So Long, Locals? 

• Mike Riedel

Back in November 2019, you might have noticed something changed at your local grocery and convenience stores—the beer suddenly got stronger. Well, it wasn't quite so sudden; we knew it was coming, and a lot of us were giddy to finally be out from under that 3.2% alcohol by weight bubble.

However, after the change occured, it left a void at the Utah Department of Beverage Control's liquor stores. Multiple brands that had once occupied DABC shelves now had new homes in grocery store cold cases. This left the state with an inventory issue, and it needed to fill those empty spots with new beers that were above the new 5.0% alcohol by volume mark.

Data obtained from the DABC's Spring 2020 Category Need Analysis Report shows that 47 current beers are being evaluated for viability and profitability in this new era of Utah beer. The report lists eight categories overall that are broken down by "large" and "small" packages, and price points. "We acquired a new purchasing system a little over a year ago," Terry Wood, Department of Alcoholic Beverage Control's spokesman, says, "and we've been analyzing everything in our inventory."

The new inventory system is called Symphony, and its nonemotional algorithm has the entire DABC re-evaluating its purchasing and sales practices. "We are mandated [by state law] to operate using 'sound management principles and practices,'" Wood says. "We have limited shelf space, and a lot of back-stock that just isn't moving." Unfortunately, some of the numbers Symphony is seeing might be skewed by the recent dip in beer sales due to lack of inexpensive inventory resulting from the introduction of 5% beer to local stores. "If it turns out we've made a mistake in how we interpret the data, we'll correct it," Wood notes.

On the manufacturing end, many breweries were left in shock when they approached the DABC in regards to adding new brands for the spring and summer months. "Our Piña Colada Kveik beer is on fire right now at our brewery,'' Shades Brewing Company's Head of Sales Kurt Flickinger says. "We approached the DABC about getting it generally listed. That's when they informed me that they were looking to cut 47 SKUs [stock keeping units] from the flavored malt beverage category. All my beers are in that category."

When I asked Wood about this, he assured manufacturers that the "purchasing department will consider all applications and make their decisions on the taste and value of the product. ... We pull for our local alcohol makers, but we just can't favor them by law."

The law Wood is referring to is the Dormant Commerce Clause, which basically states there can be no differential treatment of in-state and out-of-state economic interests. Of note, given the DABC isn't allowed to advertise their alcohol inventory, that responsibility falls entirely on vendors. Most local brewers rely heavily on social media (and on placing ads in publications like ours) to get their branding out. In contrast, beer behemoth Anheuser-Busch spent approximately $554 M in advertising in 2018 alone.

For many local breweries that make high-point beer, the state of Utah has traditionally been their best customer. This status may or may not change depending on individual brewery dynamics, but it's fair to say that the relationships between all local alcohol producers and the state might become less cordial unless the new dynamic changes.