Month: October 2020

Intellectual Property for Beverage Manufacturers

Cyndi 2 Comments
intellectual property law

By: Brian D. Kaider, Esq.

While many people are familiar with the four main types of intellectual property: patents, copyrights, trademarks, and trade secrets, often they don’t know the distinctions between them or what they are meant to protect.  This article is meant to cut through the confusion and explain these distinctions and how each property right applies to the beverage industry.

Patents Protect Ideas – sort of

  Most people have a general understanding that a patent protects an “invention” or an idea.  In a very general sense, that’s true.  But, even though the Congressional authority to grant patent rights comes directly from the U.S. Constitution (Article 1, Section 8, Clause 8), exactly what is patentable is the subject of tremendous confusion among the U.S. population, examiners at the U.S. Patent and Trademark Office, lawyers, and even judges; sometimes requiring clarification from the U.S. Supreme Court.  The purpose behind the grant of a patent is to encourage innovation by granting exclusive rights to one’s discoveries for a limited time.  In other words, it gives the patent holder a short-term (20 years from the date of filing) monopoly on his invention.  Generally, new machines, chemicals, electronics, methods of production, and in some cases, methods of doing business, are eligible for patent protection.

  But, not all ideas are patentable.  In fact, ideas alone cannot be patented.  They must first be “reduced to practice,” meaning that either you must have actually created your invention or have described it in sufficient detail that someone skilled in that area could follow your disclosure and create it themselves.  So, you can’t get a patent on a time machine, because (at least for now) no one has figured out how to defy the time-space continuum.  In addition, to be patentable, ideas must be novel, meaning that no one else has ever disclosed that idea before, and non-obvious, meaning that your idea cannot be an obvious variant on someone else’s invention.

  Given that humans have been making beer for thousands of years, one might think that coming up with something novel in the brewing process would be impossible.  Not so.  In preparation for this article, I ran a quick search of patents containing the word “beer” in the title and got 491 hits.  Some recent examples include U.S. Patent No. 10,570,357 – “In-line detection of chemical compounds in beer,” U.S. Patent No. 10,550,358 – Method of producing beer having a tailored flavor profile,”  and U.S. Patent No. 10,400,200 – Filter arrangement with false bottom for beer-brewing system.” 

  Improvements in any area of the alcoholic beverage industry may be patentable including, new types of bottles, cans, growlers, and kegs; new types of closures and caps; improved methods of separating hops from bines and leaves; new processing equipment, improved testing procedures and equipment, improved packaging, etc.  Essentially, anything that lowers costs between the farm and the consumer, improves the quality of the beverage, or enhances the consumer experience is worth considering for patent protection.

  One word of caution, however; time is of the essence.  The America Invents Act, effective March 16, 2013, brought the U.S. in line with most other countries in being a “first to file” system, meaning if two people develop the same invention, the first to file for patent protection wins, regardless of who first came up with the idea.  Also, any public disclosure of your idea (such as at a trade show) starts a 1-year clock to file or you may lose your eligibility for patent protection.

Copyrights Protect Creative Works

  The authority for copyright protection stems from the same section of the U.S. Constitution as patent protection, discussed above.  Our founding fathers recognized the valuable contribution made to society by authors and artists and, therefore, sought to encourage creative expression by providing protection for artistic works.  Examples of copyrightable materials include, books, paintings, sculptures, musical compositions, and photographs.

  Unlike inventive ideas, which are only protected when the government issues a patent to the inventor, copyrights attach at the moment the artistic work is “fixed” in a tangible medium.  So, for example, if a composer develops a new musical score in her head it isn’t protected, but the moment she translates that tune to notes on a page or computer screen, it becomes protected by copyright.  In order to enforce that copyright in court, however, it must be registered with the U.S. Copyright Office.  While it is possible to wait until an infringer comes along before filing for registration, doing so can severely limit the damages that may be available to the author of the creative work.  So, early registration is the better course. 

  In the beverage industry, copyright issues often crop up with regard to labels and advertising materials.  But often disputes arise relating to who owns the artwork contained within a label, for example.  Generally, the author of a work owns the copyright.  But, if an employee of a brewery, acting within the scope of their employment, creates an image that the brewery owner incorporates into its labels, that picture is considered a “work made for hire” and is owned by the brewery.  Where disputes often arise, however, is if the brewery hires an outside artist or a branding agency to develop the artwork.  In that case, the brewery should include language in its contract requiring assignment of all copyrights to the brewery for the created artistic works.  The same would apply for any artwork commissioned for use inside the brewery tasting room or for marketing materials.

Trademarks Protect “Source Identifiers”

  People generally associate trademarks with the protection of a brand.  In fact, I have often described trademarks as an “insurance policy for your brand.”  But, in more technical terms, what a trademark protects is a “source identifier.”  The purpose of trademark law is to protect consumers from being misled or mistaken as to the source of a product.  So, for example, if a consumer sees a pair of shoes with a certain famous “swoosh” image on the side, they should be reasonably able to assume that pair of shoes was manufactured by Nike, Inc. and was made with the same degree of workmanship and quality that they have come to expect from that company.  That “swoosh” symbol, therefore, acts as a source identifier to tell the public that the product was made by Nike, Inc. 

  What may function as a trademark can be quite broad, including: the name of the business (e.g., Triple Nickle Distillery®), a logo (e.g., the “swoosh”), a color (e.g., the Home Depot orange or the UPS brown), even a scent (e.g., Verizon owns a trademark on a “flowery musk scent” it pumps into its stores to help distinguish them from competitors’ environments).  Not everything can be trademarked, however.  Slogans, words, and images that appear merely as decoration as opposed to a means of identifying the supplier will not qualify for protection unless the applicant can demonstrate that the item has achieved “secondary meaning,” i.e., that the public has come to associate that item with the manufacturer.  As an example, in the 1970’s McDonalds used the slogan, “You deserve a break today” in its commercials and other advertising.  People came to associate this phrase with McDonalds and in 1973 they were granted a trademark registration.  Incidentally, McDonalds briefly let this trademark go abandoned in 2014, but quickly re-filed and the mark is still active today, more than 45 years after it first registered.

  In general, marks also cannot be descriptive of the product or geographically descriptive of the source in order to be registered as a trademark.  For example, one could not obtain a registration for just the words “India Pale Ale.,” because it simply describes the product and does nothing to differentiate it from every other IPA on the market.  Similarly, an attempt in 2019 to register the name “Philly City Brewery” was refused as “primarily geographically descriptive,” because the applicant could not demonstrate that people had come to associate that name with its business as opposed to the many other breweries in Philadelphia. 

Trade Secrets Protect Valuable Confidential Business Information

  Unlike other forms of intellectual property, there is no registration system for trade secrets, because, by their very nature, they must be protected from all unnecessary disclosure.  Trade secrets can be just about anything that is confidential to your business and gives you a competitive advantage.  Some examples, include recipes, client lists, manufacturing processes, marketing plans, and client lists.  These are things that, if publicly disclosed, would harm the competitive position of the company and, therefore, must be vigorously protected. 

  One of the most famous trade secrets is the formula for Coca-Cola.  This formula has been protected for more than 130 years, sometimes through extraordinary measures.  In 1977, The Coca Cola Company withdrew its product from India, because in order to sell there, they would have had to disclose the formula to the government.  They decided it was more prudent to forego sales to one of the biggest populations on earth rather than risk disclosure of their secret recipe.

  Protecting trade secrets requires constant vigilance in two ways.  First, the information should only be disseminated to people within the company, or outside consultants, who need the information in order to perform their duties for the company.  In other words, the information is on a strictly “need-to-know” basis.  Second, those few people who are given access, should sign non-disclosure agreements with harsh penalties for breach of their duty of confidentiality.  Once the information gets out, it’s nearly impossible to un-ring that bell, so there must be severe financial consequences to someone who leaks the information.

  Brian Kaider is a principal of KaiderLaw, a 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.

For more information please contact Brian Kaider at…
240-308-8032; BKAIDER@KAIDERLAW.COM; www.KaiderLaw.com

5 Building Blocks to Build an Effective Brewery Budget

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beer glass beside 5 blocks

By: Kary Shumway, CPA, CFO, Numbers Guy

The Fall season is upon us and that means it’s time to create your brewery budget. This document will serve as the financial road map for your business and will provide clear directions to reach your sales and profit goals for the coming year.

  One challenge of the budget process is that it feels like an overwhelming task. There are so many numbers, so many unknowns and so many changes that come up unexpectedly in the brewery business. How can you accurately predict everything that will happen and get it all down on paper? The short answer is that you can’t.

  As the saying goes, plans are useless, but planning is indispensable. Likewise, the budget planning process is indispensable for your brewery business.

  In this article, we’ll review the key building blocks to create your budget and provide tips so that you can get started (and finished) quickly. An effective brewery budget is within your reach.

Brewery Budget Quick-Start

  To get started with your budget, I recommend writing out the plan in words first. Don’t worry about the numbers right now, just write down your goals, objectives and strategy for the coming year. The numbers will come easier after that.

  For example, if your goal is to grow sales by developing new beer styles or introducing new package sizes, write that into your plan. Perhaps you want to expand into a new market and hire a new sales rep for the territory. Write this into the written plan as well.

  Continue this process, in writing, until you’ve got all your goals and objectives listed out. This creates clarity and momentum for the rest of the budget process. Once the big picture goals are clear and in writing, it’s much easier to quantify the objectives and build the numbers into the financial plan.

Effective Budget Basics

  The operating budget involves five major building blocks: the sales forecast, margin plan, operating expense plan, capital budget and debt schedule.

  Below, we’ll dig into each of the budget building blocks and give you some tips to get started. Use these ideas in connection with the budget templates and you’ll be well on your way to creating an effective budget for your brewery.

Budget Building Block #1:

SALES FORECAST

  The sales forecast is simply a projection of how much beer you will sell. It should show the sales by customer, by brand, by package, and by month.

  If you sell through distributors, start by making a schedule of who you currently sell to (and who you plan to sell to). Include the historical sales for the past 12months, and the year over year growth for each distributor.

  If you plan to open new markets with new distributors, that should be included in the schedule. If you have self-distribution sales and taproom sales, include the figures for these as well.

  With a sales forecast, the trend is your friend. If growth this year was 10% but you project 50% next year, make sure you know where it will be sold.

  Ask questions. Challenge assumptions. Build an achievable sales plan.

Budget Building Block #2:

MARGIN PLAN

   Let’s begin with some simple math:

•    Sales minus the cost of sales = margin

•    Margin divided by sales = margin percentage

  In other words, the price you charge for your beer minus the costs to make the beer is your margin.

When building your plan, use an expected margin percentage. This will make communication of the margin goal easier and allow for quick comparisons to past results.

  For example, if the historical margins in your brewery are 45%, use this as an expectation for your new budget. This can be used as the goal (or a baseline) for new brands or packages you intend to create.

  To dig in on your margin planning, review the cost components of your beer: Direct labor, direct materials and overhead.

  Direct labor is the cost you pay people to make the beer. Salaries and benefits for brewers, cellar and packaging go in direct labor. Direct materials are the ingredients you combine to make the beer. Hops and malt go in direct materials.

Overhead is the cost of everything else that you need to produce the beer. It includes lease expense, insurance on the brewery and depreciation expense of the equipment. Overhead costs are those indirect costs, or support costs, which keep the brewery running.

  Build up the costs of new beer styles or packages you intend to sell. Determine pricing, calculate expected margins, and include this information in your total brewery margin plan.

Budget Building Block #3:

OPERATING EXPENSE PLAN

  Every big expense number on your budget should have a supporting schedule. Examples of big expenses include payroll, lease payments, travel budgets, and marketing costs. A supporting schedule is a detailed listing that adds up to that one number on the operating expense plan.

  For example, to create the payroll schedule, list out the number of employees, expected wage rates and hours that will be worked. The sum total should match up with the payroll expense line on the budget.

  To build up the expense plan and make sure everything is accounted for, I find it helpful to review spending that has occurred in the past. I do this by looking through the detailed transactions in the general ledger.

  The general ledger is a listing of all the transactions that hit the financial statements. It’s like a check register that shows where money was spent and a description of what was purchased in the past.

  Where did we spend money? Will that happen again? Will we spend more or less? What new plans do we have next year? What will it cost?

Chances are, if you bought something this year, you may buy it again next year. Use the general ledger to jog your memory on expense items that are likely to repeat. Use these amounts as a baseline for budgeting expenses next year.

  Use the budget that you created in words and estimate spending needs based on those goals and objectives. If you don’t account for this spending in the operating expense plan, it’s tough to make the goals a reality.

Budget Building Block #4:

CAPITAL BUDGET

  The capital budget is the place for big purchases like a new canning line, a keg washer or delivery van.

  Anything that costs more than a set amount, say $1,000, and will last longer than a year should be on the capital budget.

  The difference between a Capital Expense and an Operating Expense is that capital items need to be depreciated (or written off) over a certain period of time. If you buy a box of copy paper for $50 it’s an expense on the current income statement. If you buy a $15,000 forklift, that’s a capital expense that will be depreciated over the next five years.

  Make your wish list of needed capital items. Determine what the items will cost and when you expect to buy them. This will help with cash needs planning and be an important building block of your financial budget.

  Lastly, match up the expected spending to the expected funding. During this step of the budget process you’ll need to determine how you’re going to pay for a new canning line, keg washer or delivery van. List any new bank loans or new equity you will need to invest in the business to make the Capital Budget a reality.

Budget Building Block #5:

DEBT SERVICE

  Debt Service is the amount you pay each month on your loans. These payments are made up of two parts: principal and interest. The principal portion reduces the loan amount on your balance sheet while the interest portion is an expense on the income statement.

  To start, create a schedule of all your loans and the payments due on each. List the bank, type of loan, term of the debt and payment amounts. This schedule will be an integral part of the financial plan and will serve as a reminder of how much is due and when.

Wrap Up + Action Items

  The brewery budget is the financial road map for your business. The plan will provide clear directions to your team so that you can reach your sales and profit goals for the new year.

  Starting the budget process can be tough. So, begin by writing out your budget goals in words. Simply write out what you want to accomplish, how you intend to do it, and what resources you will need. Start with words, and let the numbers come later.

  Once you have the goals and objectives written out, it’s time to add the numbers. Use the five budget building blocks: the sales forecast, margin plan, operating expense plan, capital budget and debt schedule.

  An effective brewery budget is within your reach. Use the ideas here to get started and to finish your plan. Your income statement is counting on you.

For more information please contact…www.CraftBreweryFinancialTraining.com

Empowered Makers, Spirited Women

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By: Tracey L. Kelley

In the spirits world, female master blenders and head distillers are creating more buzz than ever, not simply for being “the first” but for their positions as innovative navigators of taste, brand and industry.

  With this angle in mind, we reached out to a few notable makers who could share valuable insight to help propel your efforts. We asked all of them three questions:

1.   What are you most proud of regarding your craft?

2.   What’s the top lesson you’ve learned as a businessperson/distiller?

3.   What advice would you give women entering the industry?

  Here’s what they shared with Beverage Master Magazine.

Connie Baker—Head Distiller and Queen Bee

Connie Baker—Head Distiller and Queen Bee—Marble Distilling Co. 

  A former pharmaceutical sales consultant, eco-minded Baker went to distilling school in 2010. She now leads a family- and friends-owned and operated business in Carbondale, Colorado, that includes the distillery, two bars and an inn. Maintaining local sustainability is important: her grains, water, and filtering marble are all sourced in the state.

  Signature Spirits: Moonlight Expresso, Gingercello, Vodka 80°

1.   Marble Distilling Co. has a first of its kind Water & Energy Thermal System (WETS) that reuses 100% of our process water and harvests the energy created through distillation, saving more than four million gallons of water and reusing 1.8 billion BTUs (20 homes) of energy annually. I’m proud that while we’re creating award-winning craft spirits, we’re being sustainable and thoughtful about the planet and natural resources. Water is our most precious resource in Colorado, so we’re doing everything we can to “drink sustainably” and “save the planet one bottle at a time.”

2.   Never give up, and believe in yourself and your craft: fear is failure, and work ethic is second-to-none.

3.   Do your homework—maybe even work for an existing distillery for a time. And don’t be intimidated by the fact that the distilling industry has been historically male-dominated. We women have great noses and palates, are thoughtful, creative and bring unique perspectives to a previously male-run industry.

Krystal Goulart—Head Distiller

Krystal Goulart—Head Distiller—Spirit Works Distillery

  Spirit Works Distillery owners Ashby and Timo Marshall celebrate female-driven innovation at this small distillery in Sebastopol, California, and give Goulart and her team plenty of opportunity to craft with skill and instinct. In July 2020, the American Distilling Institute named the organization Distillery of the Year and extended its Bubble Cap Award for diversity and community engagement.

Signature Spirits: Sloe Gin, Barrel Reserve Sloe Gin, Vodka, Four Grain Straight Bourbon

1.   First, an absolute trust in my palate, which is necessary when making “cuts” at the still, blending and product developing. Sensing subtle flavor and textural nuances within a run is what helps maintain a house profile as much as it also defines a distiller’s signature. Second, my ability to understand equipment and process timing so that I can develop efficient methods of working to increase speed and productivity. The best production hand is one who maintains speed with the least amount of movement.

2.   Being part of the craft distilling industry is, first and foremost, a passion play. The goal is to provide an environment of inspiration, education and exploration so you can stand together on new frontiers. Though deadlines and malfunctioning equipment might get in the way, cultivating employee and client relationships creates a robust team that can withstand any challenge.

3.   Learn all aspects of the business, from pressure-washing drains to making cocktails. Share respect and value with your team members, your production space and the products you make. Embrace opportunities for future growth or change. Be fearless in the face of challenge, enjoy the ride and embrace your personal evolution.

Becky Harris—Co-Founder and Chief Distiller

Becky Harris—Co-Founder and Chief Distiller—Catoctin Creek Distillery

  Harris, a former chemical engineer, formed Catoctin Creek in Purcellville, Virginia, with husband Scott, in 2009. Considered Virginia’s “Most Awarded Spirits,” Harris celebrates her state’s heritage and history through many aspects of the brand and produces a vibrant private single cask expression program.

  Signature Spirits: Roundhouse Rye, Rabble Rouser Bottled in Bond, 1757 Virginia Brandy XO

1.   I’m incredibly proud of how our vision and product have matured in the past several years. Catoctin Creek has always been grain-to-glass, but we have really leaned into our identity as the Virginia Rye Whisky, incorporating the regional grain, terroir and even wood to highlight our primary and unique focus on 100% rye mashbill whiskies. It sounds simple, but really learning who you are as a company is an evolution.

2.   As a chemical engineer, I always appreciated the technical challenges and achievement of making delicious whisky. Over the past 11 years, I’ve grown to appreciate the visual and story aspects of this business. Engaging more on the marketing aspects of what we do has not only improved my communication skills but also made me more confident as a founder and leader in a business that I entered in my 40s.

3.   I would recommend this to everyone: join one of the professional organizations available to you—volunteer to serve. You’ll gain knowledge, friendships and a better understanding of the industry and the best ways to navigate it for your company, your employees and even yourself.

Lein and Michelle Ly—Co-Founders and Head Distiller

Lein and Michelle Ly—Co-Founders and Head Distiller—Vinn Distillery

  Seven generations of the Ly family have crafted Baijiu, a 4,000-year-old Chinese rice liquor. In 2009, Phan Ly and wife, Kim Trinh, started Vinn Distillery in Portland, Oregon, to carry on this “white liquor” tradition in the United States. Today, five Ly siblings share various operational roles, with Lein as head distiller and sister Michelle handling sales and marketing.

  Signature Spirits: Vinn Baijiu, Baijiu Family Reserve, Whiskey, Vodka

1.   We’re most proud that we make everything from scratch using our family’s traditional methods, and to introduce one of the oldest and most-consumed spirits in the world to the general market here in the U.S. Using non-GMO rice products, we were the first to produce Baijiu, a rice vodka, a rice whiskey, and flavored Baijiu in America.

2.   The top lesson we’ve learned is that introducing something different, like Baijiu, to the market, is extremely difficult. Every sale requires an explanation of what the product is and how to consume it.

3.   My advice would be to have a target audience in mind, find a niche and dominate it.

Julie Shore and Arla Johnson—Co-Founders and Head Distiller

Julie Shore and Arla Johnson—Co-Founders and Head Distiller—Halifax Distilling Company

  Business and life partners Shore, a former dental hygienist, and Johnson, a counselor, previously owned and operated Prince Edward Distillery, home of Canada’s first potato vodka, before launching Halifax Distilling Company in Nova Scotia in 2016. Shore, a fourth-generation distiller, now focuses on a Maritimes favorite, rum.

  Signature Spirits: J.D. Shore Rum Cream, Black Rum, Gold Rum

1.   I love creating and visiting other distilleries to taste their creations. It’s so exciting! This industry has grown so much since we first distilled in 2008. It has brought such awareness to the public and gained much support! This is no small feat when the big conglomerates dominate the industry—to be able to carve out a piece from them is a very proud feeling!

2.   As a businesswoman, I’m still learning. Seems we learn everything the hard way! I think the top lesson that I’ve stumbled across is I try to be a real part of my community—and not just for the social media posts either. We want to help out when we can. If someone asks us for something, we really want to be there for them. Johnson adds: “’No’ does not mean no—you have to push back.”

3.   Follow your dream, and don’t take anyone’s shit! Seriously, there are folks who will get in your way—don’t waste time with them. Figure out how to get it done without them. If—and this will happen, too—you have to work with them, swallow hard and compliment the hell out of them. These folks trying their best to prevent you from succeeding typically have huge egos, and complimenting them really works. Just try not to sound sarcastic. Johnson adds: “You have to have passion and tenacity. You have to push through the challenges.”

Joy Spence—Master Blender

Joy Spence—Master Blender—Appleton Estate Jamaica Rum

  The grand dame of master blending, chemist Spence has spent nearly 40 years crafting Appleton Estate’s centuries’ old tradition for the modern age—first working with the master blender, then assuming that role in 1997. Along with creating special blends for presidents and princes, she mentors Nassau Valley high school students in chemistry. 

  Signature Spirits: Appleton Estate Signature Jamaica Rum, 12-Year-Old Rare Casks Jamaica Rum, 8-Year-Old Reserve Jamaica Rum

1.   As a master blender responsible for the legacy of our rum, I’m most proud of the several limited-time releases that we have introduced, such as the Appleton Estate 50-Year-Old, the Appleton Estate 30-Year-Old and the Appleton Estate Joy Anniversary 25-Year-Old. These offerings have created greater focus on the premium quality of the Appleton Estate range while showcasing the depth of very old rums in our inventory.

2.   During my career, the top lesson I have learned as a master blender is that every failure leads to an improvement, and being pragmatic is a key success factor.

3.   My advice to any woman entering the industry is to focus on your craft and not your gender. Become an expert in your field and pass on your knowledge. It’s your passion, skill and creativity that will make you successful.

Chanel Turner—Creator

Chanel Turner—Creator— FOU-DRÉ Vodka

  Once a government contractor, Turner spent more than six months researching distilleries with the technology to produce the quality of crisp, clean vodka she wanted. Today, her “lightning” brand has robust Asian sales and a strong online market. She’s also the founder of the Black-Owned Spirit and Wine Festival in Washington, D.C.

  Signature Spirits: FOU-DRÉ Vodka

1.   I’m most proud that we’ve been able to sustain in an industry that sees many brands come and go. Looking back, I identified a problem that many can relate to, with vodka being a spirit that people tend to grow out of. At 25, I knew I wanted a “better experience” when consuming spirits without having to use sugary mixers. I realized I would have to source the right distillery to bring my vision to life. It took months of research, formula tests (87!) and market surveys to come up with the infused formula that’s found in a bottle of FOU-DRE today. We’ve not compromised the unique taste or exquisite packaging of FOU-DRE in any way—that truly makes me proud.

2.   I’ve learned to celebrate the small wins and appreciate the journey. The older I get, this matters more than ever before. Essentially, I’ve grown with the business, becoming a proprietor at such an early age. Outside of what it takes to build a spirit brand, I’ve learned patience!

3.   My advice would be to make the right alliances early on. Though we’re seeing more women come into this space, it’s still a male majority industry. So it’s important that we unify, join together and share moments of pains and progress. We can learn so much from one another and get ahead of the game by tapping into each other’s resources. When I first started, there was a small percentage of women owners/distillers in the industry. Even more disheartening, there was an absence of platforms for community-building and very little visibility for women in the field. We’ve come a very long way but still have far to go. I encourage women coming in the industry to network, network and network some more! Make your presence in the industry known. When one wins, it’s a win for us all.

Kaitlin Vandenbosch—Head Distiller/Brewmaster

Kaitlin Vandenbosch—Head Distiller/Brewmaster— Mill Street Brewery

  After earning a master’s in brewing and distilling at Heriot-Watt in Scotland, Vandenbosch started at Mill Street in Toronto in 2013, just when it was expanding into micro-distillation. She advanced in many management positions since then, helping Mill Street refine its line. In 2019, she became the organization’s brewmaster.

  Signature Spirits: Single Barrel Canadian Malt Whisky, Tankhouse Bierschnaps, Small Batch Gin

1.   There are two things I’m proud of: first, Mill Street brought distilling back to the Distillery District in 2013, and I was the first head distiller. Spirits hadn’t been distilled on-site since the mid-1980s! Second, during my time as head distiller, I set down two barrels of whisky. Since it was very small scale, I was able to take a lot of time and care with the recipe design, aging and blending. I am really happy with how both turned out (released in 2017 and 2018).

2.   It’s fairly technical, but one of the most useful skills that I learned from my former boss, Joel Manning, is benchtop trials. This comes in handy when determining flavor additions, final alcohol strengths, barrel blends, cocktail designs, and so on. It’s extremely useful to dial in on a small scale the flavor profile you’re aiming for and then adapt it to a larger scale.

3.         Network! I believe it’s really important, especially in craft distilling, to meet others in the industry or similar industries. There’s also a lot of overlap between brewing and distilling and wine/cider making and distilling. Similarly, it’s good to meet people who are the end-users of your product—bartenders and customers. Networking is a great way to share ideas, learn about events, ask questions and make connections.

Choosing Effective Incentive Rewards for the Craft Beer Distribution Channel

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Beer Company Leaders
America’s Beer Distributors: Fueling Jobs, Generating Economic Growth & Delivering Value to Local Communities. (PRNewsFoto/National Beer Wholesalers Association)

By: Nichole Gunn, Vice President of Marketing and Creative Services, Incentive Solutions

From improving market penetration to increasing sales volume for a specific product, craft beer producers rely on their indirect salesforce to accomplish their strategic goals. Incentive rewards can help craft beer producers create win-win scenarios for their indirect salesforce and influence their selling behaviors in ways that benefit the brand. However, not all rewards are created equal. The effectiveness of an incentive reward program depends on choosing rewards that capture the attention of wholesale and distributor sales reps and provide sufficient motivation for them to go the extra mile.

  When choosing rewards that appeal to their target audience, it’s important for craft beer producers to focus on the following factors:

•    Value Proposition: Will these rewards provide sufficient value to your indirect sales reps to justify their efforts and maintain their interest?

•    Personalization: Will these rewards feel meaningful to participants on a personal level, creating an emotional impact?

•    Scalability: Will your reward selection give you the ability to tailor your value proposition to different segments of your audience, from easily attainable rewards for new participants to exclusive rewards for top performers?

•    Memorability: How long will this reward keep your brand top-of-mind with participants? 

•    Participant Lifestyle: Which types of rewards appeal to your participants’ interests and align with their lifestyles?

•    Competition: If your competitors are running a rewards program, how will your program provide a more compelling value to your participants?

  Additionally, craft beer producers need to consider how their reward selection ties into their overarching goals, as well as their budget. Will it be more profitable to focus on providing more attainable, less personalized rewards to drive short-term growth or to develop high value, highly personalized rewards to solidify long-term loyalty? Or, perhaps, some craft beer producers will be interested in a mix of both. Either way, it’s important for craft beer producers to view their incentive reward program as an investment rather than a cost and concentrate on choosing rewards that help them achieve their goals in a profitable, cost-effective manner.

Types of Incentive Rewards

  Today’s incentive reward programs provide a variety of different reward types that craft beer producers can offer to their participants. These include gift card and debit card rewards, points-based merchandise rewards and group incentive travel. Each of these reward types has various strengths and weaknesses, depending on the goals of a craft beer producer and the makeup of their target audience.

  For instance, gift card and debit card rewards are highly scalable and provide an easy to understand value proposition. However, this comes at the expense of personalization. While a branded, reloadable debit card will keep your brand top-of-mind longer than cash commission, it doesn’t provide much in the way of social value and will not necessarily make a distributor sales rep feel warm and fuzzy about your brand. With e-delivery options and reloadable cards, gift card and debit card rewards can be awarded almost instantly, making them best-suited for SPIFFs (short-term incentive promotions) or for sales promotions for a wide audience. 

  Merchandise rewards, on the other hand, have trophy value and provide tangible rewards that indirect sales reps will associate with your brand for much longer. With an online rewards catalog that’s chock full of millions of exciting rewards, from digital movie rentals and Netflix subscriptions to home theaters, a points-based merchandise program is highly scalable and allows participants to choose personalized rewards that fit into their lifestyle and match their level of performance. Online merchandise rewards allow craft beer producers to incentivize sales growth across each segment of their salesforce, while also inspiring loyalty in top accounts with higher value, more personalized rewards.

  Of the different reward types, group incentive travel is the most memorable and emotionally impactful. By rewarding top-performing indirect sales reps with a trip to an exclusive locale like Tahiti or Venice, craft beer producers will have the opportunity to really personalize their relationship with their wholesale and distributor sales reps and create memories they won’t soon forget. However, incentive travel isn’t very scalable. Typically reserved for top accounts, incentive travel is better suited for building loyalty and solidifying long-term relationships. Additionally, it’s worth noting that while the effects of Covid-19 have put a damper on incentive travel events, demand for these trips will be through the roof when travel resumes, and many vendors will be motivated to provide great deals for craft beer producers who plan ahead. 

Setting Reward Parameters

  An important component of reward program strategy is determining how participants will be rewarded. Craft beer producers should consider which specific actions participants must take in order to accumulate reward points and whether different actions have different strategic values in helping them achieve their goals.

  For instance, if a craft beer producer’s goal is to increase overall sales, then it might make sense to assign reward points to distributor sales reps based on overall sales volume. But it also might be beneficial to provide point bonuses for first time sales, sales on a new or underperforming product line, completing online educational courses or providing referrals. All of these actions can help facilitate sales growth in the long-term and provide distributor sales reps with a clear path toward maximizing the value they receive from the program.

  Additionally, setting qualification thresholds and offering tiered rewards can help craft beer producers make their program more cost-effective. For instance, it might make sense to require distributor sales reps to sell a certain amount of beverages before they qualify for the program or to offer a group incentive travel trip for the top 25 performers each quarter, in addition to a card or points-based merchandise program for the other sales reps. Doing so allows craft beer producers to allocate their reward spend toward their most valuable supply chain trading partners, while limiting expenditure on sales reps who may not offer as much long-term value.

  In addition to tiering rewards based on performance, craft beer producers can leverage this strategy to target different hierarchical segments of their indirect salesforce, offering higher value rewards like incentive travel to sales managers while running a points-based merchandise or card program for the individual reps who work under them. This allows craft beer producers to incentivize from the top-up or the bottom-down, maximizing their influence within their sales channel.

  Online incentive technology offers craft beer producers the ability to easily segment their audience, change parameters, automatically allocate points and track the impact of these decisions on their ROI through dashboards and custom reports. For craft beer producers, it’s important to have the flexibility to quickly adjust elements of their reward program strategy, while minimizing the man hours necessary to manage their program.

Expanding on the Reward Experience

  Rewards are exciting and provide an easily understood value proposition, making them an effective tool for marketing an incentive program; but rewards are only a small component of the value an incentive program creates for craft beer producers, as well as their supply chain trading partners. An incentive reward program provides new touchpoints to improve the partner experience, such as:

•   An integrated digital hub, where indirect sales reps can connect to learn more about the brand, explore the latest incentive promotions, track their progress and redeem for rewards;

•   A communication platform that craft beer producers can use to send customized communication and automated alerts via email, SMS, push notifications and direct mail;

•   Customizable enrollment forms that craft beer producers can use to capture data about their indirect sales reps in order to personalize their sales and marketing;

•   Data collection tools that make it easy for indirect sales reps to upload sales invoices or scan QR codes in order to verify their sales claims and earn points;

•   Elements of gamification such as leaderboards, spin-to-wins and limited time bonuses to keep sales reps more consistently engaged;

•   Online surveys and analytics tools that help craft beer producers better understand the members of their channel and provide a more rewarding partner experience; and

•   Interactive quizzes and online training platforms to help indirect sales reps become more informed, effective advocates of the brand.

  The appeal of earning a reward channels indirect sales reps into this funnel and keeps them invested in the communication they receive through the program. But, more importantly, the reward program itself provides an entire ecosystem for more personalized communication and engaging brand interactions between craft beer producers and members of their channels. By focusing on the partner experience, both before and after earning a reward, craft beer producers have the opportunity to maximize the effectiveness of their reward program, solidify brand preference among their supply chain trading partners, differentiate their brand and target long-term strategic initiatives.

  Nichole Gunn is the VP of Marketing and Creative Services at Incentive Solutions (www.incentivesolutions.com), an Atlanta-based incentive company that specializes in helping B2B companies improve their channel sales, build customer loyalty, and motivate their employees. Nichole Gunn can be reached at ngunn@incentivesngunn@incentivesolutions.comolutions.com.

In the Can & Out the Door: Canning Systems Adapt to Current Market Needs

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canning system in a facility

By: Gerald Dlubala

“The situation that we’re all in just adds to the advantage of selling beverages and cocktails in cans,” said Dennis Grumm, CEO of Oktober Design, manufacturer of can and crowler seamers for the craft beverage industry. “With the COVID-19 situation, the lifeblood of many bars and restaurants is the sale of their beer, wine or mixed drinks to-go, for pick up or for their patrons to buy and enjoy at a nearby outside area. Having one machine that can deliver all of these in a quality canned form at any given time is a huge advantage.” 

Can Seamers

  Oktober Design’s can seamers, such as the Model-7 series, are designed for easy plug-and-play installation and operation. Right out of the box, the can seamers are calibrated and ready to go using standard 110v power. There is minimal maintenance, involving only user related adjustments. Additional customer support is available if needed, but Grumm said that’s usually not the case. 

  “It’s as easy as putting the can in, clamping it down, closing the door and rotating the handles,” he said. “Our seamers handle any U.S. can and some non-U.S. sizes. You set it up depending on the size of the can end you’re using, with different tooling sets available for different ends. Switching end sizes takes about 15 minutes using standard tools. Maintenance generally involves keeping the unit clean, so wiping it down and performing a weekly cleaning on a quick release shaft is recommended. Honestly, most customers are doing these things daily or at the end of each shift as their normal cleaning process anyway.

  “Can seamers are common-sense purchases right now. Whether canning for individual purchases or small batch runs, with the quick changeover ability, you can see what is working with your customers and what isn’t. Then you know where to spend your time and effort.”

  Grumm told Beverage Master Magazine that Oktober Design’s Series-7 units are incredibly reliable, easy to care for and available at an entry-level price point friendly to the brewer’s budget. The units can handle 100,000 cans or, in some cases, upwards of 200,000 cans without any issues. Oktober Design also sells can ends in smaller lots to match the needs of craft brewers, and soon it will offer brewers the ability to order fully labeled and designed cans right from its website.

  “We want brewers to remember that when looking for a machine like this, that even though we call it a plug-and-play can seamer, it is still a precisely engineered and fine-tuned machine,” Grumm said. “You’ve got to look for quality, and all of our moving parts are stainless steel or aluminum, with a minimum of normal wear parts involved. We’ve sold thousands with great success because we started as engineers and designed a quality machine with that mindset.”

Filling Systems

  XpressFill Systems LLC offers fillers designed and manufactured for the modern-day artisanal beverage producers. Weighing in at under 35 pounds, these compact, easy-to-use machines are built for tabletop portability and easy use by a single employee.

  “XpressFill offers two types of fillers for carbonated beverages,” said Rod Silver, Marketing Coordinator for XpressFill Systems. “A counter-pressure, air-operated system capable of filling up to 200 12-ounce cans per hour, and an open fill, 110v or 220v, two or four spout system capable of filling between 300 to 600 cans per hour. They’re pretty simple to calibrate. A scale is used to verify the fill levels in the cans. Our counter pressure fillers come with a clear can so pressure and fill rate is optimized for each beer and the needed corresponding carbonation level. Once calibrated, you’re ready to fill.

  “Our open can fillers feature a moveable shelf that is easily adjusted for various can sizes, with a maximum diameter of four inches. The counter pressure filler features stoppers that fit snuggly into the can opening to seal and pressurize. The standard setup is for the 202-lid size, but custom stoppers and other components may be required for different sizes of lids. Our fillers provide a cost-effective means to distribute a product in cans or bottles without the prohibitive expense of an automated production line. But, even larger breweries use our fillers for canning small batch or specialized runs. It saves them the expense of starting up their automated lines or calling in mobile canners for a less than normal size run.”

  Codi Manufacturing has made a name for themselves with their professional counter-pressure filling and canning systems, offering whole systems from depalletizer units through filled container conveyance. They design systems for individual spaces and provide specific upgrades for components that have reached their maximum limits. They offer that same knowledge and technical expertise in their smaller machines.

  “There has been a massive uptick in the demand for counter-pressure filling because of the need and desire to package items other than just beer,” said Andrew Ferguson, Sales Manager for Codi Manufacturing. “We’re talking the ready-to-drink canning market, and the rapid spike of popularity in seltzers, which have a more rapid foam cap dissolve rate than beer. Counter-pressure fillers can reinvigorate that foam cap right before seaming, which has shown to increase seltzer shelf life from the standard three months to up to a year.”

  Ferguson said that to meet the demands of today’s world, brewers have different priorities in canning systems. Those include smaller, more economical builds that offer a path for future growth and expansion when allowed. It also usually means more modest in-feed options with a plan for automation down the road.

  “But just as critical right now is the option and availability for complete sanitation and sterilization of the filling and canning lines,” said Ferguson. “We always recommend using stainless steel systems and components that can handle this type of cleaning. Aluminum components prohibit the use of any sanitization or sterilization process involving caustic methods.”

  Ferguson said that craft beverage producers should always, but especially under current conditions, make sure there is a reliable aluminum can supplier with adequate inventory for the system they’re using, especially if it requires a specific size. Will you always have the cans and ends that you need? What happens if the supply dwindles? Yes, you can switch seamers and get new tooling, but that will cost you. Brewers must have a supplier that fills their needs both now and for future upgrades.

  “Hopefully, restrictions eventually ease up, and you find a need for faster production,” he said. “Sometimes this is as simple as a faster filler, but sometimes that means a better in-feed system to keep up with that filler. Always research future possibilities.”

  Codi Manufacturing researches future possibilities as well, and Ferguson told Beverage Master Magazine that soon they will roll out a single canning machine that will run every can on the market worldwide. 

  “As far as we know, we are the only ones to do this,” said Ferguson. “That’s quite an advantage when you think about it because we don’t believe that the canned beverage and ready-to-drink market is going to stop or slow down anytime soon. In other countries, especially in places with high alcohol taxes like Australia, the canned beverage and ready-to-drink market is very heavy. It’s likely going to remain a way of life, and a good one at that.”

Moving on Up: Automation in Times of Increased Demand for Canned Beverages

  Like other manufacturers, Jim Mackay, CEO of SKA Fabricating, has seen a mad dash by craft brewers to install smaller canning lines to fit in with the new economy and get their products packaged and out the door. SKA offers automated lines and accessories designed specifically to utilize available floor space and footprint. They offer everything needed before the filler and then from the filler to packaging operations.

  “We help craft breweries with automating their can depalletization before the filler and then the repalletization for packaging,” said Mackay. “A lot of the time, the main issue with small craft breweries is the limited amount of available space, so smaller footprint machines like our Half Pint OD (orbital discharge) mobile depalletizer are designed to solve this problem specifically. Any astute brewer can set it up and have it running in minimal time, but we also will consult by phone if needed.”

  SKA’s first of its kind rotary design is a 30-inch wheel featuring a better drop angle for the rinse cage, allowing for more accumulation and higher line speeds in a smaller footprint. The rotary wheel can run both clockwise and counter-clockwise, making it possible to install two discharges for different can sizes with minimal changeover. The Half Pint OD requires no specialized installation, increasing its value and popularity with craft breweries and mobile canning operations. The unit is on wheels for ultimate portability and the ability to safely store it out of the way when not in use. 

  “Before purchasing any system, the brewer has to ask critical questions and know their limitations, goals and future projections,” said Mackay. “Honestly, packaging is, a lot of times, the last consideration, but in most areas of production, we believe that any automation is better than the manual option. Your automation needs are determined by how quickly you need a new pallet of cans when canning your product. If you’re canning at 200 to 250 cans per minute, you should probably start looking into some sort of automated in-feed and out-feed to keep up.

  “When considering Ska equipment, we’ll need to know what type of filler you have or are planning on having. Different fillers have different characteristics and needs. It’s critical to maintain both mechanical compatibility and upgrade capability regarding can sizes used now and in the future. What capacity can your filler accommodate? You may need to address your filler capability before your lines. You don’t want a filler that can’t keep up with your lines, and you don’t want your lines running dry waiting on cans. Brewers should always consider future growth in their machinery choices, and we, along with our trusted partners, can design your whole system from start to finish if needed.”

Sealing in the Craft Brewery Difference

  OneVision Corporation leads the industry in providing advanced measurements and information systems that help users predict and prevent double seam quality issues. They have been providing seam inspection solutions to the food and beverage industry since 1994, installing more than 300 SeamMate Systems for food and beverage canners. Their proprietary, ready-to-use system includes a video module controlled by SeamMate software for use in a standard or networked Windows environment. It quickly takes the user through a process of cutting, measuring, viewing and recording double seam dimensions for ongoing comparison against the original can manufacturer’s specifications.

  “Craft brewing is all about taste, so it’s critical to retain that taste and freshness in the can to guarantee a quality consumer experience. That’s when a system like our SeamMate Craft Beverage System becomes essential,” said Neil Morris, CEO of OneVision. “Simply put, our system helps brewers ensure leaky can seams don’t sabotage the taste or integrity of their beer. It includes all the necessary equipment and software that craft brewers need to properly inspect and track the quality of can double seams in a low maintenance, dependable and affordable system, including on-site installation, training and unmatched support from our OneVision team. The OneVision team member installs the system and provides a full day of training. After startup, telephone and email support are available free of charge. Except for the occasional saw blade and seam stripper cutter wheel change, the system requires little maintenance.”

  SeamMate software runs on a Windows 64-bit PC, which is included in the SeamMate Craft Beverage System package. It functions as a standalone system or is connected to the customer’s network with optional SeamMate reporting software. 

  “Brewers should be regularly inspecting and tracking internal double seam dimensions to prevent leaking seams and flat beer issues,” said Morris. “Being proactive and inspecting and tracking the double seam saves brewers money and headaches down the road and is an integral part of delivering quality canned beverages to customers. We provide everything the customer needs to get started using the SeamMate System. Breweries only need to be canning and commit to quality.”

21st-Century Growlers: Pairing Innovation and Convenience

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hand filling the beer cup

By: Cheryl Gray

Portable beer containers earn their reputation not only by how convenient they are to transport but also by how well they protect the beer inside. In the age of COVID-19, these portable options have also become a lifeline for craft breweries whose businesses have turned to beer-to-go sales to survive.

  The growler has been around since the late 1800s when beer was transported from saloons in a rickety metal pail with a not-so-secure lid. Fast forward to 1989, and the year historians say that Charles Otto, founder of Grand Teton Brewing in Wyoming, introduced the half-gallon glass growlers we see most commonly today. Since Otto’s reinvention, the growler has come a long way. Many 21st-century growlers have little resemblance to their predecessors.

  However, the demand from consumers remains the same. Beer lovers want their favorite craft brew to stay cold, fresh and ready-to-pour in a container that can go anywhere.

Craft Master Growlers

  John Burns knows a thing or two about the creativity and technology required for manufacturing the perfect growler for beer lovers on-the-go. He is CEO of Source Management Limited, the 22-year old parent company of Craft Master Growlers, Inc., based in Tacoma, Washington.

  Burns told Beverage Master Magazine that craft breweries can truly benefit by marketing products through the use of growlers. This is especially true for onsite brewing operations that don’t distribute their beer to wide areas. Pressurized growlers can help unlock a key market for those breweries because these growlers bring the convenience, portability and attributes of kegs down to an individual level. 

  “The craft beer industry is a dynamic industry with constant innovations,” he said. “But they need to get their product out to the public. There is nothing like a fresh beer direct at the brewery or brewpub, but you are limited to customers who visit your establishment. Growlers have a high demand and are encouraged by the industry because it allows more people to enjoy the breweries.”  

  While growlers are becoming more widely used, Burns said not all produce the same results. He compared glass and insulated-style growlers to his products.  

  “Unfortunately, the most widely used growlers–glass growlers–have a very limited shelf life. If not consumed within hours of filling, the beer changes. The experience is diminished,” said Burns. “A thermos-style growler is slightly better, keeping the beer cold for a certain period of time. But with Craft Master Growler’s pressurized systems, brewery customers can give a true, just-poured-by-the-brewery experience in any location and on their own schedule. By preserving the carbonation, the beer stays fresh, one glass at a time, for a period of weeks.”

  Craft Master has a variety of growlers, kegs and portable containers available for industrial and consumer use. They use only food-grade materials in production, an important factor, Burns said, because it protects the beer’s flavor integrity. Among the materials used is SUS304,  food-grade stainless steel that is standard in commercial kitchens and breweries.

  “We currently sell two lines, Craft Master CO2, a heavy-duty, high-end line of pressurized growlers for hotel/restaurant, breweries/brewpubs, home bar and homebrewers. These come in the legal filling sizes of 64 ounces and 128 ounces,” he said. “We also sell a lightweight, portable growler, ‘Growlveller,’ which comes in various finishes and is a 64-ounce capacity.”

  Burns, who built Craft Master by keeping pace with new technology and developing innovative products, shared the marketing logic behind its earliest innovations.    

  “Our first step was to create a square growler. This is very important for commercial establishments where refrigeration space and counter space is at a premium. The nature of metal fabrication is such that pressing a round container is straight forward, but to create a square is technically a lot more difficult.

  “Growlers are put into residential refrigerators, but round containers take up too much space.  The square enables the growler to be placed, for example, in a refrigerator door. And we created a tap which can swivel 180 degrees.” 

  Craft Master is currently developing integrated caps with PSI dials that perform functions such as pressurizing, maintaining safety, regulating CO2 and controlling pressure release. The company is also responsible for creating the Perfect Head USB pump. This patented system uses ultrasound to stimulate the release of CO2 into the beer and create a perfect head.

GrowlerWerks

  Tap on-the-go with a flair for style is the signature mark of GrowlerWerks. The Portland, Oregon firm enjoys the benefit of a team of engineers and product design experts whose focus is to provide consumers with unique and functional products. Its flagship growler is the ProSeries uKeg. This product’s features include an internal variable pressure CO2 system, a sight tube to check beer levels, a pressure gauge to dial in the perfect carbonation and a pour tap for tapping off beer when and where the consumer wants it. Fiona Berry is President of GrowlerWerks Canada, the company’s Canadian distributor. 

  “Craft breweries want to create a buzz about their products, so they should want their beer being served in ultimate condition. A growler from GrowlerWerks does that job exceptionally well,” she said. “Our growlers have been designed to serve craft beer the way the brewer intended.  Because of the variable pressure regulator cap, you can serve your craft beer exactly as it would be from the brewery’s tap line.” 

  GrowlerWerks products come in a standard 64-ounce size and a double-sized 128-ounce version and feature a stainless steel tank and brass fittings. For carbonation, the growlers use eight and 16-gram food-grade carbon dioxide cartridges that provide head pressure in the growler. The regulator cap is made mostly from plastic, silicone seals. 

  Aside from functionality, GrowlerWerks is big on appearance. “The brass fittings on our growlers give it a stylish appearance that attracts a lot of attention when seen going out for fills,” Berry said. “Our clients all comment on how many people ask questions and start up conversations with them because of their growler. It is a very social item.” So much so, she added, that GrowlerWerks is branching out with new products for new markets.  

  “Our line of growler products has expanded into nitro cold brew coffee. You can now brew and serve an excellent cup of nitro coffee with that signature cascade of bubbles from your own home,” she said. “Our recently released GO growler is designed for the outdoor enthusiast. It has a simple and rugged design yet delivers all the functionality of the Pro Series uKeg. We will be releasing a GO 128 in November. We have just signed a deal with the NHL to apply team logos on our GO growlers.” 

  In addition to marketing strategies, GrowlerWerks also considers itself a competitor when it comes to innovation. Berry pointed to one key component that she believes is superior to others on the market. 

  “I think our most innovative accomplishment is our variable pressure regulator cap. It allows for stylish integration of CO2. Other pressurized growlers on the market have their CO2 cylinders attached externally to the growler.”  

TrailKeg

  For consumers who already own a non-pressurized growler and want to upgrade, TrailKeg provides some options. The Lexington, Kentucky-based company offers its brand of growlers as well as the TrailKeg Lid Package, a conversion kit that makes it possible to transform an existing non-pressurized growler into a pressurized one. TrailKeg markets its growlers for more than craft beer. 

  The company promotes its growlers for multiple uses, including creating carbonated sodas, draft cocktails, seltzers, nitro coffees and kombucha. Sold in half- and one-gallon versions, TrailKeg growlers are double-wall, vacuum-insulated containers designed to keep beer and other drinks cold for 24 hours and hot beverages, such as coffee, hot for 12 hours.

American Keg

  For bigger options in portability, there are always kegs. In Pottstown, Pennsylvania, American Keg manufactures and supplies stainless steel kegs for the craft brewing industry. According to the company, it is the only steel beer keg manufacturer in the United States. Its team touts the use of domestically sourced AISI 304 stainless steel to produce 1/2bbl and 1/6bbl kegs. American Keg also offers custom embossing and silk screen printing on orders, which craft breweries find cuts down on keg loss.

  No matter whether the container is a keg, growler or the like, all breweries have to factor in return, refill and exchange policies that are governed by state and local laws. Now that COVID-19 has become part of the business climate for beverage service nationwide, many breweries have incorporated multiple safeguards, including curbside growler fill-ups and suspension of container exchanges. The aim, naturally, is to protect their employees and customers.

  In doing so, many breweries continue to promote their products by drawing on the convenience of growlers, kegs and other portable containers that allow consumers to enjoy a tap fresh, chilled craft beer experience–exactly what the brewer had in mind.  

All About Boiler Use in the Distillery

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By: Alyssa L. Ochs

There are many different things to think about when operating a distillery. However, one often-overlooked detail is the distillery’s boiler and its quality, condition and features. There are various kinds of boilers available to craft distilleries today, which is why it’s a good idea to learn more about them and know what questions to ask before either buying your first boiler or upgrading your current one.

The Importance of Distillery Boilers

  Boilers are used in distilleries to heat the kettle, for sanitation and sterilization, for pasteurized heating, to maintain precise temperatures and to meet production demands efficiently. Boilers are essential in the distilling process because making spirits requires hot water to be at specific temperatures, and a boiler helps the distiller control temperatures. The ability to control this heat improves the quality of the spirit and ensures the distiller’s safety.

  Boilers create high-quality steam that impacts a spirit’s taste and are commonly used to sanitize and sterilize distilling equipment. In some instances, boilers can even help control a distillery’s air temperature where tastings and tours take place.

Boiler Types

  Modern water tube boilers start producing steam faster than older models, while older fire tube boilers take longer to heat up and can be out of commission for longer during servicing. Distilleries use low-pressure and high-pressure steam boilers or steam injection boilers that are typically affordable to buy and install, supply steam with no filters needed and provide hot water for various distillery needs. Low-pressure steam boilers are efficient and low-cost to operate, less noisy than steam injection boilers and pass inspections more easily.

  Dave Baughman, President of Allied Boiler & Supply, told Beverage Master Magazine that low-pressure boilers produce and supply steam below 15 PSI. These boilers come in various designs, including fire-tube, water-tube, tubeless and cast iron sectionals.

  “Some of these boilers are great at handling low-pressure steam heating loads, such as a church, school or apartment building,” Baughman said. “But they aren’t as conducive to a production type of application.”

  He also said that the type of boiler used in a distillery should be dictated by the distillery equipment and the associated steam load requirements.

  “A small craft distillery may be able to utilize a boiler that produces steam up to 15 PSI, which is ASME Section IV construction,” Baughman said. “As the pounds of steam per hour load demand increases with larger distillery equipment, then a power boiler of ASME Section I construction–which produces steam greater than 15 PSI–may be required in order to hold a steady steam pressure at the equipment. Holding a steady steam pressure at the distillery equipment is extremely important as steam pressure relates to temperature. The distillery equipment needs to have steady pressure in order to perform properly. If the steam pressure fluctuates, then temperature fluctuates accordingly, which affects the performance of the stills and other distillery equipment.”

  Allied Boiler manufactures fire-tube and tubeless boilers, both Section I and Section IV construction, from six to 2,000 horsepower. Baughman said that each installation and its particular steam load determines the type of construction the boiler needs to be.

Boiler Features

  Many modern boilers are narrow enough to fit through a standard doorway and easily install into a distillery building. Boiler companies make over a dozen different sizes ranging from five to 150 HP. Options for craft beverage producers of varying sizes are generally between five and 120 barrels per batch. Commercial distilling boilers are usually over 50 gallons. For example, a distillery can get a 150-gallon steam injection boiler that produces 337 pounds of sanitary steam per hour. For regulatory purposes, boiler and pressure vessels should have a stamp of approval from the American Society of Mechanical Engineers.

Questions to Ask Before Buying a Boiler

  One crucial question to ask about is the start-up time for a new boiler. It is usually unnecessary for a boiler to run 24 hours a day and waste energy, so quick-start-up boilers are designed to be turned on and start producing steam within a few minutes. Also, ask a boiler salesperson about energy efficiency because you’ll want to pay attention to fuel costs and not run up utility bills unnecessarily.

  Confirm the exact boiler measurements to ensure that it fits in your distillery space and also fits well alongside other equipment and any tasting or tour areas. Ask about the maintenance process, because if routine maintenance shuts down the distillery for a long time or if repairs are complex, this could hurt future business. Newer models of boilers typically have lower emissions for a reduced environmental impact. However, it still doesn’t hurt to ask about any emissions or harmful substances that may come from the boiler. It’s also good to know if extra parts will be readily available if they’re needed later.

  “The boiler itself is a powerful piece of equipment,” said Baughman. “If operating personnel are not properly trained, or if the boiler and support equipment are not properly maintained and serviced, then the boiler can be deadly.”

  He recommends asking the following questions before purchasing a first boiler or upgrading a current one:

•   Do you offer boiler training?

•   Do you perform start-up commissioning, boil-out, combustion tuning and jobsite operator training with the purchase?

•   What are some installation references from distilleries that have had your boiler for at least three years?

•   Do you have 24/7 personnel available for service?

•   What makes your boiler, support equipment and company different from others?

•   Why should we purchase this design boiler versus a different one?

When to Upgrade a Current Boiler

  For existing distilleries that have been in operation for a while, the time may come when you need to consider replacing or upgrading your current boiler. Common reasons to upgrade are a boiler that’s too noisy in public areas, high utility bills resulting from energy inefficiency and inconsistent steam pressure. It may also be time to replace your boiler if it can’t produce steam quickly and on-demand.

Maintenance Considerations

  No one likes to think about a brand-new boiler breaking down, but maintenance should always be part of the decision-making process when making a significant distillery investment. Fortunately, many modern boilers require minimal maintenance and need to be blown down at the end of the day to flush out the sediment that settles at the bottom. The blowing down process should be quick and help prevent damage to drains and plumbing lines.

  Routine maintenance should also involve checking chemistry levels to ensure the pH is ideal for steel. There are mandatory state inspections to adhere to as well. For ease of operation, consider installing an alarm system to tell if the feed tank is running low. Some boiler systems can be easily maintained by distillery staff; however, older models may require an expert maintenance specialist to come onsite for repairs.

Boiler Placement

  Concerning placement, it’s vital to keep boilers away from other equipment and isolated with a vapor barrier. Place the boiler at least six feet from still parts that are 18 inches or less from the floor. Also, place the boiler at a minimum of two feet from still parts above that 18-inch mark.

  Most boiler experts recommend placing boilers as close to the still and fermenters as possible to minimize the distance that cold water and steam have to travel to and from the equipment. This placement helps control heating and cooling loss, as well as piping costs. Boilers are often located in a separate room from other distilling equipment, but not every distillery separates their boiler in this way.

  Another consideration is the floor strength in the distillery. Older buildings may require custom installation because of inadequate floor strength, building materials or availability of utilities.

  Baughman said that the best placement of a boiler is in a separate boiler room because the boiler is a pressure vessel that is hot and typically has a water level sight glass, gaskets and other parts that can leak or blow.

  “By definition, wherever the boiler is placed becomes a boiler room,” he said. “Because of this, the boiler room has certain code requirements that must be met. From an environmental standpoint, a boiler likes to operate where there is not a lot of moisture. A separate boiler room affords this environment typically, whereas, if the boiler is out in the distillery, it may be subject to moisture from the wash down of the floors and cleaning of the equipment. So, from a safety and operational standpoint, a separate boiler room is the best.”

Boiler Accessories

  New boilers come with accessories that need to be added to the budget and stocked for repairs and maintenance. For example, CRT and VRT return tanks are used to collect condensate from the system and recycle it back to the boiler. Copper coils are used to make potable hot water for sterilization and keg wash-down. There’s also the blow-down separator used to flush out sediment and keep everything working well.

Choosing the Right Boiler

for Your Distillery

  Like grains, extracted juices and sugars, boiler steam is an essential ingredient in many spirits. The right boiler will meet your steam demands at production time without waiting hours for it to provide steam. It should be able to handle multiple processes simultaneously for greater efficiency and be capable of adjusting the steam supply on demand to save fuel costs and reduce energy waste. Other things to think about when choosing a boiler is proper roof venting for boiler operation, and whether to hire a licensed steam boiler technician to install the boiler and service it in the future.

  No matter what you’re looking for in a boiler, ask a lot of questions. There is a lot more that goes into this piece of distillery equipment than you might think. And, as Baughman said, the only bad question is the one that doesn’t get asked.

Bryant’s Ciders: Creating a Niche Market in the Cider World

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Man handing a cider drink

By: Nan McCreary

A driving force in the craft beverage market today is to create unique tastes and products—and even tasting rooms— not found anyplace else. One cider maker, Jerry Thornton, is trying to do just that with Bryant’s Small Batch Ciders in the heart of Virginia’s cider country.

  Thornton’s journey began when he inherited his family’s sixth-generation farm and orchard, Edgewood, located near the Route 151 beverage corridor in Nelson County. Thornton had a successful career in corporate finance at the time but saw an opportunity in the property, where the family had been growing apples since 1865 (except for a brief time after hurricane Camille destroyed the orchard). Bitten by the cider bug, he attended a cidermaking course through Cornell University in Geneva, New York, and returned home determined to make the farm (replanted in 1998) sustainable. He immediately converted the 40s era garage built by his grandfather into the cidery, and a nearby building into a tasting room. The tasting room opened in May 2018.

  Thornton’s goal then—and now—was to “produce authentic farm-to-table hard ciders using traditional methods while creating an organic and always evolving consumer experience.” With its rustic charm, the cidery is a throwback to pre-prohibition days when cider ruled. But there is nothing rustic about the ciders.

  Unlike the sweet ciders of yore, Thornton produces 100% sugar-free, naturally carbonated ciders with fresh, organic ingredients. Call it champagne with flavorings, or, more officially, call it a brut cider, a style growing in popularity today.

  Bryant’s apples are sourced from his “backyard,” the 45-acre orchard on the original homestead that has traditionally produced table apples for commercial use. 

  “These are quality, multi-use apples—like Pink Lady and Stayman—that make good cider,” Thornton told Beverage Master Magazine. “They have good acidity and good sugar content, and they’re not too tannic. They fit in with the style we make. We want our cider to have a neutral flavor, so we can have more leeway to make funkier stuff.”

  Bryant’s Small Batch Ciders are hand-crafted from picking to packaging. Unlike many cideries that opt for short fermentation, Thornton ferments his juice for two months to produce a totally dry cider. He then adds flavoring ingredients—always natural or organic—and lets the flavors steep for three days. To avoid spoilage, after straining and racking the juice, he quickly packages the product, be it in a bottle, can or keg. After packaging, he adds the “magic potion”—champagne yeast and priming sugar—that initiates a second fermentation. This process takes three weeks to a month, or until all the sugars are consumed. The second fermentation adds a small amount of carbonation to the product as well as character and body. Thornton does not disgorge or filter after fermentation. 

  “We leave it in the package,” he said. “Most people are comfortable with lees in the bottle, and in the cans, you can’t even tell. Besides, people in the craft market appreciate a little haze.” The finished product, a brut cider, is bone dry with an elegant finish.

  Bryant’s Small Batch Ciders fall in the mid-tier price level, costing $12 for a four-pack of cans or a limited release 750 ml bottle. “We’re going for quality, not profits,” Thornton said. Currently, he produces 1500 gallons or 45 barrels of cider per month.

  What makes Bryant’s Ciders particularly unique is the flavors. His mainstays include Unicorn Fuel, a brut cider with rose hips and hibiscus; Brite Good, the flagship Brut cider, which incorporates French oak tannins to enhance mouthfeel while leaving a true cider aroma and flavor profile; Sumthin Juicy, styled after a New England IPA and dry-hopped three times with six different hop varieties; and Red Eye, a cold-brewed coffee cider with locally-sourced beans brewed directly in the juice. Bryant’s also sells seasonal and limited release ciders, including a Star Sign Line named for signs of the Zodiac. Typically, the ciders’ alcohol by volume is 8%.

  While Bryant’s ciders are all-natural, sugar-free and in the brut style, Thornton is always on the lookout for new “funky” flavors. “Our mindset favors craft beer profiles and ideas as opposed to historic, simple cider profiles,” he said. “If we can get an ingredient, we’ll try it. We don’t make test batches; we just go for it. So far, most have gone pretty well, and we haven’t had any complete disasters.”

  One recent experiment that turned out positive results is Bryant’s line of ciders fermented and aged in used stout beer barrels. These include Satan’s Heaven, a slightly bitter cider aged in Blue Mountain Barrel House American oak bourbon barrels with cocoa nibs and cayenne pepper, and Dark Unicorn, a smooth cider featuring Bryant’s cult favorite, Unicorn Fuel, aged in Blue Mountain’s bourbon barrels with rose hips and hibiscus. “I get barrels from local distilleries and breweries for aging ciders,” Thornton said. “If I have fresh juice, I will ferment it in the barrel too.”

  While fermenting and aging in bourbon barrels are relatively new trends among cider makers, the processes harken back to American cider’s origins in New England when all ciders were fermented, aged and transported in barrels. Today’s cidermakers are seeing that oak-aging adds tannins, complexities and flavors to the juice.

  While Thornton continues his innovative approach to ciders, he is expanding his

operations to include a new tasting room near downtown Richmond. The new space, which opened this spring in Shockoe Bottom, offers seven ciders on tap and cider cocktails. The historic 1850’s building also includes a second cidery in the back, which allows Thornton to double production.

  Whether offering cider in an 1850s sheep barn on a quiet orchard or in a cozy bar close to a population center, Thornton has his local bases covered. The farm is an ideal, family and pet-friendly getaway, 45 miles from Richmond, where customers can enjoy quality cider in an isolated, mountainous setting. The Richmond location has a unique vibe of its own, with its 1850s building located in a historic part of the city with cobblestone streets and trendy stores. Thornton also distributes his ciders to high-end craft beer stores throughout the state of Virginia and is hoping to expand to North Carolina and the Washington D.C. area. With a broad range of ciders packaged in cans, bottles and kegs, Thornton’s products are designed for customers who are seeking sustainable, natural and sugar-free quality drinks. The canned ciders are a special boon for those with an active lifestyle who favor cans over glass while hiking, boating or picnicking.

  As Thornton looks to the future, he plans to maintain the legacy of the sixth-generation farm using sustainable agriculture to preserve the natural resources. He also wants to move forward by building a larger cidery and developing the property into an event space to host weddings, meetings and private parties. Currently, the farm and the Richmond location offer light snacks and grilled cheese options. Product-wise, Thornton has planted 13 acres of cider-specific apples and is launching a cider-style hard seltzer with minimal calories and 4% ABV this summer.

  While Thornton sees growth ahead for the cider industry, he recognizes that there are challenges ahead, as there are for any craft beverage. “Our biggest challenge,” he said, “is that people refer to the beverage as being sugary, but they really don’t recognize its range. Cider can be a drink that is just like a fine wine, or it can be a sugar bomb with apple juice. Here in Virginia, I think people understand that there are different niches, just like in craft beers. As people start experiencing cider, especially in bars, I think the brut styles will help grow the market. People are really into 100% sugar-free drinks.”

  While hard cider—the dominant drink in American before prohibition—is having what Thornton calls “it’s second coming,” industry projections predict more consumers will jump on its bandwagon. Thornton plans to be there for them, offering drinks that are innovative and health-conscious. “We’d like to grow, but our team is content right now to make stuff that is unique and gives a different vibe. We’re just going to go with the flow.”

For more information on Bryant’s Ciders, visit… bryantscider.com

Varieties of Gin Botanicals in the Pacific Northwest

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assorted spices in a table

By: Becky Garrison

The recent sale of Aviation Gin to Diageo in August 2020 put the Portland, Oregon, distillery scene, and gin in particular, back on the national map. Aviation’s history can be traced back to 2004 when Christian Krogstad and his wife, Christina, launched House Spirits Distillery intend-ing to make American single malt whiskey. However, as whiskey requires a significant time in-vestment, they decided to generate some revenue by redistilling a neutral grain spirit-based gin that could be brought to market relatively quickly.

  They chose to deviate from the other gins on the market at the time, which they found to be juni-per heavy. They began experimenting with different botanicals and spices in a quest to manufac-ture a truly American spirit.  

  “When I started a beer business, I learned from my brewing experience that you really have to innovate. You can’t just do what other people are doing,” Krogstad said.

  A year later, Ryan Magarian joined the team and came up with the term “New Western Dry Gin.” The first taste of Aviation’s new style of gin was not juniper, but a balanced blend of bo-tanicals that included cardamom, coriander, French lavender, anise seed, sarsaparilla, juniper and two kinds of orange peel.

  These botanicals are steeped in neutral grain spirit for about 18 hours and then combined with water and distilled in a steel still for about seven hours. The resulting product is 142 proof initial-ly but cut to 84 proof for bottling.

  The name Aviation came from the iconic Aviation Cocktail created in the early twentieth centu-ry. Their bottle design, Krogstad noted, is “almost reminiscent of the Chrysler building in New York City,” and brings to mind the style of the TV series “Mad Men,” circa 1960.

  In 2016, owners Christian Krogstad, Thomas Mooney and Ryan Magarian sold the Aviation brand to Davos and put their money and energies toward expanding production of Westward Whiskey. (Incidentally, Westward Whiskey is also partly owned by Diageo).

Cask Finished Gin at Copperworks Distilling Company

  Jason Parker, first head brewer at Pike Brewing Company and co-founder of Copperworks Dis-tilling Company in Seattle, Washington, took a somewhat similar route to Krogstad when he founded Copperworks in 2013 with fellow craft beer maker, Micah Nutt. They began distilling their small batch gin so the proceeds could keep their business afloat until their American single malt whiskey matured and could be marketed. Their gin is distilled from a base of Washington-grown malted barley with a balance of juniper and hints of coriander, citrus and other exotic bo-tanicals.

  They also began experimenting with cask finished gins. Copperworks New Oak Cask Finished Gin is finished for roughly three months in charred, new American Oak barrels, the same barrels used to age Copperworks’ single malt whiskies.

  Cask finishing brings forward floral, coriander and cinnamon notes and softens the juniper. Also, the presence of caramel and vanilla comes from the barrel. “The other spices really pop forward, and you get this kind of burnt character to the orange. It’s really delicious,” Parker said.

  This venture led to an experimental cask finished gin series that includes limited-edition gins fin-ished in casks that previously held spirits such as Laphroaig Single Malt Scotch Whisky and Caol Ila Single Malt Scotch Whisky.

Surveying Other Gins in the Pacific Northwest

  In what appears to be a trend, Freeland Spirits in Portland, Oregon, founder Jill Kuehler also be-gan distilling gin while waiting for their bourbon to mature. Named in honor of Kuehler’s grandmother, Meemaw Freeland, this women-owned distillery seeks to capture the flavor of Meemaw’s garden gin. Kuehler’s team combines traditional heat distillation with vacuum distil-lation to turn fresh Pacific Northwest grains, ingredients such as cucumber, rosemary and mint, as well as other dried botanicals, into the small-batch gin. They also produce an award-winning canned gin and tonic cocktail, and Geneva, a spirit inspired by genever that showcases Oregon-grown rye with savory botanicals.

  Scratch Distillery in Edmonds, Washington, was born out of Kim Karrick’s passion for making gin– from scratch–using locally sourced organic ingredients. Scratch Gin is crafted from the dis-tillery’s organic, non-GMO, wheat-based vodka, and vapor infused in the still using a gin basket. Customers can choose from a barrel-finished, martini-style or gin-and-tonic-style gin, depending on their taste preferences. Knowing that each person has a unique palette, Karrick also developed the GINiology program. Here, participants choose from more than thirty different botanicals, spices and other flavors to create a personalized gin to take home.

  AJ Temple of Temple Distilling Company in Lynwood, Washington, distills his gin using a cus-tom stainless steel and copper bain-marie style pot still. This double boiler heating method lends an even and soft heat to the botanicals. Temple Distilling’s first and flagship spirit, Chapter One London Dry Gin, was made to showcase a love for old world-style gins. Other offerings include Navy Strength gin, aged in once-used bourbon casks, and a limoncello. Since Temple discovered citrus oils play better at higher strengths, they use fresh lime peel and dried grapefruit, as well as cassia bark for added body, when making their Navy Strength gin.

  Rusty Caldwell, co-owner at 503 Distilling in Oregon City, Oregon, views gin like a calling card. Every distiller tells their story by showing what they find tasteful and elegant through their choice of botanicals. “Like wine, our Circa 17 gin tells the story of terroir,” Caldwell said. “Our use of Oregon juniper, fresh-cut spruce tips, gardened rosemary and other herbs represents a taste of our environment in the Pacific Northwest.”

  Distilled in Seattle, Washington, Big Gin is named after founder and third-generation distiller, Ben Capdevielle’s father, Big Jim. The juniper, sourced in Italy, Albania and Macedonia, along-side cardamom, cassia, and Tasmanian pepperberry, gives the gin a complex peppery or spicy flavor, while the angelica, coriander and bitter orange peel add citrus and savory flavor. Now owned by Hood River Distillers, Big Gin offers a London Dry gin, along with Big Gin Bourbon Barreled, Big Gin Peat Barreled and other Big Gin Single Barrel releases.

Aria Gin: Dry London Gin Infused With the Pacific Northwest Spirit

  In response to this ginned up craze, Aria Portland Dry Gin, established in 2012, set out to pro-duce a top-shelf classic dry London gin. As much as co-owner Ryan Csanky loved gins like Avi-ation, he found they did not work when he would make a classic martini for his older clientele. 

  “Distillers would use all these innovative and creative flavors like prickly pear, spruce tips and lavender, and build a drink around them. But they don’t always plug directly into some of the classic gin cocktails that people like,” Csanky said.

  Rather than push the boundaries of flavor even further than Aviation, Csanky decided to pursue another route. “We had this aha moment where we decided to take a big step back and shift our focus to doing something that is not being done. For us, that was a high-quality, independently-made alternative to the mass-produced gins.”

  They experimented with traditional English botanicals, searching for the right harmony and bal-ance in crafting a classic dry London gin. “I didn’t want the gin defined by a single ingredient or a single component of the flavor profile,” Csanky said. “The art of this gin is all about how we paint the picture with the botanicals.”

  Two years into product development, they realized they did not need to use nearly as much product. So they moved away from the heavy-handed, intense flavors Csanky found were present in many independent gins, in favor of flavor combinations that were bold but also delicate. Even-tually, they settled on a recipe that combines the ten-ingredients they list on the bottle: juniper, coriander, angelica root, grains of paradise, cubeb berry, orris root, lemon zest, orange zest and cassia bark. 

  Presently, Csanky does not plan on distilling other products. “I don’t want to make a little bit of everything and do it all kind of decently. I want to make one thing and be known for doing it well.”

  Moving forward, Caldwell of 503 Distilling offers a reflection on the future of gin. “One of the things I love about gin is that within recent years distillers–and consumers–have opened their minds to appreciating gin like they would whiskey. Until recently, gin has always been given the distinction of a mixer spirit, which means that it must be neutral enough to be blended into an-other substance. However, among craft distillers, there is now the trend to treat botanicals like a brewer treats hops.”

Distillery Startup: Where the Journey Begins

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distillery equipment set

By: Gerald Dlubala

“You want to start a distillery? Try not to be overwhelmed, but by all means, prepare to be overwhelmed,” said Patrick Kelty, President of VITOK Engineers, Inc. VITOK Engineers help design and optimize every element of the distillation process, from raw material receiving to proofing and bottling. Their clients range from craft distillery startups to the likes of Wild Turkey and Jack Daniels. And if nothing else, Kelty wants potential distillers to remember a few things.

  “Educate yourself about the distilling process and business,” said Kelty. “Talk to other owners. Learn from their mistakes and successes and apply them to your situation. Get to be best friends with your Fire Marshal, insurance agents and inspectors. They are the ones with intimate knowledge of the specific rules and regulations of your location. Base your design on your current situation, your forecasted production numbers and goals and your target customers and marketing plans.”

  Kelty said that too many distillery startups begin with the owner blindly agreeing to options and amenities before obtaining proper cost estimates, causing hard decisions regarding cost-cutting and expense squeezing later. Collecting accurate cost measurements before startup is a lot of work, but it ensures that the owner gets the equipment and machinery based on what they have right now and what they want in the future.

  “For example, going with a column still means you’ll be installing the entire system upfront, even if you don’t yet need it,” said Kelty. “You may only run it on a part-time basis, but with a column still, once you reach max productivity, you have to install additional column stills to increase production. One fermenter is generally needed per eight-hour shift, so if you run continuous shifts, you’ll need up to three fermenters per 24-hour cycle. A simpler pot still can be run on a batch basis and, if needed, can also be used after fermentation as pre-bottling holding bottling tanks. They are multi-functional and can be added to, but they require more attention than a column still.”

  Kelty told Beverage Master Magazine that using experienced professionals in distillery design is a must. Roughly half of VITOK’s distillery design business includes the trendy retrofitting of old buildings into new distilleries. Often, these buildings need redesigning to accommodate the potential hazards of distilling. New construction is costly upfront but allows optimal design based on current and future plans. 

  “All architects, designers and engineers must have a safety-first mindset because of the inherent dangers of distillery operation. VITOK started as chemical plant engineers, so safety is ingrained in our way of thinking. Others may not necessarily have that same mindset,” Kelty said. “Did you know that commonly installed PVC drains installed under slab concrete floors can melt if distillery wastewater is pumped through them at too high of a temperature? Neither did the particular distiller that this happened to. That’s just one example of things that experienced distillery professionals know, and some unexperienced general contractors in the distillery construction field may not.”

  Future goals and expansion plans should include the possibility of increased deliveries, the need for additional raw materials storage and what happens to your spent grain. Farmers used to take all they could, but in Kentucky, Kelty said there’s now an overabundance of distilleries and spent grain, so farmers are now charging to haul it from the distillery, meaning additional costs.

  A project manager is also critical, he said, to keep the project on deadline, within budget and moving smoothly.

  “And then assemble as much of a dream team as you possibly can to keep all parties moving in the same direction towards the same goal. The owner, architects, engineers, lawyers and marketing consultants need to start at the same time to be on the same page and working towards the brand story or identity that the distiller wants to convey. Having that singular vision helps avoid cost overruns and delays.”

  “Just learn as much as you can, talk to those that have gone through it, and partner with those having verified experience in distillery startup equipment, procedures and practices,” Kelty said.

Don’t Forget About Grain Handling

  “Grain handling is usually an afterthought,” said Adam Dubose, Sales Engineer at ABM Equipment (See their ad on the Inside Front Cover). “It’s just how it is. By the time we get involved, it’s usually the last step, and we have to deal with the leftover space. But that’s okay because that’s what we do.”

  “Most brewers will mill their grain if they can,” said Dubose. “If you can do that, you have total control over the coarseness, the makeup and the content while saving significant money. You’ll find out just how quickly you go through grain when you only buy small bags of pre-milled grain. The costs will add up quickly, so if possible, it’s best to mill it and start with one silo. Just keep in mind a plan and a place to install two or three more down the road.”

  ABM Equipment helps brewers design a future-friendly brewery layout to efficiently use the available space to maximum advantage. They take the needed time to go through plans and goals and develop an agreed-upon design to match each brewery’s specific needs. This method heads off potential problems and headaches before installation begins.

  “Good planning with good future projections is the key,” said Dubose. “With grain, milling and conveyance equipment, you need to plan as far into the future as you can. Budget will always be a factor. Get what your budget allows, and add the needed equipment later, but good planning and foresight with design and space will make any future additions easy to implement.”

Been There, Done That, and Willing to Help

  Starting up a distillery is unlike any other business startup. It’s critical to take advantage of the information and help from those that have traveled the path. People like Patrick Heist, Ph.D., Chief Scientific Officer of FermSolutions and Co-owner of Wilderness Trail Distillery, are a wealth of knowledge, from questions about the startup process through full-service consultation and design of your distillery.

  “We engage with customers from the conceptual phase through the distillery construction,” said Heist. “FermSolutions was started in 2006 and works directly with hundreds of distilleries on process optimization and problem-solving. By starting Wilderness Trail Distillery as an extension of FermSolutions, we have real-life experience in the right versus wrong ways of doing things to help solve issues for other distillery startups. Once they are running, we offer our expertise-driven fermentation products like yeast, enzymes, lab services and more to make sure the process is optimized and producing the best possible yields and flavor. We’ve expanded three different times since, from a one barrel per day operation to now being the fourteenth largest bourbon producer and the eighteenth member of the Kentucky Bourbon Trail.”

  Heist said that there are numerous questions to consider when starting a distillery, and as expected, the big one involves funding. “Make sure you are properly capitalized, not only for seeing the project through but for any unforeseen situations that will arise. Make sure you can wait, if you haven’t already, for the aging process before you start realizing a cash flow. Some distillers are trying to get initial cash flow through products that can be ready to sell in short order, like moonshine, vodka or gin. I will warn you that sometimes the marketing required to get any meaningful revenue out of these types of spirits is cost-prohibitive. Make sure you have your priorities in order. You should already know the types of distillate you plan to produce along with what feedstock you’ll use for each type. What recipes will you follow? Are your sources reliable? What are your plans to meet future growth and demand? What type of equipment do you need to meet these goals? Are your building utilities proper for your distillery plans?”

  Heist suggests that just as you use your budget efficiently and wisely, so should you use your time. For example, if you’re planning on making a straight whiskey, you likely have at least two years to design a bottle and work on marketing plans, so stay focused on the current operation itself, including yields and great flavor profiles. Legalities, laws and regulations must be precisely met and followed, so it’s mandatory to get help in these areas. FermSolutions can provide guidance, but the Distilled Spirits Council of the United States (DISCUS) and the Alcohol and Tobacco Tax and Trade Bureau (TTB) are also great resources. Tap into other nearby distilleries that have already navigated those waters, and don’t be afraid to ask for help and guidance.

  “Be a student of the process,” said Heist. “Take the initiative to get yourself going and choose help based on actual need. A lot of money can be spent on non-essential consulting services that could be put to use in production. Because when you get down to it, it’s about what you can afford. Some say to go with bigger equipment, like stills, to support future growth and production increases, but along with that comes more energy requirements, the need for bigger boilers, chillers and so on. Focus on getting equipment that will serve your immediate needs within your current budget constraints.”

Addressing COVID-19 During Startup

  “You normally have the big five concerns when starting a business: namely, your business model, portfolio mix, funding, appropriate licensing and equipment, but 2020 has put a whole new spin on things, especially where the public is concerned,” said Donald Snyder, founder of Whiskey Systems, a complete craft distillery management service. “You’ve now got to also ask yourself how you’re going to comply and maintain the safety requirements for your area, including OSHA-based requirements and more, and of course, social distancing if it’s still mandated later this year. In my experience, most new startups don’t consider the current requirements for their locality. How are you going to achieve and continually manage the mandates needed to comply with your local safety, health or fire regulations?”

  Snyder told Beverage Master Magazine that while opening and building anticipation of a new distillery in today’s market can be done within local requirements, it’s a different story moving forward. “You’ve got to have some sort of system in place to build on and meet your needs while remaining current on, and working within, those state and local allowances and restrictions. You may, for example, have to prepare to spend money upfront and wait the necessary number of years to age and produce a quality product. White spirits and moonshine age faster and are available to sell quicker, so you just have to be creative and use what you are given.

  “A good example is the option to sell your full bottles, mixed cocktails and related items to go,” said Snyder. “If you’re in one of the states that allow that, then great, that’s a quality feature you can build and design your business model around while waiting for the restrictions to ease up, hopefully in a reasonable time. If you aren’t allowed to do that, then for now, at least, your storefront has to be built around merchandising and awesome consumer experiences. When I walk into your place, the customer experience should be your number one concern, followed by the tasting and the tasting room experience.”

  Snyder believes in having something to show for your investment, so it’s best to purchase or lease-to-own quality equipment. Financing can work, but the thing to remember is that, unlike the beer or wine industry, distilling equipment holds its value exceptionally well. It won’t depreciate like other manufacturing machinery, so, many times, you’ll get your full or near full investment back. With leases, it can be easier to have someone take over the lease and be on your way. A lot of the equipment for wine and beer can be interchangeable, but distillery equipment is different.

  “Little things that have big meaning for distilleries can be overlooked if you’re not using engineers and architects experienced in distillery design,” said Snyder. “One mistake I see made a lot is the absence of roll-up or dock doors. How are you going to move your glass, cans, grain, spent grain and materials? Prepare for the cost of employees, rent, any leases, etc. You’ve got to stay aware of long-term logistics for business expansion or the addition of future lines or products. Don’t layout your distillery in a way that restricts or financially inhibits future growth and expansion. Safety is another important area of concern, so it’s important to consult with engineers and architects that are familiar with and understand the workings of a distillery and the relatable OSHA regulations. Distilling and grinding your grain produces natural explosion hazards, so it’s critical to design your spaces accordingly.”

  “As important as all these other things are, it’s just so critical to stay in compliance with state and federal reporting regulations,” said Snyder. “It’s so important to start your reporting and tracking before you get audited. Choose a system similar to Whiskey Systems that fits your needs and provides an audit-ready place to manage your records.”