A Hutchinson microbrewery sold more than $16,000 worth of hot dogs and other food on Tuesday night in defiance of Kansas’ antiquated liquor laws.
With an additional $13,000 in food sales by the end of the month, the business can stay open.
Sandhills Brewing, a microbrewery with two drinking rooms, faces losing its liquor license for the Hutchinson drinking room due to Reno County requirements that at least 30% of annual profits come from food sales. Without the liquor license, the tavern would have to close.
Pippin Williamson, who founded Sandhills Brewing with his brother and manages the Hutchinson site, said he submitted the liquor license renewal application in early September. The license expires on October 18 and the renewal process usually takes a month.
For microbreweries like his, there are few good licensing options available. Opting to get licensed as a drinking establishment, which comes with the 30% food sale rule, was Williamson’s best option, he said.
Other choices were to obtain a license as a private club, which would require the business to operate on a membership basis and track customer information, or to obtain a malt grain drink license, which would only allow the company to sell beer containing less than 4% alcohol.
“It’s just inconsistent with us as a business,” he said of the private club license. “If we were to lose our liquor license, we would have chosen not to go down this route, even if it was our only option.”
The Kansas Department of Liquor and Beverage Control responded to the license renewal by asking the company to submit a plan to increase food sales, which the brewery complied with. But the state agency informed Williamson on Monday that the plan had been denied and the license would not be renewed.
Williamson said he was blindsided by the news, especially since the license was renewed two years ago without issue, when he only had a 20% profit on food sales at the time.
“The most important thing that happened caused such a shock: it wasn’t so much that they decided to apply the rule that they had previously chosen not to apply; it’s that they enforced it and gave absolutely no recourse,” Williamson said.
But on Tuesday, half an hour before the tavern opened for the night, he and other staff realized there was a way to get their license renewed.
If the brewery was successful in increasing its food sales by the end of September enough to meet the 30% requirement, Williamson could resubmit the license renewal application in October with the new food sales numbers and meet all requirements.
The bar sells items like personal pizzas, beef jerky, fries, and other snacks. In the past 12 months, the company had sold approximately $22,500 worth of groceries. He initially thought he should sell around $14,700 in just over a week.
“It felt a bit like a Hail Mary, but theoretically doable,” Williamson said.
After emailing about the diner’s plight, brewery staff bought hundreds of hot dogs and prepared to bake as many pizzas as they could. When they opened for the night, Williamson said, the community turnout was incredible. In five hours, the brewery sold $16,710 worth of food.
“I’m a little tired,” Williamson said. “I haven’t slept much but I feel good. The outpouring of support and generosity from our community and customers has been overwhelming. Not only did we have people who came to vote with their wallets, their presence and their support, but we had people who came and gave hours of their time.
“We sold virtually all the food we had in the building,” he added.
He thought the tavern had met his food sales requirements for the year, but he miscalculated. The 30% figure is for food and alcohol sales combined. On Wednesday, he informed his supporters that he was still $12,952.46 short of the amount required to stay in business.
Although Williamson is happy with local support, he thinks local licensing laws are too restrictive.
Sixty three counties across the state are operating with the 30% food sales rule, according to 2021 data from the Kansas Department of Revenue. The restriction was put in place by Kansas law and passed by individual counties. For larger outlets, the 30% rule isn’t an issue, as most have full kitchens and dedicated kitchen staff.
For small places like Sandhills Brewing — which has just three full-time and three part-time employees, not counting Williamson — the rule can be destructive.
Microbreweries also face additional licensing requirements – they must have a license to produce and sell beer to go, as well as a liquor license to sell the beer on-site. In 30% rule areas, microbreweries must also have a food sales license to meet beverage establishment license requirements.
Williamson said he spoke with his local state legislator, Democratic Rep. Jason Probst, about efforts to change current laws. Probst plans to resolve the issue with the Legislative Assembly.
“For me, the microbrewery structure, licensing, and regulatory environment is particularly onerous,” Probst said. “Especially when it comes to a growing industry. We are seeing microbreweries popping up all over the state. And I think that’s an industry that we should probably be looking at removing some of those barriers so that they don’t have those restrictions in place that are hindering their growth.
Correction: An earlier version of this story stated that the microbrewery had sold enough food to stay open. The story was updated after Williamson learned he miscalculated.