The growth of the craft beer industry has been seeping into Texas for some time now, and Hays County is beginning to experience the trend firsthand.
Two brewpubs—a designation given to businesses that are licensed to manufacture up to 10,000 barrels of beer annually—will open in Hays County this summer, with two more planned for late 2014 or early 2015.
Middleton Brewery and Bomber Brewery, two businesses which will be licensed as brewpubs, are planning to open this year in San Marcos and Kyle, respectively. A San Marcos resident is also planning to open Aquabrew, a restaurant that will brew its own beer, at 150 S. LBJ Drive, San Marcos, in 2014 or early 2015.
The craft brewing trend has been building in Texas for several years. Between 2007 and 2011, the number of licensed brewers in the state more than doubled from 35 to 78, according to the Texas Craft Brewers Guild, an organization dedicated to promotion of the craft-brewing industry in Texas.
Austin has been a hub for much of that growth, but Christopher Newton, who plans to open Bomber Brewery in Kyle in the summer, said Austin’s rising real estate prices are what brought him to his location in Kyle. Building in Kyle will allow Newton to keep his overhead low, he said.
“Austin is pricing itself out of entry-level,” Newton said. “If I were even to try to get a chunk of land outside of Austin but inside of Travis [County], the costs would be astronomical.”
Newton’s plans for Bomber Brewery, which sits on 2.5 acres in West Kyle, include the use of solar power and rainwater collection in his brewing process. He estimates he will have nine beers and three craft sodas on tap when he opens in the summer. He is currently in the permitting process with Hays County.
Calvin Kouba, brewing assistant at Middleton Brewery, said the business has seen growing demand for craft beer in Central Texas.
“People in the Central Texas area, Austin all the way down to San Antonio, people are starting to get an idea of what beer can taste like,” Kouba said.
Middleton Brewery, which has been operating in Wimberley for three years, is planning an expansion that will increase its capacity twentyfold. The new property, located at 101 Oakwood Loop, San Marcos, will feature food trailers, live music and, of course, beer.
Dennis Middleton, brewmaster at Middleton Brewery, said Texas’ craft brewing industry is just catching up to the rest of the nation.
“It’s just Texas’ time. In California, this happened 15 or 20 years ago,” Middleton said. “In other states, like Colorado, maybe eight years ago. It’s a snowball and it starts going fast once it’s rolling, and it’s rolling now.”
The economics of craft brew
Experimentation with the brewing process, a necessity for a brewery wanting to capture new customers, speaks to another truth about the industry, TCBG President Charles Vallhonrat said.
“They push some buttons, and beer is made,” Vallhonrat said. “If you go to a craft brewery, you’ll see a bunch of guys running around and working in cramped, hot conditions—moving hoses, cleaning out vessels and doing all this laborious work by hand.”
The result of that manual labor is a boon to the state’s economy, he said.
According to a 2012 TCBG-commissioned study examining the economic impact of Texas’ craft breweries, craft beer accounted for 0.7 percent of all beer consumed in the state but supplied 51.2 percent of the beer manufacturing sector’s jobs.
The study also projected the economic impact of Texas’ craft beer industry could grow to $5.6 billion over the next eight years if legislation is passed that brings it more in line with Texas’ wine industry and other states’ craft beer industries.
Carolyn Beck, director of communications and governmental relations for the Texas Alcoholic Beverage Commission, said Texas’ wine laws were loosened in the early 90s, during a push to grow the state’s agriculture industry.
Wineries have been granted rights that allow it to act more like a retailer than a manufacturer, she said.
“It seems to me [the wine and craft brew indstries] are sort of on the same growth track, but the craft brew industry is just a little bit behind,” Beck said.
Before 2013 laws that restricted where craft beer could be sold meant that large-scale craft breweries—such as Real Ale Brewing Co. in Blanco and St. Arnold Brewing Co. in Houston—could not sell their beer for on-premises consumption. Selling beer by the pint can be a huge cash generator for breweries compared with selling in kegs, Newton said. To skirt that law, many brewers began offering tours that would typically cost about $10 and include three to four complimentary beers.
Vallhonrat called the move “innovative.”
In 2013 the Texas Legislature passed multiple bills affecting Texas craft brewers. Among those laws was a measure that allowed breweries to sell their beer for on-premises consumption.
The Legislature also adjusted the laws regulating brewpubs to allow for increased production volume and distribution to retail channels. The effect is that breweries with a relatively small market share such as Middleton or Bomber can now sell their beer through retail channels such as H-E-B.
For the many victories brewers collected in the 2013 legislative session, Vallhonrat said there is still more to be done.
“I can go to a winery or I can go to a distillery and I can buy their beverage to take home,” he said. “Sadly we still cannot do that for beer [sold at breweries].”
Newton described the 2013 session as “two steps forward, one step back,” but the volatile landscape of brewing craft beer in Texas is too attractive for him to pass up, he said.
“This has the ability to turn into my own business, and I’m my own boss,” he said. “I get to do something I love. Not just something I’m good at. Not just something I got a degree at—something I love.”