Photo courtesy of Joyride Brewing
Alcohol regulations have changed rapidly in response to COVID-19—sometimes so quickly that they’ve sowed confusion. The majority of U.S. states have loosened restrictions to generate new sales channels for breweries and bars that had their on-premise business evaporate. Some have allowed restaurants, bars, and breweries to pursue direct-to-consumer delivery, plus permitted selling cocktails, guest beers, and whole bottles of alcohol to go.
While there’s momentum behind making looser regulations permanent, there is also significant opposition. Executive orders that have allowed delivery and other temporary provisions would need to be written into law by legislators. That would trigger a battle of the lobbyists, with many states expecting significant pushback from beer retailers and wholesalers.
Overcoming that opposition is an uphill battle that’s likely to play out differently across the country. Some states have already successfully made beer delivery legally permanent, while others are expected to revert to the status quo. Which scenario plays out will have long-term consequences for breweries’ revenue streams—and for the ways drinkers buy their favorite beers.
Looser regulations have been a life preserver for small breweries without significant retail distribution—and drinkers like the flexibility, too. With many Americans still leery of returning to restaurants, bars, and shops, breweries and consumers alike have advocated for continued home delivery or curbside sales of beer. A Maine Brewers’ Guild survey of its member breweries found 35% were interested in keeping some sort of curbside pickup option available even after tasting rooms reopen, while 21% said they’d be interested in continuing delivery.
While some state are in early phases of economic reopening, many breweries still desperately need the revenue that to-go and delivery sales provide:
In early April, a survey by the Brewers Association found 45.8% of responding breweries said their businesses could last between one and three months under circumstances current to that moment in time. That window has arrived.
While there’s no way to know how much revenue beer delivery has generated for the nation’s breweries in total, Biermi—an online platform breweries use to fulfill online orders for pick-up and delivery—was facilitating $50,000 in daily sales for small breweries in early May.
Breweries and customers have quickly embraced home delivery of beer, but as with any changes to the three-tier system, that updated model faces significant pushback legislatively because of established power structures.
Calls to make beer delivery and other temporary regulations permanent often overlook the bureaucratic steps it would take to do so. While governors were empowered during a state of emergency to make instant changes, codifying those changes will require they be written into law by legislatures—and will no doubt spark debate along the way.
“It is not as if without legislation, the executive order that some governor passed will stick around. It will be rolled back in every instance,” says Ashley Brandt, a Chicago-based alcohol regulatory attorney at Goldstein & McClintock LLLP.
Essentially, advocates for residential beer delivery and similar measures will need to pass new laws. And they’ve seen some success:
Oklahoma legalized curbside sales for breweries as well as home alcohol delivery from restaurants, grocery stores, and liquor stores. This is notable considering it was just four years ago that Oklahoma allowed full-strength beer to be sold in grocery stores and taprooms.
Kentucky’s legislature in early April voted to allow residents to have any type of alcohol shipped directly to their homes; it will take effect in July.
New York State Senator Brad Hoylman has introduced legislation that would continue to allow bars and restaurants to offer wine, beer, and cocktails for take-out and delivery for two years after the current state of emergency ends.
Ohio lawmakers are considering a bill to allow packaged and covered-cup alcohol to-go, and Washington, D.C. is eyeing legalizing alcohol delivery when paired with take-out food.
Such proposals aren’t likely to sail through without facing headwinds. The Wine & Spirits Wholesalers of America (WSWA) opposed Kentucky’s bill, as it has generally opposed any changes to the traditional three-tier dynamic. “The current system is built for today’s challenges,” the distributors’ trade group said in a statement.
When it comes to breweries’ ability to deliver, Brandt says restaurants, retailers, and wholesalers with vested interests in the status quo aren’t likely to cede new sales privileges to breweries without a fight. But breweries may be up to the challenge if they realize their livelihoods are on the line: even in states where breweries can reopen taprooms, most are doing so at reduced capacity. Many consumers remain nervous about visiting public spaces. Beer delivery could mean the difference between survival and failure.
There is a path forward to turn temporary alcohol regulations into law:
First, it requires breweries and other businesses to play by the rules, demonstrating that all hell won’t break loose once alcohol restrictions loosen. (These very fears informed a Maryland task force assembled just a year and a half ago.) Any drunk-driving accident, ill-advised gathering, or flagrant rule-breaking jeopardizes the cause.
Second, it requires customers and breweries, bars, and restaurants to advocate for making such changes permanent. Because the distributor lobby is well-financed, grassroots efforts need to be more vocal and more persuasive. In recent years, state brewers guilds—including those in Texas and North Carolina—have financed their own lobbying groups to combat such deep-pocketed interests.
Third, those grassroots advocates need to find state legislators willing to sponsor bills and build coalitions to push them through. Donations from wholesalers to politicians cross party lines, creating complex affiliations and influencing votes on alcohol regulations in statehouses across the country.
Legal experts say consumers have more power here than they may realize. Yes, lobbying efforts are well-funded, but legislators can be influenced by persistent, loud, and direct calls from their constituents. Brandt says that local state governments are the bodies most responsive to direct public pressure. Changes are much more likely to happen locally than at a federal level.
“That kind of hearts-and-minds campaign is the thing to raise awareness,” Brandt says. “Breweries on their own or through their guild need to use consumer sentiment to get their lobbying done. I see some positive results when consumers get organized the way other groups do.”
The pandemic has changed consumer behavior and expectations around alcohol sales. Getting beer—or groceries, or a Target order, or anything really—delivered, or picking it up curbside, is fast becoming an expectation during the pandemic. Accelerated by online orders during the pandemic, ecommerce is expected to represent one-third of all retail sales globally by 2024.
Legislation moves more slowly than consumer behaviors, but consumers and breweries could feasibly make the case that alcohol delivery is now the new normal. To keep those channels open, advocates need to position such sales as the safe option—and one they can’t do without.
A recent legal change in Illinois provides a potential model to follow. Bars and restaurants in the state formed an advocacy group, Cocktails for Hope, that successfully pushed for restaurants and bars to legally sell premixed cocktails to-go.
Sean O’Leary, president of O’Leary Law and Policy Group, and a legal advisor to Cocktails for Hope, said the organization wasn’t gaining any traction with the governor or the Illinois Liquor Control Commission. So it went the legislative route.
The public face of the initiative was Julia Momose, partner and creative director at Chicago cocktail bar Kumiko. Prior to Cocktails for Hope, Momose had no political experience. But O’Leary says she rose to the challenge, talking with legislators and advocating for her industry. He credits “grassroots support”—including a petition signed by more than 12,000 people—for the initiative’s success.
Breweries who want to see similar changes should do the same, he says, and take matters into their own hands. Momose made the case to state government that selling cocktails to-go would keep business afloat; breweries need to be equally clear about their own dire stakes.
“Breweries need to get personal with their representative or senator, because the distributors are definitely doing that,” he says. “Some of these businesses say they don’t have time to do that, but that’s when you lose your rights.”
He says brewers’ guilds can’t be expected to do all the work; many of them are busy fighting for their own financial survival. He notes that the Illinois Restaurant Association was in support of the cocktails to-go legislation, but was also busy with a Payroll Protection Program (PPP) bill and other member priorities during the pandemic.
He’s not hopeful about Illinois breweries’ chances of securing permanent rights to deliver and ship beer to drinkers in-state—“With the strength of beer distributors in Illinois? Probably not”—but says there’s always a chance, if they’re loud enough.
“We started an organization in six weeks and made a radical change to Illinois law,” he says. “Craft brewers need to make the case that if they don't have delivery, they won't be in business.”
Given the precarious financial situation many of that state’s small breweries currently find themselves in, his advice shouldn’t be hard to heed.
Words by Kate Bernot