Craft brewers across Texas celebrated the passage of several new laws during the 2013 legislative session that made it easier for brewpubs to distribute their product and for craft breweries to gain a bigger foothold in the market.
Old laws prohibited direct sales by a brewery—requiring samples to be free—and restricted brewpubs to only selling their beers on-site. As of January 2014, breweries can sell up to 5,000 barrels at in-house bars and beer gardens, and brewpubs can sell to distributors.
Charles Vallhonrat, executive director of the Texas Craft Brewer's Guild, said the new laws modernize the alcoholic beverage code in Texas, making the state more competitive in attracting other brewers. Previously, a brewpub owner outside of Texas could sell more beer in Texas than an owner who was actually located in the state, he said.
"We wanted to basically open markets up for breweries," Vallhonrat said. "We see a number already taking advantage of the new laws, particularly the redefinition of brewpub and a breweries' ability to sell pints in their taprooms."
The guild is a trade association working with most of the craft breweries in Texas. The organization's legislative committee worked with legislators and other brewing industry stakeholders to craft the wording in the 2013 legislation and helped get the bills submitted.
Texas ranks in the 40s among states in terms of breweries per capita but second in terms of economic impact of the craft beer industry, Vallhonrat said. The TCBG estimates the industry brought in $608 million in 2011 and projects that number could reach $5.6 billion within the decade if more restrictions are lifted.
"We have a lot of room to grow and room for opportunity," Vallhonrat said. "If we can balance that more, we can get more competitive."
Among local breweries with plans to expand is Karbach Brewing Co. in northwest Houston. One of the fastest-growing craft breweries in the nation, Karbach has plans for a $15 million expansion on a 1.2-acre tract adjacent to its facility at 2032 Karbach St.
The expansion will include a downstairs area that will be used largely for the public to purchase beer for consumption on-site, which was previously restricted by the old laws, said David Graham, marketing and promotions coordinator with Karbach.
"We would've wanted to expand even if the laws weren't changed, but that just opened up a lot more possibilities," he said. "I think we're going to see a lot more places start on projects like this and a lot more smaller breweries starting up with the new laws in place."
Although the recently passed laws are a boon for craft brewers, Vallhonrat said the TCBG has more work to do, specifically when it comes to franchising laws governing the relationship between breweries and distributors.
"The laws were written in the 1970s to protect the distributors from breweries that were very few and very large," he said. "The dynamic of the market has shifted considerably since then—there are a lot more small brewers and a lot fewer distributors—but the distributors still have the power. We'd like to see that become more modernized as well."
Karbach Expansion
Karbach Brewing Co. broke ground on its 19,000-square-foot expansion project March 25, giving the company the capacity to produce three times as much beer. The plan involves building a two-story brewery on the 1.2-acre tract adjacent to the existing brewery. The $15 million project will also make the facility more visitor-friendly with plans for a public tap room, kitchen and an upstairs area for special events.
