Why Alabama lost two major economic development projects in 2014
We love our homegrown brewers first and foremost, but craft beer has been exploding across the country for decades. Nationally, craft beer production increased by 18% in 2013 despite overall losses in beer as a general category. (Alabama beer production grew at almost three times that rate in 2013).
As many of the largest craft breweries are located in the western United States, there has been a recent trend of west-to-east expansions. These projects often bring initial investments of tens of millions of dollars, hundreds of direct jobs, and thousands of indirect and induced jobs. Any state this side of the Mississippi River should be interested in winning a bid.
Alabama Discovers Stone Brewing Co
Stone Brewing Co, one of the largest craft breweries in the United States, was unusually public about its search for an east coast location in early 2014. Perhaps for this reason, Alabama economic development officials across the state caught the brewery bug.
The interest was phenomenal and the proposals to land this major project began to be developed. Unfortunately, a problem was quickly discovered. On page 34 of their RFP, Stone made it clear that any prospective location must have an expansive retail space similar to its Stone World Bistro in San Diego. This space would be used by the brewery for direct sales to visitors, both by the glass and to take-home.
Take-home sales of beer from a brewery are illegal in Alabama, one of only two states with an absolute ban on such direct sales. A last-minute effort to change the state law failed, and Alabama was never really in consideration. Stone announced its plans to build a $74 million facility in Richmond, Virgina in October 2014.
[su_pullquote align=”right”]We’ve kind of purposefully skipped over Alabama and Georgia because they really don’t — while there’s a lot of great things going on in those states — they really don’t have the friendliest legislation so we kind of took those off the table right away.[/su_pullquote]
Cigar City Barely Glances
Also in October 2014, Cigar City Brewing Co of Florida publicly disclosed that they were searching for a second Southeast location outside of Florida. One of the largest beer producers in the South, founder Joey Redner admitted that they “kind of purposefully skipped over Alabama and Georgia because … they really don’t have the friendliest legislation.”
In an interview with media in Alabama, Redner cited direct sales as “pivotal to the financial and marketing success of a small brewery.” The Tampa brewery “tossed out Alabama and Georgia right away because those critical components were not present.”
What It All Means
Stone and Cigar City weren’t the first craft brewery expansion projects, and they certainly won’t be the last. Also, the issues that are important for a brewery to relocate here are also important for our homegrown brewers to thrive.
Alabama attracted Remington Arms in part because it was friendly to the firearms industry while its home state of New York was hostile. If we want any hope of attracting an outside brewery, the state cannot have laws that are hostile to the brewing industry.