Weekend Feature: Why Craft Brewers Don't Want Their Beer to Be Legal in Colorado Supermarkets

March 13 2009, 3:45 PM

Colorado's artisanal brewers are undoubtedly raising a hoppy pint this weekend, toasting the recent defeat of legislation that would have made their beers available in grocery and convenience stores across the state. That's right: Colorado's craft brewers don't want you to purchase their super suds at 7-11 or King Soopers--at least not right now. They mostly worry about their David status with the Goliath supermarkets and convenience store chains, but their argument is best understood through the story of how 3.2--"three-two"--beer, often disparaged as "near-beer" swill, took hold in Colorado and how grocery stores are now stuck stocking it.

The numerical name of 3.2 beer comes from its percentage of alcohol as measured by weight, a designation that dates to an interim 1930s federal law that allowed a low-strength beer to be brewed as Congress went about repealing alcohol prohibition. Some states embraced 3.2 beer, including Colorado, which in the decades after prohibition allowed the beer to be sold to 18- to 20-year-olds. But when the state raised the drinking age to 21 in the 1980s, 3.2 became a beer-of-last-resort, conveniently available at places like the neighborhood convenience stores and supermarkets alike.

The beer was an especially good niche for them on Sundays--until early last year, when the state revised the law to allow liquor stores to sell alcohol on Sundays. The Sunday advantage has since belonged to liquor stores, which offer the full range of alcohol--including stronger and craftier beer. As a result, convenience and grocery stores have predictably complained that their sales of 3.2 beer have slowed and that liquor stores have an unfair advantage written into state law. State Senator Jennifer Veiga agreed and introduced a bill this year to allow convenience stores and supermarkets to sell full-strength beer every day of the week--just like the liquor stores. As she puts it, her legislation would have made "beer beer" wherever you go to buy it. Liquor stores shot back that such laws would put them out of business. But that's not where the opposition ended. Enter Doug Odell, who runs the Odell Brewing Co. in Fort Collins, one of the craft breweries located in what has been dubbed the "Napa Valley of beer," a designation the state and beer-drinking public have kindly adopted in recent years to drive tourism and create local jobs. You'd think Odell would be glad to hear about Veiga's bill. But as president of the Colorado Brewers Guild, he says the senator's efforts would have hurt small brewers. First, he says there are no assurances that typical convenience stores and supermarkets will diversify their shelves and suddenly include craft brews. Mainstream beers, such as another Colorado beer--Coors Light, a "Rocky Mountain tradition"--are already on the shelves in a 3.2 variety. The big beer distributors only have to restock the supplies with the full-strength versions of that same Coors Light.

While the market chains have built their relationships with distributors who've in turn developed loyalties to the mainstream brewers, the independent liquor stores have typically provided lots of shelf space to craft brewers. This is at the heart of the crafters' worries: Drinkers might settle for Coors and Bud, skipping a trip to the liquor store, if they can also buy toothpaste at the supermarket. Veiga argues that she was "just trying to level the playing field" and believes that once craft brewers get past their fears, they'll benefit from legislation like hers, which, despite being defeated at the Capitol, is being discussed as a possible item for a statewide ballot, letting the public decide. But Odell, with an alliance of craft brewers and independent liquor stores, will challenge the power of big beer interests and supermarkets, drawing from experience. He says that for two years he has tried to set up a meeting with Wal-Mart in Arkansas in hopes of convincing them to carry his company's beers. So far he's been frustrated. "How can craft brewers have an opportunity to be sold at chain stores if we can't even talk to them?" Odell asks. "If Odell's has a problem reaching the chains, how about the 103 Colorado craft brewers smaller than us?"