A spot on the shelf

The competitive craft brewing scene in Colorado prepares for more challenges

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Colorado craft-beer drinkers have choices. Our local liquor store shelves are lined with craft offerings, and we’re likely to live within a few miles of a local brewery. As the Colorado craft-beer culture continues to thrive, like any booming industry, issues can arise. Those who have been in the industry for a while have witnessed many changes, and recognize what it takes to maintain Colorado’s status as a top destination for craft beer.

Chad Melis, marketing director of Oskar Blues notes, “Nowadays the space is getting very crowded and competitive. It is important for us to continue healthy competition and collaboration; it’s part of what makes our industry special.”

So having lots of breweries keeps consumers happy with plenty of options, helps boost business at local liquor stores and it keeps brewers on their toes. But are we getting too competitive? Is the Colorado craft brewing community a little too crowded? With plenty of local home-brewers with stars in their eyes for one day opening up their own brewery, will there even be an opportunity for them to be successful?

Bart Watson, chief economist at the Brewers Association says, “I think there are still opportunities, but as one of the highest per capita states in brewery terms, for the number of breweries to continue increasing in Colorado, (new) breweries will have to be able to differentiate themselves in a meaningful way.”

The numbers back up the perceived crowding of microbreweries in the state. Colorado ranks third in the nation in total craft breweries (behind California and Washington) with 287, according to the Brewers Association. It also ranks third in the U.S. in craft breweries per capita (a more important and entertaining statistic) with 6.1 breweries for every 100,000 people, trailing only Vermont and Oregon.

To kill the point, more than one-third of all microbreweries are located in the states of California, Washington, Colorado and Oregon. No wonder the market is tight here.

So why has the craft beer movement been allowed to grow so substantially here? It’s not just great beer that’s aided our craft movement. In fact, our biggest issue may not be the possibility of too many breweries. While current liquor laws limit business owners to have one liquor license for one liquor store, this prohibits chain grocers and convenience stores from owning the entire market. This also allows small, independently owned liquor stores to flourish, and small liquor store decisionmakers to choose to sell delicious local craft brew options.

Watson can attest. “Colorado has benefited from a regulatory system that is highly beneficial to small breweries — were things to change, it’s possible the state wouldn’t be able to support as many.”

The large chain stores along with big breweries (you know who I’m talking about) have been vying to change this law for years and offer more liquor licenses per business. After all, California and Oregon don’t limit businesses to one liquor license and they’re booming. Wouldn’t it be convenient to be able to grab your six-pack at any grocery store?

Courtney Cobb, producer of the films Beer Culture and Crafting a Nation explains, “Small businesses have been built and established on the model of one license per business. If that were altered, suddenly hundreds of licenses would be given to chains and only some of them would put the energy into remodeling to include more wine and beer. Likely only the biggest domestic and craft players would be offered. New startup craft breweries wouldn’t stand a chance at shelf space, and existing small liquor stores would likely suffer.”

The controversy over the current liquor laws is not new, and seems to be gaining traction as the Colorado beer industry thrives. There are groups on both sides of the issue, from the folks involved with Keep Colorado Local who want to maintain the current liquor laws, to the out-of-state chain grocers who want to be able to sell beer at all of their stores in Colorado.

Keep Colorado Local, a coalition of local beer and wine producers, liquor stores and distributors, announced in May that breweries across the state will brew a special beer to rally support for the cause. The Keep Colorado LocALE is a pale ale grown with Colorado ingredients that each brewery will craft and put their own spin on over the next several months. Leave it to brewers to use beer as a solution to everything.

But the LocALE may not just be a cute gimmick — the issue is likely headed to the ballot in 2016. The pro-beer-in-grocery-store group Colorado Consumers for Choice is circulating a petition, which would put the issue to voters if enough signatures are gained. The group sums up their argument on their petition, saying, “Since 1933, we have invented soft-serve ice cream, rock ‘n’ roll, space travel, the Internet and the cellphone, but you still can’t buy real beer or wine in a Colorado grocery store in Colorado.”

(For those of you who are lost at this point, saying aloud and angrily, “Hey, grocery stores can already sell beer!” — you’re right, but grocery stores have to sell a watered down version of the beer, making you wonder why they even bother at all.)

It’s clear that those in the craft-beer industry are concerned that making it easier for consumers to buy full strength beer in grocery stores would kill the craft beer economy, from the brewers themselves to the independent liquor stores that specialize in providing weird and local brews. Meanwhile grocery stores say they just want to be on an equal competitive level with the liquor stores. It’s hard to compete with that logic, but the craft-beer scene also produces a lot of unique things we can’t get elsewhere. Boy, this is going to be interesting.

Better have a beer.