Athens breweries adapting to, and embracing, Senate Bill 85
By RYAN SWINDELL
“It was just a shock for everyone about whether the beer tour option would still be open,” says Charles Hendricks, taproom manager at The Southern Brewing Company. “We were learning, as well as our guests, … about whether we still did it or not, and I still get that sometimes… people are just curious about that.”
For years, Georgia breweries offered an intriguing and unique experience for beer lovers: to come and sample their beers in six ounce portions, go on a tour of the breweries and leave with a complimentary souvenir glass. Senate Bill 85 was put into effect September 1, 2017 and had a significant effect on the sale and consumption of beer on-premise at breweries in the state.
Prior to this bill being signed, Georgia breweries were forced to use designated loopholes to ‘sell’ beer in their tasting rooms. Breweries would offer a ‘tour’ package to visitors where they would be given six samples of six ounce pours, a tour of the facility and a complimentary pint glass to take home.
The tour package was a unique way for craft breweries to advertise their beer and provide a fun experience for visitors without actually selling the beer directly. Breweries also were not allowed to sell six-packs or bottles of their beer anywhere on-premise. This meant that visitors could never leave with any packaged beer, whether a six pack of their favorite cans or a 32 ounce growler filled to the brim with the newest brew.
Even though many visitors loved this tour and sample package, it simply was not efficient for the breweries themselves. Before Senate Bill 85 was passed, breweries relied mostly on the beer sold by distributors, but this method was only allowing them to pocket a small percentage of the sales price. Without the ability to sell their product on-premise, breweries were losing out on significant potential profits.
Senate Bill 85 was revolutionary, and its impact was felt almost immediately. On Halloween night in 2017, breweries were unable to sell individual pints, six packs and growlers to their customers, but the next day on-premise sales had changed drastically. With the passing of the bill, breweries are now able to sell 3,000 barrels of beer per year directly to their on-premise visitors. This equates to 744,000 pints of beer with no daily limits. Breweries went from making virtually no money on-premise, to having the opportunity to sell almost three quarters of a million pints per year in their tasting rooms.
Senate Bill 85 sets the hard 3,000 barrel limit regardless of brewery. This means that even though Terrapin Beer Co. and The Southern Brewing Company are both located in Athens, Senate Bill 85 had different effects on their businesses.
Terrapin Beer Co. is a larger, well-established brewery. It was founded in 2002 and has been at its current location since 2007. Operating for over a decade has allowed Terrapin to grow into a southeastern powerhouse that distributes its beers across 19 states. This means they did not rely on their on-premise sales as much as other smaller craft breweries.
“I think the most positive impact for Terrapin is that we can offer people what they want to drink,” says Leah Kuck, Terrapin’s marketing and communications lead. “Some folks wanted to come in and enjoy a flight, or just one pint, or sample a bunch of beers, and it’s easier for us to do that!”
Kuck says that Terrapin is certainly experiencing the benefits of Senate Bill 85, but the change had not been as well received by some loyal Georgia visitors at first.
“I know a lot of people were upset when we switched away from the original ‘tours’, even though we still had a sample option with a taster glass,” says Kuck. “We actually just brought back the option to have six six ounce pours in a pint glass that you get to take home with you.”
Soon after the change, Georgian visitors would come in having a certain expectation, and they would be surprised that they could buy individual pours rather than buying the six samples package. Seeing as Georgia was one of the last states to rid themselves of the old fashioned beer laws, visitors coming from out of state were quite used to this new landscape.
Terrapin, being larger and well-established, has had the luxury of offering a traditional tour package alongside their new options without seeing much negative impact. This may have contributed to a smoother transition period for them, but other, smaller, breweries such as The Southern Brewing Company, have had a bumpier ride.
“Most people are accustomed to paying ten to fifteen dollars for a tour with three beers and a souvenir glass,” says Mark Mooney, The Southern Brewing Company brewer. “They are now paying roughly the same amount for two beers and no souvenir glass.”
“While this environment is common and accepted in other states, it is still new here, and I think many folks feel they’re being cheated or that breweries are being greedy.”
Mooney says that because The Southern Brewing Company relies on on-premise sales to sell most of their product, they simply cannot afford to undercut their prices. This explains why the prices seem inflated, especially when consumers have a preconceived notion that the product should be cheaper on-premise when compared to a local bar or restaurant.
Mooney goes on to say that, even though they have had some trouble explaining to the public the changes to the way the tasting room works, they still believe Senate Bill 85 has been an overall positive step for them as a business.
The Southern Brewing Company first opened in 2015. By the time Senate Bill 85 was passed, the company was barely two years old. Enacting such a drastic change so early in the brewery’s history was not a simple task.
“We needed a new point of sale system in order to manage inventory and divide beer by brand and size,” says Mooney. “The biggest hurdle was probably selecting and installing a point of sale system and training staff in a consistent and efficient operation.”
When compared to Terrapin, The Southern Brewing Company has a smaller and generally more inexperienced staff. Even though this is the case right now, Senate Bill 85 allows them to thrive and build.
Mooney says that the bill makes them competitive with other breweries and allows them to hire more employees and grow quicker. The bill increases their potential profits which, in turn, allows them to expand and grow in a way that was much more difficult before last September.
“We, and others like us, stand to gain significantly from potential increases in revenue through tasting room and to-go sales without needing to dramatically increase the volume we produce or the footprint we distribute across,” says Mooney in regards to how exactly Senate Bill 85 benefits smaller breweries.
The ability to sell their craft brews on-premise has revitalized the way The Southern Brewing Company runs their business. The positive impact of the bill has surely been welcomed by breweries all across the state regardless of the size and tenure of the brewery, but Mooney and Kuck both agree that Senate Bill 85 seems to benefit the smaller and newer craft breweries more than the larger, well-established ones.
“Personally, I think Senate Bill 85 is great for everyone, but smaller, newer craft breweries have the most to gain,” says Kuck. “We’re definitely seeing benefits, but because we distribute to 19 states, our overall volume change is affected less than if we were only in Georgia.”
“Senate Bill 85 has probably had the biggest impact on new and small craft breweries,” says Mooney. “Larger, more established breweries are likely already profitable after crossing a certain volume threshold and are therefore less reliant on taproom sales.”
Senate Bill 85 has yielded various results among Georgia breweries simply due to the wide variety of sizes and atmospheres. For Hendricks, that variety is a big positive in his mind.
“That’s what I like about going to different breweries, you know? I like the fact that they’re not all the same.”
Luckily for Hendricks, it seems as though the passing of Senate Bill 85 is perpetuating growth and development for existing breweries across the state, which should promote even more unique atmospheres and experiences.
