San Antonio Express News
By Madison Iszler , Staff Writer
Distillers in Texas are raising a glass to new laws they expect will boost sales.
Senate Bill 2284, which was passed this year by the state Legislature, doubles the number of 750 milliliter bottles of spirits customers can buy directly from distilleries over a 30-day period to four from two.
That should mean distillers can double retail sales from their tasting rooms, said Mike Cameron, who pushed for the change as president of the Texas Distilled Spirits Association and co-founder of Devils River Whiskey in San Antonio. Selling directly to customers also translates to improved margins, because such sales cut out distributors and liquor stores who otherwise would take a cut.
“The bottle bill was a big deal for distilleries,” Cameron said of the law that took effect Sept. 1.
Another new law, created by Senate Bill 1375, allows distillers to offer samples of their spirits at events such as farmers’ markets and festivals.
Both are a boon for the continuing growth of the industry, Cameron said.
“The key to this business is engaging with consumers and getting liquid to lips,” he said. “That’s how you grow a brand.”
The industry has expanded rapidly across Texas in the past decade. There were eight distilleries in the state in 2012, when Cameron and others founded the spirits association. Today there are more than 200. Cameron attributed that growth in part to a series of changes in state and federal law. A state measure permitting distilleries to sell two bottles within a 30-day period passed in 2013 and an amendment to a federal bill in 2017 reduced the tax rate producers pay on beer, wine and spirits to $2.70 per proof gallon (a gallon of spirits that is 50% alcohol) from $13.50.
One law that hasn’t changed: Texas is still one of seven states that bars liquor sales on Sundays.
“I want Texas to be No. 1,” Cameron said. “That’s a tall order when you’ve got states like Kentucky and Tennessee, but I’m really proud of the progress we’ve made.”
A study conducted by the University of Texas at San Antonio’s Center for Community and Business Research and commissioned by the Distilled Spirits Council of the U.S. showed that distillers in Texas generated nearly $2 billion in revenue in 2020. The industry supports 4,900 Texas jobs with $334.9 million in salaries and benefits paid to workers. The majority of those are not direct employees of distilleries, but workers in transportation or on farms that supply inputs such as grain for distilling or fruit for flavoring. Texas grain farmers supplied about 30 percent — nearly $1.7 million worth — of the grain used in spirits in 2020.
There’s been an increase in the number of distilleries in San Antonio over the past decade or so, as well. The list now includes Rebecca Creek Distillery, founded in 2009; Ranger Creek Brewing & Distilling, 2010; Azar Distilling, 2010; Artisan on Alamo Distilling, 2012; Dorcol Distilling + Brewing Co., 2013; Alamo Distilling Co., 2015; and Maverick Whiskey, 2019.
Devils River Whiskey opened its new distillery and tasting room in the spring of 2021 in the Burns building downtown. A chunk of its business is with visitors who sip on its product in the sprawling tasting room along Houston Street and Cameron estimated foot traffic is back to 60% or 70% of what it was before the pandemic as more tourists return and conventions and meetings are booked.
“It’s been so refreshing to see it come back,” he said.