Reform on Tap Task Force: Maryland Beer Survey Results
Let’s Get Caught Up
One of the most common questions I have been fielding recently is, “Why is Comptroller Peter Franchot involving himself in Maryland beer laws?” The answer is simple – as Maryland’s comptroller, Franchot acts as the state’s regulator of alcohol.
“The events that transpired in Annapolis this session were a jarring confirmation that the State of Maryland’s beer laws are antiquated, dysfunctional, anti-small business and anti-consumer.
Furthermore, the bare-knuckled treatment to which our craft brewers were subjected sent a terrible message that this innovative industry – one that is creating jobs, strengthening our economy, attracting tourists and giving back in so many ways to local communities – isn’t respected or welcomed here in Maryland.
For the sake of our economy, business reputation and our quality of life, this has to change. It will change. The fight for the future of the Maryland craft beer industry – and for everyone who benefits from the hard work of these amazing men and women – starts today. Stay tuned.” (Source)
Two weeks later, the task force members were announced:
“The task force will develop legislative proposals based on extensive review of Maryland’s beer laws and other states’ laws. Additionally, feedback from industry stakeholders and the public will be incorporated, all with the goal of facilitating the growth and success of Maryland’s craft beer industry and other independent businesses.”
Ahead of the first scheduled meeting of the task force, Franchot’s office sought the opinion of the public, across a wide range of issues through a survey.
The response to that survey is what I will be diving into today. But first, a couple of housekeeping items. While I am reporting on the findings of the survey, I did not take part in its creation. It is also entirely separate from the survey I conducted last month, pertaining to comments made by Sen. Thomas V. Mike Miller, Jr. on the Kojo Nnamdi Show about HB 1283.
Finally, in full disclosure, I am a member of the Reform on Tap task force, but as a private individual – while I do write about beer, I am still just a consumer.
With that out of the way, let’s jump in…
An Overview of Survey Respondents
Over the course of three (3) days, 2,440 responses were collected. Of those respondents, 28 percent self-identified as female, and 72 percent identified as male. The vast majority were between the ages of 21 and 50 (73 percent), with the largest age group being 31 to 40 years old (32 percent).
Baltimore County, Baltimore City and Montgomery County made up 50 percent of all respondents – 17 percent, 16 percent and 17 percent, respectively. The counties that had no representation included Caroline, Cecil, Garrett, Kent, St. Mary’s and Somerset.
Brewery Taproom vs. Local Tavern
One of the most common talking points of those who supported HB 1283 is some form of the argument that brewery taprooms are trying to act like bars, or that they are doing so, at the expense of local taverns.
In an interview back in March, HB 1283 sponsor Del. Talmadge Branch (D-45, Baltimore City) told me he had heard concerns from retailers that brewery taprooms were an “interference” for local taverns:
While he could not recall which brewery he visited, he did remember the experience in detail: “There was music playing, and food was being served,” he recounted. “But no one was there to visit the brewery, and no tours were happening. It looked like a bar.” (Full article)
So, what did survey respondents think?
Question four cut to the heart of this matter:
“4. Some have suggested tat by allowing brewery taprooms to serve food, serve more beer on site and stay open late, Maryland policymakers are taking business away from traditional bars. Which of the following statements best describes your own personal experience on this issue?
‘A taproom is basically the same thing as a bar.’
‘Taprooms and bars are different concepts that offer different experiences.'”
Twenty-six percent agreed with the statement that taprooms are the same as bars, while 74 percent stated identified with the statement that taprooms and bars are different experiences.
The majority sentiment was echoed again later in comments offered up by respondents:
Respondent No. 369: “Taprooms and bars serve distinctly different purposes. Taprooms serve as community gathering spaces, at different times of day. Bars serve adults only, most typically at night. They are different environments that serve diverse (and only sometimes overlapping) populations. Additionally, even if taprooms sold 10,000 barrels, they would not commandeer more than a small fraction of the annual business of bars and liquor stores.”
Respondent No. 444: “I think it is really important to note that I find the experience at a tap room [sic] totally different than a bar.”
Respondent No. 451: “Taprooms tend to [be] more involved with the local community compared to pubs. The one closest to me offers yoga, participates in parades, and seems far more in touch with the community than my favorite local pub. The pub has far better food, dining, and is more in tuned for families. Brewery taprooms have a different following and culture. I truly wish that some of [the] beers available at a distant taproom were also available at my local pub.”
When you explore the answers provided regarding habits and preferences, a clearer picture of the role of a brewery taproom emerges.
Only 25.1 percent of respondents visit a brewery taproom “regularly” (multiple times per month), with the majority stating the only visit brewery taprooms “occasionally” (once every two to three months). As a note, the second most popular response (25.9 percent) was “frequently,” which was defined in this survey as once a month.
Overall, half of the 2,440 individuals who responded stated they either visited a brewery taproom once every couple of months or once a month. The remainder either did so “rarely” (17.4 percent) or “regularly.”
It kind of reminds of my own habits. I would say “frequently” best describes mine, although there are some months where I may knock out two breweries. But for the most part, you’ll find me perched on a barstool, where bartenders will actually text me to inquire after my welfare, if they don’t see me for awhile.
So, when they make the choice to visit a brewery taproom, what is their primary motivator?
Responses to the survey’s second question (shown above), found that 92 percent of respondents went to taprooms for the beer – or at least the beer was the “most appealing” characteristic of those taprooms.
Again, I would also have to agree here.
They Are Fundamentally Different Experiences
One of the reasons why I am someone who goes to brewery taprooms either “occasionally” or “frequently” – depending on the month – is that a brewery trip is a commitment to drink a single brewery’s product for that day. And, typically speaking, I like to drink around a bit when I’m going out on the town.
So, when I make the choice to go to a brewery, a number of questions will come into my mind:
- “Do they have a new release or rarity that I’m interested in trying?”
- “Will I have a chance to try more from this brewery than I would otherwise in a pub or retail setting?”
- And finally, “Is their beer any good?”
That last question is important, because there is nothing more demoralizing than getting all jazzed up for a brewery trip – which is a special event that requires planning – only to have the beer be terrible.
In addition, I think there are a lot of assumptions being made by those who think taprooms and bars are the same thing that are simply inaccurate – at least from my admittedly biased perspective.
For instance, just because I’m a craft beer lover, you can’t assume that my friends and loved ones are, as well. They aren’t. That’s why I’ll choose a bar, because it’s a place where everyone can find something they enjoy – whereas breweries serve their own beer.
You also shouldn’t assume that every time I walk out the front door for a beer, my first choice will always be a brewery, if given the chance. While craft beer is my passion, I also love wine and cocktails. I also like the ability to try beer from different breweries, which does not happen in a brewery setting.
Wait, Why Are Class 5 Breweries the Bad Guys?
Putting aside consumer choice here for a moment, the thing that baffles the most about this whole debate is that Class 5 breweries are the ones under the microscope. As if they’re this great corrosive force just itching to undermine the success of local taverns in Maryland.
As a reminder, Class 5 breweries are production scale breweries like Heavy Seas, Union and Flying Dog.
They’re also the least likely to have a brewery taproom be a major driver of their business. And data from the Brewers Association demonstrates that clearly. For instance, trends continue to show that as microbreweries grow, they shift more of their business away from the taproom and to distribution.
Also, the larger the brewery, the less they sell onsite:
This is important information to keep in mind, since Class 5 breweries in Maryland are supposed to be the largest in potential scale.
So, when someone says that brewers need to stay in their lane, because “they made the choice to be a manufacturer instead of a restaurant or bar,” the data says they are. The data on a national scale says that breweries of the Class 5 size (and larger) are moving 90 percent-plus of their production through distribution and retail channels.
Then you need to consider where Class 5s are located – in the state of Maryland, you’re almost always going to find them tucked away on properties that are zoned for industrial use. Not downtown. Not across the street from your local tavern. Not anywhere where you’ll find someone pressed to make a choice between one or the other.
Yet they are the ones being targeted.
Not Class 7 microbreweries or Class 6 pub breweries (both smaller in scale than Class 5s) – which, by definition, are more likely to be centrally located and operate like a bar. It makes no sense whatsoever.
Anyway, back to the survey.
What Happens After the Taproom Trip?
When you talk to brewers, virtually all of them will say that their taproom isn’t a vehicle to undermine other parts of the three-tier system. It’s a marketing tool that will encourage patrons to continue to buy their product at retail establishments and bars after they leave.
Did consumers agree?
Yes. Of the 2,440 respondents, 51 percent said “usually,” 29 percent said “occasionally,” 17 percent said “always” and only 3 percent said “never.”
Taking that a step further, for those who did not select “never” as their answer…
For this question, 54 percent said “usually,” 25 percent said “occasionally,” 19 percent said “always” and only 2 percent said “never.”
Between these two questions, you can see that consumers who visit brewery taprooms will often increase what they purchase at other retail outlets.
For example, we visited Union Craft Brewing a couple of months ago, and we had a blast. A week later, I found myself at a beer shop in Annapolis picking up a six-pack of Steady Eddie – which we had at the brewery – along with about $60 worth of additional retail product. A couple of six packs and a bottle of wine, to be exact.
Those who know me know that I am no stranger to Steady Eddie – it’s one of my favorites. But because I had a recent experience with it, fortified by a memorable trip to the brewery, I sought it out – and then purchased other products on top of it.
Everyone wins, in those cases. Well, everyone except my wallet.
Other Survey Results of Note
The survey yielded a few additional interesting insights:
- 78 percent of respondents believe there should be no limit on barrels sold through brewery taprooms;
- 73 percent of respondents think that forcing breweries to buy beer back from their wholesaler for an additional 1,000 barrels is a “crazy” notion; and
- 84 percent of respondents find the taproom hour limitations on Class 5 breweries – with preexisting breweries exempted from this restriction – is “anti-competitive, anti-small business and anti-consumer.”
There was also a question about buying beer and wine in grocery stores – unsurprisingly, 89 percent want to be able to have that ability.
So, What Does This Survey Tell Us?
I think before we can discuss larger takeaways, there is a key flaw worth noting in this survey that was also present in mine – those who were more likely to have brewery-positive thoughts were also more likely to reply. So, there may be some inherent bias present in the results.
However, it should be noted that there were plenty of dissenting opinions in the responses collected – many expressed the opinion that Franchot had no right to be meddling in these laws at all.
With that in mind, the largest takeaway for me is that many respondents feel that breweries are unduly burdened by complex regulations. And often, those regulations seem to favor other relevant stakeholders (distributors, bars and retailers) in a way that is unfair. Furthermore, there is a much larger debate to be had about brewery taprooms vs. taverns, as well as what role the government should play in regulating that competition.
But when all is said and done – and keeping the potential bias of these results in mind -I think the survey serves its most important purpose: It’s starting a discussion that is long overdue.