Do Brewpubs Still Exist?

Of course, it’s a rhetorical question. Obviously, businesses characterized as brewpubs are now abundant across North Texas. Instead, the question here is based more on a strictly legal categorization, one that once made a very significant difference to fledgling brewers applying for a license.

Back in the early days of the Texas craft beer revolution, brewpubs and production breweries were distinct licensed business entities. Texas alcohol laws prior to the turn of the century were very different compared to today, static for decades (and reinforced by a large and powerful alcohol distribution system) with stale Prohibition-era holdovers dictating the commercial environment until major changes amended legacy statutes.

The differences largely involved capacity and distribution as per the Texas Alcoholic Beverage Commission’s (TABC) state-sanctioned licenses: A manufacturing brewery license (B) meant virtually no limits on brewery production but with a restriction that did not allow for on-premise sales (ie, no modern taprooms, or “to-go” sales directly from the brewery). Conversely, a brewpub license (BP) meant a cap on total production capacity (10,000 barrels annually) with the restriction that did not allow commercial packaging and distribution (ie, no cans or bottles to bars or other retail) and only allowed for on-premise consumption or direct “to-go” sales from the establishment, which included filling growlers. As more of a retail storefront, brewpubs also faced additional nagging tangles with local blue law restrictions such as Sunday sales.

On a larger scale, the initial choice of a brewing license in Texas dictated your business model. Package breweries followed a commercial manufacturing scheme widely enjoyed across the nation whereas brewpubs were essentially restaurants that brewed with restricted (sometimes ridiculous) sales laws, and subject to all the local restaurant economics and benefits. Production breweries were hot, steamy, impersonal warehouses pushed into industrial zones that had to sell “tours” or glassware because the direct sale of a beverage was restricted. Successful brewpubs enjoyed central urban locations but lived with a built-in cap and a host of other restrictions on their brewing efforts. By design, never did these two ends ever meet.

Does the appellation “brewpub” need to be retired, now a meaningless term belonging to a throwback way of thinking about craft beer?

Beginning with the legalization of taprooms (ie, direct-to-public sales) that Texas passed in September 2019, the wall began to crumble. After decades of legal battles, breweries were finally able to reconceptualize their public spaces as competitive commercial establishments, selling by-the-glass beers as well as six-packs directly to consumers. Likewise, similar changes began to lift many of the restrictions on brewpubs, allowing them to brew and distribute competitively like their industrial counterparts.

A major blow followed only months later with COVID-19 and its associated restrictions in the spring of 2020. With the newly profitable taprooms categorized as “bars” by the state and forced to close to the public, many breweries quickly shifted to include kitchens or in-house food service to remain open for to-go sales under the ongoing restaurant exceptions. Brewpubs became strictly restaurants selling packaged beer on the side, and production breweries struggled to either partner with nearby food establishments or create their own ersatz kitchen concepts to avoid legal restrictions on sales.

Today, on-site food service is almost baked into the modern craft brewery model, often from the start. Breweries have become much more than simple manufacturing businesses brewing and packaging craft beer pallets to be loaded on a truck. They now run social establishments more equivalent to food halls or public community centers than grey industrial sites in remote undeveloped neighborhoods. A visit to a modern brewery taproom may be little different than to an established brewpub in the city center.

The original licenses have changed somewhat but are effectively less relevant than ever, and much of TABC’s once fearsome fire has been tempered with talk of Sunset regulation. One of the very few pluses to come out of the COVID-19 experience is that the laws have relaxed and been amended sufficiently that brewpub versus production brewery licenses are close to meaningless today. Limits on brewpub packaging and distribution have been increased, and direct-to-public sales at production breweries is now the norm. The modern models in the State of Texas allow both business types to operate almost seamlessly, with the differences merely legal footnotes of a bygone era.

Should our language follow suit? Does the appellation “brewpub” need to be retired, now a meaningless term belonging to a throwback way of thinking about craft beer? Are industrial taprooms with chef-driven kitchens sufficiently equivalent to downtown restaurants conceived from the start with in-house brewing programs? Is this a distinction noticeable or relevant to even avid craft beer consumers?

The original licensing was unnecessarily restrictive and reflected both wrongheaded historical thinking and crushing corporate self-interest. The current relaxed license designations are much more reflective of modern business practices and seem to work to the benefit of both consumers and everyone in the craft beer industry. PH