Making a Big Splash

By Kristi Willis
Graphic by Jenna Noel

Belly up to a bar around the state and you’re likely to be greeted with a lengthy list of offerings from Texas wineries, breweries and distilleries. The Texas beverage industry, once a modest economic niche occupied by a few larger players and a healthy number of hobbyists turned entrepreneurs, is now an award-winning sector that means big business in Texas—creating thousands of jobs and attracting fans from around the globe.

According to economic impact studies, Texas breweries and wineries employ more than 2,400 people directly, but their real fiscal muscle is felt through the jobs created by supporting industries like distributors, custom-crush facilities and mobile bottling and canning units. Add in the jobs and cash brought in through tourism, and the financial splash the beverage industry brings to the state becomes crystal clear—over 17,000 direct and indirect jobs. Paula Angerstein, the founder of Paula’s Texas Spirits and secretary of the Texas Distilled Spirits Association, explains, “Tourism is a big part of the industry. Our industry can become a big draw to the state like the Kentucky Bourbon Trail…it becomes a reason why people come here.”

The Texas distilleries are still young and small enough as an industry to not have measured their economic impact, but with 44 active distiller permits and a 64 percent increase in production between 2011 and 2012 according to the Texas Alcoholic Beverage Commission, they’re clearly growing. Tito’s Handmade Vodka is the heavyweight among local distilleries—churning out two million of the two and a half million gallons of spirits produced statewide in 2012. But other brands, like SAVVY Vodka, Rebecca Creek Distillery and Balcones Distilling, have increased production by more than 40 percent and are building strong followings.

For the wineries, the increase in the gallons bottled isn’t the only sign of growth. A common early complaint about Texas wine was that much of it was created using grapes grown outside the state. As the industry ages, more and more wineries are relying on Texas grapes alone—proudly touting the achievement with a 100 percent Texas grapes designation on the labels. “If we see the same expansion we have now, in roughly five years there should be enough acreage growing grapes in Texas that no winery will have to go outside of the state for grapes,” said Debbie Reynolds, executive director of the Texas Wine and Grape Growers Association.

While the craft breweries are experiencing incredible growth both in the number of breweries and brewpubs and the gallons of beer they’re manufacturing, the Texas craft-brewing industry is not growing as quickly as in other parts of the country. “When you look at Texas isolated in a bubble it looks great, but when you look at things compared to the rest of the United States we are still pretty far behind,” says Scott Metzger, owner of Freetail Brewing Company in San Antonio and member of the Texas Craft Brewers Guild. “In fact we rank forty-fifth out of the fifty states and Washington D.C., in terms of breweries per capita.”

To create more opportunities for their members, the Texas Craft Brewers Guild has been working with members of the Texas legislature to remove some of the barriers to growth. Brewpubs, for example, want to be able to distribute their beer outside of their own facilities—meaning customers could buy a pint of Freetail or other brewpub beer without driving to San Antonio. Breweries, on the other hand, are lobbying to be able to sell beer directly to customers at their facilities—much like wineries—so that people can enjoy a pint after a brewery tour.

The distillers recently earned the right to sell liquor by the glass and retail bottles at their facilities through legislation sponsored by Senator Leticia Van de Putte. Starting September 1, 2013, visitors to distilleries in wet counties can buy a drink during their visit and purchase bottles of alcohol to take home with them.

After decades of hard work to make it easier to buy, ship and enjoy Texas wine, the legislative focus for the wineries is on a few tweaks needed to make the industry stronger. Two bills introduced during this legislative session aim to do just that. The first bill would allow wineries—many of which have event centers for entertaining—to stay open until two in the morning rather than midnight on New Year’s Eve and allow guests to celebrate without cutting off the annual toast.

The other bill defines what it means to be a winery—requiring manufacturers to produce or blend wine at the facility and preventing people from cashing in on the industry’s growth by using production terms inappropriately. Reynolds explains, “In essence, if you open up a winery you are expected to produce, but there are some places that are only tasting rooms, never planning to produce. Some of the competition feels that those are no different from a package store.”

As the Texas beverage industry grows, there will be more challenges and hurdles to overcome, but the payoff in new jobs, business opportunities and deepening the unique Texas experience for visitors is worth the effort. “It is an amazing culture that is unlike any other business,” says Metzger. “Even amongst all our competitors we are still very friendly and are a community as opposed to an industry in a lot of ways. With that said, it’s not something you jump into to get rich quick. It’s something you get into because you have a passion for it and are in it for the long haul.”
Cheers to the long haul for Texas breweries, distilleries and wineries!