Brewery business booms thanks to pro-craft-beer laws
Brewery business booms thanks to pro-craft-beer laws
By SEANNA ADCOX
Apr. 07, 2018
COLUMBIA, S.C. (AP) — A decade ago, it was still illegal in South Carolina to sell specialty beers with a higher alcohol content than a Budweiser. But a succession of pro-craft-beer laws has created a booming brewery business in this Bible Belt state.
"We've certainly come a long way. There's never been a better time to be a brewer in South Carolina than right now," said Brook Bristow, director of the South Carolina Brewers Guild.
Since 2007, the craft brewery industry has grown from just a few to more than 50 statewide, with the heaviest concentration in the Charleston region.
In 2016, South Carolina's breweries produced 101,200 barrels of beer collectively and pumped an estimated $650 million into the state's economy, according to the Colorado-based Brewers Association.
Tom Davis, co-owner of Thomas Creek Brewery in Greenville, called the 2007 law a "game changer."
Lifting the 6 percent alcohol-by-volume cap on beer "started the trend of South Carolina embracing craft beer," said Davis, whose business celebrates its 20th anniversary this year. Previously, Davis could make higher-octane beer but couldn't sell it anywhere in the state.
That "Pop the Cap" effort was followed by a 2010 law that allowed limited on-site sampling of breweries' concoctions — 2-to-4 ounces per sample, depending on the alcohol content, of up to four brands — provided customers first took a tour. It also allowed each customer to buy up to a case of beer to go.
At the time, there were five craft breweries statewide.
Advocates sold the changes as a way to increase brewers' sales while boosting tourism — potentially making South Carolina a travel destination for beer connoisseurs, akin to wine enthusiasts trekking to Napa Valley, California.
But it wasn't until after the 2013 "pint law" allowed customers to buy up to three pints on-site that the industry really got brewing. The following year, legislators allowed breweries to sell food, too.
"Before, while South Carolina had a great tourism industry, it was not for beer," Bristow said. "Now that has changed completely. It is a big-time industry here."
Davis said the laws have increased Thomas Creek Brewery's sales and brought an influx of group tours, as well as customers who come to fill their growlers or grab a case.
The laws have also changed where breweries locate, as well as how they build and operate, said Davis, whose beer is sold in seven states.
"When we opened up, our only avenue for revenue was outside our doors. We were just looking for warehouse space. We had to build a tap room out of something we didn't have," he said. "Now breweries are opening with the intent to sell onsite, building them like restaurants. ... It becomes about location, location, location."
Freehouse Brewery opened along the Ashley River in North Charleston in 2013 as legislators debated the pint law.
"We were going for it either way," but the changes certainly helped, said co-owner Arthur Lucas. A busy week can bring hundreds of tourists, he said.
Freehouse's beer sales have increased five-fold since 2013, largely from onsite sales. The brewery didn't start canning its certified organic beer for grocery stores until last summer. Plans for 2018 include a major expansion of the tap room, with screen porches where customers can hang out and enjoy the riverside view, Lucas said.
"When people are deciding where to visit, it used to be good enough to just be a brewery," Lucas said. "Now, with the competition, people are spending millions on beautiful tap rooms."
State Sen. Sean Bennett, a sponsor of several pro-craft-beer laws, said the industry has grown even faster than he expected.
Bennett, R-Summerville, said his own "affinity for craft beers" made him an advocate of the brew masters he met.
"It was really pretty cool to watch," he said. "These are true American entrepreneurs ... excited about the companies they've built, but yet running headfirst into big brother governmental regulations that made little sense to those entrepreneurs."
Laws passed last year, which Bennett sponsored, allowed breweries to participate in nonprofit events and let breweries sell liquor. The latter essentially erased the distinction between a brewery and a brewpub, such as Edmund's Oast in Charleston, which, as a brewpub, couldn't sell the beer it made beyond its own doors.
Despite the growth, South Carolina's brewery industry remains far behind North Carolina's, where 200 craft breweries produced 1.3 million barrels of beer in 2016, according to the national Brewers Association. It ranks North Carolina fifth nationwide in craft beer production, while South Carolina is ranked 34th.
South Carolina brewery owners say the biggest remaining difference is that North Carolina has cut out the middle man, allowing small breweries to sell directly to grocery stores and restaurants. In South Carolina, state law mandates a three-tiered system involving distributors.
Rep. Leon Stavrinakis, D-Charleston, a co-sponsor of the 2013 pint law, said he's heard grumblings about the distributor requirements and how that potentially inflates customers' costs, but changing that could be very difficult.
Bennett said he's open to the idea, but he also understands distributors' resistance to change.
They've "invested millions in capital to operate in the business they were told to operate under," he said. "I get the desire for an open system, but we can't change everything overnight."
Information from: The Post and Courier, http://www.postandcourier.com