Craft Malt in the Brewery

By: Erik Myers

Bearded brewer in apron holds bag of malt at brewery factor

Recently, the Craft Maltsters Guild – the non-profit association dedicated to promoting the manufacturers it defines as “craft maltsters” – announced The Craft Malt Certified Seal, a new initiative to promote the use of craft malt by breweries. In order to qualify, a beer or spirit must contain at least 10% of its grist, by weight, of malt sourced from one of the Craft Maltsters Guild’s members.

  A craft maltster is defined as a maltster that is independently owned, that produces between five and 10,000 metric tons of malt per year, and that uses grain grown within a 500-mile radius of the malt house for at least half of their grain supply.

The Difficulties of Using Craft Malt

  Craft malt is an industry that is still very much in its infancy. There are very few craft maltsters that have been around for more than a few years, and even those that have been in business for a decade or more are only recently seeing healthy and sustained growth on the wave of a beer industry that favors local goods as a strong marketing standpoint.

  Craft maltster startups have many of the same issues as small brewery startups: Capital intensive equipment, a production process that requires a varied technical background, and a competitive marketplace that’s dominated by a few, large, international players. Craft maltsters have an added layer of complexity of – in many cases – having to educate their suppliers in how to make the products that they need to operate.

  The end result can be, at the worst of times, an inconsistent product: variations in color, moisture content, diastatic power, protein or sugar content, uneven kernel sizes, or inconsistent flavor characteristics, all of which can cause difficulties for a brewery that is engaged in making a consistent product from batch to batch.

  Like any brewery moving through its startup phase into an experienced, scaled production facility, most craft maltsters have grown past these initial challenges to create an even, predictable, product, but the occasional problem may still arise – particularly with an untested supplier or process.

  Other difficulties working with craft maltsters can come from simple supply chain issues. Smaller suppliers with longer lead times and limited on-hand inventory can be challenging to predict when managing a small brewery that is, itself, running a just-in-time inventory process. One hiccup in that supply chain can affect weeks worth of brewing.

  Finally, it’s difficult to ignore that all of the above also comes at a higher price point. While malt from international maltsters can run as low as $0.40/lb before bulk discounts, it’s rare to see a small maltster with the scale available to get a price point anywhere near that, and most are at least double. Those craft maltsters, themselves, are paying an elevated rate for grain from small suppliers who are dedicating a small portion of their farms to malting barley. They do not have the advantage of a scaled, international supply chain for cost benefit to pass along to a brewery customer.

  Using a local craft maltster can often mean paying a premium for a product with uneven consistency and unpredictable supply.

The Advantages of Using Craft Malt

  For all that, there are definite advantages to having a relationship with your local small malt house. 

  Working with a local maltster gives a brewer a whole new palette of flavors and ingredients to work with. In an industry where 7000+ players all use the same basic inputs, a local maltster is an avenue toward differentiation: Each grain does have its own “terroir” that follows through into the end beer, providing a very distinct taste of place. Maltsters that have roasters might offer a lighter or darker Lovibond roast of chocolate, caramel, or Munich-style malts than might be available at a commodity maltster. It allows a brewer that many more variations on ingredients that they can use to create a more distinct array of beers to help differentiate themselves in a crowded market.

  While there may be times that a local maltster can’t deliver as fast as a larger supplier could, they can also be the source of last minute saves and emergency help. Short a couple of bags of base malt on the last brew of the day? Being able to drive over to your local malt house to pick up 150 lbs of grain is a distinct advantage that can definitely save you in a pinch.

  Local maltsters also have – like small breweries – the ability to make weird stuff without taking an enormous financial risk. The capability to malt ancient, heirloom, or alternate grains like triticale, spelt, buckwheat, or corn, sometimes in incredibly small batches, can lead to truly innovative brews that would be otherwise unavailable from larger maltsters.

  From an environmental and sustainability standpoint, it’s undeniable that using a local craft maltster creates a smaller carbon footprint for your operation. Instead of shipping a container across a country or across an ocean, most of that malt originates at a farm within a day’s drive and never really has to move that much farther away, meaning less fuel, lower emissions, less labor, and fewer aggregate resources than it would at a large scale malt house.

Finally, the vast majority of the money paid to that local maltster stays within the local economy in the form of wages as well as payments to their suppliers – local farms and local agriculture. It’s a way that a brewery’s dollars can make a significant and multi-industry impact on the local economy.

But Is It a Marketing Advantage?

  The most challenging part of using malt from a local maltster, however, isn’t ingredient consistency, how to use the ingredients, or any potential supply chain issues. It simply comes down to this:

How Well Can You Tell the Story?

  There is no barrier to entry for a brewery to use a local maltster aside from price. As long as a brewery is willing to pay the premium for the malt, they are an instant user and it behooves them to become an instant evangelist. The added price of malt comes with few immediate end-product advantages itself: A smaller carbon footprint and better support of the local economy isn’t reflected in the taste of the beer, in a better bottom line, or any sort of cost-driven advantage. It’s a marketing point.

  While working with a local maltster on a specific new roast or grain might lead to new recipes, without something truly distinct showing up in the glass, telling the story of local malt is a difficult one because drinking customers, in large, don’t really know what malting is. It falls on the brewery to educate the end consumer as to what a local maltster really is, and how using one positively impacts the environment and the local economy. It also lies on the brewery to show their customer the value of the added cost that local malt brings to beer.

Craft Malt Certified

  Enter the seal of approval: Craft Malt Certified. The seal, created by the Craft Maltsters Guild, is a tool to help breweries and distilleries tell that story to their customers. By creating a seal to go into packaging and the taproom, it creates a conversation piece for customers to engage with. What is craft malt? Why does it matter?

  The odd stumbling block is that rather than creating a freely-available graphic to help breweries raise craft malt’s profile, the Craft Maltsters Guild has put a price on the use of the seal, charging $150 per year to register as a faithful customer – yet another cost, albeit a small one, on top of the premium cost of using the malt in the first place.

  That is the hurdle that still needs to be cleared by craft maltsters and their end users: how to sell the story of increased cost to their customers in a way that makes them care enough to part with their money. Without the additional value proposition, the story of craft malt becomes muddled into the same gnarled discussion of what local means that the entire craft beer industry wrestles with: What does local really mean? How far away does something have to be to no longer be considered local? Is it your local neighborhood, your city, or your state? Is your beer still “local” if it uses malt from another country? What about hops? Will the customer pay a premium for “local” when it increases the cost of the end product to well above regional market norms?

  With the uncertain answers to these questions comes the unfortunate follow-up:

  Why does any but the most enlightened end-customer care?

  The craft malt industry is an exciting new development within the craft beer industry with reflections of what the craft beer industry itself went through 40 years ago. In a modern marketplace focused almost single-mindedly on hops as a key ingredient, it faces a bevy of challenges that it may only get through with the help of its most ardent customers.

Key Finance & Accounting Performance Indicators for Craft Breweries: What Data You Should Be Tracking and How to Leverage it for Success

By: Kelly Addink

Do you have real-time visibility into your financial information?  If so, are you confident you’re monitoring the right type of data to achieve your business goals?  We plan to explore these questions and more as we dive into the issues breweries often face when it comes to financial reporting. We will also take a look at industry best practices and technologies brewers are leveraging in order to spot opportunities, identify risks, set goals, measure progress and adjust their strategy.

Cash is King

  Every business, large or small, depends on cash. However, for many breweries, the focus tends to be more on sales growth than anything else. While sales growth is fundamental to your business, it is equally as important to monitor your cash flow.

  Cash flow is the movement and timing of money into, through and out of your business. In other words, it provides a clear picture of your company’s financial health. A cash flow projection estimates the timing and amounts of cash inflows and outflows over a specific period, usually one year.

  Let’s take a look at some high-level benefits of a cash flow projection:

•   Allows you to anticipate changes versus reacting to changes.

•   Encourages a collaborative working environment between operations personnel, management and owners.

•   Fosters “bigger picture” thinking.

•   Enables you to run different scenarios such as:

  • a.  Impact of cash collection practices and terms (when and how)
  • b.  Impact of accounts payable terms and discounts (when and how)
  • c.   Cash flow for an event
  • d.  Adding a new revenue source
  • e.  Leasing or building a new brewery or taproom
  • f.   Debt restructuring

•   Can ease the burden of sudden and significant changes.

  The first step to creating a cash flow projection is to define your approach and assumptions. For example, you may want to evaluate the financial impact of adding a new seasonal brew. A few key questions to ask are:

  How much will I expect my revenue and expenses to increase?

  Will I need to tap into my line of credit or find additional financing as I start up?

Next You Will Need To:

•    Obtain historical revenues, expenses and cash flow for last two to three years.

•    Develop a template to forecast one year into the future.

•    Review historical growth and forecast growth based on discussions with management.

•    Prepare a formal report outlining the significant assumptions and the forecast results.

  • a.   Key assumptions
  • b.   Increase operating revenue
  • c.   Increase operating expenses
  • d.   Capital additions: production or brewing equipment, delivery trucks
  • e.   Debt service / borrowings
  • f.    Cash reserves

    To make sure your projection stays accurate throughout the year, consider these variable expenses:

•    Months with three payrolls.

•    Months when insurance premiums are due.

•    Increased estimated taxes due to increased sales.

  A good rule of thumb is to designate an amount equal to 10% of revenues for “other expenses” under uses of cash — so you’ll have some cushion when unforeseen costs arise.

  To keep your projections on track, create a rolling 12-month plan that you update at the end of each month. If you add a new month to the end every time a month is completed, you’ll always have a long-term grasp of your business’s financial health. However, don’t try to project more than 12 months into the future or you’ll end up spending a lot of time trying to predict something with too many variables (prime rate could shoot up, sales could go down dramatically, etc.). 

Cash Flow Projection Example:

  After you define your assumptions and approaches and create your 12-month cash flow, you notice a net cash loss in the first half of the year as highlighted below (shown as 6 months).

projection example 2

  You decide the next step to minimizing your negative cash flow in the first half of the year is to evaluate the impact of producing a new seasonal brew as seen in the projection below:

projection example 2

  Using cash flow projections is a cyclical activity. As months pass, you can compare your monthly cash flow statements to your projections for each month and the numbers should be close. You can get away with a 5% variance but if you start to see large differences from month to month, you should revisit your key assumptions to check for flaws in your logic.

  Even if the actual numbers come in higher than your projections, you should take a close look at your assumptions, because higher returns in the short term could lead to shortfalls later on. For example, if you predict your Oktoberfest brew to have the greatest cash inflow during October and you start distributing it in September, you may run out of product by mid-October. You’ll need to adjust for these unexpected changes as you move forward month to month.

  Once you’ve gotten into the habit of using a cash flow projection, it should give you added control over your cash flow and a better understanding of your brewery’s financial position.

  Beyond cash flow, it is important to understand and consider all of your financials when determining your strategy and planning for the future of your brewery.

  By transforming your finance and accounting data into key performance indicators (KPIs), you become equipped to make intelligent, informed business decisions. Below are examples of relevant KPIs for craft brewers along with items to take into consideration during analysis.

1.  Revenue trends: monthly comparisons year over year and month over month, actual to budget comparisons, revenue by category and/or style, revenue by package type, etc.

  Are sales meeting expectations? Are any seasonal brands selling well enough to go year round? Are there any year round brands that could become seasonal? Are there brands that should be discontinued? Are certain package types selling more than others?

2.  Cost of Goods Sold (COGS)/gross margins: monthly comparisons in total, by brand, by category/style, by package type, actual to budget, etc. – report both in dollars and as a percentage of revenue.

  How are margins trending to expectations? Are there styles that are cost effective to produce with a higher perceived value in the market? Are costs increasing/decreasing due to raw material cost changes? Are there items that may need a price increase? Are there potential efficiencies that can help reduce costs in the brewing process? Should you brew larger batches for better yield? Are your COGS fully loaded with labor, overhead allocations, excise taxes, utilities, insurance, etc.?

3.  Distributor/customer performance: revenue, gross margin, rebate/discount tracking month to month by distributor/customer, actuals vs projections, etc.

  How is each distributor performing compared to projections? Are their margins sufficient to cover rebates, discounts, samples, shared mark-downs, etc.? Are certain geographical regions performing better than others? Where should your inside sales team focus their efforts? Consider additional reporting options that provide visibility of distributor sales to retailer including: on vs off premise sales, sell through turns, etc.

4.   Operating expenses: monthly comparisons year over year and month over month, actual to budget comparisons, etc. – report both in dollars and as a percentage of revenue.

  Investigate areas where expenses are increasing (either in total or as a percentage of sales). Identify areas where there are cost savings opportunities. Variable expenses should fluctuate with sales levels, including staffing costs.

5.   Tasting room and restaurant metrics: Revenues and margins tracked by month year over year, food cost as a percentage of food sales, staffing costs as a percentage of tasting room revenue, daily sales trends, etc.

  Evaluate seasonality trends to determine staffing needs and consider training time needed when hiring new staff for busy season. Monitor food costs to determine if menu price increases are needed. Assess daily sales trends for potential promotions on slower days of the week in order to increase business.

6.   Capacity/efficiency: Production volumes as a percentage of full capacity month over month, direct labor costs as a percentage of revenue, etc.

  Are you at capacity and losing orders? Is it time to increase capacity? Are you consistently under capacity? Possibly consider contract brewing or other ways to fill capacity. Evaluate labor costs to ensure efficient production staffing levels.

  So, now we know what type of data successful brewers are tracking but what technology is needed in order to access that data?

  Introducing new technology to any business is commonly viewed as complicated, timely and costly. However with the rapid expansion of cloud-based technology, there are now a number of applications tailored to meet the needs of small and midsized businesses in any industry.

  Most of us are familiar with the phrase “moving to the cloud” but, what does that really mean? In its most simple form, cloud computing is the use of a shared resource on the internet to store, manage and process data. Unlike the historical way of hosting a technology platform on your own server, cloud-based technology allows unique users to access the same software application from any device, anywhere, at any time. Information is easily updated and shared between team members without the need to manually input reports or be in the same physical location. Cloud applications are also being built with an open-interface approach which allows for more seamless integration amongst individual solutions.

  Business processes that are commonly handled in the cloud include:

•   Accounting and General Ledger Management- Such as: Sage Intacct, QuickBooks Online

•   Accounts Payable- Such as: Bill.com

•   Expense Management -Such as: Expensify, Nexonia

•   Inventory Management- Such as: Ekos, OrchastratedBEER

  How leveraging those tools can provide data-driven insights while saving you time and money:

Real-Time Data and Reporting:

  Because cloud-based technology can be accessed from anytime, anywhere, the data really is “at your fingertips”. This accessibility is becoming increasingly important as the competitive landscape continues to intensify in the craft beverage space. The ability to integrate your existing applications with multiple cloud solutions allows for a comprehensive view of your data (i.e. sales, operations and finance) and thus, enables you to make timely intelligent business decisions. Plus, you can use these tools to create tailored management dashboards with customized reporting capabilities – so you see what you want to see on a regular basis.

  Taking it one step further, the ability for craft brewers to access data in real time also makes that data more useful in identifying trends, comparing results to industry benchmarks, monitoring key performance indicators and, ultimately, being a better business partner to your distributors and retailers.

Automation and Scalability:

  Most growing craft breweries tend to run lean and have limited personnel resources. In these cases, leveraging innovative technology to streamline finance and accounting functions and reduce the need for manual processes can be very beneficial. For example, cloud-based accounting software typically automates processes by importing transaction data on a real-time basis. The cloud computing model empowers team members to collaborate and share information beyond traditional communication methods – allowing multiple facilities and/or taprooms to co-manage production, raw materials, packaging levels and distribution scheduling.

  Successful craft brewers are growing at an unprecedented rate and the ability to scale on an as-needed basis is one of the biggest advantages of cloud technology. Accelerated business growth typically leads to growing pains and missed opportunities resulting from the mismanagement of more data, infrastructure and customers. The right cloud solution will grow alongside your business to meet market demands and accommodate growth as technology shifts, revenues grow and your business needs evolve.

  Brewers face many challenges in an industry that is becoming less predictable with fewer loyal consumers. Staying a step ahead of your peers in this rapidly changing environment is critical to maintain a competitive advantage and realize long term success. Having real-time visibility into your cash flow, sales and operational data is a key part of that success. This will allow you to determine KPIs that align with your business goals and track them so you can plan for the future. Take advantage of the many cloud-based tools that can help you transform your data and streamline processes so you can get back to what really matters, running your brewery.

About the Author

  Kelly Addink is a Controller in Baker Tilly’s outsourced accounting practice. She has nearly 25 years of experience in providing financial accounting advisory services to companies in a variety of industries. Kelly also worked as a Controller at a craft brewery for more than 6 years. Today she combines her technical skills and industry expertise to deliver customized accounting, finance and operational assistance to Baker Tilly’s craft brewery clients.

CIDER: It’s Time is Now

By: Tracey L. Kelley

3 cocktails in glass
Photo credit: Kim Fetrow Photography

North American regional and local cider makers are throwing elbows at major corporate producers, trying to respond to consumers’—particularly those in the 18–24 demographic—demands for alternatives to mainstream products. This is good news for producers eager to tap into the young but evolving cider sector. Current market analyses indicate cider sales will dip slightly through 2022, but some experts report this is only because larger, national brands are losing footing as the craft ciders surge forward.

  Nevertheless, there are growing pains within this emerging product line, especially when there’s so much education necessary to help the public understand that cider:

1)  Isn’t beer or wine.

2)  Is just as complex as those beverages, with particular nuances and unique profiles.

  It’s an interesting challenge for a beverage that relies on a fruit with approximately 2,500 varieties in the United States alone. Apples are grown in all 50 states in America, and five of the 10 provinces in Canada. This means regional and local orchardists offer unlimited possibilities for crafters.

To share the knowledge that’s plentiful for wine, beer and spirits, but less so for cider, we reached out to the following experts:

Peter Glockner, co-owner, director, and brewing/filtration sales, Cellar-Tek. The company started in 2004 as a two-person operation in British Columbia, specializing in winery supplies. Now based in both British Columbia and Ontario, it also provides equipment and supplies for craft brewing, cideries and distilleries.

Bill and Michelle Larkin, co-owners, Arsenal Cider House, established in 2010 and headquartered in Pittsburg, Pennsylvania, with additional tap houses in Wexford and Finleyville, plus taps in rotation throughout Philadelphia. Another location in Cleveland, Ohio, is scheduled to open by the end of 2019. The Larkins produce hard apple cider, cider-style fruit, grape wines and mead. Flagship pours include Fighting Elleck Hard Apple Cider, Archibald’s Ado Hard Apple Cider, Picket Bone Dry Hard Apple Cider and Murray’s Mead, with various seasonal and one-off releases on tap at each location. Annual production is more than 50,000 gallons.

Molly Leadbetter, owner, Meriwether Cider Company, with two locations in Idaho: a taproom in Garden City and a cider house in Boise—the first in the state. Opening in 2016, Meriwether is owned and operated by the Leadbetter family: Molly, sister Kate, and parents Ann and Gig. Notable award-winning ciders include Foothills Semi-Dry, Strong Arm Semi-Sweet, Blackberry Boom, Ginger Root and Hop Shot, crafted with Citra hops. Annual production is approximately 30,000 gallons.

Michelle McGrath, executive director, United States Association of Cider Makers, based in Portland, Oregon. Its mission is to “grow a diverse and successful U.S. cider industry by providing valuable information, resources and services to our members and by advocating on their behalf.” The USACM also stages the popular CiderCon each year, which provides new and existing members opportunities for workshops, cider tours and networking.

Tie Information to Innovation

  The Larkins started Arsenal with $60,000 and zero working capital in the basement of their city row-house. Bill was an accountant, and Michelle, a pre-school teacher. His winemaking hobby expanded into a passion for cider and mead. “When we started in 2010, there wasn’t anyone doing what we wanted to do anywhere around us. We had to essentially make up things as we went and hope for the best,” Larkin said. “This is why I always tell new people in the Pittsburgh industry to feel free to reach out to me if they have a question.”

  The Leadbetter family, after years in other professions, chose to band together and open a cider house. “My sister, my dad and I all took cider-making classes at Washington State University’s extension program, and Mom took a business of cider class. And webinar-based classes on our specific areas inside the business,” Leadbetter told Beverage Master Magazine. “We also attended the USACM’s CiderCon the years before and after we opened, which was incredibly helpful, and I recommend to everyone!” They launched Meriwether with a Kickstarter campaign.

  McGrath said the USACM strives to provide as much insight as possible. “Our Certified Cider Professional program educates distributors and retailers about cider, but cider makers may gain tools for conversations with those audiences as well,” she said. “We also have marketing resources our members can use to educate their accounts about cider. Lastly, our recently-refreshed cider lexicon project aims to curate a language for talking to customers about cider. Having the same talking points is good for any campaign—including spreading the cider gospel.”

  Refining cider lexicon is one way to lessen the gap between what consumers currently understand about cider and how makers want to communicate flavor profiles and other characteristics. For example, the USACM suggests “focusing on the accepted scientific classifications of apples: sweet, sharp, bittersweet and bittersharp.” There are also grouping categories so consumers can more easily select what taste appeals to them and have confidence in that choice. So the USACM considers input from producers to create classifications that might include something like:

•   Does it taste dry or sweet?

•   Is it tart? Spicy? Sour? Floral?

•   Is it fruit-forward or tannic?

•   Is it light-, medium- or full-bodied?

  This type of universal messaging helps all cider producers continue to create beverages people want. “Don’t make products for yourself unless you’re planning to buy them all, or you are a social media star influencer,” Glockner said. “Know your market and cater production to the customer base(s) you’ve researched and proven will trade their hard-earned money for your product.”

  Progressive success depends on customer relationships—it’s not a cliché when it’s true. “We have a gold standard of treatment for all of our customers whether they’re tasting room visitors or on-premises licensees,” Larkin said. “Everyone in our company in retail, sales and distribution know the customer is always right and that we’ll bend over backward to make them happy. I can’t overstate the importance of this.”

  “We have four core values: family, integrity, generosity and fun. We don’t make any company decisions unless they fit into this framework,” Leadbetter said. “We run a business we can be proud of, that strives to make our community better, our guests happy, and makes our and our employees’ professional and personal lives fulfilling. Working with nonprofits, connecting with the community, and educating people on cider are huge parts of doing all those things.”

  Arsenal Cider House partners with a local activity and tour provider that plans community excursions. Meriwether Cider Company’s approach includes integrative actions such as Purposeful Pours, a quarterly event that raises money for different nonprofits in its community, and Cider Crews, a tiered club program to encourage a dedicated clientele.

Mind Your Business

  The foundational practicalities of your start-up are often a mashup of reality and possibility. So start with the right advice.

  “We always advise an in-person consultation with one of our cider equipment sales gurus to ensure that our potential customers are correctly assessing their equipment choices using the correct data and math,” Glockner said. “We also try to get them to think ahead, so they don’t face having to upgrade their equipment two-or-three years after opening because they didn’t plan for growth. He stressed the need for reinforced vision. “Production plans and projections need to be backed up with solid sales plans and projections. Otherwise, you’ll have an expensive hobby, not a business.”

  He also pointed out there’s no “right” way for cideries to choose equipment. “’Right’ could mean the equipment fits their budget, or it could mean it matches the processing rates they need to achieve for the total volume fruit they harvest. Assuming that matching equipment sizes to the customer’s projected harvest numbers and product plans is the ‘right’ equipment, doing so can minimize the required time to process a given volume of fruit—typically expressed in kilograms per hour of fruit processed,” Glockner said.

  “If one producer is doing multiple small-batch productions of different styles or varietals, their equipment and tank size choices will be smaller than another producer looking to make large volumes of one or two,” he said. “The latter would benefit from equipment with higher throughputs and larger tanks to process bigger batches for longer continuous periods of time. So getting the ‘right’ equipment is all about creating operational efficiencies for the type of production the customer wants to do.”

Here are some additional tips from Cellar-Tek’s Co-owner:

1)  Most equipment for the cider industry isn’t produced in North America, so expect a supplier of specialized processing equipment containing electrical components to have the equipment UL- or CSA-inspected and approved when it lands in North America.

2)  Also, expect to have the supplier set up an appointment at your production facility to start the equipment and provide basic operations training along with any applicable maintenance and safety advice. This tutorial might not be necessary for “basic on/off equipment,” such as manually-fed fruit mills, pumps, or manual gravity fillers.

3)  If you can find used equipment in relatively good condition and see it working before purchase, it may save you capital during the start-up phase of development. However, lack of warranties and local factory support from a supplier makes it a difficult decision when your equipment breaks down in the middle of harvest, and there’s no technical support in the area to repair it quickly. The cost of lost production, spare parts and labor to repair a broken machine can easily surpass the price of a similar piece of new equipment.

4)  If you don’t have experience with fermentation, hire a pro to do it for you, or at least a reputable consultant with a list of references who can teach you the many ins and outs of a successful fermentation. “The pitfalls of fermentation are many,” Glockner said.

  Our experts all recommended allowing an ample amount of time and patience to make it through multiple layers of bureaucracy to establish your cidery. “Cider regulations are incredibly complicated,” McGrath said. “Anybody thinking to jump into the market should take some time to understand how they differ from wine, beer and spirits.” The USACM intends to provide more checklists to help answer producers’ questions, but consult your regional association for more specifics.

  Larkin added, “Many people think the biggest hurdle is getting the liquor license, but it goes way beyond that. There are zoning and building codes, county and state health requirements, general business licensing, taxes etc….To be in any business, you have to be determined and not let anything get in your way. You need to be a jack of all trades. There’s a solution to almost any problem—you just have to keep on it. You’ll get through it.”

  Leadbetter also pointed to the need for fluidity in your business approach. “We still have our original lineup of year-round flagships, but we added many seasonals, one-offs, barrel-aged and small batches to the mix every year—much more than I thought we would,” she said. “And we never envisioned having a second Meriwether retail location when we started. Truthfully, at the time, we were barely two years old and not ready to expand. But we felt an urgency because downtown Boise was in the midst of a renaissance with new businesses and bars, and we lucked into the perfect space. We might have balked and given up if not for that.”

  Larkin said, “If an opportunity seems like a good one and we can afford it, we do it.” This approach applies to both Arsenal’s stair-stepped location expansion and shifting model.

  “When we first opened, we planned to sell half our inventory by refillable growler and the other half by bottle conditioning in Champagne bottles. We sold through the initial inventory so fast, we never had the opportunity to do any type of packaging, and we’ve just been trying to keep up all these years,” he said. “We finally started canning one product and bottling a mead product for the first time after eight years in 2019. We now have the capacity to expand our product offerings and plan to do so in 2020.  It only took 10 years to get to it!” 

  McGrath told Beverage Master Magazine that “there are certain pockets of the cider market managing to make apple-forward ciders cool. That’s always been a challenge, especially in today’s craft beer culture. It’s controversial, but I think putting these types of ciders in cans is part of what’s helping drive that. It makes a complex, nuanced beverage more approachable.”

  She added that it’s important to “figure out how to incorporate educating consumers about apples into your marketing and branding. Apples are what this industry is all about. We can celebrate a diverse range of products and styles, but when consumers catch on to the variation an apple variety (and season) can provide, it will be good for cider makers and orchardists alike.”

Expanding the Industry

  All of our experts are excited to contribute to the reawakening of this pioneer beverage. Here are some final thoughts they believe about cider’s potential.

  Cellar-Tek’s Glockner: “By far the most exciting trend is the growing global acceptance of locally-made craft beverages—be it cider, wine, beer or spirits—by the sectors of the general public that used to gravitate to the large, corporate-produced beverages.”

  Larkin of Arsenal Cider House: “High-quality products aren’t optional. It’s not just important for your business, but the business segment as a whole, especially in one as young as mead and cider. This philosophy extends to how we source our ingredients, as well. If care isn’t taken with raw materials, we can tell.”

  Leadbetter of Meriwether Cider Company: “After creating a good product, our main mission is to create what Danny Meyers (restauranteur and CEO of Union Square Hospitality Group in New York City) calls ‘enlightened hospitality’: ‘treat your employees well, and they will take care of your customers.’”

  McGrath of the United States Association of Cider Makers: “Most people who love cider also love food, and the consumer knowledge that cider pairs really well with food is increasing. Regional cuisine cider-pairings, geographical cider cultures, a focus on locally-celebrated apples (like Gravenstein for Sonoma County in California)—these things all make it a really fun time to create cider right now.”

Post-Harvest on the Hop Farm: Jobs Change, But Work Continues

By: Gerald Dlubala

rows of fence in a farm

After all the time and energy spent on vine training, pest-free growth and meticulous care that hop farmers put into raising the best possible crop, the harvest can feel like a whirlwind that’s over in a flash. Depending on the types of hops grown and the climate in which they are farmed, hop harvest can run anywhere from early August to late September. But the actual timeframe to get hops picked during peak ripeness and quality is a short, week to 10-day span.

  Hop ripeness and quality are directly related to the moisture content and alpha acid levels of the hop cones. Hops too high in moisture aren’t considered at peak alpha acid content. Hops harvested too late can degrade quickly in storage, be more susceptible to oxidation, and become more vulnerable to disease and pest contamination. Timing is everything, and sampling is critical to make sure hops are at peak ripeness.

  “It’s not that you can’t harvest and get good hops after that peak ripening period,” said Sean Trowbridge, co-owner of Top Hops Farm, LLC in Goodrich, Michigan. “It’s just that after peak ripening, the hop integrity comes into question and can result in product shatter during the picking process. Then you’re talking about the potential of considerable product loss.”

  Even when the harvest is completed, there’s little time to relax. When not evaluating the year in general, focus switches to working on sales and starting the farm tasks involving post-harvest sanitation, soil care, weed eradication and addressing any pest and disease issues that need attention. Since hops aren’t generally considered a pick and pack crop, there are several drying techniques to bring the moisture down so they can be stored safely without damaging the qualities that they bring to craft beer.

  “Immediately after harvest, it’s drying and baling time for the hops,” said Trowbridge. “Then we move 100% of the harvest to our pelletizers to have a fresh crop of current year hop pellets for the breweries.”

Fall is Spent on Cleaning and Maintenance

  “Cleaning, repairing and readying our equipment for next year is usually done in the fall. Just by their nature, hop cones can be pretty sticky, so after harvest, our equipment and work areas can get gummed up just with all of the contact with the hops,” said Trowbridge. “We take the time right after harvest to thoroughly clean the pickers, conveyors, belts, totes, wagons and anything else that gets used during harvest. Equipment like sprayers, whether boom or air blast type, need to be winterized. You know, it’s initially just a lot of manual work, cleaning and maintaining our equipment and getting our barns ready now for the next growing season.”

  Trowbridge told Beverage Master Magazine that after the equipment and buildings have been taken care of, late fall is generally spent in the hop fields on end-of-season responsibilities and plant management issues. Hopyard sanitation and cleanup is a critical function to get done right after harvest because it decreases the chances of disease and deters pest infestation for the next growing season. This also includes some type of weed suppression, usually by laying down a pre-emergent herbicide. 

  “As far as our hop yards here, we let our vines go into dormancy and apply a pre-emergent in spring. There’s no specific reason for that other than it seems to work better for us, and just like in farming in general, each farmer has his way of doing things that may not be the norm but have shown success in the past,” he said. “You still have to monitor moisture levels, because even after harvest, the hop vines need moisture for optimum winter survival. But once temperatures dictate action, we have to blow out our suspended drip lines and irrigation systems to prevent freezing and damage. Fall is the best time to get soil samples analyzed for pH to see what’s left in the soil and what needs to be replenished. Hops thrive in soil with a pH between 6.2 and 6.5, so fall is the time to make corrections if needed. Liming is common, but takes time to become widely incorporated into the soil.”

  Hop scrap can be a subject of contention. Some farmers take the hop scrap and compost it for use elsewhere. Others return the composted scrap right back onto the fields, while others take the scrap that’s not composted and spread it onto the fields. Every farmer has their opinion on the matter. The decision on what to do with the hop scrap is largely based on its condition. Were the hop vines healthy? Were there any signs of downy mildew or other diseases that can overwinter in clippings and on the ground?

  “Late fall is also when we switch our tractor to a mowing head and weed badger to cut all the remaining parts of the hop vines down. There’s usually about 1½ feet left of the vines after harvest, so we cut them and leave them be,” said Trowbridge. “Then, in spring, we go back over the rows with a brush head to remove all of the debris off of the plants and leave only clean rows for new growth. We won’t typically tear out or replace any vines that are healthy and productive. Good healthy rootstock can last fifteen years easy.

Some of the European heritage farms may have fifty to a sixty-year-old rootstock. Sometimes after about ten years, the Western-based hop farms will replace a portion of their hops with a more vigorous growing stock or different variety, but it’s not common. We’ve only done it once, and that was based purely on economics, replacing a portion of very low-income generating hops with a higher income-generating variety.”

Winter Involves Building Relationships And Business

  Trowbridge told Beverage Master Magazine that winter activities differ depending on where the hop is grown. West Coast farms can just keep growing, putting their harvest into the hands of brokers while they get back to producing more. In Michigan, Trowbridge first focuses on wrapping up sales for any product that remains unsold. Much of the harvest might already be spoken for, but any unsold product will be made readily available for anyone interested.

  In addition to sales duties, Trowbridge said that winter is typically the time to refresh and renew business contacts and associations and try to get more exposure for his farm. He uses the winter months to attend any conferences or expos put on by hop farmers associations or by the Craft Brewer’s Guild. He especially likes those that allow him to set up a vendor tent or booth so he can personally get his hop farm more exposure, make new contacts, refresh older ones and reach potential customers on a personal basis.

Growing Organic: Norton’s Hop Farm

  On the other side of the hop growing spectrum, smaller, organic hop farms have a different view of the post-harvest season.

  Don and Tina Norton maintain and operate Norton’s Hop Farms in Springfield, Oregon. Since 2008, they have grown Cascade and Nugget varietals on their family-run, certified organic hop farm. Because they’re organic growers, their post-harvest routine is a little different than others.

  “Well, we obviously don’t have to spend the time applying the herbicides or pre-emergent weed killers,” said Don Norton. “Most of my days are spent doing a lot of grass cutting and weeding out in the fields. We don’t chemically treat for unwanted growth, so it has to be continually weeded and mowed. We get a lot of blackberry growth in this area in addition to the grass and weeds, so it all has to be kept up with regularity. I do get basic soil testing done to see if we need to add lime and adjust pH levels in our fields. We don’t fertilize until just before we expect the new growth to appear, and that can happen in early January.”

  In between weeding and cutting, Norton spends time in the off-season on equipment maintenance as well as checking and winterizing his water and irrigation lines. He doesn’t have the same sales and marketing push that some larger volume farmers do because one of the benefits of being a smaller volume, organic farm, is that his product is generally sought after and already spoken for by regular customers.

  “We’ve sold to our local craft breweries in the past, but as of late, our harvest is sold to a locally well-known organic herb company—Mountain Rose Herbs in Eugene, Oregon. They need the whole flower of the hop, so we supply that to them. There’s also an emerging market for our hop cuttings and vines for use in-store or in other decorative displays, and also by local florists that like to use them in their creations.”

  “One thing that makes us different than a regular hop farm is that we don’t plant any cover crops or use any mulches in between rows,” said Norton. “Instead, we lay a ground cloth with holes cut out over the growing area for our hop plants to grow through. Doing it this way helps keep our weeds and grasses to a manageable level so we can remain organic.”

Kombucha with a Kick

By: Nan McCreary

Artisanal cheese for sale at artisan market in Ile rousse

Hard Kombucha is one of the latest drinks to make a splash in the “better-for-you” alcoholic beverage market. But what is hard kombucha, you ask? Wait, what is kombucha?

  Kombucha traces its roots to China’s Qin Dynasty (221 BC), where it was known as the “The Tea of Immortality” for its medicinal properties. The drink is made by mixing sweetened black or green tea with a symbiotic culture of bacteria and yeast called SCOBY and allowing it to ferment. The result is a tart and sour, lightly-carbonated drink that’s naturally gluten-free, low in sugar and chocked full of probiotics. With health-conscious millennials driving today’s beverage industry, it’s no wonder that kombucha is experiencing a revival, and is one of the fastest-growing beverages on the market today.

  Kombucha first went mainstream in the U.S. in 1995 when GT Dave, the man behind GT’s Kombucha, established the first and largest kombucha brand in the industry. Promotion for the drink touted the health benefits of both tea and probiotics, and sales immediately exploded in supermarkets throughout the country.

With an ABV of less than 0.5%, kombucha could be sold legally as an alcohol-free beverage. In 2010, however, a Department of Agriculture inspector discovered a kombucha at a Maine Whole Foods that contained alcohol levels well above 0.5%. It was pulled off the shelves nationwide, and producers were left with three options: keep their kombuchas under 0.5% and follow strict labeling laws, sell them in the beer section at their current ABV, or create an intentionally higher ABV beverage. For those who chose the latter — a “hard” kombucha — the crisis presented a golden opportunity. The low-alcohol beverage with a healthy dose of probiotics caught on quickly, and in just a few short years, became the hot new kid on the beverage-industry block. According to Nielsen, sales of hard kombucha spiked 247% in the 52 weeks leading up to April 20, 2019.

  One of the first to create high-alcohol kombucha was Dr. Hops, based in San Francisco. “I was working in Berkley with the fitness and yoga community, and craft beer was exploding and doing amazing things,” said CEO and founder Joshua Rood. “Non-alcoholic kombucha was also growing rapidly. I’ve always been a food and beverage guy. When I saw this happening, I realized you could make a high-alcohol kombucha that would be authentic to both categories, offering the benefits from the health properties of straight kombucha, and the flavor, complexity and pleasure of a really good craft beer.”

  With only one hard kombucha on the market at the time—Unity Vibration in Ypsilanti, Michigan—Rood approached a brewer who was making both beer and kombucha and asked him to make a prototype that offered the best of both beverage worlds. “The prototype was awesome,” he said.  “At the same time, my wife had an adorable rabbit named Dr. Hops, and I thought, ‘what a perfect name for a health-conscious kombucha that’s all hopped up.’ So that’s why we named our product Dr. Hops.”

  While Rood was developing his product in 2016, another hard kombucha hit the market: Boochcraft, California’s first high-alcohol kombucha, and today’s market leader in sales.

  To make hard kombucha, producers start with a mixture of sugar, tea and water. For his base, Rood selects the highest organic quality and fair trade tea he can obtain. Next, he adds SCOBY—a combination of bacteria and yeast that he’s developed in-house—and adds it to the tea mixture. The concoction ferments for a week, allowing the SCOBY to work and make kombucha what it is: a probiotic, sour and flavorful drink. To raise the alcohol level beyond the 0.5% from the initial fermentation, Rood adds a Belgian Ale yeast that creates a slight beer quality and lets that mixture ferment for another week. This step raises the alcohol level to 0.7 to 1%.  Finally, after the second fermentation is complete, Rood adds hops, fruit, herbs or spices and “lets it rest” to let the flavors develop. 

“This is a very mellow waiting period,” Rood told Beverage Master Magazine. “We gently stir the mixture and let the particulate matter sink to the bottom. Then we add a bit of sugar, which gives the kombucha a touch of sweetness, and finally, we package it.”

  Dr. Hops makes four standard products: the IPK, similar to a juicy IPA; the Lop, a tart, refreshing pomegranate chai with prominent grapefruit notes; the Jackalope, with prominent ginger, lime and mint flavors; and the Blinky, with hints of basil and lemongrass. All are dry-hopped with hops sourced from the Pacific Northwest. Sugars vary from 4-6%, and ABV runs from 5-9%. Flavors come from fresh, organic fruits rather than flavoring compounds.

  In terms of legal classification, hard kombucha is typically classified as a beer rather than a wine product. The Dr. Hops production facility is similar to a brewery, with stainless steel tanks and temperature, pressure and oxygen controls. To produce optimum results, brewers have to be very meticulous, Rood explained. “The process goes through many different phases, and each phase has the potential to create benefits as well as off-flavors. It’s really an art. We have to check fermentation constantly, as it’s a living process and not an exact formula, although we’re getting pretty good at it.”

  Ultimately, Rood’s goal is to create a product that is “good for your belly” and “good for your buzz.”  Hard kombuchas have less sugar than anything in the alcohol world, he said, except for pure vodka. “As Americans, sugar is one of the worst things we consume, so we keep ours as low as possible.”

  Rood also uses a kombucha strain that’s rich with alcohol-resistant lactobacillus, a health-enhancing probiotic. Because Dr. Hops’ products are unfiltered and unpasteurized (heating from pasteurization destroys enzymes, organics and flavors), the probiotics stay in the beverage, helping the body process not just food, but also alcohol. Another health benefit: Dr. Hops uses only organic fruits, roots and herbs, which provide additional nutrients.

  “Essentially, we’re trying to eliminate the junk people put in their bodies while drinking alcohol,” Rood said. “When you take all of our ingredients together, you have a beverage that’s remarkably distinct and much healthier.”

  As more and more health-conscious imbibers turn to beer/kombucha blends, Dr. Hops is enjoying great success. Currently, the company produces 1,000 barrels a year, with plans to triple—or even quadruple—production within the next year.  Right now, they package their kombucha in bottles, but Rood intends to switch to cans soon. Dr. Hops is available in liquor stores and independent food stores and markets in Northern California and is on tap in several bars in the Oakland, California area. Rood’s goal is to increase distribution to the western third of the country and Florida. 

  “Sales have been amazing,” he said.  “It’s something people want, but most don’t know it until they discover it, and then they get very excited about it.”

  Within the past couple of years, many up-and-coming hard kombucha brands have emerged within the growing industry, including Flying Embers, KYLA, JuneShine and Lambrucha. Established kombucha producers are also getting in on the action. Wild Tonic, originally a regular kombucha brand, created two hard kombucha products: one with 5.6% ABV and one with 7.6% ABV. Kombrewcha, one of the country’s pioneering hard kombucha brands, received backing from AB InBev’s investment arm, ZX Ventures, to produce a new line of hard kombuchas.

  It’s not only AB InBev getting in on the action, however. Craft breweries have also extended their product portfolio to include hard kombucha. For example, New Holland Brewing, a Holland, Michigan craft beer brand that’s been around for over 20 years, now produces a seasonal offering that combines the flavors of an IPA with Kombucha. Boston Beer, maker of Samuel Adams, recently launched Tura Hard Kombucha. And Deschutes Brewery in Bend, Oregon collaborated with Humm Kombucha to create Humm Zinger, “a beer that blends together Humm’s tangy grapefruit kombucha with Cascade hops and Pilsner malt for big citrus flavor with a profound dry hop character.”

  Clearly, hard kombucha is hitting the mainstream. After all, what’s not to like? It’s all-natural, gluten-free, organic and vegan, low in sugar and calories yet contains enough alcohol to be fun. As part of the low-alcohol trend, which includes hard seltzers, hard ciders and low-alcohol spirits, hard kombucha has a lot of opportunities to grow. If you think you might be one of those who want it but don’t know it yet, hustle off to your favorite vegan restaurant, grocery or liquor store and check it out.

Assessing the Growth of Cider Apples in the Pacific Northwest

By: Becky Garrison

4 cider cans in a table

In 2016, the Northwest Cider Association received a specialty crop grant from the Oregon Department of Agriculture. This grant enabled them to launch a signifi-cant initiative encouraging farmers to plant cider apple trees in the Pacific North-west. The Northwest Cider Association chose to focus these planting efforts in Oregon in two areas: Willamette Valley and Hood River.

  While there has always been a small selection of heirloom cider apples available for small-batch releases, this initiative marks the first time post-prohibition that a sizable number of cider apples will be available to cider makers. Will these ap-ples bear fruit in the burgeoning cider market?

  Currently, there is no available national data on the breakdown of cider made with cider apples versus dessert apples. Michelle McGrath, Executive Director of the United States Association of Cider Makers, attributes this lack of statistics to the fact that the U.S. cider market consists primarily of many very small cideries. As such, their sales are not reflected in any of the scan-based data found in trade reports.

  Even though a majority of ciders available in grocery stores, bars and restaurants are made with dessert apples, a large percentage of the cideries in the U.S. uti-lize cider apples. In McGrath’s estimation, “Fifty percent of our paying members grow their own apples, and 50% of our paying members are using cider apples to make cider.”

  Furthermore, regional brands continue to absorb more of the cider market share, and these brands offer a greater variety of ciders to consumers. McGrath says that in 2012, regional brands represented about 8% of the cider retail market, a number that has risen to 34% today. Also, regional brands of cider sales have grown 16% in the last year, while national brands declined 9%. Because national brands represent more of the total market share, the net result is an overall de-cline of 2% in domestic retail cider sales in 2018. 

  At first glance, this appreciation for small regional craft ciders seems to indicate consumers will be interested in paying a premium for heirloom ciders made with cider apples. Crystie Kisler, co-founder of Finnriver Farm & Cidery, observes how the consumer’s palate has evolved since 2008 when she founded an 80-acre farm situated in Chimacum Valley, Washington.

  “We have appreciated seeing how the sensibilities and palate of folks in the cider-drinking community have evolved over the years,” Kisler says. “We get a lot of interest in our homegrown ‘estate’ ciders—featuring those traditional cider apple varieties with greater complexity—and enjoy seeing people discover the nuances and possibilities in cider fruit.”

  Kisler’s partner at Finnriver, Eric Jorgensen, says that the higher price point of cider made from cider apples does not appear to deter customers who travel to their tasting room. “I’d say that despite their higher price point, when we have them available, they are just as popular as our ciders made from dessert fruit. That preference runs the full range of consumers—we get a very broad spectrum of people coming to visit us.”

  According to Jorgensen, this consumer interest in cider apples can be attributed to several factors: flavor profiles that are nuanced, interesting and complex; gen-eral values around tradition and the rediscovery of these apple varieties; and in-terest in products made with ingredients farmed locally and on a smaller scale.

  From the cidermaker’s perspective, Andrew Byers, Head Cidermaker & Produc-tion Manager at Finnriver, says the advantage of producing cider apples is based in complexity. “Making cider from dessert fruit—be it antique varietals or more modern releases—is making cider from fruit that was conceptualized for a differ-ent purpose, such as eating a fresh apple, or saucing, or baking a pie. Cider fruit has been selected for the qualities they bring to the cider. Body, phenolics, aro-matics—all that cannot be found in a dessert-fruit-based ferment.”

  Byers describes how these apples can transport drinkers to another level. “[Cider apples] waltz you across the room with ease to a place of wonderment where you didn’t know ‘apples could do that.’ [They bring you to] that lovely platform of hav-ing your horizons broadened—a place to realize you just discovered a previously unknown potential. Cider fruit, each year, is an opportunity to waltz with the pub-lic and show them the best we can be.”

  Some logistical challenges are inherent in growing cider apples not necessarily found when producing dessert apples. Tim Larsen, owner and cidermaker at Snowdrift Cider Company in East Wenatchee, Washington, says, “These apples were never cultivated because they grew in an orchard so well, or because they yielded so many tons to an acre. They are grown because of their flavor and aroma. Furthermore, fermentation and aging of cider apples is a fair bit different than working with modern eating apples.” Larsen designed his new operation, Sunred Cider, to manage these challenges for cidermakers and streamline the process between growers and producers.

  Adding to the cost of producing cider fruit is the U.S. law prohibiting farmers from harvesting apples that fall to the ground. Hence, farmers cannot mechanically harvest these apples on a large scale, unlike in the U.K., where apples can be harvested after they’ve fallen off the trees.

  Larsen points to the need for consumer education. In his estimation, “most peo-ple see cider as a sort of holistic Mike’s Hard Lemonade.” He attributes this per-ception to the fact that most large scale cider operations are forced to rely on a very restricted supply of apple juice that, at its best, is pretty uninteresting. They spice up their product, adding flavorings, sweeteners and colors. “This is great if you want something that tastes like alcoholic watermelon juice with hibiscus or some other flavor combination, but it’s not great if you want to experience real cider,” he said.

  Ryal Schallenberger of Northwest Mobile Juicing says that cidermakers try to distance themselves from the apples when they are using bulk juice. “They make comments on their labels that are generic like ‘fresh northwest juice.’ Folks that are using traditional cider apples say so on their labels, for the most part.” This distinction may be apparent to cider connoisseurs; however, this differentiation does not seem to be conveyed to the general public.

  The question, though, is how many consumers crave “real cider” given the popu-larity of ciders made with added pineapple, hops, botanicals or spices? In 2018, apple cider without added fruits, spices or botanicals constituted 63% of national retail sales. Even though over half of all sales in 2018 were ciders made with ap-ples, the trend toward producing non-apple ciders appears to be on the rise. For example, Jeff Parrish, co-owner of Portland Cider Company, notes that consumer demand continues to increase for ciders made with pineapples, pears, and other non-apple fruit.

  In his analysis, Parrish does not view large-scale production of cider apples tak-ing off unless enough cider apples are grown and harvested to bring the cost down to the same price point as craft beer. Simply put, not enough consumers are willing to pay $10 to $12 for a bottle of cider made with premium Pacific Northwest cider apples to justify producing it on a large scale.

  Also, Jorgensen says the general cider distribution market trends towards cans, and thus towards higher production volumes. He’s not aware of anyone with ac-cess to enough “traditional” cider juice to be able to package and sell in large quantities, let alone at a price point comparable to the more contemporary ciders on the market.

  Emily Ritchie, Executive Director at Northwest Cider Association, acknowledges the difficulties faced by craft cideries like the Portland-based Cider Riot. They closed their doors in November 2019 as they found themselves unable to produce their award-winning heirloom ciders while also maintaining a viable cidery and pub. “Right now, it’s harder to keep a business open when you’re just using cider fruit, as your price points are higher,” Ritchie says.

  In assessing the future of cider apples, Parrish points to cider’s long history as a working man’s drink. “It’s never been seen as having a high intrinsic value, and will not be viewed by the mass market as having a high value similar to wine.” In his estimation, history has proven that cider apples will remain a niche market with a loyal following.

  Conversely, Ritchie compares the potential growth of Pacific Northwest cider ap-ples to the growth of the wine industry in Oregon over the last 30 years. Those who planted the first vineyards in Willamette Valley and other AVA’s began from a place where they had no name recognition into producing internationally re-nowned Pinot Noirs and other varietals.

  With the first harvest from these aforementioned cider trees slated for 2020, will cider apples join Pinot Noir grapes as a fruit that defines this region? Time and price point will tell.

“SMART” Brewing: Innovation & New Technology for Craft Breweries

By: Cheryl Gray

man inspecting a machine

Brewers have needed packaging and tools to dispense their products ever since beer was first brewed a millennium ago. Today, innovation and technology that transform a good idea into a great one are driven by industry titans who know how to keep pace with the demands of a highly competitive field, putting craft breweries in a position to stay a step ahead in an increasingly crowded global marketplace.

Print-on-Demand With Abbott Company

  One of those titans is Wisconsin-based Abbott Company, in business for 95 years, specializing in industrial marking and packaging solutions. Tim Stark, Abbott’s president, points to the rise in craft brewing as the catalyst for creating a demand for innovation and new technology aimed at achieving best practices in product identification operations.

  With craft breweries increasing their production capacity and distribution, Stark says there is a correlating trend towards print-on-demand inkjet technology replacing pre-printed boxes and hand-applied labels.

  “Print-on-demand inkjet technology offers many benefits, including a lower cost-per-mark compared to pressure-sensitive labels, as well as more flexibility for managing corrugate stock volumes and case sizes. Our recommended high-resolution inkjet technology, FoxJet ProSeries print heads, has been recently enhanced to print scan-able barcodes on porous cases at higher speeds consistently.”

  Stark says that in automating the printing of product identification on cases, today’s brewers are also looking at improving efficiency by integrating what he calls “scan and select” capabilities into their operation.  

  “This makes product changeovers, and subsequent print message changes effortless and free of human error. A hand scanner is used to scan a barcode from a work order, which selects the correct message to be printed on the case. This is often paired with a barcode vision system which can verify the readability of barcodes before they are palletized and shipped to retailers, allowing a turnkey case coding solution that will scale as breweries continue to grow.”

  Craft breweries are also looking for innovation when it comes to products that solve their primary packaging identification needs, says Stark.

  “We also see a growing desire for high contrast date coding on bottles and cans that are dark in color,” he said. “With a focus on freshness, an increasing number of craft breweries are requesting to use yellow and light blue inks to make the date code and other important product information pop out to consumers. The introduction of the Linx 8900 Plus soft pigment inkjet printer allows brewers to print high contrast codes on their bottles and cans while avoiding the difficulty commonly found with traditional pigmented ink printers. “

Shrink Sleeves With PDC International

  PDC International is another company at the forefront of an industry upon which many craft breweries depend—shrink sleeve labeling. From the moment the business opened in 1968, anticipating customer needs is what the Connecticut-based company has brought to its brewery clients. PDC Founder Anatole Konstantin immigrated to the United States from post-WWII Eastern Europe, building his company out of the den of his home. 

  Through vertical integration and in-house controls, including its own machine shop, PDC is known for quickly solving customers’ production challenges. Neal Konstantin is president of the company his father, Anatole, founded fifty years ago. He says the widespread use of shrink sleeves, a technology allowing a brewery to place its brand name on blank cans rather than having to inventory large quantities of pre-printed cans, saves warehouse space, simplifies logistics and saves money.

  “The recent widespread adoption of shrink labeling by breweries has resulted in machine refinements for labeling [either] full or empty aluminum cans of all sizes,” says Konstantin. “Special product handling ensures that aluminum cans are not dented or marred when processed through the labeler. PDC’s proprietary cutting blades now last millions of cycles between sharpenings, saving downtime and labor and reducing overall costs. We offer the widest range of shrink sleeve label applicators in the industry, ranging from entry-level systems up to 400-500 pm.”

Release the Pressure With

R&S Supply Company

  Don’t be thrown by the Napa Valley location of R&S Supply Company. It also caters to craft breweries, along with wine and other industries in all 50 states and 10 countries around the globe. Founded in 1984, R&S Supply Company is a distributor of products from brands such as Tassalini Valves, Strahman Washdown Products, Definox Valves, Texcel Brewers & Spirits hose assemblies and Dixon Sanitary Pumps & Fittings.

  Company President Paul N. Roberts touts the newest product line that R&S Supply has recently added to its roster. “The newest product line that we have added is Bradley Industrial Products and Keltech Tankless Electric Water Heaters. The Keltech Tankless Water Heaters provide instant hot water anywhere in a production facility when mounted on our cart.”

  Roberts points to the Italian-manufactured line of Tassalini Sanitary Valves as one of his company’s top innovative products. Industry insiders know that the name Tassalini has been around since 1922 when it first produced products for the aeronautics industry. R& S Supply Company is Tassalini’s largest U.S. distributor, Roberts says, stocking all original manufacture replacement seals and repair kits, along with an entire line of Tassalini Valves for every need.

“We stock the complete line including butterfly valves, actuators, check valves, ball valves, tank vents, sight glasses, plug valves and all the accessories and repair parts.”

Pour One Out With Xpressfill Systems

  A relative newcomer to the industry of packaging and tools, XpressFill Systems LLC is led by owner Randy Kingsbury, a mechanical engineer with more than 30 years of experience. Based in San Luis Obispo, California, XpressFill Systems is a global player in the development of affordable, efficient filling equipment for the brewing industry, with customers in the United States as well as Europe, Australia, South America and Asia.  

  “Our equipment is small—tabletop—making it easy to position in smaller brewery operations. It is simple to operate and maintain, requiring only one or two operators to efficiently maintain the quantity and quality of the beverage,” Kingsbury says.

  XpressFill introduced its first filler for brewers in 2014, a tabletop counter pressure filler for bottles with a pair of fill spouts. This product, Kingsbury says, was designed to launch its fill sequence with a carbon dioxide purge, then seal and fill the bottle to a level sensor that automatically stops the fill so the bottle can be removed and capped. XpressFill edged its technology forward, developing its four-spout counter pressure bottle filler, capable of filling 12-ounce bottles at a rate of 400 per hour.  In 2018 the company introduced counter-pressure fillers for cans.  

  “The XF4500C has two fill spouts and is capable of filling 300 12-ounce cans per hour. To further satisfy the demand for filling cans, the XF2200 open fill unit was developed. This provided a faster, less expensive alternative, capable of filling 360 12-ounce cans per hour with two spouts, while still providing quality fills,” says Kingsbury.

  More innovation and technology is in store with the development of XpressFill’s new two-spout filler, the XF280W. “Current quality control of fill volumes is accomplished by craft brewers weighing their filled cans, which is an additional step following the filling,” Kingsbury says. “We set out to explore the possibility of providing a user-friendly and cost-effective filler that would measure the weight of dispensed beer to save the additional weight verification step.”

Expand With iStill

  For craft breweries exploring the world of distilling, Netherlands-based iStill offers an automated, robotized distillery unit that promises a simple setup with only a water hose and electrical plug needed to begin.

  “Due to our scientific approach to distilling, we have been able to create an easy to operate, versatile machine that takes the magic out of distilling great spirits, and makes whiskey, vodka, gin and rum production an easy add-on to the already existing brewery,” says Edwin van Eijk, CEO of iStill.

  “The iStills come in sizes ranging from 26 to 1300 gallons. Each and every machine can make every distilled product. If the craft brewer does not want to re-invest in expanding mashing or fermenting capacity, the iStills can mash and ferment as well. Everything takes place in the same unit.”

  iStills offers a broad range of services, Eijk says, to assist its more than 700 clients worldwide, including iStill University, which educates and trains approximately 200 distillers annually in North America, Europe, Asia and Australia. 

  Innovation and technology are ever-evolving as leaders in the packaging and tools industry find new ways not only to push themselves but also, push craft breweries into thinking smarter about ways to make their products move quickly in the marketplace.

Important Tank Supplies & Accessories for Your Brewery or Distillery

By: Alyssa L. Ochs

tanks wrapped over

High-quality and reliable tanks are one of the most essential parts of any brewery or distillery. However, there are many components involved in keeping tanks in good condition and well-monitored throughout the beverage-making process. Experienced brewers and distillers use various tank supplies to keep their tanks working well for many years into the future and to produce excellent craft beverages.

Here is an overview of some of the most important tank supplies and accessories to stock up on and use regularly in a brewery or distillery.

Basic Tank Needs

  Wraps are one of the most important tank-related products that breweries and distilleries should invest in because they provide fluid temperature control for tanks. Wraps also reduce condensation and allow fluids to circulate with a cooling jacket on for thermal control. Glycol wraps help control the fermentation process and are also referred to as glycol jackets. These products are put on the bottoms and sides of tanks to maintain beverage temperatures, regardless of the beverages’ fill levels. This is especially important on packaging days of the year. Overall, breweries and distilleries typically look for wraps made with lightweight and flexible fabric that’s easy to apply and manipulate as needed.

  Insulation is useful for craft beverage tanks because both hot and cold temperatures are required from these tanks. Common insulation materials are fiberglass and stone wool. Insulation helps to counteract high humidity in a brewery or distillery and also prevent burn and freezing so that ice does not form on the pipes. Since insulation helps resist corrosion, keep mold away and save energy, it is also a way for breweries and distilleries to become more efficient and sustainable. For example, Synavax™ multipurpose coatings use a liquid wrap insulation to coat the equipment and cover exposed valves to prevent energy loss. Just keep in mind that staff members must to be trained thoroughly on insulation safety, especially when working around hot pipes.

  Meters are another crucial piece of equipment used alongside tanks in the brewing and distilling processes. Liquid pressure and vacuum gauges come in both analog and digital formats, with digital versions typically being more expensive. Common sizes are ¼ inch to 1.5 inches, and stainless steel is the most common meter material used in the food and beverage industry. Meters often use two pressure transmitters to measure the beverage level – one for the head pressure and the other for the total pressure. It is that differential that’s really important number to steadily monitor. Magnetic flow meters often range from ½ inch to six inches and provide readings to minimize losses in the beverage-making process. Meanwhile, temperature sensors monitor a beverage’s temperature so that you can quickly adjust temperatures that become too high or low. Regardless of the chosen product, it’s always important to have hygienic process fittings for meter sensors.

  Tank Stands, a less technical but equally important product that goes hand-in-hand with tanks. Stands are usually made from stainless steel and can accommodate 100, 200, 300, 500, or more liters for the right fit with your tanks. Stainless steel pipe stands for brite tanks are available to fit 1.5-inch and two-inch sizes. Some stands accommodate just one large tank, while others fit several tanks and are ideal for small batches. Some smaller tanks have wheels to make them transportable in case mobility is convenient for your operations.

Top Tank Supply Products

  Dean Thompson, the brand manager for Flextank USA, told Beverage Master Magazine that his company’s most popular tank products among breweries and distilleries are its line of SS sanitary fittings, fermentation locks and oak adjuncts. This company manufactures and assembles all of its vessels in Vancouver, Washington and distributes them worldwide.

  Among the most-used products throughout the beverage industry is Flextank’s AK1T – Combo 6-Bolt Flange Accessory Kit in the 1.5-inch size that includes VF1, BV3 and SV1T. This kit includes a complete drain valve installation and a Tassilini sample valve, and it fits all Eco and Dexter Maturation and heavyweight tanks, plus the Apollo Fermentor. Other popular products are Flextank’s butterfly valves and FL1 Fermentation Lock.1 for use on Eco Tanks and Dexter Lids purchased prior May 31, 2014. Meanwhile, the company’s FC060-50-70-80 FlexChill is an exterior wrap chilling system used with glycol chillers and designed for cylindrical tanks in two standard sizes.

  “Our oak staves are French and American oak and available in different toast levels and sizes for different tank sizes,” Thompson said. “These are made with directions to add up the staves needed for use. An example is if you need 80 gallons, you can add the staves from the 50-gallon tank and then add the 30-gallon tank, and now you have what you need for the 80-gallon tank.”

  Miyuki Clauer of ATAGO U.S.A., Inc. told Beverage Master Magazine that ATAGO’s most common product line used for craft beverage tank monitoring is its In-Line Refractometer PRM Series. Based in Bellevue, Washington, ATAGO U.S.A. is a leading manufacturer of refractometers, polarimeters, salt meters, acidity meters, pH meters and saccharimeters.

  “The PRM series offers a digital display section with a seven-segmented LED that displays the temperature and measurements,” Clauer said. “Using output methods, such as RS-232 or 4-20mA, the data can be transmitted to a PLC system for system automation. It offers lab-grade accuracy across the full range of refractive index, Brix or user-defined concentration scale. The PRM series is equipped with an alarm output function that transmits a signal when it detects values exceeding preset high- and low-limit values.”

  Clauer also explained how these inline units use COP (clean-out-of-place) and CIP (clean-in-place) methods for easy cleaning. This is always a valuable feature for busy breweries and distilleries.

  “The detection section occupies a small footprint, taking up very little space and offering an installation option to be directly mounted to the tanks or piping systems,” Clauer said. “The unit can be easily removed without requiring previously acquired skills to be easily removed and installed for COP. The prism section is completely flat and can be easily cleaned once removed. For CIP, users can install an optional accessory and let the ultrasonic cleaner prevent utterly unavoidable sample build-up around the refractometer’s prism surface. Another option is the prism wiper, which attaches directly facing the detection section of an inline refractometer installed in the piping system to manually wipe buildup off the prism surface.”

Other Tank Accessories to Consider

  In addition to wraps, insulation, meters and stands, there are many other tank products that can come in handy during the brewing and distilling process. For example, your beverage operations may benefit from carbonation stones, CIP spray balls and hydrators. Racking arms, valves, sight glasses, basic thermometers and through wall fittings are among the many other tank supplies that experienced beverage producers use.

Choosing the Best Tank Products 

  Although there are many brands, types and styles of tank supplies and accessories to choose from, not all of them are necessarily right for your beverage company. This is why it’s a good idea to get to know industry leaders who make these types of products so you learn about what will best suit your needs.

  With regard to insulating beverage tanks, Thompson of Flextank USA said that the best strategy is “either a temperature-controlled room using our FlexChill system or using standard insulation materials common in hot water tanks.”

Thompson’s advice to breweries and distilleries is a reminder that starting with Flextank for fermentation of grains and sugars can significantly lower start-up or expansion costs.

  “These tanks come in variable permeation rates so they can serve a double-duty and can age spirits, beer and cider without the cost of barrels,” Thompson said. “If an oak profile is desired, inexpensive oak staves are available in a variety of toasts and species that can complement the end product.”

  When shopping for tank supplies for your brewery or distillery, Clauer of ATAGO U.S.A. says that the most important things to look for in a tank meter are the specification of the measurement range, temperature compensation capabilities and after-care services.

  “ATAGO offers in-house service in the U.S., and we offer loaner units while we have customers’ instruments,” Clauer said. “With NIST certification, it offers information security standards and guidelines to ensure that the instrument is working accordingly.”

  Clauer also told Beverage Master Magazine that when searching for pieces of craft beverage equipment, such as tank meters, it is important to have a comprehensive overview of what’s needed and what options are available.

  “Purchasing an instrument is one part, but also knowing the spare parts and how accessible it is to these parts are important, as well as any technical service turnarounds,” Clauer said. “Having a manufacturer that can offer customer service that walks with you every step of the journey of craft beverage manufacturing is important. ATAGO is dedicated to meet our customers’ need with a motto of ‘You ask, we create.’ We offer a portable CO2 meter, refractometer, pH meter, and conductivity meter, as well as the inline refractometer.”

Finishing and Aging Options Evolve with Booming Secondary Barrel Market

By: Gerald Dlubala

barrels outside a facility

Those barrels hanging out in the distilleries, whether new, used or refurbished, are just getting started. Oak barrels have a full and varied life, complete with occasional travel between distilleries, breweries, wineries and back again, sometimes internationally.

  Just within the Kentucky commonwealth, there is an inventory of over eight million barrels of Bourbon and other spirits in various stages of the aging process. It’s the highest inventory in 40 years and represents almost a two-barrel per person ratio. That’s a lot of barrels coming onto the market, which coincides with a booming secondary barrel market.

Impacting Flavors By Following The Seasons

  One company helping those previously used barrels live their best life is Moe’s Barrels, with locations in Galt, Lodi and Fairfield, California. COO Dean “Deano” Wilson is a winemaker and self-proclaimed foodie, so he found it natural to follow his passion by selling previously used wine and whiskey barrels for secondary, flavor impacting purposes.

  “We source our barrels from both the big and small producers,” said Wilson. “The boutique producers are our preferred source for quality used barrels simply because they tend to take care of them a little better. We buy our barrels in lots, with 99% of them coming in already cleaned and sanitized. But we’ll look at, inspect and grade them, giving them a wine or beer grade. If they don’t qualify for that, we can use them as furniture or décor grade. A trend that has grown recently is to sell the parts of used barrels to the artistic community, selling the individual staves, barrelheads or barrel rings for creative endeavors.”

  Wilson told Beverage Master Magazine that his formula for success is to try and follow the season for selling a certain type of barrels. 

  “We get a lot of first and second use barrels at harvest time, which is very good for cross-utilization. White wine barrels are excellent for reuse with wine, Belgian style beers, Cognacs and more. The barrels we get immediately following the crush are great matches for repeated wine and bourbon use.”

  Wilson gets his used barrels delivered with blue painter’s tape over the bunghole. The tape covers the hole for sanitary reasons but still allows the barrel to breathe. If they sit around too long with the bung in, there’s a chance for mold growth. If the barrels are left with the openings uncovered, they could dry out and start to split. Moe’s does the rest, performing sanitation, rehydration, steam cleaning and hot water rinsing.

  “Communication is key for customers looking to purchase used barrels,” said Wilson. “The buyer needs to be comfortable in the relationship with the supplier. First and foremost, look for quality, but be comfortable enough to ask for what you need. Know what flavor profiles you’re looking to build. Use your nose and trust your smell when inspecting the barrels that you are buying. Some staining and minimal hairline cracks are fine, but larger, deeper cracks around the bunghole can be a sign of a problem, and it’s always best to stay away from any hardened purple stains. Check for holes or damage that could be related to borer beetles. We invite all buyers into our warehouse, where you can completely inspect the barrels you’re looking to purchase. Inspect them from head to head, inside and outside, noting the year on the cooperage. Know the barrel’s origin, exactly what it was used for and how many times it’s been used. A quality supplier will know and willingly share this information about the barrels they’re selling. Cleanliness and smell are your two biggest assets when looking at used barrels, so always follow your nose.”

  Moe’s Barrels keeps all of its inventory inside a warehouse and available for buyer inspection.

  “We want to recycle these barrels and give them another life in the business, whether it’s for additional distilling and brewing, for use as furniture and décor or ultimately selling the parts to the artistic community. It’s a way towards sustainability.”

Kentucky Bourbon Barrel: The Name Says It All

  What better place to source local Bourbon and whiskey barrels than in Kentucky, the birthplace of Bourbon and home to the renowned Kentucky Bourbon Trail. Noah Steingracher is the man to talk to for North American and international craft sales at Kentucky Bourbon Barrel, a full service used barrel cooperage, offering used Bourbon and exotic spirit barrels.

  Being right in the heart of the Bourbon Trail in Louisville, Kentucky, Kentucky Bourbon Barrel primarily sells Bourbon barrels sourced locally from all of the familiar names. When Steingracher joined the company, he brought his international sourcing experience with him, so exotic and international barrels are now in play as well. He has sourced used barrels from spirits distributors, breweries, meaderies and wineries for use in finishing and aging a potential customer’s product.

  “We do it all,” said Steingracher. “We sell the used barrels from barrel to stave, depending on every customer’s unique needs. We have contracts with reputable and well-known distilleries to empty and ship their used barrels directly to us. We inspect them using our stringent guidelines for acceptable and unacceptable issues, including the size of any distinguishable cracks. If needed, our experienced team of coopers repair the barrels and make them fit to fill. We fill the used barrel market for customers that may not have the time, expertise or source to fill it on their own, and our experience and reputation are such that we have customers worldwide. I’ve shipped to islands that I’ve had to find on Google Maps. I’ve delivered barrels to the base of the Himalayas. There’s nowhere we won’t deliver.”

  Steingracher told Beverage Master Magazine that the used barrel market is affected by the same seasonal changes that affect all brewers and distillers, as well as how the barrel will be used.

  “A used barrel can function as either a vessel or an ingredient,” said Steingracher. “As a vessel, used barrels are just the holder for the product. For example, if a brewer wants to offer chocolate, porter or coffee stout, a used bourbon barrel fits the need and will provide the expected stone fruit and vanilla notes. But if you want to put out the best coffee stout, you should use a rye barrel so that the unique flavor from the barrel imparts a distinguishable, peppery infused difference. The right barrel will be a noticeable and valued ingredient in your formula.”

  Steingracher noted that brewers and distillers sometimes become too easily attached to the brand stamped on the barrel rather than going with barrels that fit their actual needs, if for no other reason than to associate their brand with that of a particular distillery. 

  “A mindset of only looking towards a brand name rather than filling your flavor profile defeats the purpose of striving for reliability and availability of your product offerings. Craft distillers and brewers can always run into a situation of not being able to find that particular distiller’s used barrel for the next batch. Frankly, they usually don’t even have the marketing rights to use that particular distiller’s name in their marketing. Jim Beam can release up to ten thousand barrels a week, with Buffalo Trace releasing around six thousand a month, and then others like Pappy are obviously extremely limited.”

  “Relationships matter when discussing that reliability and availability,” said Steingracher. “You need to know the type, origin, and age of the barrel you’re getting. With all the variants and combination spirits being distilled these days, what specific type of Bourbon was the barrel last used for? Was a char put on it? What level? Was it toasted? Repaired? How many years has it been used? Barrels can last a hundred years or more if used and maintained properly. The oldest is probably in Scotland, but I’ve personally seen some from aged before World War II. We do buy some back from the distillers that we know care for them the right way, and having access to our cooperage allows us to be able to make the repairs necessary to keep them in circulation. You can certainly come through and check on barrels yourself, but with our regular buyers, they know that the barrels we send them are fit to fill.”

  The flavor and use options for used barrels are indefinite. With many craft distillers and brewers now openly sharing their barrels between multiple brewing cycles, with proper use and care, barrels can last indefinitely. It’s what you can do with them after extensive uses and fillings that become limited.

  The Barrel Mill’s Infusion Spiral Technology Offers More Flavor Options While Decreasing Aging Time

  Options for those barrels, whether new or extensively used, have gotten much greater due to Infusion Spiral technology from The Barrel Mill, a central Minnesota-based cooperage that specializes in premium new oak barrels.

  Len Napalitano is an infusion spiral expert with The Barrel Mill and told Beverage Master Magazine that their infusion spirals are perfect for creating unique flavor profiles and helping distillers get their product to market faster.

  “Sometimes, you won’t find the right barrels for the flavor profile that you want to build for your customers,” said Napalitano. “With each fill, a wooden barrel loses part of its flavor offering and balance, and after three fills, barrels can be neutral regarding any noticeable flavor profile. These barrels are still obviously good for use, and now they can benefit from infusion spirals to regain that lost flavor profile.

You can achieve new oak flavor without the new oak barrel, which can be in short supply at times. Even when used with a new oak barrel, infusion spirals help get your product to market quicker. Our spirals are cut from premium oak, maximizing end-grain exposure for full extraction in weeks instead of months, saving the distiller money in labor, cost and time. The spirals are formed from barrel stave wood, cut through, then put into a convection oven to get their desired toast or char by way of our proprietary formula.”

  Jeremy Wochnick, Sales Professional for The Barrel Mill, said “The spirals range from a light toast to a #3 char depending what the distillers want, and are available in not only the standard, premium oak, but also in French oak and more exotic species like sugar maple, cypress, cedar and more for experimental and unique small-batch flavor profiles. Barrel quality results are obtained using any type of barrel, carboy or stainless tank. The spirals have proven to be successful in spirits, beers and wines as well as hard ciders and nonalcoholic drinks like ginger ale and regular ciders. Infusion spirals can be used to add a flavor profile to anything. We also have packs with blend options featuring different toast levels. The spirals can be used once, and are inserted into your barrel through the bunghole by way of netting or some sort of daisy chain for making retrieval easy.”

  And those infusion spirals, after being retrieved from their time in the barrel? Well, it turns out that they’re a pretty good addition to your outdoor barbecue.

Will Cannabis Beverages Cannibalize Beer Sales?

By: Briana Tomkinson

Detail of cold glass of beer with cannabis leaf, marijuana infused beverage concept

Cannabis was legalized in Canada a year ago; however the production and sale of edibles, in-fused beverages and tinctures, remained illegal—until now.

  The first legal cannabis-infused drinks and edibles are expected to hit shelves as early as De-cember. Many have been designed to produce a high mimicking the effects of alcohol in terms of onset, intensity and duration.

  While the federal government officially legalized edible cannabis products on Oct. 17, produc-ers still need to obtain Health Canada approval, a process that industry insiders expect to take a minimum of 60 days.

  Some products will include only CBD, a non-intoxicating compound found in cannabis, while others will have THC, the psychoactive compound in marijuana that produces a “high.”

  According to a report from Deloitte, the cannabis-infused beverage market will be worth an estimated $529 million per year in Canada, most of which will be on top of existing cannabis spending. Deloitte predicts sales of these beverages will come at the expense of beer, wine and other alcohol as “cannabis-curious” customers experiment with marijuana instead of booze.

  The Deloitte report notes that alcohol and tobacco companies are looking for opportunities to enter the legal cannabis industry to avoid losing market share. Pharmaceutical companies are also entering the market, as consumers turn to CBD oil and cannabis to self-medicate.

Mild High Aimed at New Cannabis Consumers

  Deloitte predicts cannabis-infused beverages will appeal to older, often female, Canadians who are concerned about the adverse effects of alcohol and are interested in trying cannabis yet are turned off by the idea of smoking it.

  Most producers of THC-infused drinks are aiming for a formulation that triggers a high within about 15-20 minutes and lasts no more than a few hours. This effect is in contrast to most cannabis edibles and oils, which are slower to take effect and produce a high that can last as long as six hours.

  Unlike beer or wine, there’s little risk of a hangover from cannabis beverages. Some varieties can also boast they are low-calorie drinks, which could appeal to more diet-conscious con-sumers. Prices are expected to be similar to that of craft beer; however, the beverages can on-ly be sold at legal cannabis outlets, not grocery stores or alcohol retailers.

  In October, Ontario-based Canopy Growth Corp announced the launch of 13 cannabis-infused drinks, some boasting as few as five calories per serving. The drinks range from pure distilled cannabis, intended to be mixed with sodas or other beverages, to pre-mixed blends of canna-bis with tonic, ginger ale, cola, soda and fruit-infused sparkling water.

  Unlike some legal producers in the U.S., Canopy Growth’s lineup focuses on low-dosage bev-erages with an effect similar to that of a single beer or mixed drink. According to the Ottawa Citizen, while Health Canada allows a THC concentration of 10 mg per package, 10 of Canopy Growth’s 13 products will have 2.5 mg or less, producing a mild high aimed at appealing to inexperienced cannabis users looking for an alternative to alcohol.

  Truss Beverage Company has also announced it will be ready to release cannabis-infused beverages in December, including CBD-infused spring water and THC-infused drinks. Compet-itor Fluent Beverage Company said it would be prepared to release CBD-infused beverages but is still working on formulations with THC. 

Beer Brands Push Into Cannabis Beverages

  Ever since Canada legalized the sale and consumption of cannabis, big beer companies have been teaming up with cannabis companies to develop cannabis-infused beverages.

  Canopy Growth, for example, has benefited from billions of dollars of investment from U.S.-based Constellation Brands, maker of Corona. Truss Beverage is the product of a joint venture between Molson Coors and cannabis producer Hexo, and Fluent Beverage is backed by An-heuser-Busch, who has partnered with British Columbia-based pot producer Tilray.

  In June, Bloomberg reported that Molson estimates cannabis beverages will make up 20-30% of Canada’s legal cannabis market. However, a report by Deloitte estimated drinks make up just 1% of sales by value and volume in U.S. states where pot is legal.

Marketing, Labeling Restrictions on Cannabis Beverages

  If cannabis beverage producers want to steal market share from beer and wine, they need to overcome the strict limitations on marketing, packaging, labeling and distribution imposed by Health Canada.