Texas Craft Brewers want to deliver “Beer-To-You”
This upcoming legislative session, we need your help to change state laws currently prohibiting Texas breweries from delivering their products directly to beer enthusiasts around the state! Let’s deliver convenience and choice for Texas consumers and open up opportunities for our small manufactures to compete.
Texas Craft Beer’s Opportunity for Impact
The craft beer industry contributes $5 BILLION to the Texas economy, creating more than 30,000 small business and manufacturing jobs. Texas ranks 6th in total beer production yet, when it comes to breweries per capita, we rank 47th.
This means the industry still has a lot of room to grow, but we need to fix anticompetitive laws holding small brewers back from maximizing the potential growth and economic impact they are capable of.
Case Study: Texas Wine Industry Growth
In 2005 the Texas Legislature passed a law allowing wineries to ship their products directly to consumers. Today, the state of Texas ranks 2nd in direct wine sales volume with more than 600,000 cases shipped annually direct to wine enthusiasts’ doors. Texas’s wine industry has blossomed exponentially since the passage of this legislation, growing from around 40 wineries in 2005 to more than 400 wineries today, making Texas the 5th largest state for wine production in the United States and an industry with more than $20 billion in total economic impact. This growth is clearly tied to the safe, rational, and direct access to market Texas wineries enjoy.
Wine Tourism in Texas
Texas wine tourism has become big business with the Texas Hill Country AVA (American Viticulture Area) now ranking only behind Napa as the most visited AVA in the country. Texas wineries attract over 2 million visitors each year spending over $300 per person at wineries alone without considering the impact for restaurants, lodging, and other local businesses. With the direct to consumer shipping rights afforded to Texas wineries, these visitors are able to continue to support the Texas wineries they love by having their favorite wines shipped to them at their homes both instate and across the country.
Direct to Consumer Impact on the US Wine Industry
With direct to consumer wine shipments now available in 48 states (all but Utah and Mississippi) and Washington DC, the US wine industry shipped around 8.5 million cases this year for a total product value of $4.2 billion dollars continuing a steady growth pattern it has seen since California became the first state to allow shipping in 1986. Direct to Consumer wines can now reach over 96% of the United States population with the recent additions of Kentucky and Alabama.
Bottle clubs have become a major vehicle for growth in Texas wineries. They serve as the primary way for a winery to sell its more specialized products to the consumers who are interested. The growth of Texas wine bottle clubs hinged on the ability for wine to be sold with direct to consumer shipping. In a 2017 study by Texas Tech university on the Texas wine industry and the economic impact of model Texas wineries, surveyed wineries attributed around 85-95% of their total sales through Direct to Consumer methods including own-premise sales and shipping. The same survey also noted that small and medium sized wineries do between 25-45% of their total wine sales directly to their wine club making this sector of their business crucial to their success. Opening up this right for breweries would allow for Texas breweries to market their niche products directly to audiences around the state who are interested in them. This in turn builds consumer choice by allowing the brewery to release special versions of their products directly to consumers who have already shown interest in these products.
‘Margs to Go’ Saves Texas Retailers
With the passing of House Bill 1024, Texas allowed for beer, wine, and mixed drinks to be delivered to consumers from retailers such as bars and restaurants. This bill codified Governor Abbott’s COVID-19 allowances that helped save many Texas small businesses during the pandemic. Brewpubs, which are members of the retail tier according to the Texas Alcoholic Beverage Code, were written out of the pandemic allowances as well as the bill that codified “Margs-to-go” into law excluding them from the delivery rights enjoyed by their fellow retail tier members.
The National Landscape
As of March 2022, the only states that provide clear, statutory authority for brewers to legally ship beer instate and across state borders are Alaska, Kentucky, Nebraska, New Hampshire, North Dakota, Ohio, Oregon, Vermont and Virginia, as well as the District of Columbia. While we see that the number of states with direct to consumer privileges is low, the demand is high with 92% of regular craft beer consumers saying they would regularly order direct to consumer beer shipments once a month or more.
Currently only 14.8% of adults have access to direct to consumer beer shipping while 96% of adults enjoy direct to consumer wine shipping. Texas says that it’s “Open for Business,” let’s demonstrate our commitment to this by leading the way on direct to consumer rights for breweries right here in the Lone Star State!
Delivering on Convenience & Safety
Not only does direct to consumer shipping and delivery contribute to industry growth, it is also safe as there are existing protocols to prevent minors from accessing alcohol through shipping and delivery already in place.
Frequently asked questions:
What do these protocols look like for delivery?
The TABC Marketing Practices Advisory relating to delivery of alcoholic beverages from members of the retail tier can be found here. You will notice it looks very similar to the protocols for selling alcoholic beverages in store for off-premise consumption.
What do these protocols look like for shipping?
The TABC guidelines for direct to consumer wine shipping can be found on their website.
What does the research say?
In fact when looking at data from the CDC’s Youth Risk Behavior Surveillance System, minor consumption of alcohol in states that allow direct to consumer shipping of wine has continued to decrease year on year at similar or even increased rates compared to states without direct to consumer shipping of wine.
Access to Market
Texas breweries are increasingly looking to rural communities for homes as we see real estate costs in urban areas climb. Between new breweries opening and the expansion of existing breweries, there is great potential for industry growth in rural communities. Rural breweries, which often are modeled around being tourist destinations and selling almost all of their products directly to consumers, have greater barriers to market than their urban or suburban counterparts. Population density, strict distribution contracts, and shelf space limitations all provide difficult barriers to these small rural businesses getting their products into the hands of eager consumers.
Direct to Consumer shipping would allow them to reach craft beer fans across the state in a safe and sensible way that promotes growth for these rural businesses. Many of these breweries strongly support their communities by hiring local employees, giving back to the community, and drawing in tourism and economic growth. We as Texans can help these breweries and, in turn, the Texas communities they call home, by legalizing this important access to market.
We Need Your Support!
Texas wineries, most retailers, and third-party delivery apps all enjoy pathways to ship or deliver alcoholic beverages directly to Texas consumers while complying with state liquor laws and customer age verification requirements. Let’s help Texas brewers do the same, giving Texas consumers more convenience and choice to access the products they demand.
It is time that we allow Texas brewers to have the delivery and shipping privileges other members of the Texas alcohol industry have such as:
- Allow Texas breweries and brewpubs to deliver beer directly to consumers at their homes/apartments.
- Allow Texas breweries and brewpubs to utilize third party delivery services to deliver beer to consumers at their homes/apartments.
- Allow Texas breweries and brewpubs to ship beer directly to consumers across the state via licensed carrier.
- Sovos Ship Compliant Study on Direct to Consumer Wine Shipping
- Sovos Ship Compliant Study on Direct to Consumer Beer Shipping
- Brewers Association State Craft Beer Statistics for Texas
- Brewers Association National Craft Beer Statistics
- Brewers Association Press Release on Direct to Consumer Shipping Market
- R Street Study on Direct to Consumer Impact on Underage Consumption
- Texas Tech Study on Economic Impact of Model Wineries
Get in Touch!
Caroline Wallace | Executive Director
Travis Bailey | Government Affairs Associate
Jon Lamb | Government Affairs Committee Chair
Jim Dow | (512) 965-1371
Nelson Nease | (512) 466-8271
Tom Holloway | (512) 923-5944