Tag Archives: #sb1714

Post-legislative session wrap-up: an interview with Pepin Distributing’s J.P. Pepin

It has been nearly a month now since the close of the contentious 2014 Florida legislative session. I felt like it would take about this long for things to simmer down. By the looks of things, we’re getting back to normal. Cigar City made good on their promise to deliver 2014 Hunahpu to those who weren’t able to get it during Hunahpu’s day. Beer fests happened in Venice and Bradenton of all places, and yes, they happened simultaneously. Heck, even the monthly “Occupy Saint Somewhere” went off without anyone in the fermenters. No beerpocalypse in Tampa Bay, at least not today.

But memories of the angst and bitter words traded between members of the general public, the craft breweries, the distributors, and certain legislators in both the House and the Senate will not fade quickly. There are plans for at least two new organizations to represent individuals and craft breweries, and at least one PAC. Perhaps one of the most vilified companies from this entire episode was Tampa’s Pepin Distributing. It seemed to me that aside from the legislators that were sponsoring the bills, no one entity was the object of as much sheer rage and enmity as was Pepin. I wanted to get to the bottom of what Pepin’s position is in this situation, so I reached out to J.P. Pepin, the guy in charge of Pepin’s craft beer business and spent some time with him over lunch at the Holy Hog recently.

Now mind you, a lot of people will look at this story and won’t be able to see past the name before they begin trembling with rage – but hear me out – I think this is a story of good old ‘Merican politics and business, and I wonder if the tables were turned would you not act differently?

“This whole thing is a case of misinformation,” says Pepin, “we were meeting with Representative Young 18 months ago. My brother Tom and I were in a room with a few local brewers and Representative Young and we were trying to hash out something that would protect these breweries.” And that’s the Pepin position.  The way the session ended – you would think that was their goal all along. Remember the article in the Tampa Bay Business Journal with Pepin and Cigar City’s Joey Redner sharing a beer? Many of you who have followed along at home may be wondering – why didn’t I hear about this? Well, that’s the misinformation that Pepin is talking about.

To understand this a bit better, it’s important to understand Pepin a bit better.

Pepin Distributing is a large company. Its revenue in recent years was nearly $70 million. Pepin distributes beer, water, wine, energy drinks, and even chocolate milk throughout the Tampa Bay area. Craft beer accounts for no more than 2-3% of that business, and that includes brands like Goose Island, Sweetwater, Greenflash, and Saint Arnold. After taking out those nationally known craft beers, the balance comes from local breweries like Tampa Bay Brewing Company, Big Storm, 3 Daughters, Florida Avenue Brewing, and ESB. Upcoming brewery Coppertail has also signed with Pepin for distribution in the Tampa Bay area. J.P. Pepin is responsible for that fraction of the Pepin line of business, and it’s something he holds dear.

This is why J.P. thinks that this whole mess is just about misinformation. People don’t quite understand the way “the bill” – also known as SB1714 – ended up, or why it even was an issue in the first place. No matter what the general public may understand or not understand, it seems that the root cause of the issue may be one of misinformation and tension within the state of Florida itself. “The craft beer breweries and popularity has exploded, under the radar, in the last three years, and literally taken Tallahassee by surprise.” says Pepin.

Why should there be any change to the existing situation? I couldn’t get an answer to this question, but I suspect that some of Rep. Kelli Stargel’s comments on the floor of the Senate during the legislative session could be followed to their natural conclusion: “… rather than have them [Florida brewers] face them [challenges] in the courts … what I’m doing is putting into law the certainty that they need to be able to operate and build a business model and grow.” Stargel foreshadows legal challenges to the operation of breweries in Florida. Where did this threat of legal challenges come from? It’s impossible to say with any certainty, but Pepin thinks “perhaps the lack of communication between the members of the three-tier system and the explosion of the first tier (the breweries) needs to be addressed.”  The meeting with Young could have been the proactive strike J.P. took to protect his growing craft beer division. “The bill as it was introduced was nothing like what was discussed in that meeting,” says Pepin, “the intent was to clarify what is a brewpub, a brewery, a brewery with liquor sales, or a brewery with wine and liquor sales, and what each can do under that license.” When asked who wrote the final bill, Pepin adds “I don’t know.”

The discussion I had with Pepin continued for at least another half hour, in which we discussed the beer business in Florida, the lack of transparency in the process, and the uproar from craft beer enthusiasts in the state. We also discussed J.P.’s vision for craft beer in Florida. “Within 10 years I expect craft beer to be 10-15% of the state beer business” says Pepin. “Our job as a distributor is to market and promote beers, regardless of where those beers come from. We want to focus on keeping our brands relevant in the marketplace. I’ve picked up four kegs from [Tampa brewery] ESB in the back of my car. My job is to help them grow.” In his eyes, the main thing that will hold back craft breweries in the state of Florida is quality. New local breweries have to compete with national brands and established local breweries for tap and shelf space, and if a local brewery puts out a sub-par product, they will have a hard time seeing their market-share grow. “Brands are only as good as their liquid,” Pepin says, ” no matter what we do, how much time we spend on brand building, it all comes down to the consumer enjoying the liquid.”

 

 

 

Update on Stargel last minute strike-all amendment to SB1714

I had a chance to speak with David Doble of Tampa Bay Brewing Company this morning about the recent changes to SB1714. The story is intriguing and definitely brings to light the lengths to which some members of the local brewing community are going to find a positive resolution to this situation.

David Doble of Tampa Bay Brewing Company and Mike Bishop of Big Storm Brewing, both distributed by Pepin, recently met with J. Paul Pepin (Craft Manager for Pepin) to bring to light that their businesses were going to be negatively impacted (including possible boycotts) because of their relationship to Pepin. The talks proceeded positively and resulted in a follow-up meeting between Pepin Distributing, the FBWA (led by Mitch Rubin) and FBG leadership. Over the next few days, FBWA and FBG hammered out the terms of an agreement that both parties could agree with. “Then things went sour” reports Doble. “Negotiations were cut off and the guild advised us to kill the bill.”

Fast forward to this weekend, when negotiations came back to Doble, Bishop, and Pepin directly. Apparently the two groups (FBWA and FBG) couldn’t come to an agreement, so Pepin tried to work with its breweries to get the FBG to come back to the table. In last minute negotiations, the discussions proved fruitful and an agreement seemed imminent, only to be upset by last minute changes from Sen. Stargel. The final amendment was not the same as the terms the parties had previously agreed upon.

Ultimately, the FBG and FBWA are not yet able to come to an agreement, and it seems that Sen. Stargel’s changes are the going to move forward in the absence of an agreement.

EDIT 9:25AM 4/28/14: I left a voicemail for J. Paul Pepin and sent a Facebook Message to Joey Redner to get their feedback as well. I’ll update this post when I get some more information.

EDIT: 9:27AM 4/28/14: Received feedback from Josh Aubuchon at Florida Brewers Guild on the Stargel Strike-All amendment: “Unfortunately, the amendment contains provisions that would harm the economic growth of the craft beer industry in Florida and places limitations on brewery operations that are not currently in Florida law. It would be difficult for us to support any language that places additional burdens on small businesses that are experiencing such rapid growth in Florida.”