Understanding Taproom Laws in Your Area

The taproom can be the key to expanding your brewery in new and exciting ways.

Smart brewers know that the more people that taste a product, the more customers they’ll have. Finding ways to get your beer in glasses is one of the hardest parts of running a beverage business. Many breweries have gone the direct route by establishing brewpubs where consumers can dine and drink on the property – like a couple of our favorites, Lakefront Brewery in Milwaukee and Thr3e Wise Men Brewing Co. in Indianapolis. For those who can’t commit to the time and effort, the taproom has become an excellent way to directly sell your brews to your customers. Educating yourself on their history as well as what you need to do to open one can help you get paid by your customers and take out some of the middlemen.

The Taproom Boom

Legislative changes within the last five years greatly affected who and what could sell food and beverages directly. The economy caused a lot of exploration by vendors looking to expand their wares and customers looking for alternatives to full-service, sit-down establishments that were still upscale from fast-food restaurants. These forces exerted pressure on states to expand or loosen their direct sales laws, though each state has subtle differences of which any potential taproom owner should be aware. For example, in Indiana, you should be aware of the rules and regulations governing the state. Meanwhile, in Wisconsin, local municipalities set the fees for selling alcohol.

The rise of the taproom coincides with another trend in modern restaurants; the food truck. Taprooms themselves aren’t new, but usually only offered the barest of non-alcoholic refreshments since they didn’t have the time, money or space to get into the restaurant business. Now, with mobile restaurants prowling cities around the world, taprooms find opportunities to pair their brews with foods that greatly complement their taste. Food trucks opened customers up to the idea of quality foods coming out of small, contained areas. Taprooms share much of the same reputation.

Taprooms also offer a halfway point between a straight brewery and a brewpub. Running one business, especially a complex one like making beer is tough enough, but running two can be absolutely terrifying. Even successful restaurant owners often consider selling their ventures. A taproom provides a direct line for customers to sample your wares without the extra headaches of zoning, permits, and other hassles of running a restaurant. That being said, running a taproom isn’t as easy as tapping a keg in an empty room of your facility.

Put the Law on Your Side

If you’re serious about starting a taproom, make sure you know the laws in your area. Prohibition might be long gone, but many areas still have tricky laws in place about not just who is able to sell directly, but what type of beer as well. The laws are available on most local websites, even if it takes a little digging to find them. There’s no shame in consulting with a lawyer if you want to make sure you get everything right.

Once you know what laws govern your location, make sure to get the proper licensure. Even if you already have your brewery license, there’s a good chance you’ll need a beer sales or beer wholesale license. Many jurisdictions limit the amount of these licenses that can be active at any one time. If your area is already at its limit, this may mean you have to track down someone already holding the license and buy it from them. Often, local agencies help people looking for licenses acquire one. The city wants as many of those licenses as active as possible since they are good sources of revenue that don’t require raising taxes.

The most important step is properly filling out the paperwork. This is another area where some legal assistance might be useful, but you’ve already navigated these waters before when building or buying your brewery. Much of the same paperwork is required, like floorplans, proof of property occupation, tax documents, and so on. It can take up to three months once the documents have been submitted, so working on the other pieces of your new taproom can be a good way to stay busy while the gears of bureaucracy grind together.

The Taproom Experience

The biggest key to a successful taproom is staffing it with people who know your products and are enthusiastic about it. Customers come to taprooms to talk about beer as much as they do to drink it. Taprooms thrive when they build communities of people passionate about making beer. You likely got into the business as a brewery because you love beer. If your taproom employees display that combination of knowledge, drive and fun, your barstools will be full any day of the week.

In many places, brewery tours were used as a way to get around restrictions on direct alcohol sales. The tour would cost a few bucks, but then there would be a “complimentary” beverage or two at the end to wipe away the thirst brought on by walking through a factory. These days the reverse is usually true. The tour is free but the taproom and gift shop at the end capitalize on the tour taker’s enthusiasm for the product to pick up a beer or two and maybe a growler to take home.

One of the biggest strengths of the taproom concept is allowing the brewmaster to experiment. Small batches can be shared with your most loyal customers directly. They’ll give you feedback right there and help you decide if something is worth making a bigger batch. Many award-winning high gravity beers began as mixes sampled in a taproom. Few businesses have an opportunity to get good feedback during the creation process. The taproom provides an avenue to see what your customers want out of your next creation before you invest too much time and effort into projects that will never see the light of day.

The taproom can be the key to expanding your brewery in new and exciting ways. The changes in direct sales laws mean you can sell your beer through a taproom in addition to local pubs, distributors and more traditional channels. Consumers are more open to drinking directly at your facility, especially if it’s located near someplace they can get something to eat. Taprooms offer many of the advantages of a brewpub without the extra challenges of the restaurant business. They also provide a place where you can truly show your love of the brewing business. Make sure you follow the laws and you’ll soon be seeing the satisfied looks on your customers’ faces with your own eyes.

Featured image courtesy of Flickr user ryan harvey.

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