado. We visited a small brewery in Fort Collins called Funkwerks. We enjoyed samples, took a tour and were able to purchase some beers to bring back to Georgia. We shared these brews with friends here and told them about our experience. Any time I hear of anyone traveling that way, I tell them about that brewery. I constantly ask our retail friends if they've heard anything about that brand coming to Georgia. I want to support them, because they create an incredible product. The individuals with whom we shared those beers also became champions of their brand and feel the same way.
Additionally, we had a recent discussion with a friend in Charleston, S.C., who owns a brewery. We noticed they are experiencing a huge growth rate through massive distribution and production expansion. We asked him, "How are you growing so quickly? What is the secret?"
We know they have great beer, but there was something else. He said once the laws changed which enabled them to do limited beer sales for off-premise consumption, it opened up incredible opportunities for them. The immediate influx to their cash flow allowed them to hire several more employees. It also allowed them to purchase much larger tanks, a packaging line, etc.
These increases to their production capacity combined with the new exposure enabled them to almost double their distribution network. They are experiencing such a growth rate that it's difficult for them and their distributors to keep up. He told us it all stemmed from the change of the laws that gave their small business the right cash flow they needed to expand.
We spoke to several other brewery owners during our visit and asked them if their accounts were affected by the law change. We know there have been some third-party retailers that express concerns about breweries being able to sell limited beer for off-premise consumption.
That is a major concern for us, as well, because without our accounts selling beer, we wouldn't be in business. Once asked, our friends immediately replied with "No way!"
The new capacity and exposure for the brewery helps everyone. The brewery has more equipment, therefore can sell more, offer products in various packaged forms, open new markets, add variety to their existing lineup and more. Their accounts have not experienced any drops in sales and they actually continue to gain new accounts because of their increased capacities.
Without the ability to do these things, Georgia will simply fall behind the rest of the craft beer scene, which is vastly growing nationwide. Charleston is quickly putting South Carolina on the map for a craft beer mecca. The many breweries there are thriving and growing. The ability to have these limited sales for off-premise consumption allows breweries to fund more tanks, canning lines and even new brew houses.
We are just small businesses trying to grow and promote our trade. Unfortunately, we are at a competitive disadvantage to our counterparts in surrounding states. All we want is to grow with them, continue to make great beer, make our customers happy and have a great time while doing it! It will happen one of these days, we just need to keep moving forward.
Please feel free to reach out to your representatives and Senators if you are in support of these bills. You are our brand champions - without you, craft breweries wouldn't be in business. Thank you for your support!
Smith Mathews (brewmaster) and Carly Wiggins (marketing director) are the founders of Southbound Brewing Company, Savannah's only production microbrewery. Go to southboundbrewingco.com or send an email to firstname.lastname@example.org.