The newly-named Utah Department of Alcoholic Beverage Services says its job now is to help businesses thrive. 

• Derek Carlisle

One year ago, the government agency overseeing the production, distribution and sales of alcoholic beverages in Utah underwent a name change intended to prioritize the business of alcoholic beverages—within the realm of public safety, of course—marking the first major shift in the agency's direction since Latter-day Saint Church leader Heber Grant began promoting prohibition in 1908.

You read that right.

Utah's Department of Alcoholic Beverage Control (DABC) is now the Department of Alcoholic Beverage Services (DABS). In swapping out the word "control" for "services," they have signaled a change in the agency's mission statement and philosophy.

No longer will the department be hyperfocused on controlling every thought and action of those who sell and/or consume alcoholic beverages, leaders say. Instead, it will focus on helping bars, pubs, breweries, distilleries and restaurants to be successful.

And under the direction of Utah Gov. Spencer Cox, Tiffany Clason was hired as DABS director. Her mandate from the governor was to make the business case for alcoholic beverage sales and to inform the public of the department's new service-first initiatives.

"Our department name changed last year, but we've been continually implementing the service-first policies," said DABS spokeswoman Michelle Schmitt. "It has been a genuine focus in recognizing the role [of alcoholic beverage sales] in community and economic development and supporting business owners. People hear that from government and think, 'Yeah, right.' But we wanted to prove it."

With one year's worth of hindsight, is the name change signaling a real change, or is the public justified in thinking, "Yeah, right"? One of DABS's first moves was to publish the department's first-ever strategic plan and implement a "Starting From a Place of Yes" philosophy.

That was a necessary declaration, as those who produce or sell alcoholic beverages in Utah have long perceived the department as defaulting to "No" when dealing with them. The state was happy to rake in a half-billion dollars in alcohol sales each year—$557 million in 2022—but it seemed leaders wanted to appear to the non-drinking public like they were uncomfortable making that money, and that they were running alcohol sales poorly on purpose.

The new philosophy is an absolute sea change. Under Clason, DABS states that it wants its bar, brewery, distillery and restaurant "hospitality partners" to thrive in Utah's economy. New printed materials say the department will strive "to take the mystery out of complex regulations" and to "act as partners with business owners because of our shared interest in a robust local economy."

Instead of forcing licensing applicants to wade through Utah's regulatory miasma alone, DABS intends to "provide clear, accurate and timely information on what is required by those seeking to access and sell alcoholic products in the state."

And in situations where businesses hit a roadblock, DABS states an intention to "document the issue and consider whether it's appropriate to forward to state lawmakers for possible policy or legislative updates."

It's surprising enough that alcohol regulators in Utah would intend to be helpful. But when asked whether these intended changes are becoming tangible realities, industry leaders generally say, "Yes."

"The goodwill is there, and it is something we've never seen. What they're doing is putting customers first—hence the name," says Michele Corigliano, executive director of the Salt Lake Area Restaurant Association. "They're not putting the 'control' as the focus, and they have been really great to work with. All my members have been ecstatic with what they've seen so far."

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High Spirits
Kate Bradshaw, executive director of the Utah Beer Wholesalers Association, is also happy with the results of DABS's first year. "Overall, it's been a positive shift and emphasis from my perspective," she said.

Similarly, DABS's service-first approach is being felt among some who've applied for bar and restaurant licenses in the past year.

Amy Anderson and her husband, Jaron, were pleased with the support they got from the new DABS in procuring a license in preparation for opening their brewery, Helper Beer, in the spring of 2023. The Andersons were told to call the department with their questions, and they did. When they requested a meeting with their license and compliance specialists, they were invited to come up for an in-person visit the very next day.

Amy Anderson said she felt that as long as she had all her documentation and asked a lot of questions, getting approvced for licensing was a relatively simple process. "It's definitely a 'the ball's in the licensee's court' kind of thing," she said. "You have to have your ducks in a row."

In addition, Amy said the couple had an above-and-beyond experience with the Utah Proud program, which is intended to promote locally produced alcoholic beverages. She said the DABS employee over the program—Bonnie Bills—personally reached out during the licensing process. Bills was also quick to connect Helper Beer's website to DABS's online product locator, Amy said.

"We had a great conversation," Amy said. "She walked me through some of the things, welcomed me into the industry, sent me a handbook and said to reach out."

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• Ann Torrence of Etta Place Cider

Ann Torrence of Etta Place Cider in Torrey also has had a positive experience since the department's philosophical change. "We were getting a bottleneck in getting the Utah's Own label approved," Torrence said. "Bonnie Bills interceded and helped us find a way to get that done." (Utah's Own is currently a separate program that also promotes Utah-made products.)

Torrence also mentioned that the problems that used to arise from dealing with a string of constantly changing compliance officers have noticeably diminished.

"Sometimes when the people you work with leave, you have to start over from Square 1," she said, "but the last couple transitions with compliance officers have been seamless."

That's the new level of service that Clason wants DABS to provide, but it's far from being fully implemented. Kate Lubing of Han's Kombucha/HK Brewing Collective did not get to experience the new service-first philosophy in her company's recent pursuit of a bar license.

"I wouldn't say that there was a whole lot of—I don't know how to word this—active support, where they were coming to us trying to kind of guide us along the way," says Lubing, co-owner and director of operations. "I didn't really feel that. We certainly made a lot of contact with them."

When asked about the Utah Proud program, Lubing said that she hadn't ever heard of it, "I'm not even aware of the program," she said.

The state's perpetual underfunding of the department is likely a contributing factor for the scattershot experience of producers in experiencing "service-first" in DABS's first year. DABS has traditionally had an employee turnover rate far over 100%—meaning it loses more employees per year than its total number of positions—and has offered wages too low to compete with other agencies or the private sector.

To correct that problem, Clason requested investments toward employee compensation, and the Legislature responded. This year, it passed measures that changed the way warehouse and retail staff are compensated, finally making income for DABS jobs more competitive. Clason also implemented vastly improved training for employees.

"We want to work on developing our employees so that they have options," Clason said. "In addition to receiving higher wages, DABS employees are receiving job training. This includes a mentor and buddy system program and a staff newsletter."

For the first time ever, job training at DABS includes product knowledge training. Clason says she wants staff educated enough to recommend products to customers, and to feel excited about their jobs.

The in-house training offers detailed information on several alcohol product categories. Employees are offered 17 short courses about spirits, 25 about wine and 20 about beer.

"When a customer asks for a recommendation between two bottles of red wine, nobody wants to say, 'I don't know.' They want to feel like they can make a recommendation," Clason said. "That's not only a plus for our workforce, but also a benefit to our customers."

Top Shelf
Alan Scott, co-owner of Waterpocket Distillery, is another small producer who said he has yet to feel the improvements at DABS. As a distiller, his primary concern is the difficulty of getting craft spirits like his into state-run liquor stores, because the purchasing system favors cheaper, commercially produced products.

"There's been very much a focus on low-cost, high-volume liquors, and that's kind of antithetical to craft," he said. "If you're actually going to make your craft product, you make it in a more traditional, less industrial way. You charge more. If you're making a farm-to-glass product, there's no way you can get into those price ranges. That's still a fundamental problem with anything that's crafted in the state."

This difficulty has been compounded by Symphony, the inventory management system the department implemented in 2019, before Clason came on board. Symphony assesses the state stores' needs based strictly on sales data.

That means a preference for national brands and cheap liquor, unless the price on a Utah brand is comparable to the chain product. Some Utah distillers feel pressure to outsource production in order to get their Utah-labeled bottle under the price-point and into state stores. All of the above factors contribute to the products available on liquor store shelves being limited and largely homogeneous.

The small number of state liquor stores and the state's single, undersize warehouse compound this problem. There's only so much shelf space.

"If you went to a Utah liquor store, you'd have no idea of the revolution in craft spirits that's going on nationwide," Scott said.

Clason recognizes that state stores—and a single package agency per vendor—are the only path to market for artisan producers, and that such producers keep a lot of revenue local. She also concedes that local producers haven't been warmly welcomed into the DABS retail space in the past.

"It's safe to say that [when I was] coming into this job, most of our local producers probably felt a lack of respect and understanding," she said.

In the past, the department has explicitly told Scott that they can't give any preference to locally made products. That left Waterpocket Distillery to compete with brands like Jack Daniels (owned by Brown-Forman, one of the largest wine and spirits producers in the world). Local products also suffer the nightmare of delisting, or being periodically removed from the shelves as cheaper products take precedence.

When asked if there is a special responsibility to show any preference toward alcoholic products created here in Utah, Clason said, "Yes." She acknowledged that the dormant "commerce clause"—which states there can be no differential treatment of in-state and out-of-state economic interests—has been used in the past to mistakenly justify non-support of local suppliers. She expressed a willingness to change that.

She's also gathering information about industry trends through the National Alcoholic Beverage Control Association, an industry association for the 17 so-called "control states" in the U.S.

"Before each delisting period, we're asking, 'Do you see trends in your store? Do you have customers regularly asking for a product we don't carry?'" she said.

Until now, Symphony has used only inventory management data to make purchases for stores. Rather than eliminate Symphony, Clason's current strategy is to add additional information to the data the program collects.

She claims that sales data, run rate data, customer survey data and data from store managers should also be considered so that local producers are no longer at the mercy of a strict inventory management program. She also wants to draw attention to Utah-made products within stores, insomuch as the law will allow.

"Human intervention in looking at the data is helping us make better choices," Clason said.

Surprisingly, the law has been allowing quite a bit. During the most recent legislative session, lawmakers passed Senate Bill 3, which allows DABS to borrow up to $140 million for a warehouse expansion, a new store in Ogden and replacement liquor stores in Moab and Roy.

In June 2021, the Taylorsville branch became the first state liquor store to sell cold beverages. The store installed 10 coolers, and local beers from Squatters, Red Rock and Uinta have been in top sales positions.

All new state liquor stores will have coolers installed, and the department plans to add them to existing stores as funding becomes available.

Scott points out that future excellence in retail sales will require a very well-educated purchasing staff.

"DABS is an instrument of the Legislature, and if they want a better performance of DABS, they would create the procedures, policies and mechanism for doing it," he said. "If they wanted to hire a hotshot expert in retail sales to run the purchasing arm, they could."

Old Fashioned
The most common challenge faced by those selling alcoholic beverages comes down to the limited number of liquor licenses Utah makes available each period. This is based on a formula that allots one license per 10,200 state residents, so licenses granted by the Alcoholic Beverage Services Commission are scarce. The solution to this problem has been to grant them only to businesses that can be fully operational—staffed, trained and ready to go—within 48 hours of licensure.

The model assumes that business owners will be able to assume huge upfront costs in construction, inventory and staffing only to sit closed for as many months as necessary until they're duly licensed and allowed to open.

If a business wants staff thoroughly trained on Utah's ever-changing and complex liquor laws, the staff might be on payroll for weeks before any paying customers arrive. If the business can't afford that, owners must secure staff on short notice and risk under-training them—that puts an alcohol-selling business at huge risk in Utah, which strictly patrols improper service and levies heavy fines for mistakes.

Again, the state's previous model has privileged national chains and corporations with deep enough pockets to pay carrying costs and lawyers as necessary. The new DABS philosophy acknowledges this problem, with updated materials calling for "strong communication" before a would-be licensee submits their application

While HK Brewing was trying to procure a liquor license so they could offer a kombucha cocktail menu, they were told to apply for single-event permits to sell alcohol while they waited. Venues are allowed between 12 and 24 such permits a year, at the cost of $500 apiece. Bar licenses carry application fees, licensing fees and recurring renewal fees.

"So we're $13,000-$15,000 in, on top of paying for a bar license," Lubing said. "I think some changes could be made there where they're dropping the fee or it's going toward your application, because you're waiting on a bar license you've paid for, and you're out that [permit] money as well."

HK Brewing is trying to become the first hard kombucha manufacturer in Utah, and is having a hard time getting its manufacturing license. This is more evidence that the state's past policies have been antagonistic to local business, as the state is importing hard kombucha while preventing a local producer from moving forward on operations and distribution.

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DABS can't legally advocate for more licenses, but Clason says it can educate the Legislature by sharing the concerns of applicants and other stakeholders with them.

Members of the Utah Legislature assigned to focus on alcohol policy are Sen. Jerry Stevenson, R-Layton; Rep. Jefferson Burton, R-Salem; and Rep. Karen Peterson, R-Clinton. In recent years, they've funded a study to determine if Utah should change the quotas related to licensure.

It's rumored that past alcohol studies were essentially thrown in the garbage. But DABS and the Legislature were intentional about publicly announcing the commissioning of this new study.

"One of the main attractions of large cities—and I can say this as a professional in my industry—is food and beverage," Lubing said. "Utah, in general, cannot continue to preach that it wants to grow positively in the same way some of these other thriving cities have while tying the hands of the people who make the business."

It's been said that the changes are happening slowly because first the department has to "come out of the Dark Ages." That means updating the DABS system and stores to simply function on the level of modern retail businesses.

Necessary improvements will include installing Wi-Fi in all DABS stores so staff can use common retail operation tools, like hand scanners for stocking shelves. They also plan to update the customer payment system to include Google and Apple Pay.

For years, the department has largely required businesses to apply for licenses, make orders and pay for their alcohol through on-paper and in-person transactions. To change this, DABS has procured funding from the Legislature to build an IT infrastructure that will allow businesses to conduct routine orders and operations online. The program launches on July 5 and was developed with input from hospitality partners and business associations.

There's still a long way to go. For example, businesses purchasing alcohol for resale pay full price, including the state markup—there is no wholesale discount. This severely limits revenue in an industry with minuscule margins.

Then, the businesses often can not pick up their liquor order from the warehouse, but instead have to drive from one state liquor store to another to gather the necessary product.

Apart from being time-consuming, this puts them in competition with retail customers who might be heading to their closest liquor store for a bottle, only to find that the product they wanted has been wiped off the shelf.

Although one of 17 control states, Utah is largely viewed as having among the strictest regulations and was recently—and famously—called the No. 1 most "boring" of them all. But if the changes keep coming, the state could start to be known for something besides its backward liquor laws.

And because the change in DABS has come about under Gov. Cox's direction, some interested parties are talking about campaigning for the him during the next election cycle in order to keep Ms. Clason.

"You're only able to do these improvements with the support of Gov. Cox and the Legislature," Utah Beer Wholesalers Association's Kate Bradshaw said, noting that lawmakers now recognize the need to treat DABS like they would other departments. "It's been a big shift from both of the branches of government, and a director in Tiffany Clason who has had a great skill set to take that initiative and direction to implement these big changes."