New Law Brings Big Changes, Growth for Montana Breweries

Big changes are in the works at Montana breweries now that House Bill 541 is in effect. The new law raising the production cap from 10,000 barrels to 60,000 barrels took effect on October 1, prompting exciting changes for the breweries largest production volume breweries: Bayern, Big Sky and KettleHouse. Meanwhile, other growing breweries that are looking at breaking the 10,000 bbl mark in the near future have been given a green light for growth.

With this significant barrier lifted, Montana breweries may now take full advantage of market opportunities. Other breweries that could not sell beer in a taproom under the previous law are now doing just that.

The thanks goes to the HB 541 co-sponsors who made it happen – Rep. Adam Hertz (R-Missoula), Rep. Ellie Hill Smith (D- Missoula) and Rep. Greg Hertz (R-Polson) – as well as Governor Steve Bullock for his strong support of Montana’s craft brewing industry and all the Montana craft beer lovers who showed their support for HB 541 during the 2017 legislative session.

Here’s a look at how HB 541 is affecting three of Montana’s oldest and largest breweries:

In 2016, KettleHouse opened their third production facility, a modern brewery dubbed “K3”, on the old mill site in Bonner. The new facility, which is capable of producing around 20,000 barrels annually, will allow KettleHouse to distribute beer like their popular Cold Smoke® Scotch Ale to more communities around Montana and beyond.

Under the old law, they would not be allowed to sell beer through a taproom at their new facility. But thanks to HB 541, KettleHouse is now planning to open a K3 taproom in 2018. The taproom will be a welcome addition to the Bonner community and is sure to become a popular destination for locals and visitors who recreate in the area.

“We’re excited to add a taproom experience not only to our brewery in Bonner but also to the world-class KettleHouse Amphitheater located next to the brewery,” said Tim O’Leary, KettleHouse co-founder. “We’ll be helping our customers make lifetime memories on the banks of the Blackfoot River for years to come.”

A new taproom already opened across town at Big Sky Brewing. Big Sky has been in business since 1995, but until this October, they had never sold a single pint in their taproom. When the law was changed in 1999 to allow Montana breweries to sell beer in a taproom, Big Sky was already producing more than the 10,000 bbl limit.

Big Sky has operated a modest sample room to provide free samples to guests. With their beers like Moose Drool distributed to 24 states, it’s the brewery that visitors to Montana are most likely to already know and want to visit. However, there was never much incentive for Big Sky to do much with the sample room beyond having a destination for those visitors. After all, Big Sky gave away over $2 million worth of beer during those years. Now, all of that has changed with the implementation of HB 541. Big Sky closed their sample room for over a month this fall to remodel the place and get ready for the new world of selling pints. The newly remodeled taproom opened on October 20.

The law change is affecting Bayern Brewing is different ways. Bayern has been selling beer in the Seattle and Tacoma area where they’ve found a healthy market for their authentic German-style beers. However, the previous 10,000-barrel limit meant Bayern couldn’t ship too much beer to the West Coast, otherwise they faced having to give up their taproom sales. For three years, Bayern walked that fine line of building relationships in Washington without being too successful in their out-of-state sales. Now, with HB 541 in effect, Bayern is free to pursue that export market and see just how big they can go.

The passage of HB 541 is a massive win for Montana brewers and beer lovers alike. The higher barrel limit means more Montana beer for both Montana and out-of-state consumers, and continued growth and success for this popular homegrown industry.

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