Amid all of our stories about expansion and growth in the craft brewing industry, we’d be crazy to gloss over the importance of the local craft brewing scene. At Craft Brewing Business (CBB), we try to provide a snapshot of these regional issues, opportunities and concerns in our ongoing “Better know a craft beer guild” series.
We kick off our series of craft beer guild Q&As from California with Brian Stechschulte, executive director for the San Francisco Brewers Guild, and now we continue down that road with Tom McCormick, executive director of the California Craft Brewers Association (CCBA) to cover the issues and opportunities across the entire state.
McCormick: California is generally a difficult state in which to run a business. There is a wide range of fees, permits, regulations and restrictions that inhibit start-up and growth. As the CCBA grows and our capabilities increase, we are working more with other statewide business groups, economic development agencies and others to help push for a more business-friendly environment. On the local level, the CCBA is very active in working with cities and counties that have reached out to us and want to be more “craft brewery friendly.” These cities and counties are forward thinking and realize that craft breweries bring jobs, pay taxes and create a dynamic and exciting vibe in the areas where they locate. This in turn attracts other businesses to open in the area.
CBB: What specific legislation are you keeping an eye on right now?
McCormick: We are always watching for any legislation that could pose a threat to the craft brewing industry in California. Recently, the wholesalers’ association has indicated that they want a more strict “black and white” three-tier system.
Current public policy in California supports a qualified three-tier system that allows beer manufacturers to operate brewpubs, engage in self-distribution and provide our consumers with tasting rooms and retail sales. These current privileges are critically important to our ability to start small and grow large. They have been instrumental in allowing the craft brewing industry to thrive in the state. While these policies are important to us and beer fans, they aren’t so popular with all distributors.
The CCBA anticipates an attempt by wholesalers to legislatively remove some of these privileges. We will not let that happen. Losing our ability to operate tasting rooms and brewpubs and to self-distribute our products would eliminate jobs, reduce taxes paid to the state and crimp the variety and choice that consumers clearly enjoy in California.
CBB: How do you hope to influence that issue?
McCormick: It’s a simple message. The consumer doesn’t want tasting rooms to close. The consumer wants choice in the marketplace. It is the consumer who is driving the growth of craft beer. Our industry is good for the economy and craft breweries are good for our state’s social fabric. Wholesalers would be party poopers to try and reduce access to craft beer solely to make their businesses more profitable. Last I checked, wholesalers in this state were doing pretty well. We are a grassroots organization, and we will deliver our message to policymakers via our partners and good friends: the beer enthusiasts and craft beer consumers.
CBB: Let’s switch gears to the beer. What defines the craft brewing industry in California?
McCormick: The craft brewing industry in California is defined in a big way by the fact that California is the birthplace of the craft beer revolution. This is where it started. Despite other claims to fame, no one can deny that this is the most vibrant craft brewing state in the country. We have the grandfather of our industry, Anchor Brewing Co. We have the craft beer leader, Sierra Nevada. We have a multitude of large, fast-growing, highly unique companies like Stone, Lagunitas, Firestone Walker and Bear Republic to name a few. We have innovators like Russian River, The Bruery and The Lost Abbey. We have more craft breweries than any state. And we have family. The CCBA has tremendous membership support and we all work together in supporting each other.
CBB: About how many brewers out there? Is it possible California is starting to approach a saturation point?
McCormick: With 400-plus breweries, there is still plenty of room for new breweries to start up, especially those with an on-site sales model such as brewpubs and tasting rooms. With an estimated 12 percent market share in the state, I think we can easily double that. There is lots of room for growth for those who are in it for the right reason.” The craft brewing industry in California is defined in a big way by the fact that California is the birthplace of the craft beer revolution.” — Tom McCormick, executive director of the California Craft Brewers AssociationCBB: What are the unique opportunities and challenges today?
McCormick: The opportunity is limitless for those who start a craft brewery for the love of the product, make good beer and understand how to run and operate a business. Our greatest challenge will be contending with “opportunists” who get into this business solely as an avenue to make money. Opportunists cut corners, often don’t abide by ABC regulations, drive volume through discounting and use other tactics that dampen the authenticity that the consumer so greatly appreciates about craft beer.
CBB: Tell us a little about your meeting earlier this year. Any highlights?
McCormick: We had yet another sellout and the largest meeting the CCBA has ever had. Highlights included a great discussion of the future of the craft brewing industry by J.B. Shireman and a California-specific data analysis of craft beer sales by Dan Wandel. We also had a view of the Pacific Ocean from our perch up on the UCSD campus, which was pretty nice!
CBB: Any other big events this year?
Our next general meeting is coming up on Oct. 29 and will be held at UC Davis in conjunction with the UC Davis brewing school. It is my goal to continually improve the quality and quantity of information delivered at these events so we are expanding the program to two days, adding tracks and getting great some great speakers. We are also continuing our “On the Road Again” series of regional meetings. These are small, intimate outreach meetings, held all across the state, where we talk about the issues and I get feedback from the membership. We don’t currently have any on the calendar, but we’ll have two to three before the end of the year.
CBB: What other services and information do you provide to your members?
McCormick: We have just added a free service for members to get answers on regulatory questions. We also just added a members-only section to our website that will include a discussion board and tons of educational content. We will be kicking off a webinar program early next year where members can access an ongoing series of educational discussions that can be viewed anytime on our website. These will include a wide range of topics from business management, sales, marketing, brewing, etc. We are developing a comprehensive program with all the materials needed for a brewery to make contact with their representatives at the local, state and congressional levels.
CBB: Thanks for taking the time to shed some light on what’s happening in California these days. Any parting thoughts?
McCormick: The future is bright. My biggest concern is that the core values of our industry are not eroded. If we remain true to the values that have driven us this far, we will continue to thrive. Craft brewers have revolutionized the brewing industry worldwide. A mere 30 years ago, there was no craft brewing industry. Today, we are a household word. As the assembly member I met with yesterday said, “Once you try a craft beer, there’s no going back.” Cheers to that!