It’s been a few weeks now since the passing of HB770, or more widely known as the Hawaii Growler Law. When I announced the potential new law and its signing into law by the governor there was a ton of fan fair. Hawaii beer fans rejoiced and flooded the Beer In Hawaii Facebook post with dozens of happy comments. Finally residents of Hawaii will be able to fill growlers with beer from any tap handle at any participating bar or restaurant, not just brewpubs and breweries was the general response.
The new law seemed like a huge step forward for consumers in Hawaii and it might prove to be one, but new things take some time to get going. Now remember, Hawaii residents have been able to fill growlers at breweries and brewpubs for many years. This new law added the ability for those breweries to fill growlers with beer other than their own. A small advance for breweries, but not really a huge leap considering that most breweries want to sell their own beer because they make more money on it.
The other major addition of HB770 is the ability for restaurants, bars and other various establishments holding a specific type of liquor license to be able to fill growlers. This is what got so many people excited. The widespread thought was that you’ll now be able to fill up a growler with any beer you see on tap. Portland’esque growler fills on every corner at every bar!
All sounds great right? It could be, but it may take some time to get there. I know many popular bars have been getting asked regularly when they will start filling growlers. Many customers expected that bars would start filling right away, but the reality is that there are a lot of issues that need to be worked out before this can happen.
I thought I’d help break down some of the issues that many of our local bars are considering right now. Let’s first start with how many bars make their money.
Draft beer is normally the one of the biggest profit makers for most bars. Bars have a specific profit margin they try to hit with each keg and the markup is generally high. Normally the price per ounce of a draft beer at a bar will be much higher than the exact same beer in a bottle of can bought from a retail store. Bars and restaurants have much higher operating costs than liquor stores. All that food equipment, cooks, servers, food costs, etc., etc., add up and normally liquor, wine and beer is where bars and restaurants make their biggest profits from.
Retail shops don’t have the same type of overhead. You buy your beer (can or bottle) and leave. The profit margin and hence markup is much less on beer at retail. So that is why a 10-12oz pour of Knee Deep Simtra will cost $10 at a bar, but you can buy a 22oz bottle at a retail shop for $12.
Beer waste is also a major factor when filling growlers. When a faucet spews foam that is beer being loss. It is possible to fill a growler from a regular tap faucet, but there is normally a large amount of waste trying to get the entire growler filled with beer. Typically when filling a growler from a regular faucet there is a large amount of foam that starts to fill the headspace. As the beer gets closer to the top you have to tilt the growler to let that foam flow out in order to get beer all the way to the neck. The more foam, the more the bartender has to keep the faucet open and continue pouring until the growler is full. Wasted beer is money down the drain for bars.
Current bars with draft systems have a few options. They can opt to fill with their current faucets and try to minimize waste, but even with the most careful pour in the cleanest growler there will be a greater amount of loss than pouring a regular pint.
A second option is to invest in growler filling equipment. As the popularity of filling growlers has soared in the US (thanks to the thousands of brewpubs) there have been more than a few great inventions to help minimize beer loss when filling a growler. There are special faucets that control the beer flow and even fancy filling stations that purge your growler with CO2 before precisely filling it (Honolulu Beerworks will soon be getting one of these bad boys.) These awesome toys don’t come cheap, which may deter many bars from making the investment.
So now lets take a look at growler fill pricing. If a bar wants to start filling growlers it has to first look at how it will price each beer. As mentioned above, bars have a much higher markup on draft beer than the exact same beer found at a retail shop. Lets take Maui Brewing Company’s Bikini Blonde Lager as an example. At your typical bar on Oahu a 16 ounce draft of Bikini Blonde will cost you about $7. If you wanted to fill a 64 ounce growler of the same beer at the same bar with the same price per ounce you’d be looking at a $28 price tag. Outrageous and you’d never fill your growler right? So, the bar wanting to fill growlers would have to lower their margins on the same beer to make the fill price more palatable. If they reduce the price by 25% (and hence taking a huge cut in their biggest profit maker), the price would now be $21 for 64 ounces. Seems better right?
But is $21 for 64 ounces of beer a good deal? Not really if you look at the exact same beer sold in 6 pack cans for only $9.99. That’s 72 ounces of the exact same beer for less than half the price.
Herein lies the biggest challenge for current bar owners. How do they competitively price a growler fill without cannibalizing their main source of profit? Does it make sense for them to heavily discount the price on a beer just so you can fill up your growler and walk out of the bar? Can they even price it low enough to make you want to fill up regularly? Sure the first couple times filling up is great, but at some point you realize that you can get the exact same beer for a hell of a lot cheaper down the street at the liquor store and you don’t have to worry about it going bad once you open it (if you’re buying a six pack.)
But what about specialty one off kegs that you can’t find in bottles you may ask about? Good question and the same basic math applies. If a keg is rare and highly sought after, it normally costs a heck of a lot more than your regular everyday keg. Any bar that gets their hands on this wonderfully rare keg knows that they can easily sell every last drop in it at their bar to customers happy to sit and drink it right there. There’s a reason why many breweries and brewpubs don’t do growler fills of their most elusive and specialty beers. They don’t need to and it would be priced way too high for most people’s threshold.
I’m sure there are some people willing to pay $50+ for a growler full of Habanero Sculpin or some other can’t find in bottle beer, but that isn’t a sustainable model for everyone to follow. I’m sure some bars will be happy to take your money for an expensive fill like this, but in the long run it won’t really grow the market much.
There are a also slew of other issues current bars have to figure out before they can dive into filling growlers. Here are just a few: storage space for all of those big clunky glass growlers, cleaning and sanitizing growlers (a space and time issue), interruption of regular bar service (filling a growler takes a lot more time than filling a pint glass) and most importantly public safety. This last issue is something all good bar owners take very seriously. If you come into the bar, have 5 drinks, stumble to the bar and ask for a growler fill to go, should they serve you? A responsible owner won’t and those types of situations need to be thought through and policies put in place before starting this type of service.
Whole Foods in Kahala and Kailua were the first to start filling growlers. Whole Foods heavily backed this bill and played a huge part in getting it passed. As a major corporation with stores across the country they already have experience in filling growlers in other states. Within a week or two of the passing of HB770, both Puka’s in Kahala and The Windward Bar in Kailua had shiny new growlers and pricing set. I posted Puka’s pricing menu on Facebook and many people were instantly excited, though there were a few who were actually shocked (and rightly so.) Most, if not all of the beers on draft can easily be found across the store in the bottle cooler for less than half the price of the growler fill. Simple math will show that you’re paying a lot more money (71% more) for less beer just to have it filled in a growler. Is it worth it? That’s up to you.
This post isn’t meant to be a downer, but rather to help inform the general public about the challenges that your favorite bars are facing. There will be some bars that will eventually start filling growlers and I predict that the prices will be similar to Whole Foods. That still puts the price of a growler fill far above the equivalent beer in a bottle and it will be up to the consumer to decide if they are willing to pay such elevated prices for a fill. Many bars and most restaurants simply won’t ever get into it. It’s just not worth the trouble or expense to offer the service.
In the growler capitol of the US, Portland, OR, there have been many specialized growler fill stores that have opened since a similar law passed there in 2013. These growler stores have a very different business model than your regular bar. Establishments like the regional chain The Growler Guys focus primarily on filling growlers and don’t serve food. As a result they can price their fills at a lower point. A 64 ounce fill of Maui Brewing Company’s Mana Wheat is priced at just $12 at The Growler Guys in Portland. Compare that to the $18 fill currently offered at Whole Foods Puka’s Bar in Kahala.
Portland has a well established craft beer culture and it took no time for many specialized growler business to pop up and open after growler fills were legalized in 2013. It may take a bit longer for that to happen in Hawaii, where the culture is still evolving and it’s much more expensive to open a business. Until then, we’ll have to wait and see how many local bars want to fill growlers and how they will price those fills. Of course, you can still fill growlers at our local breweries (like you always have been able to.)