Brewers Guild to craft brewers: Engage public on issue of grocery-store beer sales

BOULDER — Don’t be surprised if a craft brewer settles in next to you at your favorite taproom in the coming months and starts talking politics. That’s exactly what Colorado Brewers Guild marketing director Steve Kurowski challenged brewers to do on Tuesday.

Speaking at BizWest’s CEO Roundtable on craft brewing, Kurowski said local brewers need to get the message out at a grassroots level about how a potential shift in Colorado law to allow grocers and convenience stores to sell full-strength beer would negatively impact the brewing scene that has become so prominent in the state.

A group called “Your Choice Colorado” is aiming — with the backing of the likes of Safeway and Walmart — to put an initiative on the 2016 state ballot that would ask voters to make just such a change in state law. Such measures have been argued before the Colorado Legislature several times in past years only to fall short. Craft brewers and liquor stores argue that their businesses would be seriously harmed if large grocers were able to stock full-strength beer and wine.

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“Each one of you that gives a damn about this topic needs to be having this conversation with the public,” Kurowski told the group of about a dozen Boulder County brewers, noting that craft brewers face an uphill battle against the grocery chains’ public relations capabilities. “Once we have that conversation, we feel we do pretty well.”

Tuesday’s roundtable, sponsored by accounting firm EKS&H and the law firm of Berg Hill Greenleaf and Ruscitti, spanned several topics related to the booming craft-beer industry. But top of mind were a couple of issues that pose threats to the industry’s strength, most notably the full-strength beer debate.

Colorado’s liquor laws have been largely credited with helping Colorado’s craft-beer sector become one of the most vibrant in the country, and Kurowski said he’s hoping the status quo remains in place.

Bob Pease, CEO of the Boulder-based Brewers Association, said the issue of grocery stores selling full-strength beer is one that comes down to convenience versus choice. While proponents of such legislation will tout the convenience of being able to buy beer in the stores, craft brewers fear that the stores won’t carry the wide selection of local offerings that many liquor stores do. Many independent liquor stores, meanwhile, will lose market share and be forced out of business, further reducing choice for consumers. Left Hand Brewing Co. co-founder Eric Wallace said the argument of convenience is shaky at best, given that most grocery stores in the state have a liquor store next door.

Access to market, all at the table agreed, has been critical to the success of the craft-beer industry. But if large out-of-state grocery chains controlled which beers go on shelves, the fear is that many local breweries would be left out. Michael Memsic, co-founder of Boulder-based Sanitas Brewing Co., said that he can almost always get a meeting with the person making purchasing decisions for Colorado liquor stores now.

“They work where we sell beer,” Memsic said. “They don’t work in Pleasanton, Calif. I don’t have the budget to jump on a plane to fly out to Pleasanton just to see if there’s a chance we can sample somebody to see if we can get it on the shelves at Safeways in Colorado.”

BIG BEER’S GROWTH

Another issue on the minds of many in the craft-brewing industry is Anheuser-Busch InBev’s pending acquisition of SAB-Miller, the world’s two largest brewing behemoths. In large part, Pease said it could be a year before some of those impacts come to light.

However, the issue of expansion by Anheuser-Busch already has some known perils for craft brewers, Tuesday’s participants said. Anheuser-Busch recently acquired two major beer distributors in Colorado, including Loveland-based American Eagle Distributing Co. The fear among craft brewers is that they’ll be left with fewer and fewer distribution options of their own as such deals occur. Wallace, of Longmont’s Left Hand, said craft brewers are already at a disadvantage even with independent distributors because for most of them, the nation’s large brands represent most of their portfolios.

“The economic might of an (Anheuser-Busch InBev), when they control 70 to 80 percent of your supply, it’s hard to understand how (those distributors) are independent because when ABI says ‘Jump,’ they say ‘How high?’” Wallace said.

And yet, the presence in Colorado of large breweries such as Anheuser-Busch and Coors has also provided some benefits to the state’s craft brewers. Coors and Budweiser frequently host things such as Master Brewers Association meetings and other educational programming that benefits smaller brewers, multiple brewers said Tuesday.

“It’s a big political dance that we do,” Pease said in noting that the Brewers Association, which represents small, independent brewers, must sometimes work with big beer on certain issues.

SATURATION POINT?

With some 270 breweries now in Colorado, Tuesday’s discussion inevitably turned to whether the state is reaching a saturation point. Kurowski said some breweries in Colorado are already selling a majority of their beer out of state as a way to avoid competition in the state, and Kristin Scott, co-founder of Odd13 Brewing Inc. in Lafayette, said shelf space at liquor stores is already getting tight.

“I can see it getting worse and worse as more and more breweries get into distribution,” Scott said.

Memsic, of Sanitas, said he’s not worried about a bubble. But in an industry noted for its collaboration among competitors, he said he worries about whether the industry can maintain that vibe.

“It’s brutal,” he said of shelf-space saturation.

That said, many said they’re not worried about oversaturation. While not everyone can be like Fort Collins-based New Belgium Brewing Co., distributing in dozens of states, they believe there’s still plenty of room for local taprooms to gain strong footholds in their communities.

“Craft breweries, brewery tap rooms have become the new place for people to visit,” said Tom Horst, owner of Louisville-based Crystal Springs Brewing Co. “It’s becoming a gathering place for America.”

TRADEMARK ISSUES

It’s no secret that it’s getting tougher and tougher to come up with names for breweries and new beers, and several local brewers have run into trademark issues.

Davin Helden, of Liquid Mechanics Brewing Co. in Lafayette, said his brewery had to discard two names before it even opened due to trademark issues. Vindication Brewing Co. co-founder Marty Lettow and his partners, meanwhile, had to change the name of their brewery early on. After opening as Kettle and Stone in 2013, California-based Stone Brewing quickly sent the founders a cease and desist letter.

“There’s a deep search whenever we do use a name for a beer now because you have to,” Lettow said.