Pop the Cap movement paves way to Craft Freedom

Before Fullsteam ruled in Durham, before Sierra Nevada and Oscar Blues and New Belgium built shiny outposts in Western North Carolina, before Asheville won the “Beer City USA” crown, before anyone in Charlotte or Raleigh ever had to ponder which brewery they were in the mood for on a Saturday night, North Carolina was a craft brew wasteland awash in mass market suds.

Our state’s beloved – and lucrative – craft brew scene reached a turning point a dozen years ago when a disparate band of activists coalesced around twin passions: a love of craft beer and hatred for being told what they couldn’t do.

Those passions fueled a movement called Pop the Cap, a grassroots campaign that led to a hard-fought legislative battle. The resulting law, passed in 2005, did away with an antiquated statute that limited beer sold in North Carolina to six percent alcohol by volume, making it possible for brewers to create and sell a vastly wider range of beer. The Pop the Cap legislation not only gave North Carolina’s craft beer lovers access to their heart’s desires, it opened the door to economic and cultural shifts that continue to shape the state today.

Now, another legislative battle is brewing over beer. A group of breweries, bottle shops and local businesses are pushing for changes to the state’s beer distribution laws, united behind a movement they have branded Craft Freedom. Existing North Carolina law allows breweries to self-distribute their beer, as long as they produce fewer than 25,000 barrels per year. Any more and breweries must engage the services of wholesale distributors to get their products to their customers, a requirement that Craft Freedom supporters view as an unwelcome encumbrance.

In the litany of issues our legislators might take up next year, the concerns of craft brewers might seem a small matter. But when considering the changes that Pop the Cop wrought, it’s worth recalling how this group accomplished what it did.

The annual economic impact of the craft brew industry in the state is estimated at $1.2 billion. It creates thousands of jobs worth $300 million in wages annually. And it’s growing as we speak. In 2010, North Carolina was home to 45 craft breweries. Now there are 150, with plans for more in the works. Our craft beer scene thrives thanks in part to Pop the Cap.

Response to a rant

To fully understand what Pop the Cap did, you must imagine the reality that beer lovers faced when ABV – alcohol by volume – levels were set at six percent. Big beer ruled in bar taps, on restaurant menus and on convenience store shelves. Budweiser, Coors and Miller were your choices, with an occasional St. Pauli Girl option if a place had grand ambitions. Serious beer lovers would drive to Virginia to find the IPAs and stouts they craved. A few stubborn brewers persisted in making and selling interesting varieties. Weeping Radish on the Outer Banks, Spring Garden Brewing, now Red Oak, in Greensboro, and Highland Brewing Co. in Asheville were among the pioneers, but the climate that existed with the cap was stifling.

“When you’re a craft brewer that puts too many guard rails on your creativity,” says Margo Knight Metzger. “Until Pop the Cap, it just wasn’t worth it.”

During the Pop the Cap campaign, Metzger was executive director of the North Carolina Wine & Grape Council, a state-run agency whose mission was to support the fledgling but growing wine industry. Today, she is the executive director of the North Carolina Craft Brewers Guild. Her role with the wine council made her a statewide expert on walking the line between artisan-entrepreneurs who specialized in creating alcoholic beverages and conservative communities that nurtured long-held fears of the evils of booze. In the early 2000s, communities where wineries had sprung up were beginning to understand their value. When fallow fields turned into vineyards and wineries, creating jobs and drawing tourists with open pocketbooks, business leaders began to notice.

Her work attracted the attention of Sean Lilly Wilson, a beer enthusiast and social activist who was one of the driving forces behind Pop the Cap.

“They were kind of looking at the wine industry as what could be possible if breweries were allowed to operate in a similar way,” Metzger says.

Wilson is now the founder and Chief Executive Optimist at Fullsteam, the Durham brewery. But in 2004, while he was heading up the Pop the Cap effort, he had no plans to open a brewery. He was just a beer nerd who had read an impassioned plea in “All About Beer” magazine.

“It was just kind of in the air, and I had started discovering and learning about craft beer through a friend of mine and I was starting to get really curious about it and I discovered a column by Julie Johnson,” Wilson says. “It was an epic rant on the fact that it’s time to get rid of the six percent cap on alcohol in beer in N.C.,” he says.

Wilson got together with Johnson, then editor of “All About Beer,” and a few others and started getting folks organized. “We set up a meeting on a rainy, gross day in February in 2003,” he says. “About 40 people showed up in the All About Beer offices.” The assembled crowd included enthusiastic home brewers and craft beer lovers as well as professional beer makers, all united behind raising the ABV limit. Their initial efforts involved gathering signatures for petitions, a naive but heartfelt gesture, Wilson recalls.

‘Such a stupid law’

They knew there would be opposition. Church leaders had historically fought any move to loosen restrictions on alcohol. Big beer wholesalers also would be against the change.

The group’s enthusiasm stalled until another member connected them with a lobbyist named Theresa Kostrzewa. She recalls when the Pop the Cappers reached out to her.

“Being interested in it was the easy part because it was such a stupid law,” she says.

The law was a relic from the post-prohibition era, a rule pushed by mill owners who didn’t want their beer-drinking workers showing up hungover when the morning whistle blew.

Kostrzewa set out to show lawmakers and the public that Pop the Cap was about more than simply putting more alcohol in beer.

When her connection at WRAL did its first story on the proposed legislation, she made sure that the focus was on the craft of making beer, not just on the higher ABV. Then, she reached out to Mothers Against Drunk Driving, who pledged to stay neutral on the matter.

After that, she started pouring beer, holding tastings for lawmakers at her Raleigh home. She laid out craft beer and food pairings, spreads of cheese and chocolate, so that legislators could acquire a visceral understanding of how different these beers were from those now on the mini-mart shelves.

“That’s called ‘taking the hill,’ ” Kostrzewa says. “How we took the hill was, we put it out there in the public so they could see it wasn’t just another six pack of beer.”

Strange bedfellows

Kostrzewa also rallied the Pop the Cap troops, organizing a legislative day for the group to come meet with their law makers and bring their favorite craft brew to share. She recalls one bottle shop owner from Wilmington who arrived wearing a black suit, tattoos covering his exposed skin, spool rings in each ear and a black hat atop his head.

“This guy looked like an undertaker,” Kostrzewa says.

But lawmakers listened and one even kept on display a bottle of beer he received that day.

The bill, which had been introduced in the early days of the long session, passed in August, but it wasn’t easy.

“We went in the House, and literally I had talked to every single legislator, so I knew what the vote was going to be,” Kostrzewa says. But even lawmakers who knew the bill made sense were getting pressure from conservatives in their districts. Their preachers were calling to dissuade them. ... I was too scared to even watch the final vote.”

At that point, Kostrzewa had been a lobbyist for nine years and had a small client base. She was not among the well-known group that regularly makes the N.C. Center for Public Policy Research most influential lobbyist rankings. After Pop the Cap, she came in at No. 10 on that name recognition list.

Kostrzewa is not involved in the Craft Freedom movement. The challenge for that group – persuading lawmakers to change a distribution model that’s been in place for decades – is different from that which Pop the Cap faced. Craft Freedom wants to lift the restrictions on self-distribution to give brewers the option of continuing to distribute their own goods after they meet the existing 25,000-barrel-per-year limit.

For many beer-making entrepreneurs, the constraints of contracting a distributor can be financially and philosophically crushing. Craft Freedom supporters maintain that distributors are expensive, that the contract agreements force breweries to hand over control of the brand to the distributor and that contracts with distributors are almost impossible to get out of. They say by getting rid of the mandate that breweries must use distributors once they grow to a certain size, brewers will gain more economic freedom.

Wilson, a Craft Freedom supporter, says he realized the economic impact of Pop the Cap about a year after the law passed when he visited a friend’s beer store which had thrived with the new inventory that was available: “I remember ... seeing the owner’s new truck sitting out front. It just hit me. It made me so happy.”

Breweries and beer gardens are now hubs of communities across the state, not just in the metro areas, but in small towns, where opposition to Pop the Cap was great. Tarboro, Kinston, Bryson City, Waynesville and Rocky Mount all have breweries, where families and couples and children and dogs hang out together.

“They said ‘People are going to drink their high alcohol beer and lose their minds and raise hell’ – and guess what?” Metzger says. “That didn’t happen.”

She says these days community leaders are seeking breweries out.

“You would not believe the towns that ask ‘How do we get a brewery?’ ”

Because in the post-Pop the Cap era, having a brewery means your town is getting something right.

Amber Nimocks writes the monthly Let It Pour column for The News & Observer. Reach her at ambernim@yahoo.com.

This story was originally published September 3, 2016 at 4:44 PM with the headline "Pop the Cap movement paves way to Craft Freedom."