More retailers will offer half-gallon beer growlers

New law may boost Arizona craft-beer industry sales

The growing Arizona craft-beer industry could boost sales in August when a new law allows restaurants, bars and liquor stores to sell glass “growlers” of draft beer to take home.

Currently, only microbreweries and brewpubs can sell the reusable half-gallon containers filled with their own beers.

Under the law, a variety of businesses with liquor licenses will be able to fill growlers, allowing people to bring home beer not available in bottles or cans.

Even though some microbreweries sell bottles or cans of their beers, they sell much more beer in kegs to other vendors. The only way to take home specialty seasonal beers, such as the Pumpkin Porter that Four Peaks Brewing Co. in Tempe makes in the fall, has been to visit the brewery for a growler.

In August, beer lovers will be able to take home a small jug of their favorite brews from Four Peaks, Papago Brewing Co. and others without visiting the source because other stores and bars with those beers on tap can offer growlers.

It’s even possible that shoppers could find Walgreens drugstores installing taps and offering growlers because the chain was a proponent of the new Arizona law.

Some brewers, especially those that don’t can or bottle, anticipate they will sell more locally made beer with the change. Others are skeptical and concerned about how their specialty products will be sold and packaged.

“We are definitely for it,” said Ron Kloth, owner of Papago Brewing Co. at Scottsdale and McDowell roads. “I think it will definitely help draft sales.”

He plans to begin brewing about 20 percent more of his Orange Blossom wheat beer after the law takes effect, anticipating that patrons at various bars where the brew is available on tap will start taking half-gallons home.

“People like having draft beer at home, and this is a good way to do it,” he said. “It is economical for bars and for customers.”

Papago does not package Orange Blossom in bottles or cans.

Unlike some brewers, Papago offers several other specialty beers on 30 taps from Arizona and beyond, and Kloth expects the change to help him sell much more of that beer at his bar.

He plans to fill any growler customers bring in with almost any beer on tap, except for some specialty kegs that are in short supply or those that require special carbonation.

The law will allow growlers no larger than one gallon, although most in use by microbreweries today are half that size.

Beer lovers are excited about the change.

“It’s about time,” said Clay Hoerner, 39, of Scottsdale, as he purchased a $12 refill for a growler of Orange Blossom at Papago on Wednesday. “I don’t want to buy a different growler for every different bar.”

Alexis and Shane Butler, twentysomethings from north Phoenix, also picked up a growler of Orange Blossom for a dinner party that night, their second refill of the week.

They might be able to get their Orange Blossom fix closer to home after Aug. 2.

“It would be nice if I could go pick it up at Yard House,” Alexis said.

Opening the market

The change in law is likely to increase the number of outlets that offer draft beer, especially because it was not the craft brewers that pushed for the change.

The Arizona Department of Liquor License and Control, on behalf of Walgreens, asked for the wording to be added to a broad liquor bill at the Legislature.

Walgreens officials were hesitant to disclose their plans in Arizona. The company has small growler bars at four of its New York City drugstores operating under the Duane Reade name, a chain acquired by Walgreens in 2009.

“In order for Walgreens to potentially respond to changing customer tastes and market opportunities, we supported legislation in Arizona that allows retailers to try alternate packaging of craft beers that has had success in other markets,” spokesman Robert Elfinger said from the company’s Illinois headquarters. “We haven’t come to any decisions whether or not growlers would be an option for any of our Arizona stores, but we would like to have the option to respond to customer demand.”

Other retailers that could set up growler stations include Total Wine, BevMo and Whole Foods, said Chuck Noll, master of fine beer with World Class Beer, a division of Crescent Crown Distributing.

“We are waiting to see exactly what accounts will get on board and which aren’t,” he said. “Total Wine or BevMo could put in growler stations. That is where it could get interesting.”

The craft-beer industry in Arizona has been growing at more than 20 percent a year for the past three years, according to a report by Northern Arizona University. It has grown even as overall beer sales in the U.S. dropped 1.3 percent last year, according to the Brewer’s Association.

Craft brewing had a total economic benefit to Arizona of $278 million last year, according to the NAU report for the Arizona Craft Brewers Guild. The total economic-benefit figures include restaurant sales and indirect economic activity associated with the industry.

The 33 Arizona brewers made about 3.7 million gallons of beer and sold it for an average of more than $10 a gallon, mostly in kegs. It’s more expensive purchased by the pint or growler.

Some are concerned

Some brewers are less optimistic about selling more beer and more concerned about how their brews will be handled if barkeeps around the state are pouring growlers.

Dirty glassware can affect the beer’s flavor and carbonation, and now the beer inside a growler won’t necessarily match that of the brewery.

“There is an issue with product quality,” said Urs Riner, head brewer at Mother Road Brewing Co. in Flagstaff, which offers some of its products in bottles. “Beer is alive. It can thrive, and it can die. If it sits on a warm shelf in sunlight, it will die. If it is kept cold, dark and happy, it will thrive.”

He said brewers will have to educate new retailers and possibly bar workers .

“Good beer will provide (those retailers) with good profits,” he said. “Bad beer will put both of us out of business, not just the brewery.”

Mother Road is one of the few locations in the state that, because of ambiguity in laws regarding growlers, will currently fill growlers from other brewers with its beer.

Riner said he sees marketing and partnership potential in growler labels with multiple breweries, but other brewers are not so optimistic.

Roxane Nielsen of Prescott Brewing Co. said that she is concerned that growlers might not be cleaned well and won’t offer beer as good as the cans her brewery sells. She also is concerned about labeling.

She and her husband, co-owners of the brewery, still are deciding if they want people putting their beer in growlers.

“At this point in time, I don’t know that I want to put our beer in somebody else’s bottle, or for somebody else to put beer in my bottle,” she said.

Popularity to be seen

Filling growlers is certain to give some beer aficionados more access to specialty beers to drink at home, rather than at the bar, but some insiders doubt it will dramatically change the Arizona brewing landscape.

Patrick Fields, president of Old World Brewery at 25th Avenue near Van Buren Street in Phoenix, said more beer could be sold with growlers.

But he worries that popular out-of-state brands such as Bend, Ore.-based Deschutes Brewery and the major breweries will continue to dominate regional taps.

“We can’t get the local bars and restaurants here to put local beer on tap,” he said. “The main brands own the real estate on taps.”

He said he is considering a Southern California location where craft beer is more popular.

“This law could have its day in the sun if you get drive-through growler stations where a guy has 46 taps and you can bring a growler for him to fill,” he said. “These are things that happen in mature craft-beer markets. This is a long way from that.”

The change in law prohibits filling growlers at drive-through or walk-up windows.

Others see it as a niche.

“Bottling and canning is better packaging than growlers,” said Jerry Gantt, executive director of the Arizona Craft Brewers Guild. “The only reason I would buy a growler of something is if it were not available in a bottle or can. And a half gallon is a lot of beer to drink, for me. The bottom part is going to get a bit funky in the refrigerator before I can drink it again.”

Growlers might not increase the amount of beer sold but could make the sales a bit safer for drivers, he said. “(Bartenders) like the idea of growlers because they can send people home (with a growler) before they drink too much,” he said. “That is probably a good idea.”

 

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2 Responses to More retailers will offer half-gallon beer growlers

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