Month: April 2020

Combining the Cannabis and Cocktail Cultures

Cyndi 2 Comments

By: Becky Garrison

Terms like “The Wild West” and “Gold Rush 2.0” have been used to describe the rapid shift of cannabis from an underground illicit practice to a legalized market. Global brands like AB InBev and Constellation Brands have invested in cannabis-infused beverages. (For now they appear to be focusing on the Canadian market where cannabis is legalized at the national level.)

Also, after hemp became legalized at the federal level in 2018, CBD-infused drinks for the adult market (21+) began popping up at bars, restaurants, and select grocery stores. In addition, the increasing legalization of cannabis for adult use has led to the rise of non-alcoholic drinks called “mocktails” that contain THC and are available for purchase in those licensed cannabis dispensaries located in states where recreational cannabis is legal. 

As one example of the increasing normalization of cannabis, in 2019, Feast Portland, a food and drink festival celebrating the bounty of the Pacific Northwest, included in its educational offerings a panel titled “Cannabis & Cocktails: Best Buds?” During this panel, Jeremy Plumb, Director of Production Science at Prūf Cultivar, lent his 30-years of expertise in the cannabis industry to illuminate this new trend. He describes this current state of cannabis as a “frontier culture” where people are exploring a all the dimensions of over thousand compounds found in the cannabis plant.  

The two compounds in cannabis getting the most buss are  buzz is CBD (Cannabidiol) and THC (Tetrahydrocannabinol).  Both CBD and THC possess analgesic and anti-inflammatory properties that can help with a range of conditions such as relieving pain and reducing stress.

For those unfamiliar with this plant, Plumb breaks down cannabis into three types. Type 1 cannabis is high THC with almost no CBD. THC is that compound that produces a psychoactive high and is the most heavily regulated (in the U.S.). Type 2 cannabis is a 1:1 ratio of THC to CBD,  a combination that produces a balanced high. Finally, Type 3 cannabis contains less than .3% THC and is also called hemp-derived CBD. This is the form of cannabis that’s theoretically legal in all 50 states and the one being used in beers and cocktails available in bars, restaurants, and other public settings.

Rather than focus on just CBD and THC, Plumb encourages people to explore the “entourage effect” that happens when one consumes a cannabis infused product. This term describes the overall sensations a consumer experiences when consuming a particular product. In particular, Plumb homed in on terpenes, which are the organic chemicals present in food and drinks that produce certain effects. Among of the more common terpenes found in cannabis include Pinene (pine), Myrcene (musky, earthy, fruity) fruity), Limonene (citrus), Humulene (hoppy, earthy), Humulene (musky, earthy, spicy), Linalool (spicy, floral), Caryophyllene (peppery, spicy), and Terpinolene (woodsy, smoky).

While cannabis and hops belong to the same Cannabaceae family, Plumb notes that cannabis offers a broader range of flavors and aromatics than what one finds in hops. According to Plumb, cannabis is the most genetically diverse plant on the planet. “Any aroma found in nature can be found in some variety of this plant.” In his work, he explores whole-plant infusions that take advantage of all the plants properties rather than distilling a single compound and adding that to the products. 

How Cannabis  is Used in Cocktails  

Once hemp derived-CBD. became legalized at the Federal level in 2018, CBD drinks became the latest craze. Howeer, until the FDA and USDA formalize the legal guidelines for how to regulate food and beverage products made with hemp-derived CBD, these products will not be available for adult use in all 50 states. Furthermore, The Alcohol and Tobacco Tax and Trade Bureau (TTB) has not approved cannabis or CBD as approved ingredients for use by a distillery, brewery, cidery, or winery.

But while one cannot expect to see these cannabis or CBD-infused alcoholic products available in the near future, CBD drops can be added to alcoholic beverages. According to Brandon Holmes, CEO of Danodan Hempworks, the challenge in using their Hemp Flower CBD shots in a drink is the same as using any other ingredient in cocktails. “Mixologists make great drinks because they experiment with ingredient ratios that captivate the senses and amplify each ingredient’s characteristics.”

Joanna Matson,  founder and CEO of  ZVEDA Botanicals, created her CBD wellness drops using fusions of Ayurvedic herbs, cannabinoid-rich Hemp-CBD oil, and signature essential oil blends as a natural product to help promote health and wellness. Presently, she also partners with the Portland Bitters Project to produce a line of bitters infused with CBD and organic botanicals. 

For those looking for a lighter taste, East Fork Cultivar’s CBD drops are not flavored as strongly as other hemp products. Their CBD Drops are a glycerine-based tincture made from their USDA Certified Organic Oregon-grown craft hemp flower to produce an accessible, mild-tasting, broad-spectrum, water-soluble form of CBD to be added into drinks.

While CBD affects everyone at different dosage levels, one can generally expect to feel a light, pleasant feeling of relaxation after taking a 10-50 mg dose. However, some people can experience these feelings with only 2mg of CBD.

Sparkling beverages such as those produced by Ablis CBD Infusions and clēēn:craft can be used as mixers or consumed as stand-alone products for those wanting a non-alcoholic lift courtesy of the CBD present in these product but also desiring products made with organic ingredients. For those desiring products infused with THC, companies such as Magic Number and SōRSE Technology manufacture non-alcoholic THC beverages available in different strengths. These zero-proof cocktails work well for those who want a sophisticated drink in a social setting but do not wish to consume alcohol.

The Future of Cannabis-Infused Cocktails 

Lee-Ellen Reed of East Fork Cultivars, speaks to the role of CBD in the bar space. “They offer an alternative to alcohol for those who still want to “take the edge off.” Also, both cannabis and cocktails could produce some new experiences when combined together. In Plumb‘s experience, sipping on a whole plant vaporizing creates a new experience which could be incorporated into a cannabis infused cocktail. 

Also, anecdotal evidence suggests that consuming cannabis could help reduce the amount of alcohol consumed and prevent hangovers. However, further research is needed to ascertain the effects of combining alcohol and cannabis

In Plumb’s estimation, blending together cannabis and cocktails makes sense from a craft perspective. He believes cannabis should be seen in the same context of other craft food and beverages that produce nourishment and enjoyment. “There’s a whole community of passionate craftspeople who existed in this underground [cannabis] economy for a very long time, aspiring to simply be at the table with other brilliant crafts people who are producing spirits, ales, wine, and food.”

Special Considerations and Latest Innovations for Growlers & Kegs

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beer glass with a small keg

By: Alyssa L. Ochs

Growlers and kegs have been staples in breweries for many years. With the bevy of options available to brewers today, choosing the right size, shape and material for these essentials may be an overwhelming task. To make the best choice, brewers need to consider their options as well as the new and exciting innovations in the world of portable containers.

Types of Portable Containers

  Growlers can be made with various materials, such as glass, stainless steel, ceramic and plastic. Vacuum-insulated growlers go beyond a standard glass growler’s functionality to keep beer colder and fresher for longer. Some popular models include Hydro Flask beer growlers, DrinkTanks, GrowlerWerks, 45-Degree Latitude stainless steel growlers, Yukon insulated beer growlers and two-liter Euro Growlers with metal handles.

  Meanwhile, keg types vary based on volume, capacity and weight. The most common kegs are sixth barrels, quarter barrels, slim quarter and half barrels. Consumers also have access to Cornelius kegs, mini-kegs, one-way kegs and eighth barrels.

  With headquarters in Atlanta, Georgia, Schaefer Container Systems North America manufacturers ECO KEGS that are lightweight, durable and stackable stainless-steel kegs, and 100% stainless-steel Sudex Kegs. The company also offers fully or partially encased Plus Kegs, the FreshKEG and SmartDRAFT keg with flexible small-scale dispensing systems and Party Kegs that are stylish and easy to use with a gravity-fed system. Schaefer’s specialty kegs include yeast brinks and cellar topping kegs that are adaptable by using tri-clover and tri-clamp fittings.

  “The most popular are our ECO KEGS,” said Richard Winslow, the president of Schaefer Container Systems North America. “These kegs provide immediate brand differentiation, are highly customizable, and offer significant value-added features and long terms cost advantages. Also very popular are our Party Kegs, which use a gravity-fed system with all the utility of a Firkin and none of the hassles.”

  Yet there are even more types of portable containers that are trending and particularly attractive. For consumers looking for less than the standard 64 oz fill, smaller containers, like Swig Savvy’s stainless-steel water bottles, are popular. Some breweries are now equipped to fill 32-ounce crowlers, aluminum cans filled and sealed on demand that keep the beer fresh until it’s cracked open at its destination.

Best Materials for Growlers and Kegs

  Since the advent of the modern growler, glass has been a popular material. Easy to clean, easy to fill and easy to find, glass growlers can be clear or amber color. However, the material is heavy and easily broken, among other problems.

  “Glass has a highly non-porous surface and does not absorb microorganisms which can spoil your beer, but annealing is weakened with use and when subjected to temperature changes. Thus, glass weakens over time or when subjected to an impact and will eventually break,” said John Burns, Jr. of Craft Master Growlers. “Glass is not suitable to be pressurized.”

  Based in Tacoma, Washington, Craft Master Growlers creates the next generation of growlers forged from high-quality stainless steel and designed for performance and durability.

  Stainless steel is sturdy and keeps beer cold; however, during filling, bartenders are unable to determine the fill level accurately, often leading to a loss of product. However, stainless is sustainable and durable, resists oxidation and corrosion, and is ideal for pressurization.

  Ceramic growlers have a classy look but are heavy, more difficult to clean and prone to chipping. Plastic is also used for growlers because of its low cost and low likelihood of breaking, but is less durable with multiple uses and may cause oxidation in the beer.

  For kegs, stainless steel is the most commonly used material because it is durable, sterile, long-lasting and affordable with reuse. Aluminum was once used for kegs because of its strength and low cost, but is prone to corrosion and runs the risk of being stolen for scrap metal. Plastic kegs are cheaper, lightweight and stackable, but they also create concerns about durability, oxidation and exposure to heat and sunlight.

  Emma Shepanek of G4 Kegs told Beverage Master Magazine that food-grade stainless steel is the best material for kegs. Founded in the craft beer destination of Bend, Oregon, G4 Kegs offers high-quality and durable kegs, as well as various keg services and leasing.

  “All stainless-steel kegs are the most durable, reliable and safest kegs on the market,” Shepanek said. “There have been recent innovations with plastic kegs, but they are still not as safe or sustainable as all stainless-steel kegs.”

Refill Policy Considerations

  For both growlers and kegs, there are considerations to keep in mind about refill policies. First, check local and state laws concerning portable container fills to ensure you comply. Make sure to openly and publicly share your brewery’s policy about refills with consumers to avoid confusion.

  As a general rule, never refill a container with questionable sanitation or cleanliness to avoid compromising a consumer’s health. Brewers may always want to avoid refilling containers with other breweries’ names and logos on them to avoid misconceptions about whose beer is inside. Some states have laws against filling any growler that does not feature that brewery’s logo. Again, brewers should check state and local regulations for more information.

  Many breweries have a policy of not refilling plastic containers since plastic cannot be cleaned as well as other materials and is more likely to harbor bacteria. Brewers should only use and fill containers that maintain the integrity of the beer that they’ve worked so hard to produce, such as insulated stainless-steel or colored glass.

Return Policy Considerations

  Return policies are important to have in place if the brewery is in the business of leasing kegs to consumers. Always provide written policy details to consumers and include details about how to reserve kegs, the time frame for reservations and the length of time before it must be returned.

  Other important information to provide includes how long the brewery will honor deposit refunds, the charge for unreturned kegs and the deposits amounts for barrels and hand pumps. Brewers may want to advise customers where to park while picking up their keg and how to properly exchange an empty for a full one.

New Technology for Portable Containers

  The world of portable beverage containers is continually changing due to new technology and innovations in the industry. Portable beer systems are gaining popularity by allowing consumers to pour their favorite beer anywhere. Pressurized growlers serve as mini-kegs to maintain carbonation levels for longer and even include customizable tap handles and pressure gauges. Entrepreneurs are even turning shipping containers into mobile multi-tap kegerators to help beer lovers enjoy their favorite brews outside the taproom.

  Burns of Craft Master Growlers said that new pressurized growlers substantially extend the longevity and usability of fresh craft beer for a couple of weeks or longer. This is a significant upgrade from glass growlers with virtually no shelf life.

  “Double-wall insulation lets you enjoy a cold or hot beverage for hours when outside or on the road. Oxygen is substituted for CO2, as oxygen will cause the beer to go stale. A pressurized growler goes beyond just beer, to cider, kombucha, spritzer, seltzer and more,” said Burns. “At Craft Master Growlers, we are innovating the CO2 delivery system, giving the user a way to control and monitor the pressure for the appropriate beverage, and offering ways to infuse and ferment in a small-batch container. The way we think of it is broadening the appeal and accessibility of all the great things local craft brewers and homebrewers are doing.”

  Schaefer Container Systems’ FreshKEG and SmartDRAFT technology allow brewers to pour beer without CO2 tanks or draft systems. “The CO2 and beer are contained within a single keg body, and the unit is tapped by an easy-to-use dispensing unit,” Winslow said. “It’s ‘plug and play’ for the consumer!”

  Because kegs have been designed well and there’s little need for improvement, manufacturers look to technology as the next big thing.

  “Kegs are actually quite boring and basic,” said Shepanek of G4 Kegs. “The design and engineering of the keg have already been optimized, so there’s not much to be improved with the form or function. Yet spear and keg manufacturers continue to innovate to sustain consistent quality. There are some exciting things brewing in the keg tracking and software space. Services that give breweries access to their own data about their keg fleets and that can be used for other business insights could be really beneficial.”

The Importance of Modern Portable Containers

  The demand for portable beer containers is growing, especially for small batches, and as more beer drinkers begin thinking about how their consumption impacts the environment. Beer consumers are a mobile population that’s on-the-go and looking for ways to enjoy local craft beer while traveling and enjoying the outdoors.

  Portable containers are an eco-friendly option to help consumers control their waste, while also allowing more access to rare and special-release beers. With the right marketing, portable containers encourage brand loyalty with greater exposure in the community and cost-effective refill programs.

  Burns said Craft Master Growlers’ products are ideal for anyone who likes beer, enjoys their local craft brewery scene, and also homebrewers who want to share their hard work and innovations.

“Craft Master Growler can be a delight for campers, boaters, tailgating, picnics and barbecues where a cold and fresh local craft brew is coveted,” Burns said. “Craft Master Growlers were designed for people who want a luxury, high-end product for their home, and the professional food service industry where quality and durability are so important.”

Expert Advice About Growlers and Kegs

  Industry experts who work with growlers and kegs every day have a lot of useful advice and tips about how to choose the best portable containers.

  “I think most people are aware that fads come and go, and plenty of companies jump briefly on the bandwagon,” said Burns. “So, you want to make sure you are not buying a cheap consumer product that will break or is destined for the basement, the yard sale or donation center.”   

  Winslow of Schaefer Container Systems’ said breweries should spend the money to customize their kegs for distribution. “You want to maximize your chances of getting them back!” he said.

  Shepanek advises craft breweries to invest in their own fleet of kegs. “Kegs are a great investment as they can last 30 years and pay for themselves quickly,” she said. “Leasing is a great option to keep cash flowing, but make sure it is an ownership-based program. Rental and logistics options can seem attractive and convenient, but many breweries end up locked into contracts for services they don’t need.”

Standing Out in a Crowded Room: The Beverage Distributor & Supplier in the 21st Century

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man standing in between a line

There is a compelling evolution in the industry and from our vantage point, the industry is changing rapidly, every month – week – day!  As our country continues to change at the same rate, so must the beverage leaders to address this rapid evolution. Change, however, is difficult and having agility built into your company is critical to success. But, what is success? Many companies struggle with this notion. When asked “what is your one year and five year plan?” many just do not have an answer. This results in confusion at the top and bottom of your organization, as well as with the investment community. Planning is not rocket science but it is one of the most critical functions that leaders do for their company and intellectual property (IP). How does your craft company create, maintain and maybe even increase value?

  The number of phone calls we receive at Baker Tilly regarding mergers and acquisitions (M&A) for craft companies has increased significantly during past 18 months. This is a testament to the state of the industry. You can certainly see cognitive dissonance with the hype in relation to the number of brewers, distillers and even distributor licenses issued and in process vs. our M&A conversations.

What is not apparent, is how thin these companies are running. Many are not capitalized appropriately, have poor information systems, lack qualified management, have incomplete infrastructure, understaffed expansion markets, equipment requiring upgrades, and a limited understanding of their customers and markets. Just because sales are up (and that’s not for many brewers) doesn’t mean they are financially sound. There are many investors that haven’t seen any return on their investment and are being asked for more financial support in order for the business to become profitable.

It is not surprising that investors and over-worked managers are looking for an exit. Unfortunately, for many companies, valuations may be disappointing and in some cases, there is little to no interest from new investors in a craft company. These companies have failed to distinguish themselves in the increasing competitive and volatile marketplace. M&A is not a solution for many due to current sales trends, market share and financial performance. Waiting for a deal to break through and rescue investors is only an option for those with well-run operations.

  To overcome this situation, a solid strategic understanding of your business and a supporting plan is necessary. We are frequently asked, “How do I do this when I am so busy?” The last thing you want to say to yourself is that we completed our business plan a few years ago and everything is fine. Can your business really be fine with the amount and speed of change with consumer and retail demands? How you answer this question is how people are viewing you both internally and externally. There are very large companies with plenty of resources looking at your industry with plans and strategies to capture opportunities and improve operating performance with an appropriate funding. You must do what they are doing with a clear strategy and diligent planning processes that address the consumer, retailer and aggressively play to your strengths as a company.

  Understanding your industry, the trends within it and where you fit, is a critical first step The beer, wine, spirit and alcohol industries remain highly concentrated in the hands of the largest suppliers. There are now approximately 9,000 brewers in the United States and five of them control approximately 80% of the market share. Currently, there is a record number of distillers and distributors with licenses and many had aspirations of becoming a top-volume, successful operator in their city, state, region or even country. It was common to bootstrap the start-up phase while seeing others raise money from investors. Many began with multiple founders and received support from family members. Few were able to jump into business with all of the right funding for their business plan. No matter how it transpired, everyone is feeling the pressure of shifting demand, innovation, SKU rationale, minimum wage challenges and receding retail traction for their brands. 

  Smaller operators are trying to keep up with new entries as well as capture interest from distributors and retailers by blitzing the market with innovations or riding the wave of the latest consumer fads. Hazy IPA’s, craft spirits, cider, spiked seltzer, Kombucha and CBD-infused concoctions are all part of the buzz. Distributors want to make the most profit and retailers want to see SKUs with high rate of sale. Analytics matter and if you have not figured out how important it is to transcend beyond the ranking and distribution reports of the past, then you are missing the boat on getting your team focused on what matters most. Did you notice that the largest brewer on the planet just released a spiked seltzer of their own instead of buying one? What does this signal? Could it be they recognize small brand values are receding?

  The share of the pie continues to get smaller as more people seek licenses to brew, distill and/or distribute. What we are clearly seeing is the inability to support these numbers at the retail or distributor level. Those who signed up to own a brewer and scale it to multiple cities or states are finding it nearly impossible to make that vision come true.

  They are being transformed into bars and restaurants. Outside sales at retail are too costly to support and rate of sale with those SKUs is not keeping up with the standards set by many retailers. Small is fine and perhaps the best way to stay true to what you do best. Most off-premise retailers (grocery, convenience, packaged liquor stores) segment brands for the masses. From a supplier standpoint, it is critical that you have the relationship with your key distributors. How your brands fit into their local strategy is one of the most important aspects in your relationship. Owning your marketplace is a great way to stay small, grow organically and be ready to scale up once the business plan indicates success. As stated earlier, with 9,000 brewers in the industry, gaining higher market share than your peers should be the first priority.

  Which companies will grow and which ones won’t? Let’s go beyond the obvious characteristics like quality. If you really want success, then you must listen to the consumer and those closest to the front line. Take action and do not deny what you are seeing in the data or what distributors, retailers and consumers are telling you. There are plenty of new avenues for consumers to order, understand and even receive delivery of your product. Disruptors in the market such as Amazon Prime, Provi, goPuff and Barley Sober are changing the buying habits of consumers. Do not try to push a rope – pouring additional effort into something that is not getting traction will upset everyone in the supply chain. Create a strong plan that covers all the bases and includes funding and support from all stakeholders.

  What we are seeing is that the successful and valuable companies are those that are the most agile and adaptable. Meaning, they have identified the complexities within their operations and streamlined them with the help of business intelligence so they can spend more time focusing on growth. The traditional approach of just adding bodies to the mix is both costly and ineffective. Having a sound plan for brand growth driven by data is how you win. As we all know, the consumer is driving this complexity. Whatever generation you want to target, there is segmentation happening. How they spend their money needs to be a factor that is applied to your planning and innovation. The next factor to consider is the occasion in which the consumers are consuming. Developing your mix shift within each segment and brand is a very key factor when planning for the now and future. Addressing these consumer behaviors is critical for knowing what brands and SKUs to carry.

  Connecting the back-office fundamentals with the front line is another solid key to success. Link your back office to your front line employees. Speed and trust is critical in the beverage environment as retailers shift from on and off premise to all premise. We see great success when the plan fits the market strategy. It is a process of zooming out and then zooming back in to understand your product attributes and how they are perceived by consumers to ultimately achieve your objective and satisfy retailer needs.

  Retailers have less and less time for a sales pitch on your latest brand. Technology has made it easy for them to figure it out on their own. Your plan of attack should consider their desire to get to the point of the pitch and be right about how well it will sell. Call frequencies of your sales team should be developed with the retailer’s business needs and schedules in mind.

  Shareholder expectations and funding requirements are issues for everyone. Getting the most out of your resources and applying solid growth strategies are foundational pillars that keep the focus of your company on profitable growth.

  To lead in the 21st century, craft beverage companies have to rely on innovation and planning. The traditional route to market is not the same as yesterday. To be successful, understand your internal strengths and protect your brands and processes. These should be the cornerstones of your plan and that plan should be a working document that increases both trust and speed to market for your entire organization.

Reflections From One Year in Operation

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2 men toasting while sitting down

By: Brian D. Kaider, Esq.

I met Christian Layke in April 2016, when he was still the head brewer at the Rockville, Maryland location of Gordon Biersch.  Like many others I had spoken to before, and since, he wanted to open his own brewery.  But, he wasn’t a homebrewer with romantic ideas of going pro with a 5 barrel system and a shoestring budget.  He had many years of education and experience in brewing (in addition to being a homebrewer) and had grandiose ideas of opening a full production brewery with a world-class taproom and launching immediately into distribution.  I was skeptical…at first.  I quickly came to realize that Christian had already developed a clear vision of what he wanted to build and had concrete plans to get there. 

  Fast forward to March 2020.  Christian and his business partner, Brett Robison, just celebrated the first anniversary of opening Silver Branch Brewing Company in Silver Spring, Maryland.  I sat down with them recently to reflect on the legal lessons they had learned in the three years leading up to their opening.

The “Harajuku Moment”

  One of the things that impressed me most about Christian was that when he first contacted me, he was already focused on obtaining federal trademark registration of the brewery name.  For many people, this thought comes much later.  But, Christian and Brett’s story highlights why this should be one of the first decisions.

  After conducting a trademark clearance search on their proposed brewery name, I had to give them the bad news that not only was it unlikely they could register the name, but that using it could expose them to legal liability based on another trademark owner’s rights.  This set off a back and forth discussion of new potential names that lasted many months.  In the meantime, they were moving forward with other phases of their brewery development; we were drafting operating agreements, deciding how to raise capital, and they were looking for commercial space.  Many months, many names, and many trademark searches later, we were still kicking around names.

  Then they met with their commercial real estate broker and had what Brett refers to as their “Harajuku moment;” an epiphany that turns a nice-to-have into a must-have.  Any landlord of the type of property in which they were interested was going to want to know what the branding of the prospective tenant was going to look like and they were going to want to negotiate with a company, not two guys with the idea of a company.  They needed a name and a branding image immediately. 

  They landed on Parallel World Brewing Company and we filed a federal trademark application on January 18, 2017.  On July 18, 2017, we received a notice of allowance from the trademark office, meaning that the mark could be registered as soon as they began using it “in commerce.”  In the meantime, they formed their LLC, opened a bank account, applied for their brewery permits, and began lease negotiations, all under the name Parallel World.

  That is when we got a cease and desist letter from another brewery with a registered trademark that they felt was too similar.  Although we believed their claim was without merit and that we would likely prevail if they followed through on their threat to file a cancellation proceeding against the Parallel World mark, it would have cost Christian and Brett money, time, and energy, all of which were precious commodities at that point.  Since they were still in the planning and building phase and had not yet opened their brewery, it made more sense to just abandon the name and try again.  As Christian put it, “if you’re not in business, you have no business being in this fight… just sigh and move on.”

  Ultimately, they feel that this process ended up benefiting them.  As they went back to the drawing board for a name, they spent significant time discussing and honing their vision of what they wanted their brewery to be.  It was an amalgamation of what they consider four key brewing cultures, Belgium, Britain and Ireland, Central Europe, and the Americas.  From this focus, they developed the imagery of their beer labels using cityscapes of those regions and they designed their taproom to have sections that pay homage to each culture.  From this concept they also found their new name, Silver Branch; a nod to their home location of Silver Spring, Maryland blended with the old world tradition of putting a branch outside your door to signify that you had beer for sale.  Additionally, in developing their new name, they also ended up with an extensive list of unused names, many of which have now become names of their beers.

  There are two overarching lessons from this experience.  First, start as early in the planning process as possible to develop a clear vision of what you want your customers’ experiences to look like.  Use this vision to guide your brand identity and the brewery name.  Second, file for trademark registration on the name as soon as possible.  Christian and Brett did everything right; they hired an attorney, researched the name, filed for registration, and got approval from the U.S. Patent and Trademark Office, and they still had to rebrand.  If they had waited until they were open for business before filing their trademark application and then had to face a cease and desist letter, it could have been devastating. 

The “Vegas Clause”

  The second thing that struck me as unusual when I first met with Christian and Brett was their focus on drafting an Operating Agreement.  Many clients will try to use a form they find online or ask if I have a “standard” operating agreement they can sign.  That is a huge mistake, because as Brett pointed out to me, “you don’t write these things for the agreement itself,” rather the value in drafting the agreement from scratch is that you get to know your partners extremely well and quickly learn whether you will be able to work together effectively.  In preparing the agreement, as Brett put it, “you put your soul to bare in front of another person and tell them everything embarrassing about yourself.” 

  In their case, one of the defining moments came when we discussed what would happen if one of them were to die unexpectedly.  It’s something most people don’t think about, but led to us drafting what they affectionately refer to as the “Vegas clause.” 

  The discussion began with two premises: 1) that if one of them died, their ownership interest would pass to their heirs, and 2) if one of them was divorced the ownership may be considered marital property, half of which would pass to the ex-spouse.  While that was fine on its face, it meant that the surviving owner could find themselves in a situation where they suddenly had a new partner who had no brewery experience, perhaps no interest, and possibly hostile intent. 

  So, we divided ownership interest in the business into two classes of LLC membership units; Class A, which were tied to managerial powers to run the business and had greater voting rights, and Class B, which had no managerial powers and lesser voting rights.  If one of the partners died, their ownership interest that was passed down to their heirs was immediately converted to Class B.  The same was true for any shares given to an ex-spouse in a divorce.  So, the heir or ex-spouse maintained the economic interest without the power to run the business. 

  The problem was that at the time we drafted the operating agreement, Christian was married, but Brett was not.  So, when the agreement was to be signed, we could have Christian’s wife sign her acknowledgement of the clause that her interest would revert to Class B shares.  But, we could not do the same for Brett.  This created a loophole where, purely hypothetically, Brett went on a bender in Las Vegas, found himself unexpectedly married (with or without Mike Tyson’s tiger in his bathroom), and quickly got a divorce or was killed and Christian would be stuck with a new partner with Class A shares, because Brett’s new wife had never signed the agreement.

  Thus, the “Vegas clause” was born.  It provided that Christian or Brett had to provide the company with a signed acknowledgement of the conversion to Class B clause from their spouse-to-be at least 5 days before entering into a new marriage.  Failure to do so would cause their Class A shares to convert to Class B.  The converted units could be reinstated to Class A upon receipt of the signed acknowledgement and upon a 2/3 vote of the Members.

  The lesson here is not in the details of this clause, but that these issues would never have come up if Christian and Brett had just pulled a “standard” agreement off the internet.  There is tremendous value in discussing these issues and ensuring that everyone is comfortable with the relationship.  Like an insurance policy, you hope that these clauses never come into play, but if something bad happens, it is a relief to know that there is a plan to allow you to move forward.

The “Curve-Ball”

  Ask anyone who has opened a brewery and they will tell you that EVERYTHING takes more time and money than you expect.  With a nod to Helmuth von Moltke, “no business plan survives first contact with the government.”  Christian and Brett learned that lesson painfully. 

  The location they found for their brewery was the bottom level of an office building in downtown Silver Spring.  It was a massive undertaking that required significant renovation, including raising the floor of one section of the building to match the rest.  After multiple rounds of discussions with architects and engineers, they were literally one signature away from getting their building permit.  Just then, the person whose signature they needed last went on vacation.  So, their application went to that person’s boss, who decided that because their proposed business required a “change of use” for the premises from office use to light industrial, they were required to bring the entire building up to specification with the new energy code. 

  What this meant was a very expensive upgrade to the building’s HVAC system and a construction delay of months.  After much blood, sweat, and tears (and money), the upgrade was completed and they celebrated in the moment captured in the photograph above; Christian and Brett toasting with a glass of scotch outside the door of what would become their brewery, the building permit in Brett’s hand.

  The specific legal lesson is that if your proposed location would require a change of use, ensure that the property is grand-fathered into the old code specifications before signing the lease.  More generally, though, think through all of the issues as thoroughly as possible before you get started, but be prepared for the fact that you will be thrown curve balls.  Budget for more than you think you will need (it won’t be) and build a team around you to help navigate the unexpected.

A Year Later

  Even with extensive experience, Christian and Brett faced a steep learning curve in building their brewery. That didn’t end when Silver Branch opened its doors.  Expanding their food service, working with artists to develop product labels, adding or changing vendors, and building their distribution network, they have encountered numerous new challenges. But, it sure is nice to meet those challenges with a glass of world-class pilsner in their bustling taproom.

  Brian Kaider is a principal of KaiderLaw, an intellectual property law firm with extensive experience in the craft beverage industry. He has represented clients from the smallest of start-up breweries to Fortune 500 corporations in the navigation of regulatory requirements, drafting and negotiating contracts, prosecuting trademark and patent applications, and complex commercial litigation.

Lessons Learned from Opening a Taproom-Focused Brewery

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taproom at pike place signage

By: D.C. Reeves, CEO, Perfect Plain Brewing Co., Pensacola, Florida

Blame craft spirits, seltzer or industry saturation, but the reality today is that craft beer is going to face its biggest challenges yet in the coming years. This is a turning point for the industry, and at a micro level, this challenge can present a turning point in your own market.

  Every brewery should be assessing what it does well, what it doesn’t and coming up with a plan to set itself apart. I wanted to share more of the more unique lessons we’ve learned about where we concentrate our time and resources that could help those thousands of taproom-focused breweries around the U.S. build and sustain their niche.

If you have a brewery you understand the value of top-quality product. We don’t need to cover that part. Let’s dive in on things that can separate you from your competition.

  I discuss a multitude of ways to do this in The Microbrewery Handbook. Graciously, Sam Calagione from Dogfish Head, Jeffrey Stuffings from Jester King and other experts shared their thoughts in the book about what they’ve learned along the way.

  Here are three key things that we learned and adapted as we opened and ran Perfect Plain Brewing Co. in Pensacola, Fla. starting in 2017 that helped us grow to one of the busiest taprooms in the state of Florida.

Taproom Vibe Matters (More than equipment sometimes)

  We spent a great deal of time deciding on the marriage in our budget between equipment “nice to have’s” and taproom. We ultimately decided to gear money towards the taproom and the taproom experience, and we’re thankful for that.

I visit breweries all over the nation that have sparkling new brewing systems and a neglected taproom. Imagine if a restaurant hired the most accomplished chef in New York City, built the most expensive kitchen, then left the dining room with bad lighting, plastic tables and old carpet? Would the chef and kitchen be worth the investment? Of course not.

  Don’t overlook the expenses of creating a great taproom. Having good furniture and fixtures. Good doesn’t mean expensive, it just means if you can afford a $300,000 10-barrel turnkey brewing system, you shouldn’t have your taproom look like a mismatched thrift store.

We can always grow into and upgrade equipment. It’s much, much more difficult to pick up and move a taproom or overcome a lacking first impression if your taproom isn’t up to par when you open.

  We are about to expand into a wood-aging program next door – it’s called The Well and will open this fall. This growth is attributed to us focusing on taproom first, and that success allowing us to do even more on the beer equipment side later.

Focus on Programming Your Space

  In the taproom model, the taproom is your sole business engine. We need to fuel it with events and fun to keep it busy, not just sit back and hope people come in.

  This is something we focused on from the start, but we’ve ramped up significantly in the past year or so. We wanted to be proactive about what brings people into our taproom. When we moved from one manager to two managers, we created an events position that would be charged with just one responsibility: Bring people into our taproom.

  So we’ve done all sorts of things: Drag shows, Harry Potter nights, trivia, we decorate the entire taproom for four days for Pensacon (our community’s version of ComicCon), we do pop-up theme bars in Garden & Grain, our cocktail garden behind the brewery.

  There are other things you can do: Synergize and integrate your brewing schedule and batch planning with your programming calendar from the get-go to give your patrons an immersive experience that has fun beer releases tied to it. A shared calendar with reminders set three months in advance can give you enough time to plan a special beer release, prepare a one-off pilot batch, or order seasonal ingredients for use in a beer for an approaching holiday. At Perfect Plain, we’ve found success with this simple reminder system that we check when we sit down to do our batch planning and raw material orders.

  What NOT to do is get desperate and offer deep discounts on your product as an attraction model. While you may see an increase in taproom foot traffic, you slowly devalue your product to the point that customers no longer desire to pay “full price” because they know they can get it somewhere else.

Learning to care about your employee culture, engagement and hiring well

  One distinct advantage I was fortunate enough to have when opening Perfect Plain Brewing Co. was working for Quint Studer, who pioneered customer service and organizational change in healthcare with his company, StuderGroup. They taught hospitals all over the nation about how to treat patients, treat employees and build winning cultures.

I was able to learn from Quint and adapt some of those tools to the beer business. That said, this also made me realize how much of a forgotten piece of the puzzle hiring and employee culture are in our business. We like to talk about how collaborative we are as an industry, but ask yourself, how are we when it comes to focusing on treating our own employees well?

Here are a Few of the Things We Installed at PPBC

  We have a three-interview hiring process for all positions that ultimately ends with peers making the decision on who to hire. I know, sounds like overkill. Maybe a little crazy. But it works. It allows all parts of the organization to have ownership of new hires and it gives employees the sense of ownership that their opinion on employees matters.

  We are one of the only bars or restaurants in North Florida with less than 50 employees to start offering comprehensive health benefits to our employees for 2020. It’s a significant expense, but an important one to send the message that these jobs are important, these people are important, and their work is important. I’m not saying you have to go to that extreme but think about measures you can put in place that build your employees’ sense of ownership.

  Another key piece to caring about your staff and culture – and a must for us each year – is doing an employee engagement survey. This is an assessment of how your employees feel in many different categories. The value of this is to not only know where you and your company stand with your employees, but it lets your staff know that their opinion counts and is heard. We have made some adjustments each year based on this feedback, so it has proven immensely valuable.

Questions Like:

•    Does the organization employ people whom I like to work?

•    Do my coworkers and I share a strong work ethic?

•    Are many of my coworkers performing at an acceptable level or better?

•    Do I feel connected to my coworkers?

•    Is the work I do meaningful?

  In The Microbrewery Handbook I have more details of how we conduct this survey (it’s not hard!) and the complete list of the 34 questions I ask my employees that could help you get started with your own survey.

  These tactics are especially important with a taproom focused staff. Your taproom staff is the face to your entire revenue stream. You want them happy and feeling a sense of ownership about the company.

For more information about The Microbrewery Handbook or brewery consultation email dc@perfectplain.com

Innovation in Craft Beer is Dead: Long Live Innovation

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4 men watching intently

By: Erik Lars Myers

It’s the rallying cry of the craft beer fan: What’s freshest?  What just went on tap? What haven’t I had before?

  Today’s craft beer industry is a vast whirlwind of new. “Rotation nation” we call it, as we tuck our tried and true flagship recipes into the back of the filing cabinet and turn to search for the next new thing to wow the customer with. This industry, with over 10,000 breweries making hundreds of thousands of individual beers each year, is becoming more competitive than ever before. As each brewery fights for their individual slice of market share, it all comes back to that same question “Whaddya got that’s new?”

  Weirdly, it’s an answer that our industry seems to struggle with. The hippest, most sought after breweries in the country are all really coloring from the same box of crayons – lactose laden juicy IPAs, pastry stouts, and fruited kettle sours. It’s the strategy at the forefront of the industry because it makes real money, particularly in a taproom setting selling the vast majority over the bar to customers who are willing to drop exorbitant amounts of money on a case of 16 oz cans. But at the end of the day, the answer to “Whaddya got that’s new?” right now in the industry really seems like, “Some more of the same.”

  Certainly, the small side of the industry is making great strides in technical brewing. We’re reducing TPO and gaining shelf life on small, open air, 4-head canning lines in ways we’ve never been able to do before. But shelf stability isn’t innovation. Our largest macrobrewery competitors have had shelf stability down for decades and longer. We’ve got enzymes available that will cut down fermentation time, reduce diacetyl, promote and stabilize hop aroma, cut gluten chains, and create clear – or hazy! – beer. But buying new products from your chemical supplier can hardly be considered innovative. The suppliers are innovating. Our hop growers are creating new varieties to supply all of our customer’s wildest fruit flavored dreams. We’re the middlemen who put it into beer.

  Most of the innovation in the industry in recent years really comes down to variations on the theme of IPA. American IPA, Black IPA, Brown IPA, Red IPA, White IPA, Imperial/Double IPA, New England-Style IPA, and the most recent brief experimentation, the Brut IPA.

  For years, IPA has been the dominant style in the American market. Leaning on hops, and particularly fruit-forward and citrusy hops, was the defining differentiator for the American craft beer industry in its nascent years all the way through to current day. It is a story that doesn’t exist with any other ingredient available right now. Every other brewing culture in the world uses malt, water, and yeast and (basically) always has. But hops – the American craft beer industry has hops. And not just, “put it in to make your beer bitter” hops, but wide ranges of usage to create wide ranges of flavor hops.

No Wonder it’s Been Our Source of Innovation

  The story of Brut IPA is a good snapshot of what innovation in the craft beer market looks like right now. A brewer – Kim Sturdavant of Social Kitchen and Brewery – had an idea. Use amyloglucosidase – an enzyme used in brewing to help increase saccharification in the mash, or to increase attenuation during fermentation – in a traditional IPA, dry it out as much as possible, build a hop bill that complimented the dry body and malt flavor profile instead of a sticky sweet one and, bam, a new style is born.

It’s a cool – yes, innovative – idea, and one that resulted in some delicious beer.

  But also one that resulted in a mind-boggling range of other results. Shortly after Sturdavant made his Brut IPA, other breweries started jumping on the bandwagon – and why not? In an environment in which “new” is prized, being the first brewery around to make a new style, much less a new IPA, is going to draw some quick dollars, and so Brut IPAs began to pop up around the country with staggering speed. The only problem is that very few of the people making them had ever had one. Sure, it was easy enough to pop “Brut IPA” into Google, read a few articles, and probably find a thread or two in brewing forums describing how people were taking shots at it, but few worked from the source of the innovation, or even tried one before making one. Consumers were presented with a wide, inconsistent range of interpretations of what a “Brut IPA” meant from dry-bodied dank hazy beers, to crystal clear effervescent champagne-like beers, and as a collective style they largely faded from draft lineups as quickly as they appeared as consumers turned back toward what they knew they could count on.

   “New England Style IPA” was arguably the last real true innovation in craft beer. It created something wholly new that the industry hadn’t seen before. Certainly, as it’s evolved, the only reason that we call it an IPA at all is that we don’t have another term for a beer that uses a lot of hops – but that’s the only resemblance it bears to IPA as a style. It lacks any sort of bitterness or clarity, and leans toward overripe tropical fruit flavors instead of the floral, citrus, woody, or dank characteristics that IPAs have exhibited for the known span of IPA history.

  Think on this. The Alchemist’s “Heady Topper” was released 16 years ago. The prototypical example of a “New England IPA” that graces the draft lineup of almost every one of those 10,000 breweries in the country is older than 75% of those breweries and the brewers in them wearing “Make Beer Clear Again” hats. It was years before you could find this style outside of Vermont.

  Since then, there have been years of experimentation and articles written about the virtues of the biotransformation of hop oils during fermentation. There have been whole books put together about the style that include topics like haze stability and how to increase fruit characteristics in dry hopping. Recently, the largest craft brewery in the country introduced one of its fastest growing SKUs, “Hazy Little Thing” as it finally jumped on the trend. Maybe Brut IPA will get there, but I suspect that, like its cousin the Black IPA, it will only see rare comebacks – a fad, not a trend.

  It’s worth arguing that wild Belgian-style, spontaneous fermentation in America fits the same categorical differentiation in many ways, but focused on bacteria and yeast, rather than hops. And it’s true – coolships, foeders, and barrel rooms are being installed at breweries dotting American geography as brewers on this side of the Atlantic experiment with their own versions of spontaneously fermented ale and mixed culture fermentations. However, it’s worth noting that while these beers are being experimented upon and popularized by American brewers, they’re ultimately historic styles. As small brewers we’re mimicking the actions of those who have been there before us. Yes, we’re learning and improving, yes, that can definitely lead to innovation, but it is not (yet) innovation in itself.

The New Forefront of Innovation: Not Beer

  It’s difficult to ignore hard seltzer’s impact upon the brewing industry. In 2019 seltzer exploded into a $1+ billion business and it immediately turned heads. Not only is it a substantial threat to shelf space and customer mind share, it delivers something that most breweries have a difficult time consistently delivering: a completely clean, completely clear beverage. That hasn’t stopped brewers from trying to emulate it, though – and that might ultimately be the basis of the industry’s problem with it.

  For a moment, think through what hard seltzer is as a beverage: a fermented neutral base (either Clear Malt Base, Dextrose, or sometimes even Sucrose), blended with a flavor. While a brewery could use a fruit puree or real fruit additions to gain that flavor, fruit extracts are cheaper, easier, and don’t add pesky colors or haze. From a pure process standpoint, it’s about as far away from crafting a beer as you can imagine, and when your innovative take on a product means, “Make it taste like Dragonfruit instead of Lemon/Lime”, you know that you’re not making great new creative strides forward. Making hard seltzer is the latest in the trend of making a thing that tastes like a different thing. It’s a bubbly water with flavorless alcohol that tastes like a fruit – maybe two fruits!

  That is ultimately the problem that craft beer faces – its fans have fallen down the rabbit hole of mimicry. We are actively helping our customers turn from beer. Those people who are standing in line at hype breweries for milkshake IPAs, pastry stouts, and fruited sours? They’re not really fans of beer. They’re fans of alcohol, and of things that taste like other things. It is the Imperial Stout that they’re a fan of? Or is it Butterfingers and Count Chocula? Are they really fans of the IPA or the fruited sour? Or do they like getting drunk while consuming something that tastes like juice?

  Chasing these customers is a sound financial decision in the short term – but when those same fans turn from the rest of your products because they taste like beer instead of something else, then you’re ultimately undercutting the concept of a brewery – a beer factory – itself and opening the door to eventual obsolescence. When customer tastes shift from juice and candy bars to something else, hope against hope that the thing they shift to is “back to beer” or your future is limited.

  Innovation in beer may be the only thing that brings these customers back – and it’s difficult to know what that looks like. Before the iPod was invented, only a small handful of people could imagine what that looked like. The next new innovation in the brewing industry – that whole new thing that brings people back to beer – could be in your head. It could be in your brewery right now, but we’ll never know if our industry continues to build and thrive upon mimicry.

  Erik Lars Myers is an author, brewer, and lover of beer. He currently works as the Director of Brewing Operations at Fullsteam Brewery in Durham, NC where he strives toward innovation every day while supporting the Southern Beer Economy by using brewing ingredients sourced and grown across the American South.

Soul of the Beer

Cyndi 1 Comment

Origin Malt’s barley roots in Ohio fosters promising growth for the Midwestern malt market

hand grabbing grains

By: Tracey L. Kelley

It’s taken nearly a century, but barley production for craft beverages in Ohio is making a comeback. Victor Thorne and Ryan Lang, the founders of Origin Malt in Marysville, just north of Columbus, are ready to fulfill brewers’ and distillers’ demand for local products. “From seed to sip” is not only the company’s motto but also a source of intention.

  “In 1900, there were over 4,000 breweries in North America. Four of the largest malt houses in the continent were in Ohio, and over 300,000 acres of malting barley were grown in the state,” Thorne told Beverage Master Magazine. “In 1978, there were fewer than 50 breweries, and no malting barley produced in our region. Now, with over 8,000 breweries in the country, and roughly half of the 27 million barrels produced within a day’s drive, we still have no industrial malting plant within 300 miles.”

  Barley was a viable crop in Ohio and throughout the Midwest before Prohibition. After repeal, beer and spirit makers disappeared, and regional farmers switched to more valuable commodities such as corn, wheat and soybeans, growing barley mostly as animal feed. While producers in the Great Northern Plains and the Pacific Northwest provide some access to quality malting barley, crafters in other regions have to look elsewhere.

  “Our craft brewers import the majority of their malt from Canada and Europe,” Thorne said. “Also, craft brewers require more than three times the amount of malt per barrel that they produce when compared to large industrial brewers, so as the craft segment grows, demand for malt exceeds domestic supply.”

  Thorne, a tech serial entrepreneur but no stranger to the foodservice industry, believes in building relationships from the ground up. One of his first ventures provided a solution for process automation software by partnering with titans such as Cargill, Sysco and Tyson. Origin Malt’s co-creator, Lang, is a fourth-generation distiller and co-founder of Middle West Spirits in Columbus. He understood a crafter’s desire for local products. The two opened the malt house in 2015.

  “I enjoy matching complex challenges with experts who can solve them. In the beer, spirits and specialty foods sectors that procure sprouted and malted grains, we require a range of expertise to tackle each of the delicate steps to provide the highest quality products at competitive prices,” Thorne said. “Before taking steps to build a malt house, Ryan and I spent several years forming trusted relationships with the agricultural community, from seed breeding, seed production, agronomists, university researchers, established global maltsters and the end customer—brewers and distillers. Our equity partners represent all of these key relationships.” 

More Than Malt

  “Malt is the foundation of beer—some people may say the ‘soul’ of craft beer. After working in the industry and learning so much about the brewing process—sensory, fermentation and quality—what struck me was that malt sets us up. It’s the canvas with which wort is created,” said Sara Hagerty, sales and marketing director for Origin Malt.

  “The question we want to answer is, ‘Why isn’t barley grown [in the area], and how can we bring it back to the region in a functional, sustainable and economically-impactful way?’” she said. “Victor and Ryan found a way to truly shorten the barley supply chain. For me personally, I could get behind that and feel confident that the groundwork was laid for a revolution in sourcing, procuring and bringing high-quality malt products for brewers and distillers to market.”

  From her passion as a dedicated homebrewer to her work for a leading liquid yeast provider, and later with a global malt provider, Hagerty’s experience helps her envision an integrated purpose for Origin Malt. “Suppliers should be more than salespeople with a price list and a catalog. Suppliers should be educators, listeners and visionaries. From our work with consumers, our customers, and our directly-contracted growers—every step of our supply chain is highly regarded and valued.”

  Supply starts with seed—in this case, that of LCS Puffin, a two-row winter malting barley. It’s derived from the heirloom variety Maris Otter—a popular grain grown in the United Kingdom and appreciated by brewers worldwide. Puffin was initially identified from 50,000 stock seeds by Eric Stockinger, a molecular biologist at Ohio State University, and now bred by the Miln Marsters Group.

  “In the Midwest/Great Lakes region, Puffin is planted in early fall and harvested in late spring/early summer. As a winter grain, the variety comes with some standard characteristics—a well-adhered husk, low protein and winter hardiness. These attributes and more play a part in how we malt it and the flavors it creates,” Hagerty said.

  Base and specialty malts include Pilsen, Brewers, Light Munich, C40, C60 and C90. “Some of the flavors and appeal that Puffin has can be identified in its classic nutty characteristic, and as more pronounced roasted almond flavor in some of our specialty malts,” she said.

  “How we decide on the base and specialty malts we bring to market is based on the general needs of our customers, and also the ability to provide a solid lineup of products that are versatile. Meaning, you could utilize all of them across a set of recipes or pull in one or two for a specific recipe,” Hagerty said. “While our established products exist with industry specifications in mind, we’re always keeping our eye on the opportunity to produce limited-edition specialty and custom products for customers.”

  The company currently uses a partner malting facility, but plans to establish one of its own in central Ohio so, as Thorne puts it, the supply chain shortens to “300 miles from seed-to-sip.”

  At press time, Origin Malt’s products are used in more than 50 beers and spirits, as well as health foods, baked goods and other items. To help producers explore the possibilities, the team frequently hosts beer dinners and “Seed-to-Sip Malt Schools” with brewing and distilling partners using a Hot Steep method to evaluate aroma and flavor.

A Boom for Midwest Agriconomy

  Puffin is sourced from directly-contracted family farms in Ohio, Pennsylvania, Michigan, Indiana and Illinois. Growers in New York are interested, too. Producers in search of a reliable winter cover cash crop have an advantage with Puffin not only because of its cold heartiness and disease resistance, but also its ability to help reduce soil erosion and runoff, improve terroir and water quality, and provide wildlife habitat.

  “By growing winter malting barley in combination with double-cropping soybeans, farms can reduce soil erosion and phosphorous runoff by as much as 80%. This is significant since we’re growing in the Great Lakes region, and phosphorous is the primary feed for algae blooms,” Thorne said. “I didn’t anticipate this being a major discovery that reinforces our commitment to conservation and sustainability.”

Origin Malt expects a 2019–2020 harvest of 10,000 acres, but the five-year projection is 75,000.

  “Puffin has a rich European heritage, and has had amazing results since we began producing and testing the variety—initially a cup of seed—nearly a decade ago,” Thorne said. “Our process and demonstrated commitment to bringing malting barley varieties to large has inspired more interest in our region from seed breeders who have been more focused on developing varieties suited to grow in other regions around the world.” 

  Reintroducing an integral ingredient in a multi-level supply line isn’t without risk, but Hagerty thinks Origin Malt’s best practices are factors growers and crafters can trust.

  “Every crop year can yield slightly different results, and it’s up to us—the maltster—to manage how we adapt and uphold our specifications and adjust our malting protocols. I’m a big believer in that it comes down to how you’re educating and keeping your customer informed—as that relationship needs to be lock-step to make sure that everyone can do their best,” she said.

  “We’re very focused on risk management, which is why we’re strategic in where we grow and how we develop and diversify our growing region,” Hagerty told Beverage Master Magazine. “That being said, if barley volumes or quality were low, there’s an established global market for high-quality malting barley that Origin Malt could procure. Maintaining those secondary-sourcing relationships is something we already have in place in case of a North American shortage or crop failure.”

  Thorne said weather is the challenge he worries about most, but cannot control. “To mitigate the risk of weather damaging our crops, we’re committed to spreading our seed across a several-hundred-mile range from Illinois to the Atlantic coast.”

  The company’s agriconomy roots will filter even deeper in the coming years. “When our plant is at capacity, we’ll be ‘reshoring’ tens of millions of dollars every year from the local researchers, seed sales, malting barley production, agronomists, local storage and transportation, and our malting facility,” said Thorne. “Total economic impact will exceed $2 billion from seed-to-sip.”

  He said he loves all the people Origin Malt works with, “aligning every day to make this a success. I’m driven by the potential to make a sustaining impact on an important supply chain.”

  Hagerty is always excited by the “amazing products made with our malt and watching consumers learn about our supply chain and the processes and products that come as a collaborative effort between Origin Malt, barley growers and our brewing and distilling customers.”

  “The value that our malt house has is in the ability for our future facility and the agricultural economy to tie in more deeply with the craft beverage movement, and most critically with craft beverage consumers,” she said. “Sustainability isn’t just an outlook for the short term, but a long-term goal that will continue to be challenged and achieved with the efforts of our team, our growers, our brewing and distilling customers, and, most importantly, consumers who seek to support American agriculture.”

Making First Impressions Count: Smart Math & Creativity Produce Innovative Design and Manufacturing of Labels

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stacks of beer cans

By: Cheryl Gray

Whether beer or bourbon, a distinguishing label serves a dual role in either identifying an old standard or giving consumers a reason to try something new.  

  Craft breweries and distilleries count on the design and production of their labels as a key marketing strategy. Labeling is part of brand identity, a creative process frequently handled by specialists in the field. Among them is Argent Tape & Label, a global, woman-owned business headquartered in Plymouth, Michigan, which makes labels, tapes and adhesives for the automotive, pharmaceutical, industrial, healthcare and food and beverage industries. While it considers itself to be a small company, ATL is big on customer service. Bekah Keehn, who spearheads quality assurance for the company, says its customer service goes well beyond the sale.

  “We are a small, dynamic company whose hallmark service begins with the personal interactions between customers and sales account managers,” she says. “Our sales account managers and customer service representatives are in continual contact with our potential existing customers, and we pride ourselves on listening to our customers. From the moment an inquiry comes through our website or an introduction is made at a trade show or other industry event, and even through successful delivery of the finished label, our sales account managers are engaged with the customer base.”

  Experts say that attractive, cost-effective and environmentally friendly are among the characteristics that craft brewers and distilleries want in their labels. Keehn says that finding the right combination of standard elements and unique creativity is what ATL strives to produce for its clients.

  “Every customer requires different characteristics for their labels,” she says. “Once we speak to our customers and have a thorough understanding of their requirements, we work with our material suppliers to provide the material substrate (underlying layer) for label production.”  

  Durability, Keehn says, is also important. “Some need a very durable label to withstand the outdoor elements, very moist or high heat conditions, while others may need something delicate and attractive or flashy and eye-catching for prime shelf appeal. We consider all conditions the label must ultimately withstand, we review the effect or finish the label should have, we address the color and graphic requirements and we employ several different pricing methodologies to achieve our customers’ requirements. Most recently, we have experienced a demand for sustainable material from our customers, and we now offer metallic, clear and white sustainable materials that we can print on. You would never know the label is specifically designed and considered environmentally friendly!”                                

  With design demands constantly changing, technology plays an integral role in the design and production of product labels. Keehn says that digital processing gives customers a heads-up on possibilities.

  “We employ digital processing and are able to show our customers online samples of what their finished product will look like,” she says. In this way, customers can ask questions, and we can discuss changes without always running numerous, costly physical samples. We can refine the outcome well before running a physical sample so that when and if we do require a physical sample, it is as close to production-ready as possible. Employing technology in this process is invaluable in allowing flexibility and efficiency through the product and design development phases.”

  Some craft beverage makers find inspiration through other kinds of collaboration. Todd Thrasher, owner of Potomac Distilling Company in Washington, D.C., teamed up with a graphic designer to get just the right look for his product labels.

“I hired a graphic designer that I knew and trusted,” Thrasher tells Beverage Master Magazine.

  “I showed her vintage labels for inspiration. We primarily concentrated on bottles from the 1960s and 1970s. I completed a marketing course at Moonshine University (in Louisville, Kentucky) that was focused largely on labels, so I was excited for the opportunity to apply what I had learned in this process. After we met a few times and sketches were developed, I sent three versions of the logo for review via email to a group of 30 people—close friends, family, business owners, etc.  A large majority favored the label that had been my favorite. It was really validating to have the opinion and feedback of others.“

  Thrasher, well-known in the Capital Beltway as both a sommelier and bartender, wanted creative labeling to showcase Thrasher’s logos for his five signature rums—Spiced, Green Spiced, White, Gold and Coconut, all produced in an urban, waterfront D.C. setting on the Potomac River known at District Wharf. For Thrasher, making products instantly recognizable was vital.

  “The most important element is that the label is easy to read and identifiable from across a bar!  I also wanted the aesthetic of a more vintage bottle. I decided not to use shrink wrap and instead went with waxing the bottles for a more handmade approach.”

  Owner input also goes into label designing at family-owned and operated Bron Yr Aur Brewing (pronounced “bron-yar”), located in Washington State’s Yakima Valley. Amanda Hatten, co-owner and Operations Manager, says that in the beginning, the brewery utilized an outside design company, but it wasn’t long before she took over the task. Becoming the brewery’s solo in-house label designer was less about saving money and more about adding a personal touch to the brewery’s brand.

  “This is a passion of mine, and it’s a great way to express who we really are as a company when it comes to working so closely together on designs,” Hatten says. “We have them printed elsewhere. For our crowlers, the main thing is to create fun graphics that are filled with adventure.” 

  There is adventure, too, in developing new innovations for labeling, led by companies like ATL, which tracks market trends. ATL’s sales force has identified a rise in the use of sustainable materials in labeling and packaging. Keehn says the information was priceless. 

  “They brought this trend information in-house, and we put together a cross-functional team that identified, tested and priced out a line of sustainable label substrates,” she says. “We partnered with new and existing material suppliers who pioneered the introduction of sustainable materials into the label market, and now ATL has its own line of sustainable material offerings that are proven compatible with our traditional, Flexo and Domino N610i, digital presses.  In this time of environmental consciousness, we are excited to meet the demand for recyclable labels that utilize less material and may be biodegradable with a low carbon footprint.”

  Above all else, a quality label is long-remembered by the client—and consumers.

  “Producing a quality label is paramount at ATL,” says Keehn. “We take quality seriously, employ standard procedures and processes to assure consistent outcomes, and we spend time prior to production reviewing our customers’ needs and whether and how we can produce their quality label.”

  Some craft breweries and distilleries are opting for full-body shrink sleeve labels. A shrink sleeve label provides top to bottom coverage because it conforms to an entire container’s shape, allowing a complete label identity for any product. It is one of the specialties of PDC International Corporation, a 50-year old company based in Norwalk, Connecticut.

  According to PDC International, converting to a full-body shrink sleeve not only boosts a product’s shelf appeal and visibility but does so at significant savings. A regular, stock container (bottle or can) is generally used, and, with a full-body shrink label, there is no worry about aligning front and back labels. One sleeve, the company says, does the job of three labels, improving consistency, lowering costs and requiring only a single application. In the spirits industry, one full-body shrink sleeve can brand a product on the front, back and at the neck. 

  For breweries, a full-body shrink sleeve conforms to the entire can, covering it 360 degrees. Rather than having to store large quantities of pre-printed cans, full-body shrink sleeves allow a brewery to decorate blank cans when needed. PDC experts say that the process saves warehouse space, pares down logistics and saves money.

  Increasing the bottom line for companies in the labeling industry sometimes means anticipating client needs before even the client can pinpoint it. ATL’s Keehn underscores how communication and innovation go hand-in-hand, citing an appreciation from clients to a commitment to stay on top of industry trends.

  “We attend trade shows and review trade publications to keep abreast of new offerings in materials, inks and methodologies, and we continually expand our product line to offer new and innovative materials and printing effects. As high shelf appeal and unique design are common characteristics of our customers’ labels, we strive to meet the next level of creativity, quality and excellence.”

  That said, creativity, quality and excellence of any label are perhaps best measured by how consumers respond as they peruse store shelves for the multiple craft beer and spirits options competing for their attention—and their money.

Testing, Metering and Monitoring Tools Enable Consistent Brewing

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staff checking quality control

By: Gerald Dlubala

Consistency in the craft brewing process is achieved through quality control. Quality control includes regular testing and monitoring of ingredients and processes to achieve consistent results over multiple batches, while also ensuring that all regulatory issues are followed and the risk of contamination is minimized. With new flavor profiles and textures being introduced seemingly daily, a craft brewer needs to practice exceptional quality control to make their beer the best they can, even if it’s a new and unique offering. Craft brewing starts with water, and as a major component, that is where the testing must begin. Quality testers and monitors are a necessity, but so is the willingness and discipline to use them diligently at the proper times.

Simplifying the Chore of Testing and Monitoring

  Milwaukee Instruments Inc., of Rocky Mount, North Carolina, operates on the belief that digital testing technology should be easy to use and available for every level of brewer. They focus on offering affordable, easy to use instruments manufactured from quality hardware. Milwaukee Instruments offers all the most widely and regularly used testing and monitoring products for the craft brewing and winemaking industries, and they do so without the use of test strips. Being known for outstanding capability while packaged in a smaller, more convenient size, their handheld meters can be kept conveniently in a pocket, and feature exceptional accuracy and lab grade performance.

  “Temperature probes, pH meters and a unit like a refractometer that measures Brix are must-haves when brewing craft beer,” said Jason Brown, Operations Manager, North American Operations. “Monitors and meters are used throughout every stage of the brewing cycle. Depending on the type of beer the brewer is making at the time, there are major factors to be controlled and monitored. The initial pH of your water plays a big role in the taste and profile of the beer, whether you’re brewing a lager or a stout, a smooth or a bitter, or anything in between. The Brix, or sugar content, is measured before and after fermentation by measuring density. We have the right testing and monitoring products available for every stage of brewing, as well as every level of brewer.”

  Included in that selection of testers and meters is their turbidity, or haze meter, used to measure clarity by the concentration of undissolved, suspended particles that are present in the beer.

  “All of our instruments are very precise and accurate when taking measurements within the specific applications of pH, temperature or Brix. Our testers and meters are manufactured to be small and wireless, yet durable and waterproof to give a brewer the most convenient and easy-to-use method for testing and monitoring applications. These instruments have withstood the test of time and generally fit all of the required needs of the craft brewer at all levels,” said Brown. “That being said, of course, there are always ways to improve on the current tools and instruments. Brewers haven’t asked for anything that we can’t provide, but faster processing and longer-lasting probes would always be welcomed. The average lifespan of a normal pH probe is 12 to 18 months, so maybe we can improve upon that. More manufacturers are heading towards data logging equipment so brewers can have a historical view of their pH, temperature and Brix levels during different applications.”

  Milwaukee Instruments’ automatic smart controllers continually monitor the required parameters set for the brewing process, including pH and ORP. These monitors dose and adjust the system as needed, 24 hours a day, seven days a week. Automatic monitoring and control systems are nice additions because let’s face it, things happen, and measurements can and will get delayed or forgotten, allowing water makeup parameters to possibly get off track. Automatic smart controllers have your back when needed.

Quality Water Before Quality Beer

  Industrial Test Systems in Rock Hill, South Carolina, knows that water matters in craft brewing, and, no matter what type of beer, it’s best to know the makeup of the water source. Without quality water, there cannot be quality beer. The water chosen for brewing, depending on things like chlorine or other contaminants, affects the sulfide to chloride ratio, how the beer is expressed to the drinker’s palate, and, ultimately, the final taste of the beer. 

  Water hardness plays a significant role in the beer’s mouthfeel. Light beers tend to be noticeably smoother on the palate, and a lot of that has to do with using softer water for brewing. Dark beers can use harder water, producing that familiar stronger or crisper flavor profile.

  All-in-one kits, like the Smart Brew Starter Kit by Industrial Test Systems, can keep water testing on target. The self-contained kit tests for water hardness, calcium hardness, alkalinity, pH, chloride and sulfates. Once brewers get the hang of the basics and are looking to expand their testing, the Smart Brew Professional Kit provides the same testing plus the eXact pH+ Smart Meter System, a Bluetooth enabled, handheld multi-parameter pocket meter that works within their eXact iDip app for both iOS and Android smart devices. This unit can test pH, conductivity, salinity, Total Dissolved Oxygen, Temperature, and Oxygen Reduction Potential using two different probes. The data captured is useful for specific brewer formulas and brewing-specific calculations.

Temperature and pH Determine Results

  “A good pH meter and thermometer are used in all stages of brewing and are, by far, the best friend of the craft brewer looking to produce a quality, consistent brew,” said Casey Thomson, Application Sales Engineer for Hanna Instruments, a world leader in pH and titration science.

  Hanna Instruments is known for developing innovative products, and many are the norm throughout the instrumentation industry. Included in their product offerings are pH electrodes with built-in temperature sensors and waterproof, portable pH meters.

  “As a brewer, one of the most important things to test regularly is the water supply you’re using as source water. If you’re using your area’s general water supply on a year-round basis, chances are your source water is changing with the seasons, and that’s ultimately going to alter and change the taste of your beer. Inconsistency in the taste of your product is something you never want because that’s a good way to lose customer loyalty. Pilsners, for example, are all about the water that they’re brewed from. Guinness will never be exactly duplicated here in the states because of the water that is used as the base.”

  “Craft brewers also need to keep tabs on temperature over the entire process,” said Thomson. “Extra-long probes, like the one we affectionately call ‘The Sword,’ come in very handy to monitor the temperatures down deep into the mash to ensure consistent temperatures throughout. When you do that, you’ll know that you’re keeping the yeast happy enough to form alcohol from the sugars.”

  Thomson told Beverage Master Magazine that refractometers are useful for brewing reports and for measuring the sugars before fermentation. After fermentation, a refractometer measures alcohol content. Many brewers still like to use older style hydrometers, and that’s fine, but they have to use a larger amount of product for a sample. If the brewer offers hazy IPAs, a haze meter is a great addition to their testing instruments and can indicate the amount of concentrated, suspended particles in the beer by measuring the amount of transmitted light through the product.

  “Due to the growth in the popularity of sour beers, we are also seeing increased interest and requests from brewers for a tool to measure lactic acid,” said Thomson. “While we don’t currently have beer-specific units to do this, we do supply these types of testing units to the dairy industry, so the breweries can use those and expect quality, true results. Additionally, being able to measure the alpha and beta enzymes in hops is an area with some interest, so we’re learning more about the science behind as this is an area of business growth.”

  “All of our instruments are generally easy to learn and use,” said Thomson. “It’s more of a situation of having the time to get the measurements done as needed. I always like to show the users what the process is to take the measurements and make sure they know what they’re getting into as far as using our equipment consistently. We get users up to speed in about two hours tops, but we also provide web training through YouTube videos, our online training manuals, etc.”

  Hanna Instruments also provides testers and monitors for the wine industry. Consistent pH measurements are important throughout the process. Their Halo wireless pH meter provides direct readings on a phone or tablet. Their edge wine meter kit is their most popular unit, measuring pH, conductivity/cold stability and dissolved oxygen. It’s Bluetooth capable, able to be carried around and equipped with an eight-hour battery. A benchtop cradle transforms the unit into a tabletop wine lab.

  “Winemakers are more traditional with their processes, so the testing tends to stay more standard,” said Thomson. “Occasionally, you’ll get a winemaker with a science background that wants to play around, experiment and see what happens under different circumstances so that other tests can come into play. But pH is, of course, very important throughout the entire production process, as is the ability to stay aware of free acids and sulfur dioxide that affect both bouquet and shelf life.”

VIRGIL GAMACHE, ORGANIC HOP FARM IN THE YAKIMA VALLEY

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aerial view of a facility

Virgil Gamache Farms, Inc. is a leading organic hop farm in the heart of the Yakima Valley. The Gamache family began farming in here in the Yakima Valley in 1913. They called their first farm “the Sunshine Ranch.” Here the company’s founder, Virgil W. Gamache spent his formative years. The family raised alfalfa, wheat, corn, potatoes, apples and grapes.

  With the end of Prohibition in 1932, the Gamaches lost no time in planting hops. In the mid 1940’s Virgil and his brother Francis took over the farm. Virgil eventually became sole proprietor. Not long after, Mr. Gamache incorporated the family business as Virgil Gamache Farms, Inc.  The family worked hard over the years to bring this thriving organic hop farm to its ninth decade of production. The growth at the farm and the industry as a whole today, would no doubt astound even Mr. Gamache.

A STARTLING DISCOVERY

  Mr. Gamache himself witnessed the beginning of a new chapter for the farm. In 1997 the Gamaches discovered a brand new hop variety. The family designated this intriguing hop variety as “VGXP01,” in honor of Mr. Gamache.

  So with this new discovery, the family began to market the carefully cultivated, organically grown VGXP01 hops as “Amarillo® brand.”  Amarillo® hops are hugely popular with craft brewers. Brewers apreciate Amarillo® hops for their complex and delightful aromatic characteristics, including citrus, floral, tropical fruit and spice tones.

   Thus, Virgil Gamache Farms and its Amarillo® brand launched a period of tremendous growth, paralleling that of the booming craft brewing industry. With that, the operation has grown from a small 15 acre ranch in 1932 to an organic hop farm of over 1,000 acres today. In addition, VGF, Inc.’s auxiliary production program produces under license an additionally significant volume of Amarillo® brand hops. VGF partner farmers grow Amarillo® hops all across the Pacific Northwest–in Washington, Oregon and Idaho–as well as multiple regions in Germany.

ADVANCED ORGANIC HOP FARM

  VGF’s operations have not only grown in scale and geographic area, but also in creativity and in use of new technology. Originally hops were all cultivated and gathered by hand, with help from industrious native Americans and other neighbors. Today, the operation is highly mechanized and automated. In addition, VGF’s lab monitors hop quality to assure ideal harvest time. Thus, today’s VGF continues its relentless pursuit of producing great hops for great brewers, in a growing craft brewing community.

  In summary, while embracing the future we also honor our past. Our founder Virgil W. Gamache’s life-long love of farming empowered him to celebrate his 100th birthday. Though Virgil is no longer with us, his spirit of hard work and innovation lives on. You see it in his sons and grandchildren who continue the tradition. It is a tradition of excellence that defines Virgil Gamache Farms to this day.

ORGANIC HOP FARM

BEST PRACTICES

  The Gamache family have a love for the Pacific Northwest. It began when great grandfather Albert Gamache first settled in the Yakima Valley in 1880’s. That love of the land is demonstrated in the sense of stewardship that guides the everyday work at Virgil Gamache Farms.

  An important way to respect the land is through organic farming. As a certified, organic hop farm, our best practices include composting and returning all vines and organic farm matter to the earth. We plant triticale, a natural grain ground cover, between the hop rows to protect the soil from erosion. The triticale crop returns organic matter to the soil as workers till it back at the end of the growing season.  It also support organic hop farming by reducing the soil temperature and reducing the spread of wind and dust-borne pests.

WATER AND RESOURCE CONSERVATION

  Finally, the Gamache family knows that water is a precious resource. VGF makes the most efficient use of water with drip irrigation. Wireless controlled water valves direct the limited water resources specifically where needed and in just the right amounts. VGF takes care to recycle everything, including motor oils and discarded metals.  All these practices work to ensure the legacy of founder Virgil Gamache and protects our beautiful Yakima Valley. 

For more information visit… https://www.vgfinc.com

https://www.vgfinc.com