Brew Talks Denver 2022 - The Colorado Agenda: The Issues Facing Colorado Brewers

Speaker 1 [00:13] All right, welcome everyone to Brew Talks. We are live in Denver, Colorado. Thanks for coming out. Yes, yes, exciting, exciting. No, get pumped. Uh, we want to, I wanna say thank you to everyone who is here in person and everyone who is watching on our live stream. We appreciate all the support and all the support for the Colorado Brewers Guild. Some of the proceeds are gonna go to them, so we really thank you for helping them out, um, and thanks to Cervante's Masterpiece for hosting us and to our Bevnet and Brew Bound wizards over here in the tech team and promo teams for making this happen. Um, thank you to our presenting sponsor Dogfish Head, who also makes this happen, and our supporting sponsors Ray's Crafted ERP and Ahead of the Curve and the e-premise Group. Um, yes, give a little round of applause for everyone. Takes a whole team to make this happen. Uh, we have a jam packed few hours, so we're gonna just jump into things. Um, we're gonna hear some tips and tricks for national accounts, uh, with some national accounts and sales managers from Athletic, Odell, Junehine, and Dry Dock, and that's gonna be moderated by my colleague and Brewbound editor Justin Kendall. And then we're gonna have a short networking break and come back here and talk about how craft can grow beyond IPA, which is gonna be a fascinating conversation. Uh, that's with our Brewbound managing editor Justin Fonte as well as some very smart folks at Are Vida, Dogfish Head, Sierra Nevada, and Three Tier Beverages. But first, uh, as I mentioned, some of the proceeds are going to the Colorado Brewers Guild, so it's only appropriate that we're gonna check in and see what they're up to and what that money is going to. So joining me on stage is Shawni Adelson, executive director of the Guild, and Jason Ford, guild president and owner of Broken Compass here in Colorado. Thanks

Speaker 2 [02:05] guys. Yeah, thanks for having us.

Speaker 3 [02:07] Yeah, thanks so much.

Speaker 1 [02:09] So I think the best way for us to start this quick conversation is I mean we're now 2 years into the global pandemic. What does that look like in Colorado? How are brewers recovering and what does that look like now?

Speaker 3 [02:23] Yeah, good question, um. I would say breweries right now are recovering, but they are still in recovery. So, uh, I, I'll measure the health based on three different metrics, but, um, first of those is number of breweries in Colorado. So in 2020 in 2020 we saw the most number of closures since prohibition. However, we saw basically the same number of openings. So 2020 we saw flat, um, growth in Colorado for a number of. Breweries, um, but we did in 2021 see less breweries close than what we were seeing prior to the pandemic and actually more breweries opened last year than closed and this year we've seen about 9 to 10 close and about 20 open so there's definitely growth and a lot of those that are opening are opening second locations so it's breweries that are reinvesting in their brand and growing their brand here. Um, another metric I would say to talk about the health is production. Uh, in 2021, the BA estimated that Colorado's craft breweries grew about 3% and nationally breweries craft breweries grew about 8%. So Colorado is definitely behind national. On that and that means that we have not made up the production numbers that we lost due to the pandemic, um, and we're about 10% below where we were in 2019, so still growing, but in 2021 we had our economic impact grew by 20%. Um, and then if you want to look at state excise tax, uh, which obviously includes not just craft, and in Colorado our two largest producers are Coors and AB InBev, um, if you compare the first six months of this year to last year, um, we're actually down about 2% overall in state excise tax, so we are seeing recovery, but it's slow in Colorado.

Speaker 1 [04:17] Ford, you have an interesting perspective on the past few years because you guys are based in Breckenridge, which is kind of up in the mountains there, and you had a very different experience with the past few years. Can you give us a little insight into that?

Speaker 2 [04:29] Yeah, it was pretty interesting during COVID. Everybody, you know, they wanted to get away and escape and do what they could, so they all flooded to the mountains. It wasn't just us, but all kinds of mountain communities across Colorado, uh, actually had a really great year, uh, 2020, even being closed and the, you know, having the difficulties that we did, it was our busiest year ever. Um, so it was very, very different from what other people saw. Um, on the flip side of that, of course, now that gas is expensive and, you know, we're seeing a little inflation and, and, you know, people don't want to travel quite as much. We've definitely seen a pinch this summer. Had a great winter. Uh, we were up quite, you know, double-digit percentages, um, really tough summer, uh, not as many people coming up, so we're basically flat on the year.

Speaker 1 [05:09] So a lot the guild did a lot to help breweries during the past few years, but you guys have also, along with navigating the pandemic, have had a lot of legislative accomplishments. Can you guys give us some insight into what you've been working on and what you've been able to achieve?

Speaker 2 [05:22] Uh, yeah, absolutely one of the first things I wanna talk about is, is not necessarily legislation that we've passed, but stuff that we've been able to do because we have a really great relationship with people on the Hill. Um, I've always valued the, the guild because of their what they do on the Capitol and their government affairs committee and stuff like that. And during COVID, they were absolutely able to step up and I was part of the board then as well. So I guess we, but meeting after meeting, hours and hours of calls to the governor's office. And I think one of the biggest things that the guild has ever done, uh, for breweries in Colorado is we were able to get lumped in with restaurants instead of bars, um, during the pandemic. So we were actually able to reopen a lot sooner and, you know, may not necessarily maybe be sustainable, but do what we good to kind of put a dent, uh, in, in the hurt of COVID.

Speaker 3 [06:07] Yeah and um you know other things that we've done to support our breweries during recovery is in 2020 they created a bill that would allow on premise retailers to be able to uh retain their state sales tax and initially breweries were not included in that so we advocated hard to include breweries which it makes sense if you're talking about on premise retailers, um, and so they were able to retain, collect the sales tax and retain it and we've been. Able to get them to do that twice more. So actually right now breweries are able to retain their sales tax. It's been a huge amount of money that breweries are able to keep in their pocket, um, but you know, the other things that we focus on are not just pandemic. You, you know, any other guild is gonna tell you they have a legislative agenda. Um, we're here to promote and protect craft beer and so our legislative agenda, uh, in 2020 we're able to still accomplish the bill that we are. Trying to get passed and that was to allow brew pubs to be able to sell their growlers to go of beer produced by the same ownership but at another location, um, so that was a big deal for us and then it became kind of a moot point because you can do to go of any kind of alcohol right now at least for the next 5 years, um, but it was a big deal that we were able to accomplish one of our goals during the pandemic, um, and then last year we were able. To, uh, actually open up the festival permit bill and so that allows breweries to take advantage of what wineries have been able to do for 20 years, um, so breweries now can pull a festival permit 9 times a year and they can join, uh, distilleries, wineries, restaurants, and bars, um, so that's something that we've been working on for years and it took us 3 or 4 years to get it done, but, uh, it passed and so we're really excited about that.

Speaker 1 [07:58] That's awesome. Uh, we are also very quickly approaching voting season. Uh, what are some things or is there anything that might be on the ballot that's gonna impact Brewers this next month?

Speaker 3 [08:10] Yeah, it's gonna be probably the most uh alcohol centric ballot that you guys will probably see in Colorado. We have 3 ballot initiatives that will be up for vote on in November. Uh, the first one, it allows liquor stores to be able to have more locations. So currently the law allows them to have up to 4, and by this would change that so they would phase it in, but they would be able to have. Unlimited liquor stores by 2037, uh, that's a very different structure in Colorado before 2016 you could have one liquor store location, um, and you know we, we think that this could potentially allow for more locations to sell beer which is great, but we also have some concerns about how it could impact some of the smaller liquor stores out there that have been great supporters of craft beer in Colorado. The other one is uh a ballot initiative to allow wine in grocery stores, so right now anywhere that sells beer only, this would allow them to also sell wine, so that would include convenience stores as well. Um, and then the final one would allow for third party delivery, so this would make permanent what restaurants and brew pubs can currently do, um, but it would also allow them to be able to use a third party. So right now you have to use your employees, um, but it would allow anybody that has retail privileges to use a third party to. Deliver alcohol and so that would include breweries um and you know anytime you remove a barrier in the marketplace we see people taking advantage of it so we're looking forward to seeing um how different business models change and adapt to that one and if the second two do get passed they would go into effect in March of next year.

Speaker 1 [10:03] Awesome, so a lot going on for you guys. um, you also have there's gonna be a task force is also gonna appoint some of you guys some new stuff. Fortunately we don't have as much time to dig into all of that right now, but everyone should please keep an eye on everything that the guild is doing and see how you can support that, um, and thank you guys for giving us some insight into all this please keep us updated please keep on doing the good work for brewers, um, give it up for the guild everybody.

Speaker 2 [10:29] Thanks again, everybody. Thanks for being here.