“SHOW ME THE MONEY”

After Friends and Family, Where Do I Get Growth Capital?

By: Quinton Jay

dollar bills flying

Like most entrepreneurs, founders and owners of smaller craft breweries and distilleries often find themselves having to wear many hats. You need to be aware of your internal operations and external logistical factors in your business’s supply chain, as well as understand how to best market and sell your brand’s products.

  Arguably one of the most important hats you will have to wear that is not obvious is the one that reads “finance.” Without having a finger on the pulse of your business’s finances, you’re setting yourself up for inevitable failure. Running out of cash is the number 1 killer of businesses within the first two years.

  When your finances start leaning towards the red, or you know your business requires an additional injection of capital to grow successfully, it can be easy to feel frustrated and discouraged. But this is simply another part of business; you can’t expect to reap the benefits without having to face and overcome the hurdles and challenges you’re bound to encounter.

  If you — like many other small business owners — were able to obtain at least a portion of your original capital through friends, family, or other investors, this may not be a possibility further down the road. This is where that “finance” hat comes into play once more. In order to emerge from uncertainty with a brewery or distillery that is ready to continue growing, you as a founder or owner are required to find alternative means of raising funds, especially if your overarching aim or goal is to land an eventual, profitable exit. But where do you start?

  Here are some ways that you can use as means of obtaining additional growth capital for your small brewery or distillery business when reaching back out to friends and family is no longer an option.

Understand the Realm of Private Equity Investments

  As the Managing Director of Bacchus Consulting Group and its capital management fund, I have more than twenty years of experience managing, consulting for, and investing in more than a handful of small, independently-owned brewery and distillery businesses. I have helped dozens of businesses in the industry understand their options when it comes to raising growth capital through VC investments, the separate stages of fundraising, and the impact that each fundraising option has on those businesses.

Private Equity Funding

  When the time comes to look into raising growth capital for your small brewery or distillery business, the most prominent option you will run into is private equity (PE). To put it simply, PE involves investing in companies using capital that has been sourced from individual or institutional investors, as opposed to investing in companies using capital sourced from public equity markets like the NASDAQ or New York Stock Exchange.

  For the sake of insight, the general thesis of any PE investment is three-fold. A PE investment is made to: firstly, purchase a company (or portion of a company) using significant leverage and a minimal amount of equity; secondly, utilize the industry expertise and synergies of the PE investor(s) in order to maximize the growth and efficiency of the acquisition or investment made, and; thirdly, to sell that acquisition in an approximate period of 3-7 years based on the company’s improved metrics and lowered levels of debt.

  A common misconception with PE funding is that giving away equity in return for capital is “free,” but this could not be further from the truth. Selling equity for capital is simply a means of delaying payment. With PE funding, there’s no true cap on what you can give away in return for the growth capital you want or need. If you believe in your business, you’re better off acquiring debt rather than selling a portion of your equity. When you give away equity, you’re giving away infinite returns in perpetuity.

Alternative Lenders (Non-Bank Financing)

  Some sources of alternative financing include:

●    Merchant Cash Advances (e.g., Quickbooks capital, Shopify capital, AMEX Merchant Finance, etc.);

●    2nd Lien Lenders (similar to a 2nd lien on a home mortgage)  and;

●    Unitraunche Lenders: a hybrid lending model that combines multiple different loans — sometimes from multiple lending parties — into one, with a blended interest rate that tends to average those of the lowest and highest rates of the individual loans lent.

  As their name states, these are each an alternative form of financing available for businesses looking for access to growth capital. However, these forms of financing for businesses tend to be riskier on the part of the lender, hence why they charge more for these sources of growth capital.

Traditional Lenders (Bank Financing)

  Financing for growth capital through bank loans is another available option for small businesses. This avenue tends to come with lower interest rates than most sources of alternative financing but is usually much more difficult to acquire.

  Financing can also be done through debt, rather than its equity, but again: if your small brewery or distillery business is already deep in debt, it may not be the most beneficial option available to you. Although, when acquiring bank debt, or any debt instrument (as opposed to equity via PE financing), there’s always a cap on how much you can pay for the use of those funds received.

Finding the Right Investor for Your Brewery or Distillery Business

  Regardless of which financing option you choose to go with when searching for additional growth capital, the most important factor to keep in mind is to find the specific investor, fund, or lending institution that compliments your business and its goals. If your aim is to grow your brewery or distillery into a business that can be acquired by a larger parent company in a multi-million dollar deal, then PE financing is likely your best option. Similarly, if your business has a higher amount of debt, finding an investor that can provide you with acceptable terms for a second lien may be the avenue you wish to pursue.

  Whatever type of growth capital investment you wish to see for your business, be sure to ask yourself questions regarding the synergies your investor has with your business. Some examples of these might include:

●   Does this investor have good chemistry with me and my core leadership team?

●   Does the investor have a willingness to help and mentor me and my team on how to best successfully grow our business in line with our goals?

●   Does this investor believe in me, my team, and our ideas for our business?

●   Do they have relevant experience and connections we can utilize for additional investment opportunities now and/or in the future?

●   Does this investor have the domain and expertise — along with the capital — necessary to help carry our business forward through periods of growth we want to achieve?

  If your answer to any one of these questions falls into the realm of anything other than “yes,” then chances are high that they are not the right investor to bestow you and your business with growth capital. Additionally, if you or your core team are not ready or willing to accept mentorship from an investor, then don’t waste their time (or yours) trying to receive an injection of capital for growth solely for the sake of having more cash to fuel your business’s runway. Too many businesses — even smaller breweries and distilleries — land themselves in hot water this way. Don’t become one of them.

Showing What Investors Want to See in Your Business

  Before any investor, fund, or firm will agree to make an investment of growth capital in your business, they are going to scrutinize your business from every perceivable angle. Throughout their vetting process, you can (and should) expect any potential investor to analyze no less than the following aspects of your company:

●   Business Model: How does your brewery or distillery make money? What are your key business metrics such as revenue and gross margin, operating profit, and EBITDA? Is your current model scalable or does it need to be reworked if your business wishes to continue growing?

●   The Team: Does your business’s core team (including you) possess the knowledge, skills, and ability to carry the company through periods of growth? If not, which employee(s) need to be let go and replaced? Is the team able to collectively address and resolve issues?

●   Structure and Governance: How is your company structured and led? Is there transparency and accountability across its departments? Does your business have a succession and/or key man insurance plan in place? If so, what does it look like?

●   Exit Plan: Does your company have an exit strategy in place? If not, then why not? If so, what does this plan look like, and is it reasonably sound?

  All of these factors will play a vital role in your business’s ability to land growth capital. From my own experience as an investor/financier, I am looking for specific reasons not to invest in or finance a company; anyone can fall in love with thier own deals and each deal must stand on its own merits. This means that you, as the founder or owner of your business, will need to know both your company and its market viability inside and out if you wish to gain an investment of capital necessary to grow it in a way that meets your goals.

  If you are able to show investors and financiers that you are credible and trustworthy, that your business has shown the capacity to make sales of quality products and grow from its revenue and profits to date, and that it has the potential to continue growing in its existing market or into new markets, then your chances of landing an investment of capital required for growth are much higher.

GETTING CRAFTY: How the Beverage Industry Can Secure Business Funding

By: Raj Tulshan, Founder of Loan Mantra

hand holding dollar sign

According to the Independent Craft Brewers Association, the Craft Brewing Industry was responsible for over 400,000 jobs and contributed $62.1 billion to the U.S. economy last year.  As with other industry segments like restaurants and retail, COVID-19 had a devastating impact on sales.  Craft beer retail sales decreased 22%, to $22.2 billion, and now accounts for just under 24% of the $94 billion U.S. beer market (previously $116 billion)*.

  At the same time, craft brewers and brewpubs may have found themselves left out of the American Rescue Plan, which offered $100 million in grants for eligible organizations during the COVID–19 pandemic. And for those companies that could take advantage of government programs like the  PPP (Paycheck Protection Program), records indicate that more than half of the funding proposed to help smaller shops and owners, actually went to larger corporations.

  When it comes to funding your business, you have many financing options. If you’ve decided that borrowing money from a lender needs to be a part of your funding plan, there are many things you can do to increase your chances of getting the best possible loan, including different kinds of research, some careful planning, or actions you can take. 43% of small businesses applied for a loan last year, and only 48% of those small businesses get their financing needs met.

  Banks lent over $644 billion to small businesses in 2019, but lending slowed in the wake of the pandemic in 2020. With lenders feeling more optimistic in 2021, there will be more options for small businesses looking to rebound. For businesses still struggling after more than a year of unprecedented disruption due to the COVID-19 pandemic and working tirelessly to recover, not all hope is lost. Consider the case of  Trubble Brewing Company.  Trubble Brewing received loans to expand from one location to three in the Ft. Wayne, Indiana area just before the pandemic began in 2019.  From 2019 through today, the company enjoys huge success.  

  To best position you to apply for a loan, there are some steps you can take, from figuring out if you can qualify to prepping all the documents you’ll need. Here are some tips to think about when financing:

  Research loan products: Understanding the type of loan that are available is critical. Applying for a loan, when what is actually needed is a line of credit, will slow down the process and possibly end in a loan denial. Experts from Loan Mantra can help you pinpoint exactly what type of funding is needed and help guide businesses through the application process step-by-step.

  Structure the deal:  Working with an expert can help you structure the loan so that your approval is fast and successful.  For instance, know what specific things associated with the business that a lender will grant you funding for and structure the loan accordingly.  For instance, borrowing money for expansion, real estate, machinery and buildings may be very amenable for a lender.

  Make a name:  Now is not the time to scale back marketing efforts or forget to update the website.  Market your craft brew, register a website domain address and update your online profiles. Get a professional logo.  Be active on social media and online.  Stake your claim in the industry and make the craft beer name stand out.  Register with search engines and on multiple platforms so that banks and other lending institutions can find and get a feel for the company.

  Realize it takes time:  One of the biggest factors in determining whether a loan is approved or not is the length of time a brewery has been in business.  Lenders want to know if a business has stability and the longevity to keep up with the business in the near and long term so that their funds will be re-paid.  In addition, the ability to provide receipts and prove profitability are very important even if a business is fairly new.  The lender is determining if a company has credibility – does a business invoice and collect payments on time, maintain records and conduct its processes in a professional manner.   

  Organize and compile your documents:  Applying for a loan requires financial transparency, so make sure your financial, accounting and tax records are accurate, organized, and updated. You’ll likely be required to submit numerous documents, including three years of business and personal tax returns, a loan application that permits a personal credit report for all owners, business debt schedule (BDS), personal financial statement (PFS), interim financials, AR and AP aging reports, entity documents, and purchase agreements. Organizing and compiling these items ahead of time makes the process much easier and less stressful. The Loan Mantra portal allows you to upload and securely store your financial documents so you’re prepared to apply for funding as you prefer.

  Maintain credit worthiness: Pay your bills on time, have the best credit possible, and know your credit score. Avoid foreclosures, bankruptcies, and late payments. While different lenders have different credit requirements, good credit is important regardless of the loan you’re pursuing. Lenders often require a credit report that can mildly impact your credit, knocking a few points off your credit score each time you pull the information.  Therefore, applying for too many loans simultaneously may undermine your credit score, so start by applying for a loan that you have the best chance for securing. Loan Mantra’s financial technology, BLUE (borrower lender underwriting environment), uses decision-tree logic, meaning it can help you determine the best loan product for your needs. Also, Loan Mantra experts can help you determine the most prudent options for financing–from a conventional loan to MCA–based on your borrowing needs.

  Be prepared:  Now is not the time to scale back marketing efforts or forget to update the website.  Market your craft brew, register a website domain address and update your online profiles. Get a professional logo.  Be active on social media and online.  Stake your claim in the industry and make the craft beer name stand out.  Register with search engines and on multiple platforms so that banks and other lending institutions can find and get a feel for the company.

  Sustain and remain:  What part of the brewery: growing, product, mechanism, process, water usage, energy consumption, etc. is sustainable?  Does the brand resonate with the community and do you know the future goals for sustainability in the areas where the business is located?  This can make a direct impact both now and in the future.

  Keep records safe:  Providing and producing documents for the loan process can be time consuming and frustrating for both borrower and lender alike.  Working with companies that have an online portal to streamline this process to keep this information safe and secure for use anytime can save time, headaches and money.  Fortunately, Loan Mantra offers this service that is free to all business owners.  Simply upload your documents to a secure portal at loanmantra.com.  You don’t even have to be a client or customer to use the service.  

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About the Author

  Neeraj (Raj) Tulshan is the Founder and Managing Member of Loan Mantra, a financial advisory firm with best-in-class and proprietary fintech, BLUE (“Borrower Lender Underwriting Environment”). Loan Mantra, Powered by BLUE, is next-level finance: a one-stop-shop for business borrowers to secure traditional, SBA or MCA financing from trusted lenders in a secure, collaborative and transparent platform.

  After graduating from Ithaca College in Finance, Tulshan began his banking career at Merrill Lynch in New York City. He spent more than a decade in the Currencies, Commodities and Investments Group where he also worked with global asset-backed securities, structured products and principal investments. Here, he also originated and underwrote deals valuated near $25 million and structured Series A and B financing.

  When the market crashed in 2008, Raj saw a significant opportunity to fix the fractured lending ecosystem. Soon thereafter, he sought after and completed an MBA from the Said School at Oxford University and began developing Loan Mantra. His goal was to remove the silos that exist between lender and borrower using secure financial technology. Though Tulshan continues to be iterative with his fintech, meeting current demands of both market and borrower, his professional mission and good- natured approach with clients remain the same. In this, Loan Mantra displays its founder ’s proud partnership between best-in-class fintech and top-marks human experts. Time-and-again, clients turn to Raj because they know he will always pick up the phone and offer unparalleled financial counsel in a remarkably human —even friendly—way.

About Loan Mantra

  Loan Mantra is a financial services company designed to serve small and medium businesses with offices in New Jersey, Charleston, SC and New York. At Loan Mantra your success is our success.  This means that our attention, purpose, and intention are all focused on you, our client.  We are your ally to overcome obstacles, bringing peace through uncertain times to achieve your highest goals and aspirations. Your friendly, responsive agent will listen respectfully, and service your account actively through one of three locations in the US.  We speak your language whether it’s English, Spanish, Hindi, Bengal, Hospitality, Laundry or Manicure, let us help you today.

Connect with us at…www.loanmantra.com or 1.855.700.BLUE (2583)

BREWERY AS A BUSINESS: Important Points to Consider

By: Jess Perkins

man writing on paper

As an experienced brewery owner or manager, you will agree that starting a brewery is easy; running one is not. There are many different things to consider and plan for when running a brewery, and many of those things only become immediately apparent once you are running a brewery. This article will discuss the major issues that any brewery needs to consider. They are not all equally important; some may even be seen as trivial, but each case has been a stumbling block for at least one brewery in the past.

Staffing

  Employees of a brewery are so crucial to the success or failure of a brewery. There are several points to consider when hiring employees for your brewery. You will want people who are motivated, responsible, professional, and of course, good at their job.

  It’s important to remember that if you have a small number of employees, you must compromise on at least one of these positions because there aren’t enough people out there with the skills of a great brewer, accountant, salesperson, and bar-tender all rolled into one. It’s not unusual for a brewery to have several business partners who take on different business roles, but this leaves some positions understaffed or unfilled.

  An important point to consider when hiring is that not all employees want to work full-time hours. You need to be able to offer flexible schedules and part-time positions as well as full-time ones. Employee scheduling and planning for business needs/periods throughout the year is a difficult skill and something that requires good time management.

  Employee training is crucial in the brewing business. It is expensive and time-consuming to train new employees, so you want to ensure that the person you hire will be successful. You don’t generally find people willing to work for free, so training costs do fall on the brewery. The more money you invest in your employees, the better they will perform their jobs — it’s as simple as that.

Labor Laws

  It would be wise to familiarize yourself with labor laws in your geographical location, country, and even state/province (if applicable). The U.S., for example, has very different laws in each state, resulting in a complex web of labor laws that can be difficult to navigate through. There are also different laws for different types of employees, e.g., full-time vs. part-time or salaried vs. hourly.

 Breweries that hire non-exempt employees (i.e., those who get overtime pay) should become familiar with the Fair Labor Standards Act (FLSA), which outlines the rules and regulations relative to paying overtime, minimum wage, and child labor.

  Breweries that hire exempt employees (i.e., those who do not get overtime pay) should become familiar with the Internal Revenue Service’s guidelines of what qualifies an employee for “exempt” status. For example, managers may be eligible as exempt under some circumstances, but it is wise to consult with a tax professional if you are unsure.

Pricing

  There are many different ways to price your beer. There is a powerful perception in the craft brewing industry that all breweries sell their product for “too cheap,” and part of the job of a brewery is to educate consumers on what good beer costs. In fact, some brewers go as far as saying that if you can’t afford their beer, you probably can’t afford craft beer.

  There are many factors to consider when deciding on a price for your product, not the least of which is competing in your market. Price too high and no one will buy your beer, price too low and you may lose money or have to discount the beer very frequently to move it off the shelf — another challenge altogether.

  In addition to that, you have to take into account other factors such as overheads costs (keg size, pour size). You should also understand the difference between pricing off-premise and on-premise bottles and cans. At Untappd, there’s a beer pricing guide that is worth a read for future reference.

  Regardless of how you price your beer, it is a fact that the craft brewing industry is a volume or “spread” business. Very few breweries make money, but those that sell beer to enough people make a decent income at a good spread. If you look at the National Brewers Association’s list of the top 50 craft breweries in the U.S., it becomes apparent that volume is king. Very few of these breweries make significant profits, but they are still thriving because the spread between their production costs and retail prices is greater than most other beer manufacturers.

Branding

  Branding is an essential aspect of running a brewery that includes everything from your logo and beer labels to where you sell your beer. It also involves how you market, advertise and promote yourself. An excellent way to think about it is the total image or “face” of your business. Breweries also have to think about consistency in their branding across multiple locations.

  There is a lot of money and effort involved in making sure that all your beers, logos, labels, and promotional materials are consistent from location to location. If you own more than one brewery, it is almost impossible to create a consistent image between them.

  Craft brewing is an industry that has been growing exponentially for several years. While it is a great time to open a brewery, staying relevant and growing your business can be equally challenging. Many challenges have come along with the current craft beer explosion, not the least of which is keeping up with demand. It’s no secret that many breweries find themselves struggling to meet the demand for their product.

Taxes

  Breweries have a general misconception that they don’t have to pay taxes on top of the price increases they charge for their beers when in fact, they do. You can avoid paying taxes somehow, but it is not advisable, and the penalties are severe if you don’t follow proper procedures by filing quarterly estimated tax returns.

  Brewers must also pay close attention to the Alcohol and Tobacco Tax and Trade Bureau (TTB).

  Once a brewery has sold its first keg of beer, it will need to get Brewer’s Notice required for breweries to sell beer. The TTB also requires brewers who produce more than 100,000 barrels per year to file an annual report and pay a fee.

Tax rebates for breweries are rare, but there are some. The primary way breweries can reduce their taxes is through tax credits usually applied to capital expenditures or new equipment. These credits are offered by the federal government yearly, and every brewery should apply for them.

Competition

  Brewery owners should always think about how they can differentiate themselves from other breweries in their local market. The more you know about the competition, the easier it is to compete with them. You will need to consider your price points, your unique selling proposition, and what makes your brewery stand out from others. To do this, you’ll want to collect as much information as you can about your competition. It doesn’t end there. Once you have a large enough customer base, you’ll notice that many of them will want to know how your beer is made, especially if they are true connoisseurs.  

  Brewery owners should also be aware of what their competitors are doing and what the market will bear. You have to know when to compete with other breweries and when you should let them fight amongst themselves while you keep your focus on growing your customer base. Brewery owners who are too aggressive in competing against other breweries may alienate customers and create bad press for their company.

Growth and Expansion

  Growth is vital for breweries, but it shouldn’t be the only focus. You need to think about how you can grow your brand and maintain your current customer base while still maintaining product quality and consistency and avoiding the depletion of raw materials as much as possible. Successful brewery owners know that growth is not always good and that some microbreweries have been forced to close their doors because they grew too fast.

  Brewery owners should think about the total market for craft beer and how it is evolving, not just your little bubble of sales. They need to be aware of what the current trends are and stay ahead of them. As new breweries pop up, you’ll want to ensure that your brand is strong enough to stay relevant in your local craft beer scene. Making sure that you are always ahead of the curve will help your brewery grow and look forward into the future rather than behind at all of the things you used to do

  Brewery owners and managers can’t just rest on their laurels and expect success to keep coming. They have to engage in the marketplace actively and stay ahead of trends or be one step behind them. You also need to try new things that you think will work despite what your competition is doing. Most importantly: never lose sight of your goals and vision and stay consistent with it. No plan will be perfect, but that shouldn’t stop you from trying your best to get there.

Assessing the State of Craft and Specialty Beer Distribution Post-Covid

By: Becky Garrison

man carrying stack of beer on his shoulder

According to the Brewers Association, overall U.S. beer volume sales were down 3% in 2020, while craft brewer volume sales declined 9%, lowering small and independent brewers’ share of the U.S. beer market by volume to 12.3%. Retail dollar sales of craft decreased 22% to $22.2 billion and now account for just under 24% of the $94 billion U.S. beer market (previously $116 billion).

  According to their analysis, the primary reason for this overall sales decline was the shift in beer volume from bars and restaurants to packaged sales. Given this shift, how did craft beer distribution change during this ongoing global pandemic?

Half Time Beverage

  Half Time Beverage features over 4,000 craft beers and ciders from over 800 breweries across 50 countries. They sell via two New York based retail stores and their online business, a convenience that helped them during the worst of the pandemic.

  “The fact that we were able to deliver the best in craft beer to people’s doorsteps result-ed in an increased amount of purchases from both existing and new customers who ordered from Half Time during Covid,” said Jason Daniels, Half Time Beverage’s Chief Operating Officer.

  During Covid, Half Time had less availability in terms of seasonal releases such as Pumpkin Beer. “We had a lot of challenges in getting seasonal products this year as craft beer manufacturers are focused on making and distributing their core product releases,” Daniels said.

  Moving forward, Daniels does not foresee any changes to their marketing strategies, adding that Covid changed buying behaviors, specifically with a significant increase in online shopping. “We anticipate this will continue as things open up. The high availability of online goods and shopping amplified everyone’s ability to shop in different ways successfully.”

Tavour

  Tavour, a Seattle-based craft beer distributor, gets its beers directly from craft breweries. Once these products arrive at their facility in Washington State, they market and ship them to their members across the United States.

  During Covid, they implemented major safety modifications, including creating social distancing measures and increased sanitation for workers and the beers they distribute.

  Throughout the pandemic, Tavour ended up increasing its sales threefold. They attribute this growth to their SEO status increasing significantly, leading the company to be listed in the top five searches for craft beer delivery.

  They also observed that since people could not attend breweries or beer festivals in person, they were looking for new ways to try craft beer. Tavour filled this need with accurate tasting notes for all their offerings, capitalizing on their bevy of product samples and quality taste testers. These notes enabled their customers to have a better idea of what they were buying, even though they could not sample the beers themselves.

  While Tavour does not have any firm dates regarding when in-person events can happen again, they hope to resume them in 2022. Currently, they are working to help put on the Barrel and Flow Festival, a Pittsburgh-based celebration of black arts and artists.

Localized Craft Beer Distribution

  As the owner and sole proprietor of Packmule Beverage, Brian Balland buys from breweries that self distribute in Washington State and Oregon and then sells these beers directly to consumers. He delivers the orders to select breweries throughout Washington State, where customers can then go pick them up.

  He developed this niche, direct-to-consumer service for Pacific Northwest craft beer aficionados who want to sample beers from smaller breweries that only have these offerings available at their brewery but are too remote for them to visit on a regular basis. 

  Initially, Balland began this service by working with brewers within his circle. Later he expanded to include requests from customers for specific breweries.

  While he launched Packmule in September 2020, Balland conceived of this service pre-Covid. However, he said, “Covid made it easier to try new things and made consumers a little more malleable to trying new ideas rather than doing things the old way.”

  Since launching this service, Balland estimated he has pivoted twenty times, trying to figure out what will work best for the consumer. Moving forward, Balland plans to con-tinue offering Packmule’s services for consumers in the Seattle and Portland area.

DIY Beer Distribution

  Given that both owners of StormBreaker Brewing in Portland, Oregon, have experience working for a distributor or a logistics company, they chose to apply these skills in assessing how to distribute their award-winning craft beer during the global pandemic. After researching the cost benefits of various distribution models, they concluded that a self-distribution model worked best for them. So, they launched their self delivery ser-vice on March 17, 2020, right after Oregon issued a stay-at-home order, forcing bars and restaurants to close statewide.

  StormBreaker already had an active website for customers to order their beer and mer-chandise online, so they did not incur many logistical issues when launching their delivery service. They set up the ordering platform, and within days they were delivering to customers’ homes and establishments that remained open.

  According to co-founder Dan Malech, “The biggest advantage we have is complete con-trol of our product from inception to delivery. We have an amazing range of flexibility of what we sell, where we sell and when we sell.”

  This DIY model allowed them to deliver beer to their customers with very little notice. Malech cites an example where, during a bad snow and ice storm, the brewpubs around town that remained open were running out of beer. No one else was delivering.

  “We received a ton of calls, hopped in our vehicles, and made many new and lasting customers. I mean, we’re called StormBreaker!”

  While StormBreaker’s beers can be found in retail and grocery stores such as Whole Foods, New Seasons, Market of Choice and most regional bottle shops, some retailers won’t work with them. Also, they cannot approach certain parts of the United States without a distributor.

  “There were too many advantages to self distribution for a company of our size to ig-nore,” Malech said.

  Currently, Stormbreaker has dedicated staff to fulfill and deliver their online orders Mondays through Saturdays. They offer home delivery to the Greater Portland area, with their sales team doing periodic drops to Bend, Oregon and Seattle, Washington. Also, they can ship beers via UPS to those states that permit online sales. For all other out-of-state and greater Oregon sales, they partner with Bevv, Packmule, Drizzly and Tavour, which allows them to have a larger reach both regionally and throughout the country.

Merchant du Vin: Specialty Beer Importer

  Seattle based Merchant du Vin noticed that the distribution of their specialty beers increased in retail stores due to more consumers drinking beers at home during the pandemic, causing their overall sales to increase.

  On the other hand, bar and restaurants sales decreased when these establishments were closed due to Covid-19 restrictions. For example, Orval Trappist Ale is one of the most popular imported specialty beers Merchant du Vin represents in the U.S. While this beer is available in select stores, the bulk of its sales come from bars and restaurants that carry a small but carefully curated craft beer list.

  In addition, with the closing of on premise sales, there were huge losses of keg sales across the U.S. According to Craig Hartinger, Merchant du Vin’s marketing manager, “We actually fared better than some suppliers, but there were hundreds of kegs that we couldn’t sell.”

  Merchant du Vin also lost their ability for their beer representatives to present beers in person to potential outlets, as well as opportunities for in-person consumer tastings. “It took a while to get our online meetings up to speed,” Hartinger said.

  When regions open up, Merchant du Vin plans on continuing their online connections, resuming in person visits and reducing their keg options. Once events can be held in-person, they plan on exhibiting their wares as applicable, such as their Samuel Smith ciders, which they featured at Seattle Ciderfest pre-Covid.

Types of New Software & Technology in the Beverage Industry

By: Alyssa L. Ochs

statistics appearing on iphone

Everything is going high-tech these days, and the craft beverage industry is no exception. If you work in this industry, staying updated on the newest technology will help you make smart decisions for your business. Not all forms of technology make sense for every beverage business, but the benefits of familiarizing yourself with what’s on the market will pay off in the long term.

How Technology Can Improve Beverage Production

  Although the processes of making beer and spirits haven’t changed much over the years, many smart technology options are available to help with everything from product-tracking to label-making to helping consumers connect with brands interactively. Whether you’re looking for help with beverage planning, supply purchasing, production assistance or quality control, there’s likely a tech-savvy solution.

  In the front of the house, technology makes it possible for customers to order drinks via touchscreen rather than through a human server. Behind the scenes, it allows tracking and data management for traceability and knowing what’s in demand. Breweries and distilleries may be interested in learning how to print 3D materials, such as creative artwork for glasses. Blockchain technology can improve trackability across the supply chain and assist producers in better adhering to regulations. Many companies use software platforms to ensure they meet compliance standards.

  Many breweries and distilleries would benefit from upgrading their data management systems to eliminate time-consuming and error-prone spreadsheets. A sound data management system can help producers with sales, distribution, production metrics and demand analytics to better understand what and when to order. Cloud-based software is often preferred by breweries and distilleries because the data can be accessed from anywhere, regularly updated by a vendor and maintained by a professional IT team. Pieces of technology should work together with existing task management apps, such as Trello, and communication apps, like Slack, that your team uses.

  Another use of technology in the industry involves mobile apps to integrate different data points, such as diagnostics, GPS, electronic logs and temperature controls. Artificial intelligence data can develop new flavors based on predictions of what consumers want. AI is also being used to improve quality control through the use of sensors and cameras.

In today’s era of staffing shortages, technology can be utilized to train staff, retain the workforce and recruit new talent when resources are strained. Beverage-makers may also use technology to expand where they sell products to lessen their dependence on traditional distribution channels.

Technology Spotlight: Refractometers

  Based in Solon, Ohio, MISCO designs and commercializes digital handheld and inline process refractometers for industries requiring quantitative determination of fluid concentration and quality. MISCO has been in the refractometer field for four decades and is the only U.S. manufacturer of digital handheld refractometers. It is actively developing new technologies to bring even greater usefulness of refractometry to its markets.

  Mark Keck, Chief Commercial Officer for MISCO, told Beverage Master Magazine that MISCO digital handheld units are ideal for generating immediate results anywhere in the operation. He said they can be programmed with up to five measurement scales from an extensive scale library to provide customers with a device tailored to their exact testing requirements.

  “This feature is especially useful for operations that produce a range of products, eliminating the need for multiple units with a single readout capability,” Keck said.

  Meanwhile, inline process refractometers are best for larger operations and give continuous readings that can be output to any data capture system.

  “For breweries, MISCO has developed a set of measurement scales that were scientifically derived from a complex sugar profile specific to wort,” Keck said. “Other refractometers base their readings on sucrose, which is why using a correction factor is required when using these units. MISCO Pro-Brewing Scales account for the wort’s complex sugar profile, which includes maltose, maltotriose, dextrose, fructose, sucrose and other materials, eliminating the need for correction factors and providing more accurate results.”

  Recently, there have been advances and innovations in refractometry that breweries and distilleries may find helpful.

  “Because every operation has unique testing requirements, MISCO has developed a build-your-own tool on its website to allow customers to easily design and order digital handheld refractometers with programming they select from our large measurement scale library,” said Keck. “In addition, we are developing new refractometers that utilize technologies that are part of the Industry 4.0 paradigm for improvements in operations, automation and communication.”

  Even when beverage-related technology looks and sounds intriguing and exciting on the surface, there is little benefit to trying it just for the sake of novelty. Keck told Beverage Master Magazine that “spyglass-style” analog refractometers are still commonly used in the industry, but these devices have numerous limitations compared to digital units, such as reading subjectivity, precision and durability.

  “When upgrading to a digital refractometer, or even considering a different digital unit, customers would want a unit that is easy to use, employs quality materials, is durable, has automatic temperature compensation, is easy to calibrate and provides readings that match the fluid testing requirements of the operation,” Keck said. “Lastly, product support should also be considered – where the unit would be serviced for routine maintenance and calibration certification.”

  Whether refractometers or any other technology, learn about the products and choose those that set themselves apart from the competition. Depending on the device, this could be related to durability, level of precision or ease of use.

  “Our optics utilize sapphire prisms for high precision, improved temperature equilibration and durability,” Keck said. “Signal detection is achieved with high-definition detectors that provide up to eight times the resolution of other handheld units. Lastly, our commitment to Lean Manufacturing principles and adoption of ISO guidelines ensures that the quality of our products is second to none.”

Benefits of Trying New Software and Technology

  Even with practical considerations in mind, producers benefit from having a forward-thinking approach to brewing and distilling and an open-mindedness about technology solutions that may help your business. Technology can help you be more flexible with production, consume less energy for an eco-friendly operation and make the quality of beer and spirits better.

  Certain pieces of software and technology help integrate functions and manage assets more efficiently, optimize production lines for greater control over processes and attract the attention of tech-savvy consumers. When used correctly, technology can help breweries and distilleries be competitive in an oversaturated market. A good technology solution exists for every brewer and distiller, whether that involves on-premise software, cloud-based software, mobile applications or specialized devices, such as refractometers.

Choosing the Right Tech Upgrades for Your Business

  It’s not always practical to take on multiple types of new technology simultaneously, but a few innovations are worth looking into further. For example, there are some excellent platforms for brewery and distillery management software, and food-ordering software for establishments serving food and drinks. Online restaurant POS systems accept instant payments and provide food traceability solutions for inventory and beverage distribution management solutions. Beverage warehouse and logistics management systems, as well as “Internet of Things” solutions to keep track of food safety recalls and shelf-life management, can be addressed with the latest and greatest technology available to the industry.

  “Tools are available or in development that can impact productivity, improve product quality and consistency and result in greater operational efficiency,” said Keck. “MISCO is integrating many of these technologies into our refractometer to allow our customers to do what they do better.”

Sustainability in Craft Brewing:

A Journey Without An End

By: Gerald Dlubala

4 beer bottles on solar panel

Environmental stewardship and sustainability are a top priority for craft breweries. It needs to be in their business plan because climate change affects every facet of the brewing from the agricultural side through the actual brewing process. A balance between workable stewardship and attainable sustainability practices ensures a quality craft brewing future. The Brewer’s Association is a not-for-profit trade organization of brewers for brewers and by brewers that make it a point to help small and independent brewers reach these goals by offering benchmarking tools and sustainability manuals that encourage and promote these practices.

  Chuck Skypeck, Technical Brewing Projects Manager at the Brewers Association, told Beverage Master Magazine that conscientious brewing practices ensure the long-term success of the craft beer brewing process and the communities they call home.

  “According to business models, there are upwards of 8,500 craft brewers in the United States, with a third of them making a substantial part of their profit through foodservice,” said Skypeck. “Their outlook on the meaning of sustainability and what they want to focus on is different from others that don’t revolve around food service. Regionality also influences a brewpub’s focus, with Western based brewers looking more towards water conservation and Eastern-based counterparts more concerned over energy conservation.”

  But where do you start? What type of benchmarking tools do you need? “That depends on what category you want to focus on,” said Skypeck. “When you break it down to basics, brewing is no different from any manufacturing business. It’s okay to start small and make incremental changes when possible and practical. For example, smaller brewers will not look at solar energy due to the length of time they’d have to wait for the payback. Still, they can certainly make smaller changes such as LED lighting and newer, energy-efficient equipment. And let’s face it, sustainability is truly a journey without an end. Still, any size brewer can be a good community partner and interactive participant in community programs such as clean water campaigns. Of course, even the largest craft brewers are small compared to the big, mainstream national breweries. However, as demonstrated by the Sierra Nevada and New Belgium breweries, possibilities exist for craft brewers, both currently operating using facilities based on sustainability practices, including landscaping and wastewater applications.”

  The Brewers Association offers manuals to help guide producers through various focus areas, including energy, solid waste, sustainable build and design strategies, water and wastewater management.

  Climate change affects everything brewing-related, building the need for sustainability within the industry. Barley has been drought-impacted, with warmer temperatures and irregular, late-season rains, causing early sprouting and more crops to be unusable for brewing, rendering them fit only as livestock feed. Hops have fallen victim to wildfires (smoke taint) and drought, leading to decreased resistance to pests. Then there’s water supply issues, hurricane devastation to specialty citrus ingredients, and CO2 shortages, exacerbated by extreme cold that affects compressors and natural gas supplies.

  “Many brewers talk about using only locally grown ingredients,” said Skypeck. “That sounds good, but many times it’s hard to pull off in the long run. Ingredients like barley have optimal conditions to thrive and are best grown where the climate conditions match that. Ninety-five percent of hops are grown in the Pacific Northwest because of the preferred climate conditions. That type of growing infrastructure is important but expensive to develop and perfect. Other non-optimal areas will naturally have trouble competing not only in quality but the price, and some local level producers can’t produce enough high-quality yield over time consistently. We’re trying to help with that. While the pandemic put a hold on our annual conference, we were still able to move forward with funded research to encourage and facilitate economic, agricultural practices. These included developing barley with longer root masses to use less water for both irrigation purposes and in drought conditions, as well as ways to minimize the need for fertilizer.”

  Skypeck told Beverage Master Magazine that he has seen a trend in the idea of CO2 capture within the brewing industry. The CO2 produced by craft breweries is roughly between 10-20% of the brewery’s carbon footprint. That seems like a small amount, but it’s an economical and sensible way to build sustainability with notable returns on investment when efficiently captured. In addition, smaller capturing units are now more feasible for microbreweries because of the rising purchase cost due to the ongoing supply shortage.

Carbon Capture Is Within Reach

For Craft Brewers

  Earthly Labs is the leader in small-scale carbon capture, with more small-scale systems deployed than anyone globally. Their plug-and-play units are specifically designed for brewery environments and handle variable gas flow rates, allowing capture from different sized vessels and brite tanks.

  Amy George, Founder and CEO of Earthly Labs, operates under the assumption that people will help protect our climate and planet given the right useful and affordable tools.

  “We are constantly innovating on our platform to increase the benefits to the brewer,” said George. “CO2 capture has long been a benefit for large-scale brewers and industrial players, but our system gives most breweries that same opportunity to avoid waste and produce a better product while also helping the environment. Operationally, most brewers larger than 1,000 barrels can now implement and maintain a CO2 capture system. Historically, the economic feasibility of a system used to be governed by the purchase price of CO2. For example, a brewery with an annual production of 5,000 barrels paying one dollar per pound for CO2 supply would receive a faster payback than a brewery producing 20,000 barrels paying ten cents a pound. However, post-Covid, that supply chain is now challenged with volatile pricing and reduced availability. The risk of not being able to make your beer due to CO2 shortages puts pressure on ways to capture your waste gas to use in your beer-making process.”

  George said that carbon capture helps avert shortages, provides cleaner CO2 for use, reduces purchases and ultimately makes products better. The Earthly Labs carbon capture CiCi system is designed for craft brewer or beverage manufacturers with an annual production rate of 5,000 barrels or more. Additional designs for breweries with annual production rates of 1,000 barrels up to those that top the 20,000 barrel mark are in the works. The CiCi system uses a three-step gas purification system that dries, scrubs and liquifies the captured gas to remove unwanted acid gases, aromas, moisture, oxygen and volatile organic compounds. This process ultimately provides a clean product that can potentially help brew a tastier beer.

  “Additional benefits include more certainty of supply while reducing costs caused by delivery fees, surcharges and price volatility,” said George. “Your brewery will reduce CO2 emissions, improving safety while enhancing your brand image by offering a more sustainably brewed product. Looking at cost-benefit alone, most breweries recover their investment within two to three years. That can be far less looking at resulting sales gains based on a better-quality product and marketing that product on a sustainable level. The expected time to recover your investment cost is directly affected by your current cost of CO2, how much you’re using, and the expected volatility of your supply. For example, if you currently can’t brew your beer due to CO2 shortages, then you can recoup your investment in a matter of months.”

  George told Beverage Master Magazine that while some claims are not part of their guaranteed results, brewers currently using Earthly Labs units report additional quality benefits, including better mouth feel and aroma, head retention and lacing. There are also reports of lower dissolved oxygen in the finished product.

  “The natural CO2 that brewers create and then capture comes from the brewer’s ingredients versus hydrocarbon sources, so the resulting CO2 waste gas doesn’t include many of the volatile organic compounds or hydrocarbons found in commercially available CO2 gas,” said George. “As a result, there is statistically less oxygen in the gas, often well below the allowable beverage grade limit. We like to say that this captured CO2 is the fifth ingredient in great tasting beer.”

  The CiCi system captures the waste CO2 vented from a blow-off arm. A stainless-steel drum called a foam trap replaces the blow-off bucket, designed to seal the gas and push it via flex tubing to the carbon capture system, purifying the gas through a three-step process. First, the CO2 is dried to remove water and oxygen, then scrubbed to remove the VOCs and other impurities down to the parts per million or parts per billion levels. After that, the gas is converted to a liquid at -34.7 degrees Celsius, sterilizing the gas allowing more accessible storage. Finally, the liquid is stored in a CO2 tank and usually connected to a vaporizer for integration into the brewery manifold, facilitating use in carbonation, packaging and purging.

  Earthly Labs provides field training through the installation, including equipment operation, troubleshooting, safety, cleaning and general maintenance. The design of the CiCi system makes it easy to use while it runs in the background, allowing the brewer to concentrate on making their beer. Essential maintenance, including weekly cleaning and monthly filter changes, can be done by brewery personnel. The system is also connected to a cloud-based dashboard so Earthly Labs can remotely troubleshoot to resolve the issue or dispatch field personnel to service the unit if necessary.

Packaging for a Sustainable Future

  “Packaging choice is another option to increase sustainability in your brewery, but like ingredients, you should consider the quality, availability and other hidden costs of your choice. There is always a tradeoff when considering suppliers, whether local or national,” said Skypeck. “The brewer has to consider the cost of transportation, how far the packaging materials are traveling and the actual shipping costs for their packaging choices. If you want to use recyclable containers, know the recycling rates for that packaging choice, as well as the recycling rates for your community. There is a current bill in Congress, [The CLEAN Future Act], addressing the returnability of bottles for the entire beverage industry. But will you get people like those in Flint, Michigan, to pay more for [non-carbonated*] returnables and recyclables when they can only use bottled water? There are pros and cons to every decision, so true sustainability is a process for continuous improvement, not necessarily a result.”

  One example of a 100% plastic-free, fully renewable, recyclable and biodegradable packaging solution is the TopClip system from Smurfit Kappa. Maria Berdugo, Smurfit Kappa’s Innovation & Development Manager, told Beverage Master Magazine that sustainability is in the company’s DNA and is the core of their business.

  “To us, sustainability in the beverage market means the reduction of waste going into landfills, the reduction of CO2 emissions and the responsibility in using recyclable raw materials when available,” she said. “We offer our TopClip cardboard solutions for packaging in 12 and 16 ounce cans packaged in a four, six or eight-can pack. TopClip is a Forest Stewardship Council certified, paper-based packaging option. It offers protection from contamination with complete coverage of the can lid and customized, easy-to-see branding opportunities. Additionally, the TopClip offers a more than 30% carbon footprint reduction over alternatives like shrink film.”

  The downside for craft brewers may be that TopClip does require specialized application machines. However, Berdugo said, multiple machine systems are available depending on canning line speeds and individual brewery’s packaging needs. Smurfit Kappa works with the beverage producer to identify the most efficient and best packaging solution.

  “TopClip is an ideal solution for companies that are purpose-driven to invest in sustainable solutions and avoiding landfill waste,” said Berdugo.

The Potential For Tax Credits Is Out There

  “We at the Brewers Association provide nationwide help,” said Skypeck. “There are 50 state brewer’s guilds for craft brewers to turn to for the local support they need, including sustainability guidelines. Along with developing resources and providing safety, sustainability, and quality development tools, we advocate for craft brewing on the federal level, helping to get reductions in federal taxes and working with federal trade bureaus and OSHA regulators. Alcohol law is based on state-level regulations, so the individual states guide breweries on navigating those laws. But we know that there are tax credits associated with CO2 capture for large breweries. We are working diligently to get those same credits available to all of our smaller craft producers.”

* In current Michigan law, residents pay a 10 cent deposit on all carbonated beverages. The CLEAN Future Act proposes a national U.S. law that would require a 10 cent deposit on all carbonated and uncarbonated drinks in glass, plastic and metal beverage containers with the exception of infant formula, liquid drugs and meal and caloric replacements.

Packaging for Distilleries:

Making First Impressions Count Through Efficient and Attractive Packaging Options

By: Cheryl Gray

bottles of alcohol beverage

Packaging for a distillery is as important as the product. They either coalesce or collide. Successful packaging means consumers are immediately drawn to the product for the image as well as what’s inside the bottle. Likewise, the opposite is true when packaging goes awry, resulting in a product that doesn’t move. 

CDA USA

  Packaging experts help their distillery clients decide which packaging to choose and how best to deploy it. One of these experts is Henrico, Virginia’s CDA USA. CDA has manufactured labeling and filling machines for a variety of industries, including spirits, since 1991. Its engineering and design teams create customized packing, labeling and filling solutions for distilleries of any size.  

  CDA attracts distillery clients who need standout, state-of-the-art packaging solutions by drawing upon its versatility. Clients include producers of cognac, brandy, bourbon, rum, whisky, vodka, gin, tequila, liqueurs and more. It offers a wide range of automatic and semi-automatic machines that can handle virtually every type of bottle–rectangular, square, conical or cylindrical. Its labeling machines accommodate new technologies, including tin, transparent and mirror printed labels. 

  For micro-distilleries, production space is at a premium and accommodating new machinery can be a challenge. CDA offers a solution with Ninette 2, a semi-automatic labeling machine that applies two adhesive labels in a single operation. Compact and portable, it solves a major packaging need without taking up a lot of space, and its speed can accommodate up to 500 bottles an hour. The machine also handles different product formats, such as glass or PVC, eliminating the hassle of changing materials. The Ninette 2 works with CDA’s automatic and semi-automatic filling machines. Another model, the Ninette 1, applies a single label at a time and is also designed for small distillery operations.  

  CDA also has a range of labeling options to suit the production needs of medium and large craft distilleries. Some of the company’s clients turn to its R1000/R1500 automatic labeling machines that can label up to 1,500 bottles an hour and place up to four labels on a bottle at a time. 

  Regarding industrial size distilleries, CDA touts product solutions that can readily integrate into existing packaging lines. The company says that its evolving products of automatic labeling machines can either be added to a complete, existing line or as a dependable backup option.  

Belmark

  Belmark is a Wisconsin-based company specializing in pressure-sensitive labels, flexible packaging and folding cartons. Founded in 1977, the company has grown from three employees and a single printing press to 1,000 workers in six facilities and three locations. 

  One of Belmark’s key customer service specialties is helping clients achieve high-end labels on a budget. Belmark uses its Web-to-Print process to get the look clients want within a price they can afford. For example, to achieve the quality and appearance of a hot foil stamped label, Belmark uses its Web-to-Print metallic inks. To get the look of embossing, the company uses a dual finish appearance with a spot gloss. The combination of these methods gives clients the metallic look they want without a hefty price tag. Web-to-Print makes it possible to handle orders in as little as 24 hours. 

  Belmark points to its Trident and Trident MAX processes as the pioneering technology designed by highly trained staff to create high-quality labels. The finished product boasts standout features such as enhanced color accuracy and consistency, finer detail, shorter lead times and lower total costs for mid-run and longer-run quantities. 

  Trident is a process printing method that achieves optimal results through advanced pre-press and press technologies. These technologies work together to create an attractive label with the color consistency, superior print registration and finer detail of a more expensively produced product. The Trident MAX process builds on the strengths of reduced lead times and production costs by utilizing fixed colors in fixed printing decks. Belmark says this method guarantees labels that consistently match client specifications. It also creates more vibrant printing with greater detail.

SourcePak

  Located in Billerica, Massachusetts, SourcePak is a one-stop shop for distillery packaging that makes branding a top priority. The company has been in business since 2002 and touts the benefits of using one source for all packaging needs. The company claims that distilleries save time and money by using one source, eliminating the need for multiple vendors for packaging supplies and services.

  Todd Wallace, Vice President of Marketing and Business Development for SourcePak, explains how it works. “We are able to provide best-in-class value by sourcing reliable suppliers, resources and pricing for our distillery partners. This enables distillers to focus on the product rather than what it is going in or how it will be shipped. Outer shippers, partitions, warehousing, JIT delivery and 3PL services ensure the packaging gets where it’s going when it needs to be there. Service is as necessary of a component as the packaging is when you work with the fast-paced and multi-faceted distilling industry. The service we offer is typically the first thing the brands we work with say sets us apart.”

  SourcePak offers a range of products and services to address design, labeling and industrial needs, streamlining the packaging process for distilleries. Services include graphic and packaging design, inventory management, product order fulfillment and distribution services. The company has an engineering and design team that can develop packaging solutions for multiple applications, from designing product bottles and the boxes used to hold them to the corrugated displays used in stores.   

  SourcePak regards the primary, secondary and tertiary levels of packaging as equals. Primary packaging holds the actual product in place, secondary packaging identifies the brand and product information, and the tertiary layer protects the product during shipping. The company provides multiple protection options for the third packaging stage, including cushion pallets, custom foam case inserts, foam fabrication and assembly and antistatic polyethylene.

  Another service that SourcePak offers is value-added packaging. These are customized packaging options, such as brandy packaged with a snifter, that create an added value to the consumer and give the spirit a competitive edge. 

Manual Packaging

  Instead of semi-automatic, automatic and outsourced options, some distilleries choose to package manually.

  Potomac Distilling Company, located in one of the newest waterfront developments in Washington, D.C., makes Thrasher’s Rum. The distillery, which opened in 2018, produces six rum varieties: traditional white rum, gold rum, coconut rum, white spiced rum, relaxed rum and a flagship green rum, the latter infused with six aromatic botanicals.  

  Owner Todd Thrasher says that besides cost, he decided to assemble his packaging manually to protect the environment.

  “We package Thrasher’s Rum in cardboard boxes with biodegradable peanuts. We strive to be as environmentally conscious as possible when it comes to packaging. One aspect that is unique about our bottles of Thrasher’s Rum is the wax seal on the top of the bottle. It was important for us to reduce the amount of plastic throughout our operation and when it comes to packaging.”

  Thrasher adds that manually packaging his products does not mean skimping on aesthetics, industry safety standards or product branding. 

  “In terms of labeling, we utilize two label colors. The white indicates a specialty label while the black indicates a release that is always available,” Thrasher says. “Our graphic is meant to evoke the ocean. The edge of the label features the sketching of ship rope, and the curved designs at the center are meant to be representative of waves. The lettering and general aesthetic are meant to be reminiscent of the labeling you would expect to see on packages being loaded onto old cargo ships. These nautical and maritime elements are personal to me. I am an avid scuba diver, and Thrasher’s Rum was actually inspired by my rum-soaked adventures island hopping as a scuba dive instructor. Our labeling and choice in graphics are a playful nod to those experiences.”

  Packaging for distilleries must meet food and beverage industry standards to ensure consumer safety. At the same time, packaging must also be attractive enough to draw consumers to the product. This careful balance requires the expertise of companies that know how to design packaging with consumer appeal in mind, meet industry and safety standards and, ultimately, allow distilleries to swiftly move inventory from shipping to shelf to the shopping carts of customers.  

Greenbar Distillery: Making Craft Cocktails for a Better Drink & World

By: Nan McCreary

distillery machine

Husband and wife team Melkon Khosrovian and Litty Mathew, owners of Greenbar Distillery in the heart of the downtown Los Angeles’ Art District, may not see themselves as pioneers in the beverage industry, but they are right up there with the leaders in two of the hottest trends going today: bar-quality canned cocktails and non-alcoholic mixed drinks. And, as Los Angeles’ first distillery since Prohibition and home to the world’s largest portfolio of organic spirits, they are using their innovative spirit to drive a sustainability movement that they hope will make the planet a better place.

  Khosrovian and Mathew began their odyssey into craft spirits in the early 2000s when Khosrovian tried to “import” the drinking culture from his native Armenia into their home. Traditions there meant sipping fruit brandy, but only with meals, and even then, always with a toast.

  “My wife hated what family served,” Khosrovian said, “so I began to visit farmers’ markets to gather fresh fruits and herbs to infuse into vodka. The first drink I created was vodka infused with fresh pear, lavender and vanilla beans. She loved it.”

  With this success, the two began making complex spirits with clean, rich flavors that they could serve with food. As a Cordon Bleu-trained chef and food writer, Mathew complemented Khosrovian’s skills as a spirits maker.

  “It was a collaborative effort,” Khosrovian told Beverage Master Magazine. “I’d make it, she’d try it, I’d fix it.” They began sharing their creations with their cousins, and when the cousins—and the cousins’ friends—kept coming back for more, and more, and more, they decided to open their own distillery. That was in 2004, and they’ve been breaking barriers ever since.

  Initially, the team created only bottled spirits in a 6,000 square-foot warehouse in Monrovia under the brand name Modern Spirits. As the couple expanded, their products—gin, vodka, tequila, rum, whisky, liquors, and amaro—were not typical run-of-the-mill recipes. From vodka infused with midwestern wheat and California pomegranate to whiskeys aged with six kinds of wood, their spirits were designed to be interesting and complex, with flavor as the main motivation. Initially, they weren’t necessarily seeking organic products.

  “We primarily bought ingredients from local farms for freshness and maximum flavor,” Khosrovian said, “and over several years, we noticed that the spirits began to taste different. We narrowed the difference down to the flavors; the farmers were selling us organic products because they had more flavor, and they knew that flavor is what we were after. That’s when we made the switch to all organically grown ingredients.”

  After several years of growing and evolving the business, in 2012, Khosrovian and Mathew moved from their Monrovia location to their current digs, a 14,000 square-foot distillery in the LA Arts District. They retired the name “Modern Spirits” and adopted the moniker “Greenbar,” a name that fits their emphasis on organic products. Instead of buying pre-distilled neutral spirits and infusing them with local produce as they did in Monrovia, they now had the equipment and space to distill their own base spirit.

  Greenbar’s spirits begin with whole ingredients. “We always use whole ingredients, whether fresh or dried, because that’s what tastes right to us,” Khosrovian said. “In fact, we make the largest volume of infused products in the U.S.”

  Khosrovian and Mathew, like true artisans, are deeply committed to their craft. Greenbar, for example, hand-zests more than 2,000 lemons for each 1,000 gallon batch of its lemon vodka. “This is why people like our products,” Khosrovian added. “They taste real.”

  The distillery uses a continuous column still for primary distillation. But it’s not the typical column still that one finds at a vodka distiller. “This still is designed to pull very precise flavors, so it is a unique beast,” Khosrovian said. “We can get very geeky with flavors by changing temperatures and extracting specific flavors, and then recombining them at the end. If you have OCD, this is your dream still.” Greenbar also owns a traditional pot still, which they use for redistillation.

  Greenbar’s spirits are essentially a bartender brand, created “for customers seeking a higher standard of taste and an easier way to make the perfect cocktail.” They include liqueurs, amaro, gin, whiskey, vodka, rum and tequila. Before the pandemic, Greenbar sold 80% of its spirits to bars, hotels and restaurants. When Covid-19 hit, the game changed practically overnight.

  “When the pandemic struck, our sales essentially evaporated,” Khosrovian told Beverage Master Magazine. “Everyone was clamoring to experience a real cocktail but couldn’t get it. Sales were exploding at retail stores, so we began to make canned cocktails that people could buy at liquor stores and supermarkets. Basically, we reinvented ourselves.” 

  Their sales took off. With products that tasted like what you could get at a bar, Greenbar found a home in more and more states. Today, Greenbar has distribution in approximately 40 states. “The pandemic hurt us in a lot of ways and helped us in a lot more ways,” Khosrovian said.

  As Greenbar enjoyed success with their canned cocktails, and with the better-for-you movement gaining traction, they decided to take another leap to create canned non-alcoholic mixed drinks.

“We’re distillers, so at first non-alcoholic products didn’t compute,” Khosrovian said. “But we learned that while people like the idea of cocktails, for many, it’s the flavor, not the booze. We began to see cocktails in a brand new light—as a flavor experience first and as an alcohol experience second.” 

  Greenbar’s non-alcoholic cocktails are made with the same process as their alcoholic products, starting as an alcoholic spirit and then distilled until the alcohol has been stripped away, leaving behind the flavors that people know and recognize. “We came to the idea with a good grasp of what was happening in the market,” Khosrovian said. “A growing number of people want the experience of enjoying a cocktail, but they don’t want the booze.”

  Today, while Greenbar still produces a full range of bottled spirits, 75% of their business is canned products. Non-alcoholic ready-to-drink cocktails include Burnt Orange Bitters+Soda, Lavender Bitters+Soda, Earl Grey Bitters+Soda, UnGin+Tonic and UnRum+Cola. All non-alcoholic RTDs are carbonated after distillation, which gives them a bubbly texture. Their alcoholic RTDS include City Gin+Tonic, Coastal Rum+Cola, Single Malt Whiskey+Soda and Hibiscus Spritz, an Italian classic updated to make it craft, organic and portable. Alcohol by volume ranges from 6% to 8%. Greenbar also produces a line of bitters to add to cocktails or sparkling water.

  With RTD alcoholic beverages being one of the fastest-growing beverage industry segments—and the market for non-alcoholic drinks taking off—Greenbar is enjoying increasing success with its canned products. “As the pandemic goes on, we are selling literally everywhere,” Khosrovian said. “We’re selling to retail outlets, restaurants, hotels, bars, concert venues; you name it. People just want that cocktail experience, and our canned products are filling the gap.” 

  As some hospitality venues are slowly reopening, canned products are in big demand there, too. Bartenders like the alcoholic products because they require less time and fewer additional ingredients. Also, staff shortages require quick turn-around times, and Greenbar’s canned cocktails—alcoholic and non-alcoholic—are simple to pour yet offer the same complexity as a real cocktail.

  While Greenbar Distillery generates enthusiastic reviews as having the world’s most extensive portfolio of organic spirits, their efforts toward sustainability are equally acclaimed. “After we went organic, we changed to light-weight glass for our bottles and recycled paper for labels,” Khosrovian said. “If not, we would have been talking out of both sides of our mouth when discussing sustainability.”

  At the same time, Khosrovian and his wife contacted a company that traced their carbon footprint for producing a bottle of spirits. To them, the results were shocking. Production of one bottle—including the box, the glass and other products used in manufacturing and transportation—created two to three kilograms of pollution (1kg = 2.2 lbs). With this knowledge and realizing that a tree absorbs 790 kilograms (1741 pounds) of carbon, Greenbar decided to plant one tree per bottle sold. Trees are planted, in cooperation with a nonprofit organization, in the rain forests of Central America and provide shade for fair trade crops of coffee and cacao so local farmers can better feed their families.

  “An average American produces 45.2 kgs of carbon dioxide every day,” Khosrovian said. “By being efficient and careful in the manufacturing process and planting one tree per bottle sold, a single cocktail with Greenbar spirits helps remove 46.6 kgs of carbon dioxide from the atmosphere. If you drink one cocktail made with one and a half ounces of any Greenbar Distillery spirits, you are carbon negative for the day, and you are drinking to a better world.” 

  To date, Greenbar has planted nearly one million trees and made more than 16 million people carbon-negative for a day.

  As Greenbar Distillery looks to the future, Khosrovian said their goal is to encourage their peers in the industry to make cocktails better and easier to drink. “Everyone loves a cocktail, but no one wants to make it,” he said. “Whether it’s bubbly in a can or a spirit in a bottle, our goal is to make the experience so easy and so delicious that anyone can drink better anytime they feel like it. Plus,” he added, “we want to forge a path as a company so all of us can keep living on this planet.”

For more information on Greenbar Distillery, visit their website at…www.greenbardistillery.com

Bubbling Kombucha: The Cool Brew in Town

By: Hanifa Sekandi

glass containers of bubbling kombucha

With some degree of certainty, it can be said that alcohol and health do not go hand-in-hand; however, a new wave of prepared alcoholic beverages would like to change that. Can the well-ness and beverage industries form a new frontier where imbibing supports a healthy lifestyle? Believe it or not, it’s happening. From alternative sweeteners to organic ingredients, there is a steady move away from artificial by-products in craft drinks. It is easy to read the room and rec-ognize that having fun does not mean entirely sacrificing your health.

  Alternatively, the movement might be partially due to the popularity of curated cocktails made by world-renowned mixologists. Further, people are looking for the at-home, a la carte experi-ence, and ready-to-drink alcoholic beverage innovators and game changers are taking note. High alcohol kombucha is turning heads both in the wellness and alcohol industries.

What is Kombucha?

  Kombucha, an ancient, probiotic-rich, carbonated, sourish, gut health-friendly tea, has become a popular beverage in the wellness industry in the last few decades. It’s not new, but over the pre-vious 10 years, mainstream society has finally caught on to its benefits.

  Traditionally, kombucha contains alcohol. Not enough to leave you with a hangover or lead you to any hazy decisions but a small amount that occurs during fermentation. How much alcohol is dependent on the length of time the tea is fermented. So it is no surprise that producers see an easy entry point into the RTD alcoholic beverage market. Who knew beer and kombucha would make a robust blend or that it would pair well with gin or vodka? All good beverages start at the bar with skilled mixologists who can create drinks in real-time. They create a demand for one-of-a-kind cocktails at your local liquor store. You may have noticed CBD is the newest addition to luxe cocktails, but for now, it’s all about bubbling kombucha.

Healthy Origins

  Kombucha has been touted as the ultimate tart gut health elixir, but how did it come to be known that way? Before exploring the possible benefits of kombucha, let’s first trace the origins of this primordial fermented beverage. Although new in the west–only making waves for the last 60 years–the drink dates back approximately 2,000 years in both China and Japan; however, it isn’t easy to pinpoint an exact moment when it was invented.

  The origin of the name is slightly easier. Sources say that around 400 AD, when the emperor of Japan, Emperor Inkyo, was ill, Korean Dr. Kombu brought the tea from China to help the ailing ruler. Adding the Japanese word for tea, cha, to the end of the doctor’s name made it Kombucha. At this time, it was used for its believed curative properties.

  The growth of European trade routes in the early 20th century opened the doors for people around the world to reap the benefits from this ancient slow-brewed tea. As with the wine indus-try, kombucha also experienced a slump due to the second world war that saw a decline in sugar and tea reservoirs.

  Kombucha’s gut health benefits were brought to the forefront after a study conducted in the 1960s in Switzerland documented that kombucha could have the same probiotic benefits as yo-gurt. This discovery sparked a wave of interest in kombucha. It first saw growth with family-owned brands sold in small health-centric markets and then drew the attention of corporations who saw the monetary possibilities of this fermented tea. Its steady consumer popularity has been due to the purported medicinal benefits for individuals suffering from various health condi-tions. Everybody knows at least one person who swears by it and drinks it daily.

How is Kombucha Made?

  Anyone considering homebrewing kombucha has most likely heard about a SCOBY. A SCOBY is a “symbiotic culture of bacteria and yeast.” Since it can be used to make several batches of tea, it’s considered fermentation gold. Traditional kombucha combines tea –generally green tea, but also black– sugar, strains of bacteria and yeast. The mixture undergoes fermentation for approx-imately a week. During this time, gases, acidic elements and small amounts of alcohol produce carbonation. Be cautious when considering DIY Kombucha since there are health risks due to contamination or fermenting too long. The longer kombucha ferments, the higher the alcohol content, and it also reduces the potential medicinal properties.

  Hard Kombucha contains approximately 3% to 11% ABV.  Larger quantities of sugar and yeast are added during a dual fermentation process to increase the alcohol content.

What are the Benefits?

  Most people do not consider the health benefits of a cocktail. Even a mimosa and freshly squeezed orange juice do not scream, “I am being healthy!” But, since oranges are full of vitamin C, you might feel a little less guilty during a Sunday brunch with this citrus-laden bubbly. Mak-ers of kombucha drinks are likewise stating their case. Although it may not be as probiotic-rich once fermented into hard kombucha or when it’s paired with beer or other spirits, it remains an antioxidant-rich fermented tea that is easier on the gut. This applies particularly to gluten-free hard kombucha. Hard kombucha also has a lower caloric content and far less sugar than other prepared cocktails, beer and cider. However, although kombucha is known to promote gut health, it is not one size fits all. The gut microbiome varies from person to person. Hence, the probiotic strains found in kombucha may be beneficial for you and not others.

  Why does gut health matter? The gut is the epicenter for health and vitality. It not only takes in vitamins and minerals from the food you consume, but it also helps to regulate inflammatory re-sponses in your body. Good gut bacteria allow the body to digest food and absorb nutrients. Like yogurt, kefir, sauerkraut, and other fermented food, Kombucha is probiotic-rich and contributes to balanced gut flora. It is primarily made with green tea, an anti-inflammatory and antioxidant-rich tea that also contains minerals, and is known for its ability to contribute to fat burning. It is an ideal alcoholic drink for individuals who consider calories when purchasing alcohol. Drinking an alcoholic beverage made with kombucha, particularly one not combined with beer or any al-cohol produced with wheat, may also be helpful for those with gut sensitivities or inflammation.

What Place Does it Have in the Alcohol Industry?

  You may have spotted hard kombucha next to ready-to-drink organic cocktails, beers and ciders at the local health store. Kombucha with an ABV of 0.5% is deemed an alcoholic beverage under federal law. The higher the ABV, you will notice that it is called high alcohol kombucha. High alcohol kombucha can reach ABV levels close to wine or other ready-made cocktails.

  On the surface, blending kombucha and alcohol does not seem a likely pairing, but, with its in-creased popularity and ability to stand on its own as a thirst-quenching alcoholic beverage, it’s easy to see why large corporations like Molson Coors are getting on board. Their acquisition of Clearly Kombucha shows a shift toward lower-alcohol drinks. The ability to craft kombucha with varying ABVs and the fact that it already contains trace amounts of alcohol render this a natural progression into alcoholic beverages. Kombucha makers are not reinventing the wheel. With a little more added yeast and sugar, they are just letting this fermented drink do what it does on its own.

  The appeal of a low calorie, low carb, low sugar, gluten-free kombucha beer is there for anyone who already enjoys the non-alcoholic version, as well as for those who look for health-conscious brands that support and encourage better lifestyle choices. Even knowing that high levels of al-cohol kill or diminish the probiotic benefits found in traditional kombucha, the other benefits make it a tempting drink. It offers the best of both worlds: a calming drink and a happier gut.

Top Hard Seltzer Brands

By: Calvin Obbaatt

2 tropical cocktails

Whether a regular or occasional booze consumer, you have probably come across the term hard seltzer at your favorite liquor store display, social media ads, or other forms of digital commercials. Maybe you missed it at your local liquor store or haven’t come across any advertisement of the same but happened to see a can or two labeled White claw, Truly, Usual, etc., that is the hard seltzer. Below is all you need to know about hard seltzer.

What is it?

  Hard seltzer is carbonated water mixed with alcohol and fruit flavors or fermented fruit that is still gaining rapid adoption. It is also known as spiked soda, hard sparkling water, spiked seltzer, or alcoholic seltzer.  The drink typically contains around 5% alcohol content by volume, but some brands go as high as 12%.

  Despite hard seltzer being mostly made using fermented fruits or flavors and alcohol, can sugar is also used in the US as an alternative. The first widely available commercial example of the style was ‘Two Dogs,’ brewed in Australia in 1993 and widely considered the world’s first modern brewed alcoholic lemonade. Black cherry, cranberry, hibiscus, lemon-lime, blood orange, guava, kiwi, mango, peach, passion fruit, pineapple, grapefruit, raspberry, and other citrus, berry, and tropical fruit flavors are some of the most popular.

Why is it gaining in popularity?

  From the accumulated market stats, it is evident that hard seltzer is one of the fastest-growing alcoholic beverage categories globally. From 2016 to 2021, its industrial growth in the US is projected to average 128% per year (estimates made before COVID struck).

  In 2020, the size of this industry was worth 1.8 billion dollars and was projected to grow by 35% in 2021. From June 2019 to June 2020, its sales reached 2.7 billion dollars, accounting for more than 10% of non-liquor alcohol sales. Although it has been around for centuries, millennial consumers demand healthier, lower-calorie; gluten-free alcoholic beverages have helped spearhead the segment’s growth. Only 4% of US households purchased hard seltzer in the year before 2019, and it was almost unknown internationally. The rapid growth rate allows new entrants with significant finances or great marketing to gain hard seltzer market share. The spirited fight is particularly from large beer and spirits firms concerned about losing beer and spirits market share. In 2016 Anheuser-Busch, an American brewing company headquartered in Saint Louis, Missouri, purchased Boathouse Beverages hard seltzer brand. Anheuser-Busch then renamed the Spiked Seltzer to Bon and Viv spiked seltzer. After renaming the brand, they used the Super bowl to advertise the new brand, quickly gaining the hard seltzer market share.

  The stats are good enough to attract investors into the seltzer market, but what is really in for individuals since the actual consumers are the bare facts behind the stats? When you consider all of the nutritive qualities it provides, such as low calories and carbs, lower alcohol content, gluten-free additives, and low sugar content, hard seltzer appears to be an appealing option. However, an individual may need to dig deeper to determine whether they consume legitimate brands that provide the stated benefits. The reason for exploring the brands is that unscrupulous players in the industry may mislead consumers with wrong information on the contents of their products, hence endangering consumer health.

  Reduced alcohol consumption also equals fewer calories. The majority of hard seltzers come in 12-ounce canisters and have about 100 calories. The quantity of sugar in hard seltzer varies by brand. However, the most common hard seltzer brands generally advertise their low sugar level, usually less than 3 grams per serve.

Celebrity Endorsement

  Earlier this year, in March, the same hard seltzer brand boosted its Cacti Agave spiked seltzer new arrival alongside influential rapper Travis Scott which saw furious demand. When a Grammy’s ad spot dropped the line of a Merch to promote Scott’s endorsement featuring American comedian, Eric Andre; DRINKCACTI’S website claimed to have sold out its inventory in 12 hours before even the airing debuted.

More Brands on the Market

  The brand seltzer market has expanded, allowing several major brands into action. This includes Beer brands such as; Michelob Ultra Bud Light, Pabst Blue Ribbon, Jose Cuervo Smirnoff spirit manufacturers.

  Forbes on 18th March reported the launching of Topo Chico, a boozy version of Coca-Cola’s sparkling mineral water. The company taped Molson Coors Beverage Corporation as its official manufacturing, marketing, and distribution partner in September 2019. The senior marketing director, Matt Escalante, defined the beverage as a modern take on refreshment that brings a whole new character to a red-hot’s.

How is Hard Seltzer Made?

  For hard seltzer typically comes from straight-up fermented cane sugar. It could also come from malted barley, although technically, that would make it a flavored malt beverage like Smirnoff Ice. Like with every alcoholic beverage, the fermentation process, including your favorite bottle of champagne, is the secret to its boozy character. Yeast breaks down sugars present resulting in the formation of alcohol. The sugars in making whiskey, for instance, originate from wheat harvested to be used in brewing. Hard seltzer is made from fermented cane sugar in its purest form. Hard seltzer can also be made from malted barley; however, it is a flavored malt beverage similar to Smirnoff Ice.

What Countries are Making Hard Seltzer?

  Hard seltzer has gained impeccable success in the US and Canada. The drink is also being adopted in other primarily English-speaking countries, majorly in Europe, gaining massive popularity. Heineken is among the most recent firms to venture into the European market with the Pure Pirana hard seltzer, a brand under Heineken. Pure Pirana launched successfully in New Zealand and Mexico. The successful launch made it possible for Heineken to be optimistic about a breakthrough in Europe. It’s anticipated that the drink will make it to broader markets in the UK and Scandinavia in 2022.

  Despite tariff challenges, hard seltzers are making their way into Africa, with some brands being found locally to overcome the tariff challenges and international brands making their way to African markets. South Africa is an excellent example as the hard seltzer culture is on the rise in the country.

Best-selling Hard Seltzer Brands From Around the World

White Claw: If you plan on giving hard seltzers a shot, then White claw is among the best brands to try. Consistently owns more than half the market though struggles to keep up with demand. A study by T4 shows it had a 58% US hard seltzer market share in 2019.

Truly Hard Seltzer: Truly hard seltzer holds 26% US hard seltzer market share. The brand was launched in 2016 by Mark Anthony Brands, the same company in ownership of Mike’s hard lemonade brand. Its popularity increased so much that in 2019, Mark Anthony brands had to limit distributor allocations due to a nationwide shortage. Despite this, its market share grew in 2019.

Truly Extra: If you are not a fan of low alcohol content servings, Truly elevated the game for you already. Truly hard seltzer introduced Truly extra, a higher alcohol content hard seltzer launched in 2016 under the brand name Truly Spiked and Sparkling, owned by Boston Beer Company, the owner of Sam Adams. Its market share has decreased since its initial. However, its sales are rapidly increasing due to the fast-growing hard seltzer market.

  Truly and white claw still dominate the market as go-to hard seltzer, but newer brands are slowly but surely climbing the ladder. However, the market is more crowded now than it was in 2019. Together, White Claw and Truly control roughly 75% of the market. The mentioned stats were phrased to the insider by Greg Doonan, an IQ analyst at Nielsen Holdings (American information, data, and market measurement firm).

Bud Light Seltzer: If you will stock hard seltzer, then Bud Light Seltzer is your ‘money-making machine’ as the brand is among the fastest-growing seltzers. Anheuser-Bush launched Bud Light Seltzer in January 2020 with a $100 million investment. It became the third biggest brand with a 9% US market share by summer 2020. The same rating is on the Instacart list.

  A couple of brands are new but booming;

CACTI: made with blue agave from Mexico produced by Travis Scott and Anheuser-Busch.

VIZZY: mentioned by Nielsen analyst Danelle Kosmal as one to keep an eye on, produced by Coors.

Bon and Viv: This brand was launched in 2013 as spiked seltzer by Nick Shield Boathouse Beverage. After being sold, the brand was rebranded to its current name in 2016 by its new owners, Anheuser-Busch. The short-term effects of Corona on it is extraordinary market growth will most probably be high. The hard seltzer market shortage is because most popular in the summer and shelter-in-place restrictions may significantly restrict access to sales channels. The long-term impact beyond the pandemic itself will likely be low as alcoholic beverages are resilient to recession shocks.