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Food, glorious food

Biking and breweries

Actually, this makes perfect sense.

This started off in the gray area between a good idea and a bad one. Two years ago, Jason Buhlman and Brian Kondrach got about 30 of their friends together for an afternoon of two-wheel tourism, in which they aimed to bike between as many breweries as possible in one day.

“At the time, there were only eight breweries that we could do inside the Loop,” Kondrach explains to a group of prospective riders on a sunny Saturday afternoon in late June. “It took us 14 hours. We were way too drunk. It was a mess.”

“A mess,” echoes Buhlman, who is standing just to the right of Kondrach, wearing a baseball T-shirt with the motto, “Wheels Down, Bottoms Up,” printed across his chest.

“So we put some rules on it,” Kondrach continues. “We made it so it was only 45 minutes at each stop – just one pint each, and then we move. And we added two breweries and did it again six month later.”

The ride was still fun. But much less … sloppy. And that’s when Buhlman and Kondrach realized that a curated version of this could potentially lay the groundwork for a business that could combine two of their loves: Craft beer and bicycles.

Then last May, their business, Tour de Brewery, was born. Rather than 10 breweries in an afternoon, they offer shorter tours in distinct pockets of the city, featuring about three breweries apiece.

[…]

Across Houston, breweries are becoming more bike-friendly. At Saint Arnold, a BCycle bike-share station opened earlier this Spring; there are plans to unveil one at 8th Wonder by the time the summer is through; and hopes of opening a third in Sawyer Yard, in close proximity to three breweries. And some of the city’s breweries are forming bike teams, and hosting bike crawls of their own. But as all this happens, it raises one big question: Should people hop on bikes after drinking?

“We’ve have people approach us and ask, ‘Why would you put a station at Saint Arnold or 8th Wonder?’” says Henry Morris, a spokesman at BCycle. “And the answer is, well, they have parking spaces. People drive there and drive back and they’re expected to be responsible. So if you take a bike share to a brewery and you have too much to drink, you should call an Uber home.”

That’s why the guys at Tour de Brewery emphasize that their outings are about discovering new beers.

“If you’re going to bike and drink, it’s important to remember that it’s a tasting experience,” says Jessica Green, director of development for Bike Houston, which is on track to add 50 miles of bike lanes to the city this year, including a stretch that will help cyclists close the gap between 8th Wonder and Saint Arnold. “Have one beer, and then ride. And the riding will help you metabolize the alcohol. But don’t drink more than a beer or two an hour, which is when you get into getting drunk.”

Not to put too fine a point on it, but these breweries are neighborhood institutions as much as anything else, in the spirit of the old corner bar. They draw their customers mostly from their nearby surroundings, not the wider region. Also, and especially for the breweries in the inner core, parking is at a premium. That’s a combination that incentivizes biking, on both sides. For sure, as the story notes, you should imbibe carefully if you do this. Honestly, though, the same would be true if you drove. So plan your route, pick your spots, maybe give Tour de Brewery a look, and enjoy your afternoon.

Here comes the driverless pizza delivery vehicle

Gotta admit, this has me scratching my head.

No Noids were harmed in the writing of this post

There goes another high schooler’s job: Domino’s Pizza Inc. plans to test unmanned pizza delivery in Houston later this year.

The chain, known as a technology leader in the restaurant industry, is teaming up with Nuro, a Bay Area robotics startup run by a pair of former Google employees. To start, Domino’s will send food to customers from a single store in the Texas city using one of Nuro’s fully autonomous vehicles.

The test is scheduled to start late this year and could expand in 2020, according to the companies. Domino’s has more than 6,000 restaurants in the U.S. and, with the labor market tight, the company is experiencing a driver shortage, with as many as 10,000 open positions nationwide, according to Kevin Vasconi, the company’s chief information officer.

The Nuro partnership will help the chain determine if autonomous vehicles are a way for its restaurants to keep up with demand during busy times when drivers are in short supply, he said.

“Consumers are ready for this,” Vasconi said. “I have been surprised by the overall positive reaction people have had to an autonomous vehicle delivery experience.”

[…]

Domino’s previously tested autonomous delivery vehicles in a partnership with Ford Motor Co. The pilot began in 2017 to see how customers would react to stepping out of their homes to fetch pizza from a locked warming chamber in the vehicle. That program has ended.

Pizza Hut, a chain that made its name with sit-down dining and is now trying to catch up with rivals on delivery, teamed up with Toyota last year to work toward driverless delivery.

Nuro is the same outfit doing the Kroger autonomous grocery delivery testing. See here and here for background on that. I wish there were some information on how the earlier pilot went (I didn’t find anything in a cursory search). With groceries, you get a cheaper delivery price if you go out and lug them into your place on your own. Will that entice people to do the same for pizza? I guess you’d save the cost of a tip, if nothing else. I haven’t ordered from Domino’s in a million years, so I’m the wrong person to react to this news. How do you feel about this? TechCrunch has more.

Whata lot of angst

I’ve lived in Texas a long time, but I wasn’t born here. As such, news like this doesn’t hit me the way it hits some other folks.

Chicago-based BDT Capital Partners said Friday it’s agreed to acquire a majority stake in Whataburger.

The burger chain will remain headquartered in San Antonio, and the groups will “begin exploring expansion plans,” they said in a statement.

Whataburger’s founders, the Dobson family, will keep a minority position in the company. President and CEO Preston Atkinson and Chairman Tom Dobson will retain their seats on the board but retire from daily operations.

Both will turn to running Las Aguilas, an investment company launched by the Dobson family in 2011 that focuses on real estate and philanthropy.

The decision “is both exciting and bittersweet” for the family, Tom Dobson said.

“Whataburger has been the heart and soul of our family legacy for nearly 70 years, but we feel really good about the partnership with BDT,” he said.

The news that Whatburger had been “exploring options” came out about a month ago, and it’s fair to say that it caused some anxiety among the faithful. None of what did happen sounds apocalyptic to me, but then I just never fully acculturated the way some other prominent immigrants have.

My wife and kids are coping as best they can, thanks for asking. We will get through this, y’all. I promise. Texas Monthly, the Rivard Report, and the Current have more.

Saint Arnold’s silver anniversary

A very happy anniversary to them.

There is nothing particularly unique about the start-up story behind Saint Arnold. [Founder Brock] Wagner, 54, had been working as an investment banker when he decided to chuck the suit and tie and try to open up a brewery. It’s the same origin story repeated on what feels like a weekly basis here in Houston these days, as side-hustle brewers ditch their full-time corporate gigs to start small brew shops. This year alone has seen similar tales told at both True Anomaly Brewing and Walking Stick Brewing Co.

What sets Saint Arnold’s story apart is the fact that it’s been able to survive all these years, even through a long period during which the state of Texas had some of the nation’s most antiquated brewery laws. When Wagner sold his first keg of beer on June 9, 1994, it was illegal to sell beer on-site. Or offer tours. He had to rely on sales at bars, but he wasn’t even allowed to promote those.

“The laws in Texas made it so the chances are, you weren’t going to survive,” he says now. “And that is why we’re the oldest craft brewery in Texas. It’s not because we were first. We weren’t. It’s because we outlasted everyone else.”

[…]

“There was a time, in about 1995 or 1996, that there were actually a lot of brew pubs in Houston. And every single one of them failed,” Wagner says. “We’d get together every month at our locations, and we’d share information and drink beers together. Then that went away for the longest time because if you were going to have a Houston craft brewers’ meeting, it would be me sitting at a bar by myself.”

He blames the laws, among other things. So he split his focus. Wagner began lobbying the Legislature to loosen up the arcane laws, nabbing a huge victory in 2013, when brewers won the right to sell beer on premises. At the same time, the brewery doubled down on consistency of beer and quality. Wagner pushed his brewers to make sure each new recipe met two criteria: It made you want to order a second, and it had some sort of “wow factor” — maybe extra-dry hops, a rush of citrus — that set it apart from other beers already on the market.

But what really enabled Saint Arnold to shift gears from surviving to thriving, as it now produces 70,000 barrels a year, Wagner says, is the idea that the brewery belonged to more than just him.

I’ve been a fan and customer of Saint Arnold since the days at the old location off 290 when tours were still free and the line to get in wasn’t that long. (Heck, I had my 40th birthday party at the old location.) The current location north of downtown is a gem, and I love that Brock Wagner supports other breweries, especially those opened by former employees of his. Craft breweries belong to neighborhoods, and there’s plenty of room for more of them in our ginormous metropolitan area. They should all hope to be as good, and as consequential, as Saint Arnold. Cheers, y’all.

Pickle ’em if you got ’em

A victory for home foodies.

Sen. Lois Kolkhorst

In a victory for home cooks across Texas, the Legislature has expanded the state’s definition of the word “pickle,” allowing for pickled beets, carrots and other produce to be easily sold at farmers’ markets alongside pickled cucumbers.

The legislation, pushed by state Sen. Lois Kolkhorst, R-Brenham, and state Rep. Eddie Rodriguez, was passed by the House Tuesday and given final approval by the Senate Thursday. It still needs a signature from Republican Gov. Greg Abbott before becoming law.

Judith McGeary, head of the Farm and Ranch Freedom Alliance, said her group is excited to see the measure advance and that it would broaden “options for the farmers and the consumers who are looking for healthy, locally-made foods.” Texas has been among the more restrictive states in allowing foods to be sold at markets, she said.

Texans have been able to hawk pickled cucumbers in local venues since 2013, when Rodriguez, an Austin Democrat, authored a law that let cooks sell certain goods without first becoming licensed food manufacturers. But an unexpected rule authored by the state’s Department of State Health Services has barred home chefs from selling any other kind of pickled produce without first installing a commercial kitchen, taking a course, and obtaining a special license.

“Only pickled cucumbers are allowed,” an FAQ section on the agency’s website specifies. “All other pickled vegetables are prohibited.”

The rule was drafted to implement the new law, and a department spokesperson told the Texas Tribune last May that the agency did not receive objections to the pickle definition. The spokesperson declined to comment Tuesday.

[…]

Laws authored by Kolkhorst and Rodriguez had already made it easier for home cooks to peddle their goods at local markets, by exempting them from regulations that some consider onerous. An old rule that small-batch bakers have a commercial kitchen, for example, was jettisoned in 2011. The exemption was extended to a host of other foods in 2013, including fruit butters, popcorn and pickles — though the State Health Services department took that to mean pickled cucumbers only.

As the story notes, a couple who intended to make some money pickling vegetables filed a lawsuit against State Health Services, which brought the issue to light. The story also notes the cottage food law, which passed in 2011 in its second attempt. I am as before on the side of the home foodies, so I’m glad to see this bill get passed. Hopefully, there will be no more weird bureaucratic interpretations necessitating further bills like this one.

A beer truce is declared

Well, glory be.

Beer brewers and distributors and have been battling for years over what can be bought and sold at breweries across Texas.

This week, two key groups in the fight finally signed a truce.

The Texas Craft Brewers Guild, which represents the interests of local breweries, and the Beer Alliance of Texas, which represents the interests of beer distributors, have inked an agreement proposing that Texans be allowed to buy up to two cases of beer per person, per day in places where beer is brewed.

[…]

Regulatory reforms passed in 2013 allow breweries that produce fewer than 225,000 barrels, or about 3 million cases, of beer each year to sell up to 5,000 barrels for on-site consumption. Proposed bills filed by Rep. Eddie Rodriguez, D-Austin, and Sen. Dawn Buckingham, R-Lakeway, would expand the law to allow the beer to be taken to-go from local taprooms.

The agreement between the two sides came in the form of a proposed new version of the Rodriguez and Buckingham bills. The added provisions include keeping the 5,000 barrel cap, limiting the amount that can be taken home and for packaged beer to have alcohol content posted clearly on its labels.

The compromise would also require breweries to report beer-to-go sales to the Texas Alcoholic Beverage Commission on a monthly basis.

And the groups agreed to refrain from lobbying to change the fluid-ounce caps of malt beverages for 12 years.

As you may recall, I discounted the possibility of this happening as the session was starting. I’m delighted to be proven wrong, though as the story notes the bill still need to pass. The other lobbying group, the Wholesale Beer Distributors of Texas, are not part of this agreement and thus could work to defeat it. It does feel like there’s an end in sight, which would be good news for everyone. Let’s get this done.

Is the craft brewing business in a slowdown?

Item one.

Alluring as those wide-open skies and rugged vistas may be, the hardscrabble life in West Texas can be unforgiving. And so it was last year for the region’s popular and award-winning craft brewer, Big Bend Brewing Co., despite a planned expansion to San Antonio that might have turned its luck around.

In December, the 6-year-old brewery surrendered to multiple challenges and announced it was shutting down Big Bend Brewing’s hometown operations and taproom in Alpine and abandoning the move to San Antonio.

“We had high aspirations and lofty goals, and we did everything we could to achieve them,” read the Dec. 21 Facebook post announcing the closure. “We remain hopeful and are working hard to make the stoppage temporary. The goal is to come back better than ever. We are no stranger to adversity – forging a craft beer brand in the rugged frontier of West Texas is no easy task.”

[…]

“The main trend is if you’re a local brewery doing small-batch beers, with an old-school small brewpub and restaurant model – those that are still popping up – if they are well-enough financed, they seem to be doing OK as local or hyperlocal places,” said Travis Poling, co-author of San Antonio Beer: Alamo City History by the Pint.

“But the time of the large regional breweries seems to have kind of come and gone,” Poling added. “Everybody wants to be the next Sierra Nevada or Sam Adams, but … the barrier to entry is a lot higher because there’s a lot more competition not just from larger regional brewers, but also the regional breweries bought up by Anheuser-Busch, Coors, and others.”

The Brewers Association reports there are 6,372 breweries in the nation, and of the $111 billion overall beer market, craft beer accounts for $26 billion, up 5 percent in 2017. Texas ranks ninth in the country for most craft brewers with 251 total breweries, or 1.3 per capita. The industry had a $4.5 million impact on the state’s economy in 2016.

In March, Brewers Association Chief Economist Bart Watson wrote, “Compared to many parts of the U.S. economy, craft’s 5% growth rate [in 2017] is quite strong. That said, it’s probably not as strong as many breweries expected as they built their business plan.”

“It’s a difficult time to invest in craft beer,” [Mahala Guevara, vice president of operations for Big Bend Brewing] said. “There’s been an enormous number of breweries opening in the last five years, and we’ve seen a lot of high-profile closures and reductions-in-force and layoffs. Five years ago, the market was going wild, everyone was making money, experiencing tremendous growth. Now there’s depressed investment in craft beer, so even though people are interested, everyone wants to wait out the business cycle.”

I don’t think the cash flow problems of one brewer in a rural part of the state is representative, but I’m keeping an open mind. Item two:

“I think people think Houston is getting saturated, because they haven’t been to a big beer city,” Platypus Brewing’s head brewer Kerry Embertson told me last week during an interview. “Like, Houston’s beer scene is relatively new. Yes. There are the St. Arnold and Southern Stars that have been around forever. But there’s a bunch of people like us that have been around three years or less. There’s plenty of room to make good beer, and customers will come to your place. Especially as spread out as this city is.”

John Holler, who co-owns Holler Brewing along with his wife Kathryn, just a couple blocks from Platypus echoed his colleague’s thoughts.

“I think Houston can definitely accommodate more breweries,” Holler said, during that same interview for an upcoming story. (Sorry! No spoilers!) “The key is, you know, we can accommodate probably 20 or 30 more Platypuses or Hollers. But not 20 or 30 more Saint Arnold.”

This story was based in part on a recent NYT story on the slowdown in growth of the craft brewing industry, and noted the switch from beer to cider at Town in City Brewery. As far as Houston goes, I think John Holler is exactly right. There’s still plenty of room here for small breweries that mostly serve the neighborhoods they’re in and a few bars and restaurants in town. Very few, if any, of those places are going to grow up to be Saint Arnold, or Karbach. Nothing wrong with that, and no reason to panic. Just a bit of perspective.

A switch to cider

Some craft brewing news of note.

The taps, they are a-changin’ at Town in City Brewery, where owner Justin Engle has decided to pause beer brewing and focus instead on creating hard cider.

The folks at Town in City began building their reputation in cider about a year ago, when they launched Houston Cider Co., in a shared space with the beer-brewing operation. But this month, Engle said he decided not to renew his brewer’s permit when it expires.

“We were given legal advice that if we were to renew our brewer’s permit prior to the TABC Sunset hearings, that we may be stuck for two years in old TABC rules,” Engle said of the current fight between brewers and legislators to modernize state laws for alcohol sales. “If the new rules are passed, it would still take us two years to get to the next rules. So we decided not to take that gamble, and so we’re not going to renew right now.”

But that doesn’t mean things at the brewery on Cavalcade near the Heights are going quiet.

On Dec. 18, Houston Cider Co. took a leap that Town in City never attempted: It began canning. Now, three of the cidery’s mainstays — Dry, Cherry and Rosé — are available at Whole Foods and a few other shops across the city.

Cider production began outpacing beer production at the Heights brewery back in August, Engle said.

Still, cider isn’t exactly a sure thing — especially not when compared with the ever-growing popularity of craft beer. According to Drizly, an eCommerce marketplace for alcoholic beverages, only 7.1 percent of sales in the beer market went to cider in October, the most recent month for which data are available. At that same time, 26.7 percent of sales were for craft beer.

But there’s another way to read that: Cider isn’t as crowded a space.

See here for some background on the ongoing legislative battle, which begins again in earnest as the Lege reconvenes. I note that one of the two incumbents that CraftPAC had been supporting as of that January publication date was defeated in November (Tony Dale of HD136). Sure hope they backed some other winners, or the slog will be harder than it needs to be. As for cider, the story notes that there are only eight such breweries in the state, with Houston Cider Company being the only one in our fair city (there is another one based in Dickinson that is the nearest neighbor). Here’s a Leader News story from January about their debut.

I blogged about Lerprechaun Cider Company, the first local cider company, back in 2011; they had a product relaunch in 2015 and according to a footnote at the end of this 2017 Houstonia story were never brewing here and had stopped distributing here. Their domain has expired, which I think tells you all you need to know. That Houstonia story was about Permann’s Cider Company, which as of last July was on track to have a taproom downtown. Not sure where that stands – they have a Facebook page that’s had five posts since February and a Twitter account that hasn’t tweeted since last August. I guess this is a longwinded way of saying that I wish the Houston Cider Company good luck, and that hopefully some day they’ll be able to brew beer again, too.

Our increasingly non-dry state

There are now only five counties in Texas where you can’t buy alcohol.

On Election Day in Stanton, just north of Midland, Ron Black was skeptical that a particular measure on the ballot would pass.

“Well, I think at first it was uh, nobody thought it would go through because they’ve tried it so many times, you know. I can’t tell you how many times it’s gone to the ballot,” Black said.

Black manages the Lawrence Brothers grocery in Stanton. The vote was whether to keep Stanton dry – that is to prohibit the sale of alcohol – or to allow the sale of beer and wine at stores like Black’s. But to his surprise, Stanton went wet after all. And it’s part of a long-term trend that’s washing over Texas.

To put it in perspective: in 1996, there were 53 dry counties in Texas. By 2011 that number dropped to 25. And as of Election Day when Stanton, the seat of Martin County went wet, there are now just five dry counties in Texas – in a state whose attitudes toward alcohol have always been complex, but tended to be more conservative than the country as a whole.

“Texas is slightly earlier than the nation and slightly later than the nation in terms of how long its Prohibition was enforced,” said Brendan Payne, a history professor at North Greenville University and an expert in Prohibition in Texas.

[…]

But the real shift toward dry county extinction came from the passage of House Bill 1199 during the Texas legislative Session in 2003.

“That is what revolutionized our alcohol laws,” said John Hatch, president of Texas Petition Strategies. To hold a wet-dry election in Texas prior to 2003, you had to get signatures from 35 percent of a jurisdiction’s registered voters, each of which had to sign their name exactly as it appeared on their voter ID card, with their voter ID number. And you only had 30 days to do it. It was more difficult to get booze on the ballot than an actual candidate. Hatch asked the legislature to change the law.

“They gave us everything we asked for,” Hatch said. “We went from needing 35 percent of all voters to 35 percent of the last election for governor. So it made it a lot more manageable. We doubled the amount of time from 30 days to 60 days. We made the signature requirement the same as any other petition: if you sign your name “Michael Marks,” that’s good enough.”

A flood of elections followed. In the 15 years preceding the law, there were about 150 wet-dry elections statewide. In the 15 years following the law, there were close to 950 elections. Nearly 80 percent of those went wet.

Fascinating. I’ve noted a few of these elections over the years – Lubbock County, whose dryness I experienced as a visitor in the 80s, was a big one – but I didn’t realize how close to extinction the notion of a dry county was. It’ll be interesting to see how much longer the last five holdouts hang on. Congratulations to the people of Martin County. Please celebrate responsibly.

Whatabout that styrofoam?

Texas’ favorite fast food chain is being asked to make changes to how it serves its food.

Activists are pressuring San Antonio-based Whataburger to end its use of foam cups and containers in favor of materials friendlier to the environment.

More than 50,000 people have signed a petition calling on the popular fast-food chain to stop using polystyrene foam, commonly known as Styrofoam, in its cups and food containers, Environment Texas Executive Director Luke Metzger said.

The petition was delivered Monday to Whataburger’s San Antonio headquarters and to restaurants in Austin and Corpus Christi by representatives for Environment Texas, Surfrider Foundation’s Texas Coastal Bend chapter and Care2.com.

“We think that they can find a good solution that meets customers’ needs but moves away from such harmful products,” Metzger said outside Whataburger’s headquarters on the North Side.

Whataburger, which has more than 800 stores in 10 states, said it is looking at alternatives to Styrofoam cups “that keep drinks at the right temperature, but we have a lot to consider from a quality and supply perspective when meeting our customers’ expectations.

“In the meantime, we continue to urge customers to properly dispose of our cups,” the company said in a statement.

[…]

McDonald’s pledged to phase out foam cups by the end of the year. Dunkin’ Donuts said earlier this year it would replace its foam cups in favor of double-walled paper cups by 2020. Starbucks Coffee Co. announced plans in July to eliminate the use of single-use plastic straws in favor of strawless lids or straws made from other materials by 2020.

“Companies are very conscious of their brand,” Metzger said. “They’re, of course, wanting to keep their customers. And that’s why I think we’re going to see companies like Whataburger hopefully join the ranks of McDonald’s and Dunkin’ Donuts and do the right thing here.”

Whataburger is talking to Environment Texas and the others about this, as they should. It’s a simple request, for a clear purpose, to do what others are now doing. Whataburger may have some questions, and they would surely need to phase in a change like this over time, but I can’t think of any reason why they wouldn’t want to do it. I hope they make that decision soon.

Beer for dogs

We live in strange but wondrous times.

When Megan and Steve Long tell friends and customers about their newest venture, Good Boy Dog Beer, more often than not, they’re met with the same three questions.

One: Is it really for dogs? (Yes.)

Two: Is it alcoholic? (No.)

Three: Can I drink it? (Um, sure?)

The beer doesn’t exactly dance on a human palate, thanks to a complete lack of sodium. But that was never the intention. The Longs, who own Henderson Heights bar in the Sixth Ward and Reserve 101 downtown, wanted to create a new product that mixed two of their favorite things on the planet — beer and dogs.

They’re not pretending to be the first people with the idea. There’s been a scatterplot of breweries offering pints for pups for more than a decade now. But they do seem to be the first in Houston, a city that has become increasingly dog-friendly in recent years, thanks to a growing number of patio bars willing to let four-legged friends tag along for Sunday funday. And that Fido-forward culture has helped the Longs find immediate success.

Within weeks of their launch, all three flavors of their beer — IPA Lot in the Yard, Mailman Malt Licker and Session…squirrel! — are available in 15 bars throughout the city, including Front Porch Pub and FM Kitchen and Bar, for a recommended price of about $5 a can. And they’re getting requests to ship cans across the country.

So yeah, it’s not beer in the sense that you or I know it. But it comes in cans and it’s served at bars, so close enough. Good for the Longs, finding a niche and filling it.

Have a Coke and a toke

Dude.

Aurora Cannabis Inc. led pot stocks higher after Coca-Cola Co. said it’s eyeing the cannabis drinks market, becoming the latest beverage company to tap into surging demand for marijuana products as traditional sales slow.

Coca-Cola says it’s monitoring the nascent industry and is interested in drinks infused with CBD — the non-psychoactive ingredient in marijuana that treats pain but doesn’t get you high. The Atlanta-based soft drinks maker is in talks with Canadian marijuana producer Aurora Cannabis to develop the beverages, according to a report from BNN Bloomberg Television.

“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesman Kent Landers said in an emailed statement to Bloomberg News. “The space is evolving quickly. No decisions have been made at this time.” Landers declined to comment on Aurora.

[…]

Coke’s possible foray into the marijuana sector comes as beverage makers are trying to add cannabis as a trendy ingredient while their traditional businesses slow. Last month, Corona beer brewer Constellation Brands Inc. announced it will spend $3.8 billion to increase its stake in Canopy Growth Corp., the Canadian marijuana producer with a value that exceeds C$13 billion ($10 billion).

Molson Coors Brewing Co. is starting a joint venture with Quebec’s Hexo’s Corp., formerly known as Hydropothecary Corp., to develop cannabis drinks in Canada. Diageo PLC, maker of Guinness beer, is holding discussions with at least three Canadian cannabis producers about a possible deal, BNN Bloomberg reported last month. Heineken NV’s Lagunitas craft-brewing label has launched a brand specializing in non-alcoholic drinks infused with THC, marijuana’s active ingredient.

Well, we have plenty of caffeine-infused food and beverages on the market, so this was only a matter of time. I personally don’t have any interest in cannabis, but I have no doubt that plenty of other folks will. If you really want to know when our state’s marijuana laws will start to change, this is likely to be your answer: When big business interests start lobbying to make it happen so that they can make a boatload of money. Ain’t life grand? Now if you’ll excuse me, I need a snack.

The beer boom continues

Raise a glass.

There were a dozen craft breweries across the Houston metro before 2013, and that seemed like a lot at the time.

Now, there are 52.

The new breweries have added 344,487 square feet of industrial space — roughly the size of a 14-story office building — to the local market, according to a new report from commercial real estate firm NAI Partners.

[…]

NAI said cities in Texas are “wildly underserved.” Only 12 of the 52 breweries are inside the 610 Loop, the report said, citing data from the Houston Beer Guide.

The report is here. On the one hand, I’m a little surprised there aren’t more breweries inside the loop, since they’re very much a neighborhood business and benefit from having a lot of potential customers in close proximity. On the other hand, real estate prices are such that it’s practically a miracle any breweries are inside the loop. However you look at it, I do agree there’s room in the market for further growth. We were behind the curve on this trend for a long time, and we’re still catching up.

Algae farms

Food for the future.

Inside a high-tech lab in a modular building in the West Texas desert here, a young scientist peered through a microscope at a slide of live and multiplying algae. She was on the prowl for “grazers,” a sort of cellular-level locust that could wreak havoc on the multimillion-dollar crop proliferating in thick green ponds outside.

It’s the equivalent of a cotton farmer walking rows in search of disease-carrying bolls, explained Rebecca White, the 38-year-old microbiologist who runs one of the world’s few commercially viable algae farms.

The harvest? For now, kilos upon kilos of biomass that is a plant-based source of omega-3 fatty acids, which in recent years have become all the rage for lowering cholesterol, promoting healthier skin and promising other health benefits. Common practice has been to consume them via a hunk of salmon or supplements derived from fish or krill. But since fish and krill actually get their omega-3 from algae, White and her team have figured out how to cut out the “middle fish” and capitalize on cultivating the source.

In a sign of how commonplace the practice has become, White, whose family has for generations raised cotton and cattle in the Texas Panhandle, says her grandfather has begrudgingly acknowledged that domesticating aquatic microorganisms counts as real farming.

The farm in Imperial is owned by Houston-based Qualitas Health, which partnered with H-E-B for the alGeepa line of supplements and is now expanding into the $33 billion omega-3 market with iWi. The latter line rolled out at Amazon.com, the Vitamin Shoppe and Sprouts Farmers Market in June.

[…]

The United Nations in 1974 called algae “the most ideal food for mankind,” and the Food and Agriculture Organization declared it “the best food for tomorrow.” But so far not even NASA’s been able to get people to want to eat it. At least, not the average American.

With more people eschewing certain foods and a world population expected to approach 10 billion by 2050, however, a new generation of scientists says the mainstreaming of algae is inevitable.

“Most people’s experiences with algae are a contamination event of some sort,” White said. “Your pool, the dog bowl, the Great Lakes, your swimming hole — that’s all negative. But algae has been doing so many positive things for so many years that they don’t talk about in a way that gets people’s attention. … Our goal is to make people think about algae as food.”

If you can package it as a meat substitute the way soy is, you’re probably most of the way there. That won’t be for everyone, of course, but I’d bet the market will be pretty substantial over time. It’s a long story, so read it and see what you think.

Beer delivered to your home

Who needs groceries, am I right?

Favor, founded in Austin in 2013, prides itself in delivering almost anything in under an hour. But until now, beer and wine — long the No. 1 request from customers — was among the missing.

Favor finalized all the proper permits and licenses to deliver beer and wine in late 2017 or early 2018. But it was the partnership with H-E-B — and the grocery company’s wide selection — that made the delivery service possible, [Jag Bath, Favor CEO and H-E-B chief digital officer] said.

Favor will offer H-E-B’s entire beer and wine selection with no minimum order size. Because every H-E-B store is tailored to its neighborhood, the selection will vary by city. Houston-area selections will include such craft brands as Buffalo Bayou Brewing, No Label Brewing, Lone Pint Brewery and 8th Wonder Brewery, and wines from the Texas Hill Country.

This isn’t the first beer delivery service in Houston. HopDrop launched late last year to provide local craft and hard-to-find beers.

Oftentimes, it delivers brews that are available only on draft.

HopDrop also provides on-demand delivery in under an hour. Customers place an order online, and a driver is dispatched to a partner bar. That bar fills a 32-ounce can, called a crowler, with beer and gives it to the driver for home delivery. HopDrop has partnered with bars throughout the Houston area, from Spring to Katy, from downtown Houston to Webster, to ensure customers receive their orders in less than an hour.

The delivery fee is $5.99 plus the cost of beer. HopDrop also offers a monthly subscription service that waives the delivery fee and provides customers same-day orders from any partner bars throughout the greater Houston area. This allows a customer in Katy to get beer from a bar in Spring.

Its focus on beers typically unavailable in grocery stores will differentiate HopDrop from the new delivery service provided by Favor, co-owner Steven Macalello said. He isn’t worried about the competition. In fact, he thinks it’s good publicity for beer delivery overall.

I get the market for home delivery of groceries. Not used it myself, but I see why people do. This one’s a little less clear to me – are there really that many people who need an on-draft microbrew brought to their door? Maybe that’s just a failure of imagination on my part. I guess if you’re the grocery-delivery consumer anyway, or maybe if you’re just grocery-delivery-curious, being able to add a six-pack to the order sweetens the deal. Is this something you would use?

Back to the barbecue battle

Once again, Sid Miller makes us pay attention to something we shouldn’t have to.

Sid Miller

Sid Miller

Texas’ barbecue culture is sacred. But some pitmasters are catching heat from a former rodeo cowboy overseeing the state Department of Agriculture.

Commissioner Sid Miller is slapping fines on their small businesses despite a warning from the attorney general that his reasoning may be illegal. The department issued at least 13 citations to barbecue joints for failing to register their meat scales since September, despite a 2017 state law requiring the commissioner to leave such establishments alone. In a case of unlikely bedfellows, Miller’s commission issued nine scale-related fines to yogurt shops, too.

The department has no plans to stop.

The citations are part of a running feud between restaurant owners and Miller, a white-cowboy-hat-wearing commissioner who made it his mission to ensure the state register all scales that weigh food for customers. But the state’s restaurant association is warning the food fight could land the commissioner in court.

[…]

When you order a quarter-pound of brisket, Miller insists the meat-slinger should set it on a state-registered scale where you can read the weight. Restaurants must also pay a yearly $35 fee for each of their scales. But strictly enforcing the law could force some of Texas’ most storied smokehouses to completely change the layout of their kitchens, incurring huge remodeling costs.

It’s “patently absurd,” said Kenneth Besserman, general counsel for the Texas Restaurant Association. Some pitmasters scrambled to rewrite their menus to serve less specific amounts of meat but found that created confusion for customers, he said.

Besserman and the restaurant lobby quickly convinced the Legislature to rewrite the law, nicknaming their effort the “Barbecue Bill.” Lawmakers in 2017 almost unanimously agreed to exempt scales “exclusively used to weigh food sold for immediate consumption,” largely pertaining to barbecue restaurants, yogurt shops and certain salad bars. The governor was sold.

Nevertheless, Miller persisted. Once the bill became law, Miller used his authority to add three additional words: “on the premises.” That meant any establishment selling food to-go — as the vast majority of barbecue restaurants do — had to follow the scale laws and regulations, essentially undoing the new law.

See here and here for the background. AG Paxton has opined that Miller’s interpretation is out of bounds, and the TRA is threatening to sue. I have expressed my reluctant agreement with Miller on the merits of the 2017 law, but it is the law and a public official’s role is to obey and uphold the law, outside of situations where the law is obviously immoral or unjust. This doesn’t meet that standard, in which case Miller should be lobbying for the law to be changed, or to work to un-elect the legislators who passed it. It’s also fair to point out, as Miller’s Democratic opponent Kim Olson does in the story, that the AG ought to have other priorities than this, as there have been almost no complaints made in recent years about inaccurate barbecue scales. Of course, given the sorts of things Miller tends to do when he has a bit of free time, this is at least not horribly embarrassing. Silver linings, I suppose.

Paxton versus Miller on barbecue

Just embrace the fact that this is the world we live in.

Sid Miller

Sid Miller

A nonbinding opinion issued Monday by Attorney General Ken Paxton continues a battle between lawmakers, restaurants and Agriculture Commissioner Sid Miller over regulation of scales used to measure food.

Under state law, roughly 17,725 retailers, including grocery store chains, airlines, coffee houses, laundries and brisket purveyors, are required to use scales to measure what they sell to the public. Those scales are also supposed to be registered with the state so inspectors can ensure that they’re not tipped in the seller’s favor.

A law passed during last year’s legislative session, however, carved out exemptions for scales “exclusively used to weigh food sold for immediate consumption,” meaning places such as yogurt shops and barbecue joints won’t have to get their scales registered.

Miller called the law “horse hockey.”

[…]

Miller’s agency, which was charged with verifying the accuracy of the retailers’ scales, decided that businesses would only be exempt from regulation if they weighed foods to be eaten “on the premises.” But the barbecue bill’s authors argued that in determining how to implement the law, Miller’s agency misinterpreted its intent. So Miller asked Paxton for a written opinion.

Paxton sided with the barbecue joints in his opinion Monday, saying Miller’s agency went too far.

See here for the background. As I said before and as I may never say again, I think Miller had the better argument, but at least we know Ken Paxton remains consistent about siding with the moneyed interests whenever the opportunity presents itself. But who cares about any of that? This calls for a song:

Now if you’ll excuse me, I hear some brisket calling my name.

Oh, no, Shipley’s

Disgusting.

Three former Shipley Do-Nuts employees are suing the company’s owner for allegedly groping them and making racist remarks, accusations that are consistent with a bevy of civil rights lawsuits filed by former workers since 2004.

The women claim that Lawrence Shipley III “regularly subjected them to unwelcome touching, other inappropriate physical behavior and unwelcome sexual comments,” according to a lawsuit filed in Harris County on Friday against the donut company and its owner.

“(Shipley) hugged Elizabeth Peralta tight across her front and touched her rear and buttocks,” the suit says. “He stared at her breasts and crotch areas. He spanked her rear.”

The other plaintiffs allege similar action from Shipley while working at the Houston-based chain’s North Main Street location. During one incident, plaintiff Esmeralda Sanchez claims Shipley did not punish a male supervisor who made sexual innuendos to her, instead saying that the way she dressed encouraged the behavior. They seek more than $1 million in damages.

The three women are also plaintiffs in a federal lawsuit filed against the company last year for failing to pay overtime, an allegation that’s been lodged many times against the company in suits.

In an email Sunday, Lawrence Shipley said his accusers were caught “red-handed in an elaborate corruption scheme whereby they duped the Shipley companies and more than 20 franchisees out of legitimate delivery and freight services for their own financial gain.”

“And if I were to become somebody I’m not and stumble over to the dark side, it wouldn’t be with these low lifes,” he wrote. “What a baseless, pathetic accusation. That’s my comment.”

An attorney for the three women said it was unclear what Shipley meant in his statement. Karla Evans Epperson said she was not aware of any legal actions against her clients that would explain Shipley’s comments. Two of the women worked in housekeeping, and the other did clerical work, according to the first suit.

Epperson said she wasn’t surprised by Shipley’s comments, though.

“This isn’t his first rodeo,” she said.

There’s more, so go read the rest. That North Main location is where I take the girls for donuts when they convince us to buy them. Not anymore. I will not darken the doorstep of a Shipley’s till this jackass has sold his shares and they have put in real reforms to treat their employees better and prevent crap like this in the future. What a damn shame.

Microbreweries organize again

About time.

Craft brewers are asking beer fans to put their money where their thirst is.

Six weeks before state primary elections, the Texas Craft Brewers Guild on Monday launched a political action committee to raise money and awareness to challenge “archaic, anti-competitive beer laws” it says are holding back an industry poised for dramatic growth.

The PAC already has raised more than $40,000 from among its approximately 250 brewery members, with the largest individual donations coming from the owners of Austin Beerworks and Saint Arnold, Live Oak and Deep Ellum Brewing Cos. Much of the money raised by the new CraftPAC will go to support state legislative candidates who support the brewers’ agenda, guild executive director Charles Vallhonrat said

CraftPAC so far has donated $1,000 each to two incumbent legislators – one Democrat and one Republican – in the Austin area.

“We intend to influence where we can,” Vallhonrat said.

Here’s the CraftPAC finance report for January. The legislators in question are Reps. Eddie Rodriguez and Tony Dale, though I’m sure there will be more. It’s one thing to give money to a friendly incumbent in a friendly district, but it’s something else altogether to contribute to someone who’s looking to take out an enemy. We’ll see how seriously they decide to play.

Brewbound has more details:

Initially, CraftPAC will focus on legalizing of to-go sales from production brewery taprooms, which Texas law currently outlaws. Although the state’s manufacturing breweries are not allowed to sell beer for off-premise consumption, the state’s brewpubs, wineries and distilleries are allowed to sell their products to-go.

Speaking to Brewbound, Texas Craft Brewers Guild Executive Director Charles Vallhonrat said Texas distributors have had a financial edge over brewers after giving more than $18 million in political contributions to lawmakers. CraftPAC, he added, is a way to level the playing field.

“We want to be on the same field,” he said. “We know that they have big bats, but we need to be on the same field to say we’re in the game.”

CraftPAC board chairman and Austin Beerworks co-founder Adam DeBower added that Texas’ brewers haven’t had a voice in the legislature since 2013, when several lawmakers who supported brewers retired or moved on.

“We don’t have any champions left,” he said.

[…]

Vallhonrat said last year’s passage of House Bill 3287 — which put tighter restrictions on how beer that is sold for on-premise consumption at brewery taprooms — was the catalyst to the formation of CraftPAC.

“The blow we received from 3287 showed the overwhelming power that the distributors wield,” he said. “That they could influence a bill that absolutely no brewery supported, and they could go around saying this was for the protection of breweries and convince the Legislature and get it passed, that really demonstrated what we’re fighting against.”

In 3287, Texas lawmakers changed the way the state’s barrel cap is calculated, adding production across multiple brewing operations rather than from individual facilities. Now, breweries making more than 225,000 combined barrels annually will be required to repurchase their own product from a wholesaler in order to continue selling beer for on-premise consumption in their taprooms.

In the announcement of CraftPAC, the Guild also cited the 2013 passage of Senate Bill 639, which prohibits breweries from selling their distribution rights to wholesalers, and led to a lawsuit that will be decided by the Texas Supreme Court.

Vallhonrat told Brewbound that CraftPAC will also work to make other “common sense updates” to Texas’ alcohol code such as eliminating the distinction between “ale” and “beer.” According to the Texas code, an ale is a beer above five percent ABV while a beer is under five percent ABV. Such distinctions are costly, and add market confusion and work for brewery owners, he argued.

DeBower added that CraftPAC would work to equalize licensing differences between breweries and brewpubs. Currently, brewers are required to have a manufacturer’s license while brewpubs receive retail license and are afforded different privileges, such as off-premise sales.

If you’ve read this blog for any length of time, you know what I think of this state’s ridiculous, anachronistic, and extremely consumer-unfriendly beer laws. (If you’re new here, you can now probably guess.) I support all of this, of course, but I’m shaking my head a little because this is at least the third separate effort to organize and whip up public opinion in favor of modernizing the beer codes. There was a bipartisan blog-based effort in 2007, of which I was a part, and the now-dormant Open The Taps group that helped spearhead the 2013 laws that represented the one step forward we have taken. The experience since then shows that a movement can never take anything for granted – what has been done can be undone, or at least undermined. I wish CraftPAC all the success – their Facebook page is here; give it a Like – and I especially wish that they stay around and keep at it well after they do have success.

The year in beer

It was pretty good overall for Texas craft brewers, especially in Houston.

Texas craft brewers will close the books on 2017 having made more beer, opened more breweries and garnered more national recognition for the state than ever.

Looking ahead to 2018, Houston appears positioned to keep the party going. Commercial real estate services firm Cushman & Wakefield recently identified Harris County as second in the nation for number of breweries in planning.

Many of these newcomers are likely to be small, inviting people to walk or bicycle from nearby homes or workplaces. But at least two established local companies recently announced major expansions that should continue the trend of making breweries bona fide tourist destinations.

Such developments have craft industry leaders upbeat about the future, though they are still seething over a law change enacted last spring that they believe has hurt the value of breweries and penalizes those seeking to grow significantly.

The law now forces breweries that reach a certain size to sell and buy back their own beer before they can offer it in their taprooms, cutting into profit margins. Because the size restriction includes production totals of parent companies, brewers fear it could deter future acquisitions – not just by global giants but from other craft breweries as well.

Charles Vallhonrat, executive director of the Texas Craft Brewers Guild, this week called the measure “nonsensical” and pledged to continue efforts to “modernize” the alcoholic beverage code.

Regardless, for the most part and in spite of a historic flood that knocked much of the Texas Gulf Coast onto its heels, it was a year of rewards and resilience for local brewers.

The trend these days is for the breweries to focus on taproom sales aimed at neighborhood customers. I’ve had a hard time keeping up with all the new construction, but I know there are more options near where I live now, and more are coming. One of those expansions mentioned above will be pretty close to my home, more of a bike ride than a walk but exactly the sort of thing that would be appealing on a warm day. Saint Arnold is building a beer garden in the space next door to their facility, which ought to be awesome. Maybe one day we’ll get our Legislature to fix the idiot anti-consumer beer laws we have in this state, but until then it’s on us to support these vibrant job (and beer) creators.

The Republican primary for Ag Commissioner is now about barbecue

Because of course it is.

Sid Miller

Sid Miller

“Barbecue might be America’s most political food,” wrote the New Yorker earlier this year. The claim certainly applies to the 2018 race for Texas Agriculture Commissioner. Instead of farming or ranching issues, it’s Sid Miller’s recent history on barbecue that his Republican primary opponent, Trey Blocker, is using against him.

For some brief background, the Texas Department of Agriculture (TDA) launched a program called Operation Maverick in 2015 to enforce, among other things, the requirement that barbecue joint scales be certified and registered, a rule that hadn’t been enforced in the past. Backlash from small business owners resulted in House Bill 2029, aka the “Barbecue Bill,” during this year’s legislative session. The bill, which exempted barbecue joints (and yogurt shops) from the regulation, easily passed the Legislature and was signed into law by Gov. Greg Abbott in June. The TDA then revised the wording of the bill—which had exempted “food sold for immediate consumption”—by adding “on the premises” in the rewritten regulation. Those three new words meant that any barbecue joint selling food to-go was no longer exempt. The Texas Restaurant Association cried foul, and the TDA asked Attorney General Ken Paxton for a ruling that is forthcoming. This has all become fuel in a food fight between the candidates.

The first shot came a few weeks ago from Miller, who mocked Blocker for holding a fundraiser at a restaurant that served Nutella crepes. Miller acted as if he didn’t know what Nutella was, despite only seeing the “tella” portion of the word on the blackboard sign behind Blocker in a photo from the event (which, for the record, was held at the Old German Bakery & Restaurant in Fredericksburg).

Blocker fired back with a fundraising email that described Miller’s stance as a “war on Texas BBQ.” Now, calling a Texan anti-barbecue is about on par with calling them un-Texan, but Blocker didn’t stop there. Over the weekend, he followed up with two campaign videos focused squarely on barbecue.

I can’t believe I’m saying this, but I don’t see anything wrong with what Miller did. I get why the TRA didn’t care for it, but I’m all for consumer protections, and that’s how I see this. All that said, this primary is already making us all stupider. Just vote for Kim Olson in November and all of this can be naught but a bad memory. The Chron and Texas Public Radio have more.

Microbrewery legal setback

Kind of a lousy Christmas present.

Three Texas brewers are going back to battle with the state after an appeals court reversed a decision that would have allowed them to sell their distribution rights for monetary compensation.

In 2014, Peticolas Brewing Co. (Dallas), Revolver Brewing (Granbury) and Live Oak Brewing Co. (Austin) sued the Texas Alcohol and Beverage Commission, saying a newly passed law related to who could sell a brewery’s distribution rights was unconstitutional. The mandate, which passed in 2013 with a bundle of other beer regulation reforms, said breweries may not accept payment for contracting with a distributor, but that a distributor could get a payout if it sold those same territorial rights to another distribution company.

Last year, a judge served victory to the breweries. But on Dec. 15, the Texas Third Court of Appeals reversed that decision. It stated, in part, the law does not prevent the brewers from successfully operating their businesses and that it also upholds the industry’s three-tier system, which aims to avoid conflicts of interest between alcohol manufacturers, distributors and retailers.

The decision will be appealed to the Texas Supreme Court, according to a statement from Institute for Justice, which is representing the breweries.

“It is well established that the Texas Constitution protects economic liberties, and these rights do not cease to exist when the government begins licensing and regulating individuals and businesses,” said Arif Panju, managing attorney for Institute for Justice’s Texas office, in a statement. “Every business in Texas should be concerned with the court’s ruling in this case. It is dangerous and we will ask the Texas Supreme Court to reverse.”

See here, here, and here for the background. You know how I feel about this. The three-tier system is an anachronism and a travesty, a glaring counterexample to any politician’s paeans to how Texas has a great business environment. Yet it persists, a lasting tribute to the lobbying efforts of the beer distributors and the big breweries that support them. As with so many things in this state, the ultimate solution is going to have to be a political one. Nothing will change until we elect enough people who want it to change. Austin360 has more.

Buffalo Bayou Brewing to build new facility

We remain in a craft beer renaissance.

Buffalo Bayou Brewing Co., which launched nearly six years ago with a beer called 1836 honoring the date of Houston’s founding, is preparing to break ground on a $14 million brewery and restaurant that would be one of the largest and most visible of its kind in the city.

The announcement marks another milestone for the industry, as breweries continue to pop up and civic boosters market them more heavily.

The three-story, 28,000-square-foot Buffalo Bayou Brewing facility is planned for Sawyer Yards, an artist studio-anchored development just south of Interstate 10 near downtown, the Woodland Heights and other bustling neighborhoods. The brewery would boost production capacity significantly and take fuller advantage of state laws that allow it to sell some beer on-site.

Founder Rassul Zarinfar said his business outgrew its original location, a converted warehouse near Memorial Park that is expected to ship about 8,000 barrels this year. The new facility, 3 miles away and expected to open in 2018, will provide immediate relief and could be expanded over time to a 50,000-barrel capacity.

The company has begun the permitting process and expects construction to take nine months.

The new site will include a taproom and 200-seat restaurant that would be larger and more comfortable for visitors, who currently squeeze into an un-air-conditioned corner of the brewery and a small outdoor patio to sample the wares and snack from food trucks.

Full- and part-time employment would approximately double, to about 100, Zarinfar said.

[…]

[Last month], Houston tourism officials began selling one-day, three-day and 90-day Brew Passes at VisitHouston.com that purchasers can redeem for a sample flight of beers and other discounts at six Houston breweries.

Maureen Haley, director of strategic tourism initiatives at Visit Houston, said locals and tourists alike seek out unique experiences.

“As more breweries that have smaller production get into the game, you have to go there to get the beer,” she said.

I’ve been to a few events at the current Buffalo Bayou location. Good beer, but definitely crowded and loud as a result, and parking – it’s on one of the narrow streets a block south of I-10 between Shepherd and TC Jester – is a problem. The new location sounds great, and I look forward to visiting. Also, I need to get a couple of those three-day Brew Passes for the next time my dad is in town. Best of luck with the construction, y’all.

The taproom bill is in effect

And it’s lousy, as expected.

The latest draft of beer legislation in Texas has left a bitter taste in the mouths of some craft brewers.

HB 3287, which lawmakers passed during their regular legislative session earlier this year, requires craft brewers that produce more than 225,000 barrels per year to pay a distributor to deliver their beer — even if the destination is inside their own facility.

Proponents of the legislation say it will maintain the state’s three-tier system — Prohibition-era regulations that legally separate brewers, distributors and retailers — and properly regulate large companies that purchase craft breweries. To opponents, though, the law targets newer craft breweries across the state, discouraging investment in their businesses while protecting larger and more established beer companies.

[…]

“When you get to a certain point, you’re no longer the little guy that needs the incentives,” said Rick Donley, president of the Beer Alliance of Texas, which represents distributors and supported the legislation. “Once they get to a certain annual production level, they’re really not new entrants into the marketplace.”

But [Charlie Vallhonrat, the executive director of the Texas Craft Brewers Guild] says craft brewers weren’t asking for any help from distributors, who he charges will benefit most from the new law. Carve-outs written into the law allow three craft breweries recently purchased by larger breweries to avoid the 225,000-barrel cap: Karbach in Houston, bought by Anheuser-Busch InBev; Revolver in Granbury, purchased by Miller-Coors; and Independence in Austin, bought by a Heineken-owned subsidiary.

“They claim that this is to protect the three-tier system,” Vallhonrat said. “This has nothing to do with protecting the three-tier system.”

See here for the background. As you know, I think the three-tier system should be ashcanned, but it remains the case that no one has asked me. I don’t know why it is that we can’t have a truly open, consumer-friendly market for beer in Texas, but clearly we can’t. The success that microbrewers have had in this state has been despite the existing regulatory environment, not abetted by it.

Crowler conundrum concluded

Finally.

Mike McKim held an empty aluminum can under a tap and pulled the handle, filling the can with Real Ale Brewery’s Helles beer. He fitted a pull tab lid on top, slotted the can into his “crowler” machine, and pushed a button. He told the story of the equipment’s origins, invented by Colorado-based brewery Oskar Blues.

Then the founder of Cuvée Coffee in Austin explained how the state of Texas took it away from him, fined him more than $30,000, kept it for months after judges told them to return it and sparked a lawsuit that cost him more than $40,000 in legal fees.

“[TABC charged us with] illegally manufacturing an illicit product,” McKim said. “Basically, brewing beer. We’re not brewing beer. We buy beer, put it on tap, and put it in a can. Who cares whether I’m putting it in this little Dixie cup or in a bottle or a can, what difference does it make? And that’s why we went to court.”

McKim’s battle with the Texas Alcoholic Beverage Commission officially drew to a close on Thursday, when he got his crowler machine back after more than a year of separation. The coffee bar sold its first crowler since 2015 on Friday. And McKim’s story has inspired two pieces of legislation this session.

[…]

Cuvée Coffee’s story became the impetus for HB 908, which allows draft beer to be sold for off-premise consumption in both crowlers and growlers. Its author, state Rep. Ramon Romero, Jr., D-Fort Worth, wrote a letter to TABC Executive Director Sherry Cook early March this year admonishing the agency for its failure to return Cuvée’s machine months after a judge ordered them to do so.

“TABC has so many other things to worry about,” Romero said. “We’ve been working with TABC to crack down on human trafficking, bars taking advantage of women, to some degree creating environments that are very dangerous for women. We’ve been working on all these things and if it was up to me, that would be what they’re focusing their attention on — not small businesses trying to innovate.”

On Monday morning, McKim testified in support of SB 813 and told the Senate Affairs Committee he had to spend $41,300 fighting the TABC over the crowler machine. Sen. Bryan Hughes, R-Mineola, said he filed the bill to give individuals and businesses the ability to sue regulatory agencies for unreasonable regulatory actions. He hopes it will deter agencies from pursuing potentially frivolous regulatory actions.

“If I’m an agency and I’m messing with a Texan, there is no downside, no risk from the agency’s standpoint,” Hughes said. “There’s nothing keeping the agency from pursuing a frivolous action. If they lose in court and appeal like they did with Mr. McKim, there’s nothing keeping them from pulling out all the stops and punishing a business owner. The idea behind SB 813 is to even things up a bit.”

See here and here for the background. This was always a ridiculous difference-without-a-distinction action by the TABC, and it’s good that they have admitted defeat. I support HB908, though I’d like to know more about SB813 before taking a side on it. The bottom line is that our beer laws and how we enforce them continue to be silly, though hopefully now slightly less silly. There’s a lot more room for a lot less silliness, if we want there to be.

Shiner’s caffeinated beer

We return to an old favorite topic, caffeination of things that are normally not caffeinated.

One of Texas’ favorite beer brands has released a new product to celebrate 108 years in business.

Shiner Beer’s caffeine-laden Shiner Cold Brew Coffee Ale has just hit stores. The brew is made with Chameleon Cold Brew, another Texas-based company.

Chameleon has been making organic cold brew in Austin since 2010. The brand has exploded in the Lone Star State as cold brew increased in popularity.

[…]

Those who have tasted the new Shiner beer say it has a clean finish, lager-like taste. According to the Beer Street Journal it “drinks like a beer, as well as a hopped cold brew.”

The beer will be released in cans, bottles, and on draft. It will be a limited-time offering.

Shiner releases specialty limited-availability brews every year around this time. Lots of things have been caffeinated in recent years – potato chips, soap, Cracker Jack, even air. Caffeinated beer has been with us since at least 2004, though as that was a Budweiser product, I’ve no doubt that Shiner Cold Brew Coffee Ale will be superior. Alas, I myself am not a fan of coffee, so I’ll have to rely on third party reports to confirm that. Bottoms up and Happy Birthday, Shiner.

A win for beer

Hooray!

All you want for Christmas is a crowler to go? It probably won’t happen that quickly, but an administrative judge’s recommendation could move the state a step closer to letting bars and restaurants sell takeaway beer in the sealed, 32-ounce aluminum cans that sparked a passionate debate last year when officials cracked down on retailers who used them.

“I’m ecstatic,” said Todd Hayden, owner of Hop Scholar Ale House in the Spring area. ” … We sold a ton of beer in crowlers.”

Until last fall, that is, when Texas alcohol regulators ordered bars simply to stop using crowler-filling machines or risk losing their sales licenses or facing thousands of dollars in fines. Seven retailers, including three in the Houston area, received written warnings.

Selling beer for off-premise consumption in growlers, typically glass or stainless-steel bottles that are capped by hand, remained legal for retailers with the proper sales license. But the Texas Alcoholic Beverage Commission declared the crowler machines require a manufacturing license to operate. Only licensed brewpubs that make beer and can sell it to-go were allowed to continue using them.

Hayden and others put the machines in storage, but Cuvee Coffee of Austin challenged regulators by continuing to sell crowlers. TABC agents seized its equipment in September 2015. The company eventually sued in state District Court, but it was ordered to go through the administrative hearings process first.

Round 1 goes to Cuvee. In a decision dated last week, administrative judge John Beeler sided with the retailer on all counts and recommended that TABC return the equipment and change its rules.

See here for the background. Basically, the administrative judge agreed that crowlers are not usable in a manufacturing process and thus should not be subject to this requirement. The TABC can accept this ruling and adjust accordingly, or it can file an exception in the hope of getting the judge to change some part of his ruling. The deadline for that is December 2. It may still be awhile after that before the crowler machines come out of storage, but barring anything unusual this is a great result for Texas and everyone who drinks beer. Austin 360 and the Current have more.

Anheuser-BuschInBev to buy Karbach

If you can’t beat ’em, buy ’em.

Fast-growing Karbach Brewing Co. of Houston is the latest U.S. craft brewery to be acquired by a global beer giant, announcing Thursday morning that Anheuser-BuschInBev is buying it for an undisclosed amount.

The 5-year-old Karbach will be part of the company’s U.S.-specific High End business unit, joining the likes of Stella Artois and Shock Top; Goose Island, Breckenridge, Elysian and five other craft breweries; a cider company; and a hard seltzer company.

Ken Goodman and longtime business partner Chuck Robertson, who founded the brewery in a building they formerly used in their beer distributorship on Karbach Street, said existing management and brewers will remain in place and the company will retain much of its independence while also gaining access to the resources that will help it continue to grow.

“The financial piece wasn’t that important at the end of the day,” Goodman said. “It was the resources.”

High End president Felipe Szpigel cited Karbach’s Love Street Kölsch as an example of a lower-alcohol, or “session,” beer that will fill a niche in the AB-InBev portfolio.

He said he first visited the Karbach brewery during a site visit to Houston about a year and a half ago and as he talked with the owners and brewers, “I really fell in love with what they are doing.”

Brewmaster Eric Warner said the move will allow his team to collaborate with those other craft breweries.

“The High End wants to see us innovate,” he said.

Szpigel and the Karbach team said they will continue to focus on developing the Texas market for the next couple of years.

I’m sure that quote about “resources” is a reference to the ABinBev distribution network, which is more a comment on Texas’ byzantine and archaic beer laws than anything else. I’m sure the Karbach founders (and I hope their employees) will nonetheless make a nice chunk of change off of this, and more power to them if they do, but a peek at their announcement of the deal on Facebook shows that the reaction from their customers is overwhelmingly negative. This is no surprise – ABinBev has openly mocked craft beers and the people who drink them in their advertising, and well, anyone who drinks Karbach almost certainly thinks ABinBev products are exactly what’s wrong with beer and the reason why breweries like Karbach needed to exist and have done so well. From a brand perspective, it’s at best a shotgun wedding and at worst a complete hash. I’m sure that Karbach will sell a lot more beer as a result of this deal. I just suspect that very little of that beer will be consumed by people who had ever drunk it before today. Swamplot and Houstonia have more.

Have we reached peak beer in Texas?

Maybe not, but we are surely testing the limits of the market.

beer

Owners of Eureka Heights Brewing Co. signed up 40 bars and restaurants to sell their beer during their first three weeks in business. The taproom was drawing such crowds that they quickly expanded hours. Saturday afternoons are now quite a scene, especially when a tour bus drops off a clutch of beer explorers.

They made opening a brewery look so easy, it’s perhaps no wonder others continue to jump in.

In late June, the Chronicle published a comprehensive list of 36 breweries operating between Galveston and Bryan-College Station, including 12 in Houston proper. In the three months since, five more breweries have opened within the city limits. Two were hosting opening events Friday night alone.

It’s a startling number, even given the surging interest in locally made beer.

“We often do see little bursts of activity as people get excited and open at the same time,” Brewers Association chief economist Bart Watson said Friday.

Brock Wagner, who founded Saint Arnold Brewing Co. 22 years ago, called it “the type of coincidence that is likely to occur when you have so many breweries in planning.” He cautioned that the new brewers may find it tougher to find shelf space in stores or room on a tap wall for their draught products.

“I think we may be at peak brewery opening,” he said, adding that it may still be two to three years before a shakeout begins and some breweries close. “I’ve been predicting a slowdown in brewery opening for a while and been proved wrong. I think we are at that point.”

Jason Armstrong, vice president, sales and distribution, and co-owner of Buffalo Bayou Brewing, sees room for more breweries. But he agreed it’s an open question.

“How many people can you fit in the boat?” he said. “I don’t think we know that yet.”

I confess I’ve lost track of the microbreweries in the Houston area. There are a few brands I buy – mostly but not exclusively Saint Arnold – and a bunch that I’ve never tried. I hope they all make it, and I hope they take an ever-increasing share of the market from the big conglomerates, but the odds are that in five or ten years’ time, the total number of micrbreweries will be smaller than it is today. In the meantime, I need to do some touring and sampling. I’ve been missing out.

Amazon PrimeNow restaurant delivery debuts in Houston

More good news for people who like having other people bring them their food.

Amazon

Announced via release, Amazon PrimeNow will offer one-hour delivery for Prime members from dozens of restaurants across the city. Which means that you’ll not actually have to visit the restaurants to enjoy food from The Hay Merchant, El Tiempo Cantina, Hugs & Donuts, and more.

Unlike other delivery services, whose fees range from $2 to $7 per delivery, PrimeNow deliveries will be free for those that have paid the $100 for Amazon Prime perks. Notably, Amazon will not mark up menu items’ prices, which other services are unabashedly guilty of.

PrimeNow delivery is officially available in Houston as of today. To see if it’s in your area, you’ll have to download the PrimeNow app and look for a “Restaurants” option.

As noted in the story, Amazon joins UberEats and some other services in the dinner delivery business. I personally prefer to dine in, mostly because I like my food hot from the kitchen; the only to-go/delivery food we get with any regularity is pizza. I know that a lot of people do like this sort of thing, and I’m sure this will be something they really like. If you’re one of those people, you now have one more reason to not leave the house.

Microbreweries win their distribution rights lawsuit

Excellent news.

beer

A Texas law that prohibits brewers from selling territorial rights to distribute their beer is unconstitutional, a judge ruled Thursday, serving up a major victory to beer companies seeking to expand their presence in stores, bars and restaurants throughout the state.

The decision says the government has no compelling interest in prohibiting brewers from seeking cash compensation when negotiating a contract with distributors, who have almost exclusive authority to handle sales between producers and retailers.

“This law, it was written by beer distributors to enrich big beer distributors and that is not a legitimate state interest,” said Matt Miller, senior attorney and head of the Austin office of the Institute for Justice, which litigated the case on behalf of Texas craft brewers Live Oak, Revolver and Peticolas.

The law, passed three years ago, allows brewers and distributors to negotiate for things like equipment and marketing efforts, but not direct compensation. That denies brewers who have worked to build up their business the ability to “capture the value of their brand” once they are large enough to require a distributor, said Charles Vallhonrat, executive director of the Texas Craft Brewers Guild.

A cash infusion from a distribution contract also would allow smaller breweries to expand operations, hire new employees and build up marketing teams to increase sales, Vallhonrat said.

Thursday’s ruling by state District Judge Karin Crump in Austin came after both the brewers and the Texas Alcoholic Beverage Commission sought summary judgments in the lawsuit. After considering depositions from both sides, Crump declared the law violates state constitutional protection for economic liberty.

[…]

Plaintiff Chip McElroy, founder of Live Oak Brewing Co. in Austin and one of the law’s most vocal critics, called it “unjust … unconstitutional … just plain wrong.”

“It took our property and gave it to them for free,” McElroy said Thursday.

Arif Panju, another Institute for Justice attorney in the case, said the ruling applies to out-of-state breweries as well. Miller said it protects all entrepreneurs looking to build up their businesses.

Miller said the ruling will help breweries going forward but does not address those who struck distribution deals while the 2013 law was in effect.

The Texas Alcoholic Beverage Commission has 30 days to file an appeal. A spokesman said agency lawyers are in touch with the Texas Attorney General’s Office and likely will appeal.

See here and here for the background, and here for a copy of the ruling. I hope the TABC will reconsider its inclination to appeal. This law serves no one’s interests except those of the Wholesale Beer Distributors of Texas. The state should not be spending its own resources pursuing a reversal of this ruling. As noted elsewhere in this story, if the original bill that forbade the microbreweries from selling their distribution rights had been about any other commodity, it would have been laughed out of the Capitol. Surely we have better things to do than this.

More from Austin 360:

Brewers and their fans might be rejoicing their victory right now, but they’re still holding their breaths over two other beer-related cases in Texas courts.

One case involves an issue that brewers unsuccessfully pushed for in the 2013 legislative session. As a result, Dallas’ Deep Ellum Brewing sued the Texas Alcoholic Beverage Commission last year to try and get breweries the ability to sell beer to-go from their facilities — something that wineries and distilleries in Texas are both able to do. (Operators of brewpubs, which sell food in addition to beer, also can sell their products to the public.)

Also, Cuvee Coffee decided to go to battle with the TABC over the issue of whether retailers can sell crowlers, which the TABC argues are one-use cans, rather than aluminum growlers, that only manufacturers of beer can sell.

Both cases are expected to be resolved within the next couple of weeks.

See here for more on the Deep Ellum lawsuit, and here for more on Cuvee Coffee. Let’s hope for a clean sweep. I’ll keep my eyes open for further news. The DMN has more.

Microbrewery lawsuit heard in court

I can’t wait to see how this turns out.

beer

Just how much is it worth for that Velvet Hammer or other local craft brew to make it to your favorite bar or convenience store?

That’s one of several key questions that came before a state district court Monday, as a group of craft brewers — including Peticolas Brewing of Dallas and Revolver Brewing of Granbury — challenged a contentious component of the state’s arcane alcohol regulations.

Namely, the craft brewers want to overturn a 2013 law that says they cannot accept financial compensation for their distribution rights.

In Texas and in many other states, the alcohol industry operates under a three-tier system: producers, distributors and retailers. That arrangement, which dates to the end of Prohibition, seeks to eliminate potential problems by keeping each operation independent from the others.

[…]

In 2013, the Legislature passed several new alcohol laws, many involving the burgeoning craft beer scene. Though multiple bills helped the upstarts, particularly brew pubs, there’s little doubt that the distribution rights piece boosted that middle tier of the system.

Consider that at least one brewery — Live Oak Brewing in Austin — sold its distribution rights for the Houston area for $250,000 before the law went into effect. Now, that would be impossible.

Some craft brewers, if they meet certain criteria, can use what’s called self-distribution as a work-around. But the restrictions that come along with that practice can make it difficult for some brewers to expand their reach, particularly across the state.

Adding to the frustration of the craft brewers is that a distributor, once it has the territorial rights to a certain brewery, can then sell those rights to another distributor. So what can’t be measured, by law, in dollars on the front end carries significant value on the back end.

“There’s just no rational basis for the law,” Michael Peticolas, owner of his eponymous brewery in the Design District, said in an interview after Monday’s hearing.

See here for some background. The lawsuit was filed in 2014, and its root is in SB639, which passed during the 2013 session at the same time as the other bills that allowed microbreweries to sell their wares at their home locations. The Statesman adds on:

Karen Watkins, a lawyer from the office of Texas Attorney General Ken Paxton, defended the law on behalf of the Texas Alcoholic Beverage Commission and said the state must not weaken the current regulatory system.

In Texas, the sales of beer and liquor are governed by post-Prohibition rules that maintain strict boundaries between manufacturers, distributors and retailers. In the three-tier system, makers of beer, wine and spirits create their products, distributors sell them, and bars and other retailers peddle the beverages to the public.

“The government’s interest is in preserving the integrity to the three tier system,” Watkins said. She said the state intends to prevent any overlap between the manufacturing tier and the distributing tier.

Watkins said the law helps the Texas Alcoholic Beverage Commission, for example, quickly remove tainted products from store shelves, if needed.

Arguing the case for the brewers, Matt Miller, an attorney for the Arlington, Va.-based Institute for Justice, said the case isn’t about the three tier system, but about fairness.

“It enriches distributors at the expense of craft brewers,” Miller said.

Miller said the law prevents many brewers from selling their products in some markets, which has the effect of providing less choice to consumers and fewer opportunities to expand for craft brewers that choose not to give away distribution rights.

As you know, I think the three-tier system is an archaic holdout from the Prohibition days that do nothing to enhance competition. Quite the reverse, in fact. Attorney Watkins went so far as to imply that success by the plaintiffs in this case would lead to organized crime, which thankfully the judge pushed back on. I’m rooting for the plaintiffs, as I’m sure you could guess. The judge says she expects to make a ruling in the next few weeks.

UberEats expands

Good news for those of you who like having food delivered.

Uber

A larger section of metro Houston now can use Uber’s meal delivery service seven days a week and with more dining options through a new app.

A new UberEats app, separate from the Uber ride-sharing app meal ordering customers have used, launches Tuesday.

“Houstonians have embraced UberEats, but we also know that with a separate app, we are able to give users a better experience,” said Sarah Groen, general manager for UberEats Houston.

As of the app’s launch, 100 restaurants are participating. More are being added to the list, Groen said.

The service’s operation hours have been extended beyond midday weekdays to daily between 10 a.m. and 10 p.m.

Users will be able to browse menus and order food from participating restaurants, and track drivers bringing their food. The service area has expanded beyond downtown and Midtown, and now includes the Galleria area, The Heights, Montrose, Rice Village, West University and Upper Kirby.

Those areas have shown large demand for UberEats, where the company has received many requests from people asking for service, Groen said. In January, the company did test runs in the new areas and registered high demand.

See here for the background. I’m still not the kind of person who likes to order food for delivery, so I’m still not in their market. But if you are, and you live in these areas, then these are good days for you. The Houston Business Journal and the Houston Press, both of which have maps of the expanded service area, have more.

Our long national breakfast taco nightmare is finally over

At long last, peace in our time.

With an escalating culinary battle threatening to destabilize the region, the mayors of Austin and San Antonio met Thursday morning to announce a taco truce.

“As St. Paul admonishes us, let us not be overcome by evil, but overcome evil with breakfast tacos,” Austin Mayor Steve Adler said. “We will have guac in our times.”

Adler and San Antonio Mayor Ivy Taylor sought to bring to a close a weeks-long feud between their cities over which has the better breakfast tacos, proclaiming peace with the signing of the “I-35 Accords” and declaring each other’s tacos similarly delicious.

As the history books will show, the Great Breakfast Taco War of 2016 was first ignited by a provocative article in Eater Austin from writer Matthew Sedacca, headlined “How Austin Became the the Home of the Crucial Breakfast Taco.”

Soon thereafter, a petition on Change.org to exile Sedacca from Texas quickly gained over 1,700 signatures, describing the Eater article as a “churlishly negligent treatise.” Sedacca’s “wild inaccuracies, which dangerously approach libel,” the petition reads, “have already stirred the ire of many South Texas communities and further discord may loom on the horizon.” Competing op-eds in the cities’ respective newspapers only further escalated the conflict.

But, proclaiming March 10, 2016 as “Breakfast Taco Day,” Adler and Taylor sought to put aside their differences and embrace their mutual appreciation of the popular morning meal.

“What we must do and what we will do is lead,” Adler said alongside Taylor at Austin’s downtown Hilton hotel. “And that means celebrating the fact that there is more that unites our tacos than divides them. Let us break our fast with the tortilla of hope and the egg of peace.”

And so possibly the dumbest controversy ever – okay, maybe the dumbest one of 2016 so far – comes to an end. Now go and eat whatever breakfast taco you like best. It’s all good. The Rivard Report has more.