NCRMA: Wine is good-to-go with the NC Legislature

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The following column was written by the North Carolina Retailers Association:

A new bill has passed that gives customers more refill options for growlers, and it promises to benefit North Carolina’s economy. Governor Pat McCrory signed House Bill 909 into law, allowing retail wine and beer stores and restaurants and bars to begin filling growlers with cider and wine for off-premise consumption. It’s the latest effort to support retail beverage businesses in North Carolina since the explosive growth of the craft beer industry, and it was only a matter of time.

Joe O’Keefe is the owner of Wine 101 in Wake Forest and he was thrilled to get the news Friday afternoon from Andy Ellen, President and General Counsel of the NC Retail Merchants Association (NCRMA).

“I was beyond excited when I heard because it’s a great way for retailers to offer some of the best ciders and wines in North Carolina,” said O’Keefe. “In the same way the growler has supported the brewery business, cider and wine makers are now free to experiment and give consumers a chance to experience more. In the end, everybody wins.”

The growler is a reusable jug available in sizes up to 64 ounces. It’s not a new concept. During the decades leading up to prohibition, the bucket trade permitted fresh beer to be carried from local pubs in the jugs. The name growler is rumored to come from a rumbling sound people heard when beer sloshed in the bucket and carbonation escaped through the lid. In recent years, the growler re-emerged to make a spectrum of craft beer available from breweries that were too small to get distribution. Now this same growth is anticipated for the state’s cider and wine makers, and the existing rules for malt beverage growlers will apply until the North Carolina ABC Commission adopts new rules.

Already, O’Keefe has ordered two more kegerators to meet expected demand. These are refrigerator containers that keep kegs chilled. He’s also requested up-to-date products and pricing lists from distributors as he plans a new selection of cider and wine. No one understands the impact of this legislation better than him.

In 2003, O’Keefe came to North Carolina from Syracuse and opened Wine 101 in Wake Forest just after the economic downturn in 2008. He started by selling wine and beer from large distributors, but soon found that the explosion of craft beer offered a new revenue stream. When the growler was approved for use in retail stores and restaurants, his business grew and he opened a second store. Since then, bottle shops and beer libraries have been popping up everywhere.

But game changing legislation that improves the business climate doesn’t just happen overnight. There’s a methodical process behind it and this is what the NC Retail Merchants Association understands well. The statewide trade association played a major role in bringing this legislation to life, listening to businesses owners, seeking supportive resources, and building common understanding about the prospects of a new business opportunity based on a spirit of trust and compromise.

How the Growler Came to North Carolina

Interest in growlers started when NCRMA’s grocery store members noticed the growing retail practice in South Carolina. Grocery stores were filling their growlers with craft beer. Customers were finding myriad brew options available that they could take home, and the local economy was booming. North Carolina members wanted to get involved in the niche market that gave breweries a way to make their specialty available to the consumer.

“We constantly look to our members for new ways to support North Carolina business, and often these opportunities come to us organically,” said Ellen. “We watched growlers coming into South Carolina and saw that the Charleston market, for instance, had Piggly Wiggly selling craft brew. The retailer branded its growler with an image of the iconic pig, and we realized this would be a great way for brewers to get more of their product out there and an easy way for consumers to gain access. At the time, North Carolina’s craft beer industry was taking off so we knew the timing was right.”

Real conversations began in 2012 when NCRMA’s legislative team began to identify bill sponsors. They found support from Representatives Chuck McGrady (R-Henderson), Rob Bryan (R-Mecklenburg), Tim Moffitt (R-Buncombe), and Larry Hall (D-Durham). These were the legislators who became the bill’s primary sponsors. The idea was also supported by House ABC Chairman Jamie Boles. Still, NCRMA knew education was needed, and there was lots of research to do to discover how growlers were working in other states.

“First, we explained what the growler was by taking in growler examples and starting a conversation about the craft beer industry,” said Ellen. “When we introduced a growler to the House ABC Committee, no one had ever seen one. Members asked if we thought people would buy it, and how could we ensure responsible handling. There were questions about alcohol content.”

Initially, the Brewers Guild was leery of offering craft beer in a growler jug, concerned that product integrity could be affected. The ABC Commission and the Division of Public Health were concerned about draft line cleanliness. Who would ensure the flushing of the line after each fill and apply sanitizer to each untapped value? Proper labeling would be required and there was a question about alcohol content, until it was clear that a 64-ounce growler of beer contains less alcohol than a six pack of beer which equals 72 ounces. The Christian Action League took a neutral position. There was nothing about the prospect of growlers to indicate alcohol consumption would increase. In the end, the ABC Commission agreed to adopt sanitation rules. This gave craft brewers the confidence they needed.

On April 10, 2013, NCRMA introduced the bill and it moved through the House. When it reached the Senate, there was an effort to combine with a bill that supported alcohol sales in stadiums and advocated for customers to be served in their seats. However, NCRMA made the decision to keep the growler bill separate, and on July 12, 2013, Governor McCrory signed the first legislation permitting the use of growlers in retail shops and restaurants in North Carolina.

A tremendous explosion of bottle shops and wine shops followed. People started niche businesses and began hiring people, investing in equipment to sanitize, and these shops carried a variety of beer products. Stores like Wine 101 and Lowes Foods LLC expanded their footprint and added beer dens. All the while, the cider industry was rapidly growing in the mountains in areas like Hendersonville, and people were coming into bottle shops wanting to purchase cider in a growler. They didn’t understand why they couldn’t take cider home the same way. When Ellen got this feedback, the NCRMA team sprang into action.

“It was a natural progression to ask for additional use of the growler,” said Ellen. “We looked around and saw that cider and wine were already being sold in growler containers in places like California, Oregon, Texas, South Carolina, Tennessee, and Europe.”

NCRMA connected with one of the original 2013 bill sponsors, Representative Chuck McGrady (R-Henderson), who had an interest in this expansion from his constituency as well. It was championed by Senator Rick Gunn (R-Alamance) who ran the bill through the Senate. While the original interest was focused on hard ciders it made more sense to request wine since the definition of cider is technically unfortified wine. What if restaurants could serve a glass of premium wine the way they offer premium craft beer, on tap? Opened and partially filled bottles of wine oxidize over time, changing their taste and reducing their quality. That’s why most restaurants only offer a few wines by the glass. NCRMA learned that serving wine by the glass through kegs is a new trend that with the expanded use provided by HB 909 will provide retailers more options in the future to serve their customers.

It didn’t take long to put the bill into play and it was approved quicker than anyone expected. Now, NCRMA is focused on helping retail members comply with growler regulations, making sure the customer has a good experience and that the growler is enjoyed responsibly.

“We want stores and restaurants to follow the regulations and we’re here to help people understand and apply them,” said Ellen. “If they don’t comply, we’ll be less likely to see these kinds of opportunities in future. Trust and respect is a part of it.”

On any given day, Ellen and the NCRMA government relations team, comprised of Elizabeth Robinson and Lexi Morgan Arthur, are lobbying for approximately 100 different bills that represent members’ interests. Whether they’re addressing sales tax, workers’ compensation or advocating for innovative customer experiences like the growler now provides, the goal is to create the best business climate possible while fostering new customer experiences. And although Joe O’Keefe is still a relatively new member of NCRMA, he’s already witnessed the powerful action that can come from having a dedicated legislative voice and it goes way beyond politics.

“What I’ve seen happen is bigger than which way you vote,” said O’Keefe. “I’ve seen communities become more reliant on each other, supportive of each other’s livelihoods, trying to take care of our families. North Carolina is a great place to be a business owner, and NCRMA is going to keep it that way.”

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The North Carolina Retail Merchants Association (NCRMA) is a non-profit trade association organized in 1902 to improve the business climate for retail merchants in North Carolina. Over 100 years later NCRMA is the leading advocate and business resource dedicated to promoting a positive legislative and regulatory environment for the retail industry – enhancing members’ opportunities for success.  NCRMA serves both large and small retailers from multi-state chains to local independent stores.