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Beer Gardens Sit Empty and Craft Brewing Teeters on the Brink as Texas Whipsaws Over Virus

Owner Wade Wadlington and brewer Sean Cooley at Division's large outdoor patioEXPAND
Owner Wade Wadlington and brewer Sean Cooley at Division's large outdoor patio
Lauren Drewes Daniels
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About a decade ago, the local craft brewing scene ignited like a flambé, and it hasn't simmered down much since. It was only in 2011 that both Deep Ellum and Peticolas brewing companies poured their first pints. 

According to the Brewers Association, in that year there were 59 craft breweries operating in Texas. In 2019, there were 341, with a total economic impact in the state of more than $5 billion. 

In that time, not only has North Texas mashed a lot of hops, a diverse craft brewing scene has emerged that is equal parts social experience and delicious. Different taprooms have different characters and ambiances, appealing to a variety of customers. 

Now the Dallas beer scene is in a precarious state.

The Texas Craft Brewers Guild recently surveyed their members for an update on the state of brewing. It found that one in three state brewers believe they will have to permanently shutter if the current regulations — closed, save for curbside pick-up, third-party delivery and retail sales — persist for another three months. 

Another two-thirds of Texas breweries responded that they won’t make it to the end of the year if they’re not able to open their taprooms again soon. 

“We’re in that 66%,” owner and brewer at Oak Cliff Brewing Co. Joel Denton said bluntly last week. “Our taproom is pretty spacious, and we follow all the guidelines. That’s one thing that is so frustrating is that we were being singled out because of some arbitrary definition put out by the TABC [Texas Alcoholic Beverage Commision] that has nothing to do with our commitment to safety or capabilities.”

A constant back-and-forth at the state level isn’t helping things either. 

Drive-Thru Breweries

Mid-March, Gov. Greg Abbott ordered all restaurants, bars, breweries, taprooms and tasting rooms to close. The sole lifeline thrown out was takeout and curbside service. Many breweries scrambled to set up drive-thrus in their parking lots. Some invested in online ordering systems to streamline the process. 

Others had to find cans. And canning lines or mobile canning systems. Labels? Pfft. Early on, Division Brewing wrote the name of the beer on the can with a black Sharpie. (They've since moved to labels.) Oak Cliff Brewing recently used something like an Avery label. It's not always pretty, but brewers make it work. Community Beer Co. tried to rally the troops with a Nationwide Cheers on Friday afternoons as a way to remind people to support local breweries during the shutdown. 

Finally, in late May, breweries were allowed to reopen at 25% indoor capacity and 100% outdoor. Windows and  doors were flung open to let the staleness out and customers in.  

The newly installed beer garden at Oak Cliff Brewing Co.
The newly installed beer garden at Oak Cliff Brewing Co.
Oak Cliff Brewing Co.

Shut Down, Round 2

June 26, breweries were told with three hours' notice to close again. This mandate was specifically (and perhaps unjustly) aimed at establishments that get 51% of their sales from alcohol and included bars, breweries, taprooms and tasting rooms, which are all governed under the same laws.

“It’s not like we can just walk into the brewery, flip the lights on and then flip them off. Brewing beer takes time,” Denton said in frustration. 

After this second shut down, according to the Texas Craft Brewers Guild, to-go sales were down:

“While craft breweries impacted by the shutdown of 51% establishments generally remain open for beer-to-go sales, many have reported a substantial decrease in traffic compared to the first shutdown, as this time customers looking to enjoy a beer can simply go down the street for a drink at a restaurant, who is permitted to stay open instead.”

This leads to a question many bars and brewery owners have: Why are restaurants allowed to serve customers at bars, but bars and breweries are completely shut out of the game? Bars have it worse because they can’t even sell drinks to-go, which is a whole other fight. 

New Guidance

Then, July 17, the TABC issued "guidance" to brewers to reduce the space of their licensed premises so customers could drink their to-go beverages in those spaces.

The notice to bars, titled Temporary Modification of Licensed Premises, said, “By working with TABC, manufacturing and retail businesses can expand or reduce the area where they are licensed to sell alcohol or conduct other licensed activities.

"Why is this important? Especially during the coronavirus pandemic, this could help a business like a restaurant expand outdoor dining or another business owner remove an area from service.”

Denton at Oak Cliff Brewing saw that fastball down the middle for what it was and adjusted his game plan. Instead of investing in a canning line, he drew up plans for an outdoor beer garden in a shaded spot near his brewery.

The large outdoor space at Celestial BeerworksEXPAND
The large outdoor space at Celestial Beerworks
Sara Morton

“We had some extra funds we were going to expand into canning,” Denton says. “Then when the TABC released a statement that we could use the outside space, we worked quickly to put it into that.”

People could sit outside, easily 6 feet apart, and order beer from a small trailer adjacent to the beer garden. It wasn’t much, but it would provide some cash flow.

Never Mind

Just five days later, however, in the “nevermind” heard in taprooms across Texas, the TABC revised its guidance. According to deputy director of the Texas Craft Brewers Guild Caroline Wallace, 51% establishments could no longer take advantage of outdoor spaces, and the guidance was only applicable to restaurants looking to expand their licensed premises for outdoor dining.

Head spinning yet?

“This period of time of to-go sales has gone from irritating, to nerve-wracking, to downright terrifying,” co-owner and creative director of Celestial Beerworks Molly Reynolds says. “We miss the life in the taproom and are so tired of this period of frustration being thrown around by the various, last-minute restrictions put on craft breweries, restrictions that aren’t being put on similar businesses, restaurants, coffee shops and cafes.” 

One thing Celestial has going for them is a canning line, so they’ve been able to sell curbside consistently. 

“I have really felt for all the breweries that have had to crowler each beer by hand or pay and wait for mobile canners to come and can their batches,” Reynolds says.

The large empty taproom at Celestial BeerworksEXPAND
The large empty taproom at Celestial Beerworks
Sara Morton

Reynolds also points out there’s a significantly higher cost associated with canning versus pouring a pint in their bar. 

“The money we have to sink into to-go sales includes the cans, lids, labels, pac-tech holders and case trays. The extra cost is not including the manpower and hours we need to spend on label design and on the canning line. It’s hard having these tight margins without being able to offset them with draft pours and the wider distribution that we had previously,” Reynolds says. 

Opening the taproom, even at 50% capacity, would mean more shifts and tips for their staff. The impact on the bottom line would be even more significant, perhaps allowing them to stretch resources to the beginning of the year and not be part of the 66%. 

Wadlington of Division Brewing points to the inherent "clean" traits of a brewery and beer.   

“Almost all breweries are housed in large spaces with high ceilings that provide great airflow and reduce the likelihood of spreading the virus,” Wadlington says. “Breweries have to maintain rigorous sanitation practices or beer will become infected and spoiled. If anything, we brewers know how to control and kill organisms. It's part of the everyday job.” 

Another layer on top of all the uncertainty facing breweries is a nationwide can shortage. Recently Forbes toyed with already docile mental states by running a headline,”Is the US Really Running Out of Beer?” 

No, certainly not.

But there is a shortage of cans. According to American Canning’s website, the availability of standard 12-ounce cans is too unpredictable to take online orders. Wadlington scooped up 700 recently when he could to have on hand.

Besides, the real problem now isn’t if there will be cans to package the beer in, rather if local craft brewers will be around in a few months to produce it. Bud Light anyone?

Update: Since writing this story late last week, Oak Cliff Brewing Co. has opened their newly installed beer garden to customers. Here's the full story on their interpretation of recent TABC guidelines.

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