How’d You Really Get That Drink?

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Navigating the maze of state liquor laws is a challenge for anybody, but especially any bar, restaurant or brewery trying to do business in many, if not every, one of the states. A Chicago law firm, the Hays Firm LLC, with a practice area in Restaurant and Bar Services, created an interesting infographic detailing many of the quirky differences of U.S. Liquor License Laws & Facts, particularly their laws on licensing, BYOB and corkage, introduced with the following:

When you wind down at the end of the day or meet up for a social night with friends for a drink, have you thought about how and why you have access to alcohol? Maybe you ordered a beverage at a bar or restaurant, or maybe you picked up a bottle of wine or a six-pack of beer before watching a Sunday football game at home.

But, how’d you really get the drink in your hand? There are U.S. regulations that provide or limit public or business access to alcohol. Furthermore, alcohol sales and serving in restaurants, bars, liquor stores, grocery stores, and even patios and events are subject to local or state laws, or consumers or sellers risk losing permission to interact with it, which could result in legal penalties, and even decreased revenues that keep businesses thriving. Many restaurants aim to have alcohol sales account for 30% of their revenue, so not adhering to liquor license and Bring-Your-Own-Beverage (BYOB) laws, could drive customers away and negatively impact profitability.

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The Battle Over Beer Label Approval

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The Daily Beast had an interesting profile of Kent “Battle” Martin, the person responsible for approving every single beer label at the Alcohol and Tobacco Tax and Trade Bureau, or TTB, in Meet the Beer Bottle Dictator. I’d heard of Martin — um, Battle, I mean — before, but didn’t realize he was the only person approving or denying label applications. I think I assumed he was simply part of a larger staff. I can’t say having a single person in charge of interpreting a fairly vague set of laws in a particularly good idea. There have been some very strange, seemingly nonsensical and contradictory decisions over the years, and I’d always thought that was because those were made by various people interpreting the regulations differently, the way the California ABC does, or the arbitrary way that movie ratings are given. I have to say, I don’t think that should be left to just one individual, no matter how dedicated or hard-working, as Battle apparently is, according to the article.

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Presidential Drinking

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It’s not exactly a beer birthday, but today is the 53rd birthday of President Barack Obama, who’s been known for a few good beery photo ops. Recently, he even played some pool with our only gubernatorial brewery owner — and the only governor I’ve ever shared a beer with — John Hickenlooper, from Colorado. Hickenlooper, of course, co-founded Wynkoop Brewing in Denver, revitalizing the entire LoDo area of town. After two apparently successful terms as the mayor of Denver, he was elected governor of the state in 2011.

Early last month, President Obama visted Denver, and Hickenlooper, and the trip was covered by ABC News in Obama “The Bear” Lets Loose in Denver. They met at Wynkoop, where they shared a pint of Rail Yard Ale.

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They also played a game of pool, which apparently Obama won. When this was first reported, I saw it mentioned that some people were upset that the president was photographed drinking beer, but I never saw those. Sound ridiculous enough to be true, though. If people see the president enjoying himself with a beer, it might give others the idea that it’s okay for an adult to drink a legally permissible alcoholic beverage, and prohibitionists don’t like that one bit.

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More Beer At Starbucks: Let The Whining Begin

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Several times I’ve seen the anti-alcohol wingnuts claim that alcohol is the most addictive substance on the planet, typing that as they sip their morning coffee and dip their doughnut into it. I’m pretty sure worldwide, and certainly in this country, many more people are addicted to caffeine and sugar than alcohol.

A few years ago, Starbucks tested selling beer in the evenings at one of their locations in Seattle. It must have went well, because they quietly expanded the test to 26 Starbucks locations, and then 40. Recently, however, they announced via Bloomberg and the USA Today that Starbucks would expand what they call “Evenings Stores” to many more locations. No exact figure has been released, but there are over 20,000 Starbucks worldwide, with around 11,500 (or 13,000, depending on the source) in the U.S., and so far they’ll only be adding “Evening Stores” in America, selling only beer and wine, not spirits.

You have to figure most sales of caffeine are in the morning or earlier in the day, at least, when people need that pick-me-up. As the sun moves farther west toward its daily sunset, less and less people want caffeine, for the obvious reason that it will keep them up at night. There are, of course, people who work different shifts and who therefore will be exceptions, but by and large caffeine — coffee and tea — is a daytime drink. So it makes sense that when sales inevitably and predictably fall at night that Starbucks, any company really, would be looking for something to keep sales flowing when their core product ebbs. They already have a comfortable infrastructure where people come and sit for hours, so why not extend that at night, with beer or wine instead of coffee or tea?

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But, not surprisingly, delight over the prospect of Starbucks selling beer and wine is not universal. The Sheriff of Notinmyworld, Alcohol Justice, as usual thinks anything they don’t like is a “bad idea.” They tweeted as much, saying “Bad idea Starbucks,” along with a link to an opinion piece in the Washington Post by Greg Williams, “who has been in recovery from alcohol and drug use for more than 12 years.” Williams is also a filmmaker, and is promoting his documentary film The Anonymous People which appears to be at least in part about traditional recovery stories, i.e. ones using the 12-step or AA model. As I’ve written numerous times, that’s the sacrosanct abstinence method that most Americans, and most of the medical community who makes money off of addicts, believe is the only way to treat addiction, despite a mountain of evidence to the contrary.

So what is Williams’ problem with Starbucks selling beer and wine? It’s all in the headline. By serving alcohol, Starbucks risks losing key customers: people in recovery. Yup, you read that right. If a coffee shop sells alcohol, then alcoholics and other addicts won’t be able to go there. Because nothing signals recovery better than the inability to be in the same building as alcohol. Never mind that alcohol is sold, in most of the civilized world, in grocery stores, convenience stores, gas stations, virtually every restaurant, sports venue, and countless other places. Whew, that’s a long list of places that people in recovery can’t go. I guess they might as well move to an Islamic country or some other place where alcohol is illegal to be really sure.

Every day, people in recovery meet up in Starbucks cafes to support one another, to talk to their 12-step sponsors and, most of all, to be welcomed in one of the few lively, popular, alcohol-free gathering places in their community.

I understand that they might be afraid of backsliding and ordering a beer if it’s offered on the menu, but alcohol is available to adults in countless other places, and yet most AA members have somehow managed to safely navigate the world. I certainly haven’t heard of there not being enough safe places for them to go before now. But even in an alcohol-friendly venue, in a meeting setting, with their support network in place to help them, that really shouldn’t be an issue, should it? Not to mention, in my view, you’re not really anywhere close to a cure if you can’t sit in a coffee shop and not order something you shouldn’t, especially when you’ll face the same issue in every restaurant, grocery store, etc. you set foot in. But with the next sentence it turns weirder.

Starbucks should pay special attention to them.

Huh?!? Why? That reminds me of those annoying “Baby On Board” signs suggesting that I have to drive extra careful when I’m near a car with a baby in it. We all live in the same world. Either figure out how to survive in it, or get the hell out. We all have the same responsibility to one another as a member of society. People who can’t handle themselves should not be entitled to special treatment. The world doesn’t owe you “special attention” because you’re incapable of acting responsibly, usually of your own making.

I know that sounds cold or callous, but it’s not meant to. I’ve known plenty of alcoholics and addicts in my life. But you can’t let them determine how you act, or how society as a whole acts, without making society a different and altogether worse place. I’m sorry you’re struggling with your own demons, but making me act differently whenever you’re around is dragging me, and everybody else, down with you. You have to stand up, on your own terms, and without our having to bend down to meet you. Otherwise, it’s not really a cure, is it?

Williams notes that the journal Alcoholism: Clinical and Experimental Research “found that 88.5 percent of those studied who were in recovery from alcoholism drank coffee. Thirty-three percent of those coffee drinkers drank more than four cups a day.” (I can’t help but see that as a sign that AA members are trading in one addiction for a more socially acceptable one, but that’s another story.) Based on that factoid, he’s extrapolated that to mean that many of Starbucks’ patrons must be alcoholics, too. Maybe some are, but then again, perhaps not. There’s no causation shown by the statistic in the study and the fact that Starbucks sells coffee. Williams, in concluding, suggests that if “executives studied this market demographic, perhaps they would think twice about this move.”

Hmm, let’s see. “Starbucks is the largest coffeehouse company in the world, with 20,891 stores in 64 countries, including 13,279 in the United States, 1,324 in Canada, 989 in Japan, 851 in China and 806 in the United Kingdom.” Their revenue was nearly $15 billion, with a “b,” last year, and they had a net income of $8.8 million and assets totally more than $11.5 billion. But he thinks Starbucks didn’t analyze their demographics before making this decision? They tested the concept for four years, in different metropolitan markets, before announcing they were planning on rolling it out to more locations, and would do so slowly over the next several years. But he thinks they acted rashly, without thinking it through?

Industry analysts, such as Mintel and Beverage Daily, seem to think the move will be a good one for Starbucks, especially if they focus on local craft brands, as current rumors suggest they will. Alcohol Justice and Williams’ “people in recovery” may now have to buy their coffee elsewhere, but I’ll be very surprised if enough to make a dent in the coffee giant’s marketshare actually do stop buying at Starbucks.

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Beverage Industry’s State Of American Beer Report

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The Atlantic magazine had a good round-up of the State of American Beer, based on a report from the trade publication Beverage Industry. Beverage Industry’s March issue had a series of articles on different segments, including Craft brewers’ sales growth continues, Domestic beer case sales decline, Mexican beers dominate imported beer growth and Hard cider draws in consumers from outside the beer category. In addition, at the same time they released a separate report, the 2014 U.S. Beer Category Report.

You could spend the time to read through all of them (and I’d encourage you to do so) but to get an overview of the reports, The Atlantic’s coverage provides the highlights (and even does a better job with the charts). For example, here’s the top craft brands from 2013.

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And here’s case sales by brand in a piechart.

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And this last one, the percentage change in case sales, is amazing because is shows just how fast Lagunitas is growing, though Stone’s doing pretty well on the growth front, too.

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EU Negotiating For Protected Beer Names

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Apparently in Washington, our Congress is hard at work negotiating a free trade agreement with the EU. Not surprisingly, the EU is asking for protective status of European products that are traditionally from Europe. You can’t really blame them. For instance they’re asking for the names “feta” and “parmesan” only for cheese made in Europe. I don’t know the history of those cheeses, but I’m guessing Greece and Italy do, and believe their cheeses to be the true expressions of them. They’re also asking that “‘bratwurst’ be allowed on only European-produced sausages.” Again, I don’t know the history but given that German and other European immigrants came to America and started businesses making bratwursts a hundred years ago, or more, it seems a tough sell. I likewise assume it was Italians in the U.S. who began marketing parmesan cheese here long before Kraft got in the game.

But according to an article in the USA Today, Senators: Back off our brats, beer, they’re not stopping there. I might have expected that Belgian beer might be part of the negotiations, since Belgian brewers aren’t thrilled about American beers labeled as “Belgian” instead of “Belgian-style.” But it’s “Oktoberfest” they object to. According to the story, “[i]f U.S. negotiators agree to European demands, U.S. manufacturers would have to change product names to “Oktoberfest-like ale.”

But since an “Oktoberfest” beer has certain style parameters that just about any brewer worth his salt could replicate, I can’t see how that one makes sense. I’ve never known German brewers to complain about that the way that I’ve heard Belgian brewers, but maybe I’ve missed that. Can a beer style, once created in a geographic area, sometimes because of the locally available ingredients or water source, only be made in that same place to be considered authentic? I think we can say yes for lambics, but others? What do you think?

There’s also countless local American Oktoberfest events throughout September and October each year, some have been taking place for decades or longer. Does Germany object to those, too?

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Top 50 Breweries For 2013

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The Brewers Association has also just announced the top 50 breweries in the U.S. based on sales, by volume, for 2013. This includes all breweries, regardless of size or other parameters. Here is the new list:
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Here is this year’s press release.

Not too much movement again this year, except for a few small shufflings, and no changes at all in the top ten. Only three new breweries made the list; Ballast Point, Narragansett (which had been on the year before in 2011) and Left Hand Brewing.

For the past six years, I’ve also posted an annotated list, showing the changes in each brewery’s rank from year to year. This year, the BA thoughtfully has already done that, saving me a lot of time and math. If you want to see the previous annotated lists for comparison, here is 2012, 2011, 2010, 2009, 2008, 2007 and 2006.

Top 50 Craft Breweries For 2013

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The Brewers Association just announced the top 50 craft breweries in the U.S. based on sales, by volume, for 2013, which is listed below here. For the seventh year, they’ve also released a list of the top 50 breweries, which includes all breweries. Here is this year’s craft brewery list:
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Three breweries are new to this year’s Top 50 Craft Breweries list; Sixpoint Brewing, Gordon Biersch (the production brewery, not the brewpubs) and 21st Amendment Brewery & Restaurant. Here is this year’s press release. For the past six years, I’ve also posted an annotated list, showing the changes in each brewery’s rank from year to year. This year, the BA thoughtfully has already done that, saving me a lot of time and math.

Craft Beer Growth Continues Rapid Acceleration In 2013

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The Brewers Association today released the preliminary numbers for beer sales last year. I thought last years numbers were great, but the 2013 numbers look unbelievable, and accelerate the momentum for craft beer. The preliminary numbers indicate that “craft brewers saw an 18 percent rise in volume, representing a total of 15.6 million barrels, and a 20 percent increase in retail dollar value.”

Here’s more on the news, from the press release:

In 2013, craft brewers reached 7.8 percent volume of the total U.S. beer market, up from 6.5 percent the previous year. Additionally, craft dollar share of the total U.S. beer market reached 14.3 percent in 2013, as retail dollar value from craft brewers was estimated at $14.3 billion, up from $11.9 billion in 2012.

As for the runaway brewery count, the number of breweries races closer to 3,000.

The number of operating breweries in the U.S. in 2013 totaled 2,822, with 2,768 of those considered craft, demonstrating that craft breweries make up 98 percent of all U.S. operating breweries. This count includes 413 new brewery openings and 44 closings. Combined with already existing and established breweries and brewpubs, craft brewers provided 110,273 jobs, an increase of almost 2,000 from the previous year.

And here’s all of that good news, fermented into a colorful infographic.

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Beer Excise Tax Rates by State, 2014

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The last time I saw the Tax Foundation look at beer excise taxes was in 2009, but recently they updated their map of Beer Excise Tax Rates by State, for 2014, taking into account several states who changed their rates over that time.

Tax treatment of beer varies widely across the U.S., ranging from a low of $0.02 per gallon in Wyoming to a high of $1.17 per gallon in Tennessee. Check out today’s map below to see where your state lies on the beer tax spectrum.

A few state rates changed since we released last year’s data. Namely, North Carolina’s tax per gallon increased by nine cents, and there were slight increases in Arkansas (+2 cents), Kentucky (+2 cents), and Washington, D.C. (+2 cents). Washington’s tax decreased by 50 cents, and Minnesota’s number was one cent lower than last year. (See the 2013 edition of our Facts & Figures booklet for last year’s numbers.)

There isn’t much consistency on how state and local governments tax beer. This rate can include fixed-rate per volume taxes; wholesale taxes that are usually a percentage of the value of the product; distributor taxes (usually structured as license fees but are usually a percentage of revenues); retail taxes, in which retailers owe an extra percentage of revenues; case or bottle fees (which can vary based on size of container); and additional sales taxes (note that this measure does not include general sales tax, only those in excess of the general rate).

The Beer Institute points out that “taxes are the single most expensive ingredient in beer, costing more than labor and raw materials combined.” They cite an economic analysis that found “if all the taxes levied on the production, distribution, and retailing of beer are added up, they amount to more than 40% of the retail price” (note that this may include general sales tax and federal beer taxes, which are not included in the estimates displayed on the map). Last year, we did a podcast with Lester Jones, Chief Economist at the Beer Institute on tax treatment of beer, which is worth a listen.

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