Joe Picou and Wes Hedges—engineers by day, amateur beer brewers by night—entered their first National Homebrew Competition in 2011. And their Red Stick Rye, named for their Baton Rouge hometown, took second place in San Diego that year among some 7,000 entries.
Picou and Hedges saw that West Coast success as a business opportunity here in Louisiana where, despite being one of the nation’s most beer-loving states, there were few breweries. So they launched Southern Craft Brewing in 2016, joining Tin Roof as Baton Rouge’s only craft beer breweries.
Sitting in the small tap room adjacent to Southern Craft’s 15-barrels-at-a-time brewhouse, Picou recently talked to Business Report about his commitment to using regional ingredients like Louisiana cane sugar, local wildflower honey, and Cafeciteaux Coffee from the brewery’s Airline Highway business park neighbors. Thanks in part to a 2012 state law allowing breweries to sell their creations directly to drinkers in on-site tap rooms, there are now more than 35 breweries in Louisiana and more than 15 being planned, according to the Louisiana Craft Brewers Guild.
But there’s another tool Picou and other small brewers would love to have in their brew kits: the ability to sell their beers directly to stores, bypassing the legally-mandated middleman.
“I think that would have the biggest positive impact on the craft beer industry in Louisiana,” Picou says in a feature from the current issue of Business Report.
The American beer industry is divided into three tiers: manufacturers, distributors and retailers. Louisiana brewers must sign an exclusive contract with a distributor to get their beer into a given market, and contracts with brewers are hard to break.
Despite the three-tiered system, Cary Koch, executive director of the Louisiana Craft Brewers Guild, says 39 other states have figured out ways to let craft brewers sell directly to retailers. In Texas, for example, breweries can self-distribute up to 40,000 barrels a year, far beyond the production of any Louisiana brewer except Abita.
Self-distribution allows small breweries to play in the minor leagues for a while, Koch suggests, keeping all of their sales revenue until they grow to the point of needing a distributor.
Distributors have economic and political clout, so for now craft brewers are treading lightly. In this year’s regular session, the Craft Beer Guild is only asking legislators to define a brewery’s “premise” for the purposes of outdoor service or events, which has been open to interpretation.
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