Author: Cyndi

Forward-thinking Marketing Is About Looking Back

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By: Jim McCune

HefeWheaties is a new beer from Fulton, which collaborated on the brew with another Minneapolis company, General Mills.

Many beer brands have recognized the value of “nostalgia marketing” by tapping into our fondest childhood memories to sell more.

But What is Nostalgia?

  It’s a human emotion defined as “a sentimental longing, or affection for the past”.

  As we grow older, we develop fond memories of our younger days. From the food, candy, and ice cream we ate, the events we attended, the music we listened to, the video games we played, the clothes and sneakers we wore, to the TV shows we watched. 

  Your experiences from your past, form your personality and identity today.

  Scientific research has proven that nostalgia is a powerful feeling that provides a pleasant effect to both mind and body, and the natural phenomenon is sometimes referred to as the “warm and fuzzies”.

  It seems the more we move into an age of technology and innovation, the more we enjoy revisiting a simpler past and the joyous memories that come with it.

  Nostalgia can be activated at any given moment by any of our senses. A certain sound, scent, or color can trigger a nostalgic episode. Nostalgia can appear as a flashback, a vivid memory, or a wave of seemingly out-of-place emotions.

  One of the reasons we love Netflix TV show “Stranger Things” is because of our desire to look back fondly on our own formative years. This show really nailed the time period of the eighties and allows viewers to relive certain aspects of their past that they enjoyed.

  Nostalgia triggers emotion, and emotion activates purchase. This is why nostalgia is smart and effective marketing tactic.

  Breakfast cereals, vinyl records, candy bars, gaming systems, ice cream cake, and literally everything in between. Brands are engaging beer drinkers by tapping into their positive memories from decades past in fun, innovative new ways.

  Retro tactics have found their way into most marketing channels. Throwback Thursdays hashtag across social media, Facebook’s “On This Day”, and apps like Timehop now account for hundreds of millions of new photos linked to personal memories.

  In a series of experiments conducted by the Journal of Consumer Science, they found that consumers who thought about “the good old days” were more willing to spend money. In contrast, less likely to spend bucks when thinking about “the present or future”.

  The research study examined how nostalgia evoked feelings of connectedness and community due to childhood memories being linked to friends, family, and a sense of trust.

  Other interesting findings from the study is that nostalgia is experienced at least three times a week by persons of all ages, and across all cultures.

  It was also determined that most persons see their nostalgic event “through rose-colored glasses,” meaning they were revising history in their favor.

  Additionally, and most interesting, persons who were exposed to extreme heat or cold found relief and comfort from these adverse states when experiencing the joy of nostalgia.

  The emotional component of your brain is far more advanced than the logical side.

  80% of your decision-making derives from emotion rather than logic. This is why most consumers make their purchase decision at the beer shelf based on what they see and feel.

  But, 64% of this group admitted they would change their mind at the last second if “something else better” caught their eye.

  Smart brands are successfully using the timeless marketing strategy to attract new drinkers by elicit the stopping power and emotion in their branding. The results have been extraordinary with the GenX and Millennial aged groups.

  If you peruse the shelves of your local beer distributor, you’ll quickly see how evident, and brilliantly, nostalgic marketing is being employed by many beer brands.

  Why does nostalgia resonate so well with these marketing segments?

  Mainly because childhood for them during the 70s, 80s, and 90s (commercially-speaking) was all about them, and chock full of awesome. So, looking back on these days, there’s bound to be a lot of great memories.

  Children born mid–1960s to 1970s were considered the first generation of children to be directly advertised to. They would be known as “Generation X” and marketers discovered that this segment was impossible to define.

  Advertisers eventually discovered that although GenX children were not the purchaser, they could use them as “parental influencers”.

  If they could get a kid super excited about their product, they would eventually get to the mum. Many parents reported being pestered by their children for products they saw on television. This new marketing tactic was termed “pester power”.

  The result was an onslaught of exciting new youth products advertised directly to kids during their Saturday morning cartoons, movies, comic books, video games, and beyond.

  The pester era was fueled by a major surge in birthrates during the 80s and 90s that ushered in the new marketing segment, known as “Generation Y” aka Millennials.

  Studies at the time estimated children spent an average of 28 hours per week watching TV and playing video games which exposed them to approximately 20,000 ads a year.

  During these 3 decades the youth market became expansive and accelerated economic growth around the globe to the tune of $250 billion today.

  Millennials were also a big part of the craft beer boom. Over the past eight years, as this age group reached legal drinking age of 21, the craft brewing industry experienced its most significant growth.

  Millennials were labeled the “Peter Pan Generation” due to their tendency to delay “Adulting” for longer than any generation prior.

  So, it’s no wonder, if a beer brand could leverage favorable memories from our childhood and evoke these warm–fuzzy feelings that allow us to suspend our disbelief for a few moments, that we’re actually adults … you’ve likely made the sale already.

  You’ll also forge a meaningful connection with this consumer at an extremely–emotional level that results in brand loyalty (a consumer quality that hardly exists in beer today).

  An alcohol watchdog group recently reported that consumer complaints were stacking-up. As increasing numbers of beer brands rollout nostalgia in their marketing, more cases are being upheld because their label “appears to be aimed at kids” or “encourages immoderate consumption.”

  It’s been urged that breweries, marketers, and designers tread more carefully with the design of their retro packaging that depicts candy, toys, and cartoons. Ensuring the alcoholic nature of their beverage is communicated clearly, and when appealing to one’s inner child, not going too far to inadvertently appeal to a child.

  Check out these 5 beer brands that did great jobs using nostalgic marketing:

1.  Captain Lawrence Brewing Company of New York collaborated with Carvel Ice Cream to make “Fudgie the Beer” a 6.0% ABV beer brewed with Carvel signature chocolate crunchies, fudge and ice cream from their famous cake. Fudgie the Beer has smooth creamy cocoa notes with a roasted crunchies finish. (https://fudgiethebeer.com)

      This innovative concept worked so well, Captain Lawrence Brewing extended the line with Cookie O’Puss St. Patrick’s Day Beer, and Cookie Puss Birthday beer.

2.  Virginia-based brewing company Smartmouth is releasing a “magically delicious” IPA with all the warm and fuzzies. “Saturday Morning” is a throwback to the early mornings in front of the TV watching cartoons in your pajamas eating your favorite cereal. Smartmouth brewed with Lucky Charms-inspired marshmallows. (https://smartmouthbrewing.com/beers)

3.  450 North Brewing Co. of Indiana is pushing the envelope with an extensive line of mouth-watering retro packaging. Peanut butter cups, ice slushes, fruity and cocoa pebbles, firecrackers, French toast sticks, rocket popsicles, marshmallows, Nintendo games, tacos, and anything else you loved as a kid is represented. (https://www.instagram.com/450northbrewing)

4.  Two of America’s iconic beverage brands, Harpoon Brewery and Dunkin’ of Massachusetts collaborated on a limited-edition 6% ABV Coffee Porter. The co-brew combines the taste of Dunkin’s Espresso Blend Coffee with Harpoon’s famous craft beer for a balanced and smooth brew offering robust and roasty notes. (https://www.harpoonbrewery.com/beer/dunkin-coffee-porter)

      Harpoon and Dunkin’ just released a bright, summery follow-up brew with “Dunkin’ Summer Coffee Pale Ale” at 5% ABV.

5.  California’s Altamont Beer Works has an extensive line of cool–looking brews. They left no childhood stone unturned with their heady, and retro plays. Catty Shack, My Little Pony, Grand Theft Auto, NKOTB, Crunch Berry Cereal, to The Dude. (https://altamontbeerworks.com/1/beers)

  Nostalgia is a positive emotion. It’s more than a passive flashback to our yesteryear, it has strong implications of our future. It temporarily alleviates discomfort of our present and provides much needed motivation to head into our future.

  Like any trend that’s rediscovered and overused, nostalgia marketing will eventually be met with skepticism and quietly fade away, only to return again when today is tomorrow.

  Jim McCune is director of the Craft Beverage Division of Melville-based EGC Group.

Reach him at …

jimm@egcgroup.com

(516) 935-4944

Burning Questions From the Craft Brewers Conference (Part 2)

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By: Jack McCraine – Firm Director, Baker Tilly

Continuing with part two of our Q&A from the Craft Brewers Conference from Denver, with additional follow-up questions to our panel of experts. It was clear that times are tough and brewers are feeling the pressure from every aspect of their business. Innovation and disruptive solutions to engage consumers and capture retailer interest were top of mind during our discussions.

  Consumers are using their disposable income on more than just beer, with consumption patterns and drinking occasions changing constantly. Generation Y and Z are entertaining spirits, RTD’s and wine as well as new and emerging industries in seltzer and cannabis (medical and recreational). Minimum wage pressures are challenging employee recruitment and retention, forcing pressure on engagement and culture. Virtual distributor models and companies like Amazon Prime are making distributors rethink and retool their sales and service strategies. 

  Diving deeper into your business plan and implementing a detailed strategy to scale your business to be more effective and efficient is a must do for brewers who want to enjoy continued success in the future. Here are some additional questions from our audience and answers from our Baker Tilly team of subject matter experts:

  Question: There’s a lot of data available and I don’t always have time to utilize it. How can I better use my data to run my brewery?

  Answer: Knowing what to track and having a process to capture and interpret the data is 1/3rd of the challenge. Another 1/3rd is knowing strategies and tactics to deploy that will correct or accelerate performance. The final 1/3rd is sharing the information beyond ownership and Sr. Management to really get your team moving in the right direction. At a minimum, record your own historic information to allow for benchmarking and variable pay opportunities that can be used to incentivize and motivate team members to accelerate performance. Here are a few good reports/charts to run:

Sales:

•   Pareto charts: They help identify the most frequent factor that you can count or categorize. Distributors, brands, SKU’s, reps, etc. These reports can be created at any level and visualize what’s helping or hurting the business. Brewery reps should spend half their time calling on these accounts.

•   Rate of sale: Measures how quickly volume is moving through a given account. This is very important to improve and an indicator of brand health.

•   Simple distribution: Number of buying accounts divided by total account base will show penetration of a given brand, SKU, etc. in a given territory.

•   Weekly time series (current and previous year): This can help identify significant events from previous years and allow you to prepare for them as they come back around in the current year.

Production:

•    Packaging efficiency such as yield target on loss: This is deeper look at breakage, low-fills and mislabels against a target/goal.

•    Yield target on loss: Hitting yield targets in total barrels filtered (by style). This shows tank utilization vs your target.

•    Reduce controllable production cost per BBL (by style, etc.): Your P&L should capture controllable COGS compared to last year.

Financial:

•   Gross profit trend lines before allocated costs: The overall percentage is important, yes, but the trend line is most important in this view. The reason you want to view prior to allocated overhead is to measure your real costs including labor. Utilization of your production facility will affect cost per BBL with allocated or overhead costs imbedded. This will allow you to forecast new brand costs, pricing and profitability.

•   Labor costs: Labor should be tracked not only to real production volume on a cost/BBL, but also as it relates to sales, overhead and management. This should trend down as your overall volume grows and efficiency improves.

•   Brewhouse and tank utilization: For obvious reasons, you need to set baselines for each of these and track overall utilization. It will allow the long-term forecasting of sales, capex planning and cash flow management.

  Question: When measuring break-evens (ROI), what is acceptable? How do I measure success? How many months/years?

  Answer: It depends. A loss isn’t a bad thing if your intention wasn’t profit but rather impressions. Creating a detailed business plan by department is the first step in understanding ROI’s. Each department should have KPI’s established that tie into the achievement of the plan/budget. Agreed upon actions and required resources should be identified, tracked and measured to achieve the KPI’s. Frequency of measure really depends upon what you are tracking. From a production standpoint, it could be by brew, by monthly/quarterly budget, etc., sales by month or distribution by quarter. These are good measures, but recouping profit only tells part of the story.

  Breakeven analysis is a great way to understand what is at stake or what you need to get back your investment. A standard percentage return is not always the best approach, but can be a good way to begin the discussion. There will be some things you can and should make more or less on depending upon the intent of the offering. You can put a breakeven on manpower, brands/SKUs, special events, etc., but all shouldn’t be the same ROI.

  From a timeframe standpoint, it would vary. People and equipment tend to have longer tails with ROI so those could scale quarters to years. Products and special event breakeven could be achieved overnight. It’s best to categorize the opportunity, apply a timeframe and capture it with a tracking/measuring system for future benchmarking.

  Question: How do you balance the setting of aggressive goals vs. selling correctly to the right accounts?

  Answer: Aggressive but realistic goals are great for any organization’s sales team as long as you have the following clearly outlined:

•    Variable pay: Compensation over the target so your team doesn’t stop selling after the objective was achieved in the 3rd week of the month. A threshold also needs to be set so you aren’t paying for easy layups too. 80% of achievement before 40% of payout is realized, or something of that nature. 

•    Standards: What does execution look like at retail? How many cases actually qualifies for a legitimate display? Is it the same for cans and bottles? Should there be a price on it? Pre-printed or handwritten? There are a number of things that beg to be defined. Salespeople want targets so they can be marksmen with their achievements of the objectives. You get what you ask for, so be specific in your standards with a document comprised of pictures and words.

•    Tools: Such as a POCM (point of connection material), account level data, profit calculator and a toolbox/kit with protocols for inventory replenishment:

           1)  POCM example:

•   11 x 17 accordion folder or box which includes the following:

A) Case cards and posters

     1)  Brand specific

     2)  PTC specific (all available pre-printed PTCs)

B) Sell sheets for all brands (core, seasonal, etc.)

C) Brand calendar

D) Brewery stickers

E) Tap stickers

F) Shelf strips

G) Tear pads (if applicable)

•   Coasters (where legal)

•   Case of glassware (where legal)

•   Tap handle (example)

•   Metal tacker (example)

•   Focus calendar – current quarter or year (wholesale sales rep distribution)

•   Brand matrix chart

•   Copy of retail standards

•   Bin displays (min of 1-2 per rep. for key account opportunities)

1)  Cooler with samples (ice)

2)  Tape

3)  Scissors

4)  Box cutter

5)  Zip ties

6)  Business cards

•    Structured selling process to clearly define, communicate and execute the critical actions of a sales call. The benefit is that standardization removes unnecessary steps and improves efficiency, sales productivity and focus of the sales team. The goal is for each salesperson to become a valued business partner with retailers and distributors through service, relationships, knowledge, collaboration and follow-through. Below is a brief example of a structured sales process:

  Our recommendation is to have the right goals set with the right accounts with the aforementioned in place instead of goals that don’t make sense for accounts and/or geographies that you are targeting based on your plan and budget.

  The goal of every good company is to plan for and achieve realistic business objectives that tie into all aspects of your business. The collaboration of departments into one business will help avoid pitfalls of silo development, which lead to mistrust within your organization and hinders the organization’s performance. As stated with these questions and answers, having a collaborated and efficient organization is the key. If everyone knows their role and targets (not just the sales team) then you can start to operate more effectively and efficiently as one company, tackling the industry together and scaling up efforts to drive elements of your business plan.

  Jack McCraine, Firm Beverage Director with Baker Tilly and leader of craft beverage services for the firm. He has more than 28 years of sales, marketing, consulting, training, revenue management/pricing, sales/service strategy, routing and training experience in the beverage industry. Jack specializes in accelerating client performance with sales and revenue growth, utilizing proven strategies and tactics to achieve business plans for wholesalers and brewers across the country. He has extensive experience with wholesaler distribution systems, compensation and incentive programs to motivate sales organizations.

For more information contact…

Jack McCraine

Firm Director, Baker Tilly

jack.mccraine@bakertilly.com

Lots, Codes, and Life: Dating in the Beer Industry

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By: Eric Myers

As the number of active breweries in the country exceeds 7000 and roars toward 8000, it’s more important than ever to consider one of the crucial facets of your packaged product: shelf life, and how to communicate it to your customer. It’s not just marketing; date lot coding and traceability is required by the U.S. Food and Drug Administration under the Bioterrorism Act of 2002. However, the exact method of recording date lot codes is ultimately up to each individual brewer, and there is a vast array of practices in the industry that can ensure that your customer knows how fresh your beer is, and that you’re in compliance with federal code at the same time.

Why Is Date Coding Important?

The easiest answer to this question is because you must. It’s the law. In the unfortunate situation that your brewery – or one of your suppliers – might have to recall product from the market, having date lot coding that is on every package, is easy to find, and easy to understand will allow your staff and every downstream partner, whether it’s a distributor or a retailer, to comply with the recall efficiently and ultimately save you headaches and money.  It’s also a great tool that your sales force–or your distributor–can use to be sure that beer in the market is as fresh as possible, it can help with FIFO inventory control and create an accountability tool for you to use with all of your downstream partners.

Finally, it’s an extra layer of transparency for your customer, as well as an educational tool, allowing you to provide them with the best–and freshest–possible product, and the best possible customer experience.

How to Code

For better or worse, there is no standard way or best practice guide to follow for date coding your beer. From a practical, legal standpoint, as long as there is a code on your package that is traceable to a batch at your particular factory and you can track that batch back to its component ingredients, you’ve complied with FDA standards. However, esoteric or confusing coding can be a problem in the marketplace and lacks customer transparency.

Many food and beverage manufacturers use a Julian Code to signify what date an item was manufactured or packaged. Julian Code is a system designed by the U.S. Military to easily date MREs and is easy to track and assign with simple programming tasks. It uses the last digit of the year in question followed by the day of the year.  (For example, a product dated with December 15, 2018 the Julian Code would be 8349.  December 15 is the 349th day of the year in non-leap-years.)  While this provides a standard format that is unique per day and easily traceable on a package and within a database, it is not easy for a customer to read and gain information from. An eager beer drinker looking for a fresh IPA would have no way of knowing what information was being presented to them and might end up looking elsewhere.

However, a standard date might not be the easy go-to answer that it seems. A report by the Natural Resources Defense Council (NRDC) and Harvard University’s Food and Law Policy Clinic (The Dating Game, 2013, NRDC) notes that confusing date labeling leads to a tremendous amount of food waste in the United States as “open dates can come in a dizzying variety of forms, none of which are strictly defined or regulated on a federal level” and that “although most date labels are intended as indicators of freshness and quality, many consumers mistakenly believe they are indicators of safety.” Putting information on your package that isn’t well thought out may create more harm than good.

Finding the Right Date

Back in 1996, Anheuser-Busch launched a marketing campaign in a bid to show that their beer was the freshest on the market and coined the term, “Born on date.” It has become a ubiquitous term in the beer industry, regardless of the fact that the date was dropped from all Budweiser labeling in 2015 in favor of a “Freshest before” date. Just because the biggest brewery in the land does it hardly makes it an industry standard, however. It’s not even standard across their entire company.

Megan Lagesse of Anheuser-Busch InBev’s “The Higher End” craft division notes, “Some of [our] partners (Goose Island, [and] Wicked Weed) are doing dual date coding (brewed on and best by) but everyone isn’t because not all of our production equipment has the capability to dual date code,” she says. “So, we chose best by date coding [for] broader consistency, because everyone understands an expiration date but not everyone is educated enough to know IPAs should be drank as fresh as possible, but you can age wild beers and stouts.”

Jeremy Danner, Ambassador Brewer of Kansas City’s Boulevard Brewing, notes proudly that Boulevard prints, “both packaged on and best by dates on all cans, bottles, keg rings and exterior boxes. If you’re going to only print one,” he says, “it should be the packaged-on date, as thoughts vary when it comes to shelf life.”

That shelf life–the basis of rationale behind a best by date–can be difficult, if not impossible, for a small brewery to determine. While larger breweries have the benefit of tasting panels, labs, and a vast number of data points, many small breweries get by with a microscope and a handful of jack-of-all-trade production team members. In small breweries, with limited, sometimes unique, production batches, shelf life is often the product of an educated guess, rather than a robust statistically significant tasting panel. Even pressure from a distributor can affect what date goes onto a package and in many cases a brewer will resort to relying on a packaged-on date and using phrases like, “Do not age” or “Best when its fresh” in lieu of a best by date.

Doing so, however, relies on the customer to be educated about your product, and that might not always be as easy as it sounds. Pete Ternes of Chicago’s Middle Brow beer notes, “90% of consumers don’t know what it means for a particular beer to have been packaged on a particular date.” While there are many craft beer fans who are incredibly well-educated and can ascertain which beer styles can handle age and which can’t, most beer-drinkers don’t know the implications of a beer’s brewed or packaged-on date.

Complicating the issue is lack of consistent temperature control once product leaves the brewery. A brewery may post a shelf life of 45 days for an IPA, but not the conditions under which that shelf life has been ascertained or should be maintained. A beer with a shelf life of 45 days at 38F has a shelf life of only 11 days at room temperature.

No Easy Answers

Unfortunately, until an industry standard or federal regulation is put into place, there is no easy answer about how to best approach lot and date coding. Ultimately, it is up to you to choose the method that you think will both comply with the FDA and provide information to your customers. Regardless of what format you do choose, providing context and information to your customers–whether that customer is the distributor, the retailer, or the end consumer–as to how you arrived at the decision of what lot and date coding method you’ve chosen is the best path and can double as an excellent marketing and education tool for your brewery.

Gaining Ground in Grimsby: Mountain Top Hops

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By: Adrienne Roman

It’s no wonder the International Herb Association named it the 2018 Herb of The Year.  The history of the Humulus Lupulus, better known as the hop plant, was first documented in the 1st century AD when its female cones were used for beer preservation on long nautical journeys from Europe. A flowering perennial with an abundance of uses, the plant’s hop cone is best known for adding bitterness or aroma to beer and is a popular crop choice among both small scale and larger commercial farmers in Ontario.

According to the 2018 market and acreage update from the Ontario Ministry of Agriculture, Farms and Rural Affairs, this cousin to cannabis took flight in Ontario between 2011 and 2017, helped by boron-rich soil and the humid temperate climate.

After a notable decline in hop production due to disease and Prohibition in the early 20th century, Canadian brewers have traditionally relied on the importation of the majority of their hops from Europe and the US Northwest. With the explosion of the craft beer industry in recent years, Ontario brewers are once again enjoying the demand, and many are buying fresh hops from local sources whenever possible.  Whether appreciated for its culinary, medicinal or ornamental use, Ontario is currently producing over 30 aromatic and bittering cultivars providing brewers and consumers a variety of hop options.

Quality Over Quantity

Phil Barry decided he wanted to investigate crop options for his custom-built 18-acre farm in Grimsby, Ontario. Above all, the Burlington Fire Department Captain and Platoon Chief aspired to build a small-scale operation that focused on quality over quantity. Mountain Top Hops was born from the desire to grow a reliable local product and connect with his community. Having spent many years living and working in the farming community of Oakwood, Ontario, Barry decided to try out his first 2-acre hop test plot build in 2016. With some valuable direction from Kyle Wynette of the Tavistock Hop Company, third place winners of the 2019 Great Ontario Craft Beer Competition, he set up a plan and a soil-testing program with The Ministry of Agriculture, Food, and Rural Affairs. Wanting to support Canadian businesses, he sourced his Waterford Lodgepole pine from British Columbia, and aircraft cable from The Good Rope Company in Oakville, Ontario.

Equipment and agronomics aside, Barry understood the potential risks of working with this often labor-intensive crop and the challenges he would need to address. “There were issues with time, commitment, careers, and of course the substantial investments in infrastructure and specialized equipment,” he said.

As with any worthwhile enterprise, Barry and his wife, Rebecca were confident that patience, combined with a solid foundation of knowledge, would balance out any of the difficulties along the way.  North American hops are often thought to have a higher resistance to Downey mildew than some of the European varietals, but tackling pest control for aphids and spider mites was more of an initial concern than soil fertility or disease.  His test build proved successful, and he’s expanded over the 2017/2018 seasons, resulting in wet hop sales to The Exchange Brewery in Niagara-On-The-Lake.  Mountain Top Hops also supplies pellet hops and is planning on increasing the hop yard to six acres within a few years. Their cultivars currently include Centennial, Newport, Cascade, and Cluster. According to the 2017 Hop Growers of America statistical report of acreage grown in the Pacific Northwest, Cascade remains at the top, followed by Centennial, Citra HBC 394, and Simcoe YCR 14.

“My favorite is Cascade, I love the citrus aroma, and in my opinion, I feel it’s the backbone of a great IPA,” Barry said.

Mountain Top Hops also grows the noble hop Hallertau, AlphAroma, Yakima Gold, Perle, and Crystal. With 1200 plants and 600 lbs harvested in their second year, they’re in a good position for expansion.

With breweries buying hops from all over the world, “the true challenge lies in consistently making a good quality product,” said Albert Witteveen, President of the Ontario Hop Growers Association (OHGA).  “It’s a maturing industry; people want to drink great beer.

Witteveen told Beverage Master Magazine Ontario is particularly suited for growing Canadian hops. “Geographically we’re not like anywhere else, our moderated weather between the Lakes puts us in a good position compared to other locations that deal with more volatile weather patterns. “

Locally Sourced

A greater appreciation of high-quality products has many Canadian consumers giving their business to smaller, more intimate brewpubs where they can enjoy a personalized experience and a sense of community. The food and beverage movement in Ontario has brewers exploring innovative recipes that are moving away from the mainstream, and sourcing local ingredients like malt, honey and fruit whenever possible.

There will always be an abundant supply of high-alpha hop varietals from the commercial producers in Yakima Valley, Washington, or Bonner’s Ferry, Idaho, but with Ontario’s craft beer sales exceeding $300 million in 2018, the need for quality hops is rapidly expanding.  Ontario breweries are working on local experimental projects and increasing collaboration with brewing programs like Durham College’s Centre For Craft Brewing Innovation to highlight local brands. This state-of-the-art location features a 50-liter pilot brew line and lab, allowing brewers the opportunity to work with advanced technology and micro-analytical services, and “conduct scientific analyses to ensure the analytical and microbiological integrity of the beer, supporting this growing sector of the local economy. “

With brewers and farming communities developing craft industry networks, there’s also increasing support coming from New York and Michigan to promote some of Ontario’s distinguished brands.

More Than Beer

Microbreweries are forging forward and according to Witteveen, “Nano-breweries are gaining popularity, and farmers are seeing their longevity there. “ Even smaller in scale than a microbrewery, nano-breweries typically produce less than 3,000 barrels annually.  Farmers can now diversify their product line with the addition of brewing capability on their property, and simultaneously expand sales locally, regionally, and internationally.

With approximately 400 different compounds found in hop oil, it’s readily used in many products in the culinary and medicinal arenas that extend well beyond the craft beer market.

The lupulin found in the hop cone glands is recognized for its anti-inflammatory and antibacterial qualities and used as a pain reliever, nervous system relaxant, and antimicrobial. The plant-derived compounds present in lupulin are thought to influence the human endocrine system. Researchers at The University of Kentucky are looking at the promising test results from studies utilizing hops to control fructan fermentation in the treatment of laminitis in horses.

Ontario Values

Barry’s farming philosophy closely echoes the principles that are found in the fire service. Mountain Top Hops was established to give his three children the opportunity to better understand the importance of integrity, adapting to change, honest hard work, and patience.

Ontario farmers are rooted in these same values, connected to their land and to each other. Vital relationships of trust form when consumers understand where their products originate and get to hear the personal story behind the brand.  Last year the province of Ontario supported the craft beer industry with funding from The Northern Ontario Heritage Fund Corporation, investing over $5 million in 16 microbreweries.  The 2018 budget has this support increasing to $150 million by 2021.

Locally bought hops are boosting Ontario’s agricultural economy, and the governments commitment to continue supporting the craft beer industry is allowing many local farmers the freedom to expand their operations, increase tourism, and create new jobs and opportunities for emerging local businesses in communities across Canada.

Enhancing your Beer Marketing Strategy with Partnerships

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By: Suzanne Henricksen

It can be hard to capture consumer attention in today’s digital age within the increasingly crowded and competitive craft beer industry. We live in a world of short attention spans, information overload, and the constant ding of gadgets begging us to look at something else. While there are many effective marketing strategies to help your brewery stand out in the digital landscape, sometimes it’s even more effective to bring a great marketing idea to life right at the shelf…particularly when it means partnering with another brand that your potential consumers already know and love. In these situations, one plus one can often add up to much more than two, benefiting both brands and helping your brewery grow in awareness and sales.

To do this, more and more breweries are starting to ink partnerships with companies to gain competitive advantage. Often, these collaborations involve parties that have nothing to do with beer, but everything to do with the brand’s values, character, and target consumers. These tend to be quite successful, partly due to the unique combinations of ideas. By success, we mean several factors: it could mean that both parties have profited from the partnership in terms of sales, or that the partnership has created buzz on social media or through publications, increasing awareness and consideration of the brands involved. Indicators such as likes, shares, comments, search queries, feature articles, increased production, and additional projects are used to gauge the reception and success of these beer partnerships. With that in mind, let’s look at a few examples of innovative campaigns that have helped craft beer brands stand out.

Muskoka Salty Caramel Truffle

Beer and ice cream…a match made in heaven. No? Well, this partnership between Ontario craft brewer Muskoka and ice cream maker Kawartha Dairy shows that it’s not as strange as it may seem.

This new brew was a bock-style beer inspired by Kawartha’s popular Salty Caramel Truffle ice cream. The beer had a milk chocolate flavor thanks to roasted malt, and was also infused with salted caramel for a unique taste. A can of this brew was only available for a limited time, which had Canadian craft beer fans scrambling to buy. The brand’s first Facebook post last February about the new product garnered over 500 likes, 118 shares, over 200 comments, and the attention of several publications in Canada.

Star Trek “Captain’s Holiday” Ale

Any product that is attached to a globally popular franchise has good odds of generating high sales. During the 2017 holiday season, Shmaltz Brewing Company launched its Star Trek themed ale, called Captain’s Holiday. The beer is tropical with hints of citrus. While the release was aimed to celebrate the franchise’s 30th anniversary, as reported in Food and Wine, it actually was not the brewery’s first Star Trek deal. Even before this release, they had already launched another Star Trek inspired beer called Symbiosis.

Both beer labels included images of the Starship Enterprise, which is one of Star Trek’s most beloved and recognizable icons. Even casual fans can identify the ship and franchise. This is why it’s often added to all sorts of Star Trek related media, for immediate recognition. This rule certainly applies to brands operating in niche markets, since they’ll be using the Star Trek name as a form of leverage. Suffice it to say, anything Star Trek touches seems to turn to gold. As of this writing, Shmaltz has released over six Star Trek-themed craft beers. Amidst their move back to a contract brewing model, they are most certainly holding onto this product line, which is a sure indication the partnership is lucrative for their brand.

Urban Underdog American Lager

Drinking for a cause? Great idea. Purina, the widely popular pet care brand is lending its name to one of Urban Chestnut’s brews called the Urban Underdog American Lager. Purina donated $3 to the Petfinder Foundation for every eight pack of the brew sold in St. Louis. To help market this partnership, Urban Underdog came up with a campaign called “Consider a Shelter Pet” incorporated into the brand’s packaging. The St. Louis Post Dispatch revealed that Purina planned to donate up to $50,000 so it could offer $50 subsidies toward pet adoption fees.

The campaign rolled out in August 2017 with Urban Underdog expanding distribution in St. Louis in 2018. With its continued distribution, it’s safe to say that the partnership is doing well for both sides. If you are looking for another reason to drink beer, you can consider finding a good home for pets a pretty awesome choice.

Are Partnerships Right For Your Brewery?

Depending on where you are in your brewery journey, marketing partnerships like the ones we’ve shared today can have a variety of benefits. For newer brands, they can put you on the map as a favorite new craft brewery. In these situations, make sure that you have a solid reputation for your own beers first and don’t jump into a marketing partnership too quickly.

For established breweries, partnerships can spread awareness to different audiences to bring in new fans. To find the right partnerships here, talk to your existing customers about what other activities and products they love. A rich pool of potential fans may be found enjoying a broad range of interest from hiking to a genre of movies or music to a certain style of food.

When thinking about collaborations with other brands, remember it is not only creativity and uniqueness that will get people’s attention; the partnership has to be relevant, in sync with recent trends, on brand, and have intrinsic value to your target consumer. As with all good marketing strategies, thinking about the 5Ws is critical…who, what, when, where & why. Then focus on how to actually execute the idea. Make sure you don’t overlook the power of partnering with smaller, local brands. We can’t all land deals with brands as big as Star Trek or Purina but, honestly, depending on your consumer base and brand, partnering with someone that big might not be the right move. So, make sure to focus on the potential value of the partnership for your customers and don’t get distracted by brand star power.

Pursuing these opportunities can be an effective and fun way to spread razor-thin craft beer marketing budgets to reach more people when done right. It’s also a great way to fund the innovative ideas that your brewer wants to explore and raise awareness for causes that are near and dear to the heart of your business. While this is only one of many marketing tactics to help grow brand awareness and sales, it’s an exciting one in today’s digital age since it comes to life tangibly at the point of purchase. And isn’t that what marketing is all about? Let’s raise a glass to working together so consumers find, buy, and enjoy more of your brews.

Contact Suzanne at The Crafty Caskor 510-316-4251

Choosing the Best Growlers, Kegs & Portable Containers for Your Brewery

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By: Alyssa Ochs

There’s something wholesome and satisfying about pulling up a barstool or sitting at a table at your favorite brewery and sipping a local craft beer right onsite where it was brewed. However, consumer demand is driving more breweries to offer their beer in portable ways so that beer lovers can take their favorite brews home and on the go.

To address this growing demand, this article will discuss the various options available to breweries for growlers, kegs, and other portable containers. With the insights and input from experts who work in this industry, we’ll also share key considerations to think about when choosing new to-go vessels for your beer business.

The Basics of Portable Containers

The concept of transporting beer in to-go containers is nothing new, but that certainly doesn’t mean that exciting innovations aren’t happening in this industry. Craft breweries of all sizes and types offer their beer in growlers and smaller-size crowlers, which are poured through a tap system and used to preserve beer for a few days up to a few weeks or even longer for personal use. Meanwhile, over 60 million gallons of beer are sold in kegs each year because these vessels are larger, durable, and perfect for parties.

While these are the two main types of portable containers used by craft breweries today, there are other portable container options available to breweries as well. For example, pressurized beer growler kegs have a double-walled design to keep beer cold and carbonated, and pressurized growlers can keep beer fresh for about two weeks. Growler Chill devices are specially designed to extend the life of draft beer, while Hydro Flask offers 40-ounce insulated growlers, and jockey boxes come equipped with stainless steel coils or cold plates, shanks, faucets, CO2 regulators, CO2 tank and beer line connectors, and perhaps even drain trays and cup holders.

Of course, this is all in addition to the onsite sale of bottles and cans. The 22-ounce bomber bottles or 750-milliliter bottles have been increasingly popular with breweries as a way to enabling consumers to take their beer off-site.

“Breweries use these for high-ABV beers like barrel-aged, double IPA’s, imperial stouts, sours, or any other special releases they may have,” said Lance Taylor, the Field Sales Manager for the North Central Region at Boelter Beverage. “There is a huge market for these. It’s also common for these bottles to be topped with wax.”

However, the newest and most creative portable containers are often geared towards use by the end consumer rather than the brewery itself.

“If a brewery is interested in transporting their beer for off-premise consumption, the usual cans, kegs, jockey box, or growler options are likely the best option,” pointed out Kevin Olmstead, the president of Instant Kegs in West Sacramento, California.

Portable Container Sizes

One of the first main things to think about when choosing new portable containers for your brewery is size. There are two main keg sizes: the 1/2 barrel (15.5 gallons) and the 1/6 barrel (5.16 gallons). Additionally, there are some less-standard keg sizes, such as the 1/4 barrel. For growlers, the standard size is 64 ounces, but half growers of 32 ounces each are common in many breweries. One-liter and two-liter growler options are available as well.

Quantity Considerations for Portable Containers

In terms of quantity considerations, breweries can choose between open-system kegs and closed-system kegs. To determine the number of kegs needed, consider who is distributing them, the distance of distribution, and how many keg sizes you want to offer. Breweries also must decide whether to use new kegs or used kegs for the desired functionality and for cost savings purposes. For growlers, breweries should remember that many local customers will reuse their old growlers many times before buying new ones and that visiting customers may bring in growlers purchased at a different brewery to fill up at your own establishment.

Materials for Portable Containers

With regard to materials, beer growlers are typically made from glass, stainless steel, or ceramic. Clear and amber-colored glass are popular for growlers, but glass can break easily, especially in a brewery setting. Stainless steel is durable for growlers but harder to fill and determine how much remains at the bottom. This material is popular for kegs as well. Ceramic growlers are much less common among breweries because they tend to be heavy and more expensive, and this material is breakable too. Plastic is a more inexpensive alternative for growlers and even smaller crowlers. Older kegs were often made from aluminum, but this is less common now as stainless steel has become the preferred keg material among brewers.

Beer Quality and Freshness

Both Boelter Beverage and Instant Kegs agree that quality and freshness are the most important factors for a brewery to consider when choosing growlers or kegs. Taylor of Boelter Beverage told Beverage Master Magazine that breweries may use their growler-filling machine and only sell pre-filled growlers to avoid this concern.

“Some breweries are concerned about light pollution tainting the flavor of beer and will avoid clear growlers,” Taylor said. “While some want to show off the color and ingredients that might filter into the beer and therefore find value in having the consumer see through a clear growler.”

“Some breweries avoid glass growlers completely because they believe beer won’t remain fresh long enough in growlers for the 64 ounces to be consumed,” Taylor went on to explain. “They will go with 32-ounce options only. Often, the 32-ounce option is a crowler, which is a large can filled on site and approximately 32 ounces depending on state laws. This crowler technology was actually developed, patented, and sold to other breweries by Oskar Blues of Canarchy.”

“There are a number of keg manufacturers from all over the world, and it is important for a brewery to be comfortable with the manufacturer and the warranty it will offer on its product,” said Olmstead of Instant Kegs. “Kegs are simply a vessel to store and sell a brewery’s product and should there be any problem with that vessel, a good manufacturer or keg retailer will step in to address any damage or replace any faulty products and lost revenue.”

Other Container Considerations

In addition to size, quantity, and material, there are additional factors to weigh when picking out new portable containers for your beer. For example, consider a container’s ease of cleaning, ability to be refilled, and potential to be returned to a brewery for credit. There is the issue of keg loss to consider because new kegs tend to cost at least $100 each, and kegs can be difficult to track without an effective management system in place.

In that regard, keg availability is a consideration because some retailers, manufacturers, and rental companies may have long lead times in delivering kegs to breweries.

“Oftentimes, these breweries are in a bind and need to fill an order or empty a tank and need the kegs as quickly as possible,” said Olmstead of Instant Kegs. “Breweries should make sure they are scheduling for their keg needs but also have a relationship with a reliable manufacturer or keg retailer they can trust to provide a quality product in a rush.”

Sanitation and cleanliness are of the highest importance, as well as usage recommendations for the best taste. For instance, it is typically recommended to consume beer in standard growlers within 24 hours of opening or within seven to 10 days after filling if unopened. Additionally, the style of beer and brewing method used can influence a brewery’s decision about growler purchases.

“More traditional brewers will often choose flip-top growlers,” said Taylor of Boelter Beverage. “If a brewery has a niche style of brewing, like German, English, Belgian, etc., it will be more interested in an ‘old style’ growler.”

Regardless of beer type, it is important to know local laws governing portable container fills, such as whether a growler can be filled onsite that displays another brewery’s name on it and whether simply rinsing a growler in hot water is sufficient for health code purposes. Since portable containers offer valuable branding and marketing opportunities with the containers’ labeling and design, this is a container consideration too.

Choosing the Best Portable Containers

Certain features of portable containers are very important to modern craft breweries, with particular sizes, materials, artwork, and closures becoming increasingly popular. For growlers, the most popular sizes are the 64-ounce and 32-ounce, although the 128-ounce growler is now available from stainless steel growler manufacturers.

“Many breweries try to differentiate by using more than one color on the growler and trying to get a full wrap print on them,” said Taylor of Boelter Beverage. “Engraving can be done on Hydro Flask growlers, and all of this can be done by Boelter.”

Taylor also told Beverage Master Magazine that powder coating is a nice way to decorate stainless steel growlers and that the bigger the print area the better for breweries to get as much brand exposure as possible.

For kegs, customizations if the most popular feature among breweries right now.

“In the opinion of many, a keg is a keg is a keg,” said Olmstead of Instant Kegs. “However, the ability to customize a keg with a brewery’s logo, name, or artwork is important in any brewery’s consideration in purchasing, leasing or renting kegs.”

Since kegs can be difficult to track once they are placed into distribution, customization lends itself to increased certainty that a brewery will get its keg back once emptied by the customer.

“Customization of kegs can be done in a number of ways, but most breweries are interested in a permanent customization that can be applied quickly and at a minimal cost,” explained Olmstead of Instant Kegs. “For InstantKegs.com, we’ve applied a laser-etching technology to our keg customization menu, which allows us to quickly apply a two-dimensional logo in great detail on each keg very quickly.”

Even with all of these sometimes-tedious decisions to make, there are still so many benefits to offering growlers, kegs, and portable containers to your brewery customers. These vessels offer access to fresh draft beer from local breweries that isn’t necessarily sold in bottles and cans. They come in different sizes and types for consumers to choose from, offer marketing opportunities to advertise your brand, and are eco-friendly to help your beer company reduce its waste and environmental impact.

With all of the great options available on the market today, now is an exciting time to revamp your portable container strategy, and fortunately, there are some highly experienced companies, including Boelter Beverage and Instant Kegs, that are ready and willing to help you through that process.

SAKÉ: THE NEW FRONTIER IN CRAFT BEVERAGES

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By: Nan McCreary

Saké has been around for thousands of years, but few Americans are familiar with the drink that is deeply rooted in Japanese culture. That is changing, and it’s changing quickly. With U.S. consumers eager to experience alternative beverages and explore new flavors, saké is on the cusp of a revolution here at home. As imports of saké rise dramatically, local artisans and entrepreneurs are seeing an opportunity for a new niche in the craft beverage market: local saké production.

Currently, there are about 20 saké breweries (Kura) in the U.S., including several that originated as American outposts of Japanese companies. These breweries span from California to Maine, from Texas to Minnesota. Wherever they are located, the owners and master brewers (toji) have one thing in common: a passion for the product. Dan Ford, founder and owner of Blue Current Brewery in Kittery, Maine, is one such devotee. After living and working in Japan for years, he decided to “spread the word” by bringing hand-crafted saké to New England.

“I love saké,” Ford said. “I love making it, and I love to see people smile when they taste it. That’s what drives me.”

So what exactly is this mystical brew that is rapidly growing in popularity in the U.S. and around the world? Saké is an alcoholic beverage fermented from rice. It has often been called ‘rice wine’ but, in fact, it is not a wine. Nor is it a beer, nor a distilled product. Rather, it fits into its own unique category.

“Saké has a little bit of identity crisis because a lot of people consider it a wine, but it’s more like a beer, fermented from grain using a saké yeast,” said Tim Klatt, co-founder of Texas Saké Company in Austin, the only saké producer in Texas. “In the past, people’s knowledge was pretty much limited to ‘hot saké,’ which is basically grain alcohol with a little rice flavoring that’s super cheap and heated up so you can’t really taste anything.  Our approach is to make a much more crafted, artisan product.”

Jack Lien, sales and education ambassador at SakéOne in Forest Grove, Oregon, said their brewery, too, is on a mission to introduce people in the U.S. to the joys of quality saké. “Saké is unique,” he told Beverage Master Magazine. “It’s brewed like a beer and drinks like a wine. It offers a nice alternative for people who are conscious of what they’re drinking. It’s sulfite free and naturally gluten-free. Some are vegan. It’s a unique beverage that intrigues a lot of people.”

Basic Ingredients

Saké comes in a variety of styles, but the basic ingredients are always the same: rice, water, koji (a fungus that converts the starch in rice to sugar) and yeast. Like good beer and good wine, good saké starts with quality ingredients, primarily premium rice. Generally, U.S. brewers source their rice from California’s Sacramento Valley, which grows some of the finest rice in the world. Texas Saké Company uses Calrose rice, the offspring of high-end rice used ages ago in Japan. SakéOne uses mostly Calrose rice and an American grown Yamada-Nishiki rice, known in Japan for its use in quality Saké. Blue Current uses Koshi Hikari, a short grain variety of rice named after the historic Koshi Province in Japan.

Water quality is also important, as completed saké is 80 percent water. “Water is critical because it can affect the final product,” SakéOne’s Lien told Beverage Master Magazine. “Soft water produces a soft and mellow saké, while hard water, which contains certain minerals, produces a more full-bodied saké.” Most American brewers prefer to use soft water.

Saké Production

Production of saké is not for the faint of heart: it is a complex process that takes time, patience and skill that can only be acquired by training and experience. This process starts when the rice first arrives at the brewery, where it is polished to remove the outer husk and prepare it for brewing good saké.

The polishing rates vary, depending on how much of the outside husk of each grain of rice is removed to reach the starchy and more desirable core. In general, the more the rice is polished, the more aromatically expressive the Saké becomes, and the higher the grade. The majority of saké made in the U.S. are junmai ginjo, a high-end saké milled to 60 percent of its original size, although some brewers may polish further.

After the rice is polished, residue from the milling process is washed from the grain, and the rice is saturated with water, depending on the type of rice and the desired characteristics of the saké. Next, the rice is steamed, which changes the molecular structure of the starch in the grain, allowing easier breakdown of that starch.

The next step — making the koji — is the heart of saké-brewing. “The Japanese say there are three pillars of brewing saké,” Blue Current’s Ford told Beverage Master Magazine. “The first pillar is koji, the second pillar is koji, and the third pillar is koji. All things flow from making koji. If you can make really good koji, you can make really good saké.”

In this process, the freshly steamed rice is spread out on long tables in a warm, heated environment known as a koji room. The rice is covered with koji-kin, the “miracle” mold that converts the starch in the rice to a form of glucose. Over the next 36 to 45 hours, the toji constantly tends the koji to ensure that it’s developing properly. “The koji is food for the yeast, and it’s critical to fermentation,” SakéOne’s Lien said. “Our toji, Takumi Kuwabara, has 25 years of brewing experience—13 years in Japan and 12 here—and he makes our koji completely by hand. He’s continually tinkering and tweaking the koji to make sure he gets the recipe just right.”

After the koji is made, a small amount is mixed with steamed rice, yeast and water in a tank to produce shubo or moto, or a fermentation starter. Typically, it takes two weeks to create a small batch of starter with a high concentration of robust yeast cells. Next, all the prep work comes together. Water, steamed rice, saké rice and the fermentation starter are added in three successive stages over four days to create the main mash, which will ferment over the next 18 to 32 days. During this time, the toji may adjust the length of fermentation, temperatures, and other factors in creating a specific saké profile.

The actual fermentation process is what separates saké from beer or wine. In wine, no sugar conversion is necessary, since sucrose is naturally-occurring in grapes. With beer, the creation of sugar and alcohol are separate processes: starches in the grain are converted to sugar in the form of wort, then yeast is added to create alcohol. In saké, conversion of starch into glucose and glucose into alcohol occur simultaneously in a process called multiple parallel fermentation. One of the characteristics of alcohol made in this method is high alcohol content. Saké is usually about 15 percent alcohol by volume and may be as high as 21 percent.

Once fermentation is complete, the saké is pressed to separate the newly created alcohol from the rice solids left in the mash. The saké is then filtered to remove fine particulates and pasteurized to kill off any remaining bacteria and yeast. Finally, the product is aged—usually for three to six months—and then bottled. The time to brew a batch of saké, from start to finish, is around seven weeks.

American Spin

While U.S. craft saké brewers typically follow Japanese methods and traditions for brewing saké, they are putting an “American spin” on the product by using processes and ingredients more suited to the local palate. The Texas saké Company, for example, filters their product less than the Japanese. “This gives a more robust saké with lots of fruity flavors,” co-owner Tim Klatt said. “We’re home brewers from the past, so we’re always trying something different. One of our big pushes is oaked sakés, where we toast oak chips in-house and add them to the brew. This delivers an amazing vanilla and oak and tannin experience, which will even stand up to barbeque.” The Texas Saké Company also produces a line of sparkling sakés with seven percent ABV and is preparing to produce a typical Japanese product that “will bridge the gap” between American and U.S. styles of sakés.

SakéOne is on the cutting edge as well, with its Moonstone brands, flavor-infused sakés. These include Cucumber Mint, Asian Pear and Coconut Lemongrass. All are infused right before bottling. “We are making these to appeal to our wild, pioneering side,” Lien said. “This is what we do to have fun.”

As U.S. Saké brewers look to the future, they see more breweries popping up, and more consumers taking notice. All agree that we can expect to see new products, more experimenting with saké-brewing techniques and broader distribution of American-made saké, both in the U.S. and abroad.

“Craft saké is definitely a niche market,” according to Ford, the Harvard-trained entrepreneur who founded Blue Current Brewery. “People are trying new flavors and looking for the next new thing. As a brewer and frequent traveler to Japan, I think it’s wonderful to open the kimono and show people this wonderful new beverage which is probably the coolest thing people have probably never had. The future is looking good: we’re seeing blue skies ahead.”

Crafting Marijuana Policies? Managing Employees in the Wake of Legalized Marijuana

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By: Amy Lessa and Nicole Stenoish, Attorneys At Law, Fisher Phillips

Marijuana legalization is on the rise and quickly expanding to all corners of the United States. Nearly 2/3 of the states have legalized marijuana for either recreational or medicinal use.  Currently, 11 states and the District of Columbia allow recreational marijuana, and an additional 22 states allow medical marijuana. These numbers are expected to grow over the next few years as the societal and political perspectives on cannabis continue to shift in favor of legalization.

Despite this shift, marijuana still remains an illegal Schedule I drug under the federal Controlled Substances Act – in direct contrast with legalized marijuana at the state level.  Although federal law is superior to state law, businesses must comply with both – even if federal and state laws conflict with one another. The chronic dispute between state and federal marijuana laws has left many employers confused about how to handle marijuana use in the workplace.  We’re here to clear the smoke.

Legalized Marijuana – What Can-a-Business Do?

Marijuana laws are constantly evolving and continue to be challenged in courts across the country. This makes it difficult to keep up with the requirements and limitations of legalized marijuana under both state and federal law.

Many employers are now questioning whether their workplace marijuana policies and practices should be revised.  Before deciding what policy is best for your company, it is important to understand the law in your state.  A company’s policies should also reflect the specific needs and challenges of the business and workforce.  For example, many craft brewery owners report they can no longer test for cannabis because most of their applicants cannot pass the drug test at the pre-employment stage. That could leave a brewery without a workforce.  As a result, Company’s should decide whether it makes sense to continue testing for cannabis in their pre-employment drug screens.  Other issues relevant to this determination are whether your employees operate heavy machinery or work in safety sensitive positions, and are you having difficulty recruiting qualified candidates for your company?

There are several key issues the keep in mind when determining the best marijuana policies and practices for your workforce:

  1. Maintain a Drug-Free Workplace

Employers are entitled to maintain specific policies related to marijuana use in the workplace, including drug-free workplace and zero-tolerance policies.  Because marijuana remains illegal under federal law, employers can strictly prohibit marijuana at work.  Employees can be disciplined, and even terminated, for coming to work under the influence, possessing marijuana on company premises, or using marijuana while at work – even in states where marijuana is legal.  In most states, companies also have the right to test employees for drug use, and can discipline or terminate employees for violation of the drug-free workplace policy. Before implementing a zero-tolerance policy, make sure your state does not specifically protect medical marijuana users or prevent employers from disciplining workers for legal off-duty conduct. Otherwise, drug-free workplace policies are essential to help protect your business and manage employees in the wake of legalized marijuana.

  1. Review Drug Testing Policies

Employers can typically require employee drug testing throughout employment. The different types of testing including pre-employment drug testing, random drug testing, reasonable suspicion drug testing, and post-accident drug testing depending on state laws.  Employers with mandatory drug testing policies need to ensure they follow specific state laws restricting disciplinary action based on positive test results.  Additionally, employers are prohibited from administering drug tests as a form of discipline or for retaliatory purposes. There are several other issues to consider when reviewing your company’s drug testing policies.

First, the science used to test for marijuana has been slow to catch up with increased legalization. While there are testing methodologies currently in development, there is no test to determine whether an individual is presently under the influence of marijuana. Marijuana can remain in one’s system for weeks, and an employee could test positive for marijuana even if it was consumed outside of work and had no impact on the employee’s job performance. This creates potential issues for employers when drug testing employees who have medical marijuana prescriptions, or in states where recreational marijuana is allowed.

Also, many states have laws that provide protections for engaging in legal off-duty conduct.  These laws prohibit employers from considering an employee’s lawful conduct outside of work for purposes of making employment decisions.  For example, in states where recreational marijuana is legal, the consumption of marijuana outside of work hours could be considered lawful off-duty conduct, and an employer could be prohibited from using an employee’s positive drug test for purposes of making an adverse employment decision. Although this issue remains largely untested by the courts, and employers are currently allowed to make certain employment decisions based on drug test results, we anticipate that employee drug test results will be challenged by lawful off-duty conduct laws in the years to come.

Furthermore, employers in a limited number of states may need to accommodate medical marijuana usage by employees. In those circumstances, employers are prohibited from making employment decisions based on an employee’s positive test result, depending on the nature of the employee’s particular position and job duties.

Pre-employment Drug Testing

Companies are generally allowed to require drug testing as a condition of employment, and can deny employment based on positive test results.  However, some states limit pre-employment drug testing for medical marijuana users, and other states have anti-discrimination laws for pre-employment drug test results.

Interestingly, an increasing number of companies, including those in the craft beverage industries, are eliminating pre-employment drug testing because of difficulties it can pose in finding employees who can pass the test.  As a result, some employers are softening their drug testing policies or removing marijuana from the list of drugs tested for. However, softening the stance on pre-employment marijuana drug testing may not be a viable option for companies with employees working in safety-sensitive positions, or companies with insurance policies or government contracts that specifically require employee drug testing.

Drug Testing During Employment

Employers may also consider random drug testing, reasonable suspicion drug testing, and post-accident drug testing of employees. Random drug testing is only allowed in some states and often limited to employees in specific, narrowly defined classifications – such as employees working in safety sensitive positions.  Almost all states allow employers to drug test employees if there is reasonable suspicion that an employee is impaired on the job.  Reasonable suspicion must be more than a hunch, and employers should be able to articulate the employee’s specific conduct or behaviors that led the employer to suspect impairment on the job.  Employers can also conduct post-accident drug testing following a workplace injury or accident, but only for employees whose impairment or drug use could have contributed to the incident.

Overall, companies should review state-specific laws and consider the specific needs and challenges of their workforce when reviewing or revising drug testing policies and practices.  And you should always put drug testing policies in writing, distribute to your employees, and enforce the policies uniformly.

  1. Accommodation of Medical Marijuana Varies by State

Generally, employers do not need to accommodate medical marijuana in the workplace. However, this could soon change. Courts in several states have recently indicated that accommodating an employee’s medical marijuana use may be appropriate in certain situations.  Employers already must engage their employees in the interactive process to explore reasonable accommodations for known disabilities of an employee. In some circumstances, this could mean accommodating medical marijuana use if it is determined to be a reasonable accommodation that does not create an undue hardship on the Company. Before doing so, however, employers should consult with qualified legal counsel.

Employers also need to be careful when disciplining medical marijuana users. Several states have specific laws protecting medical cannabis patients from employment discrimination. Medical marijuana patients in Massachusetts, Rhode Island, Connecticut and Pennsylvania, for example, have already won lawsuits against companies that rescinded job offers or fired workers because of positive tests for cannabis. Medical marijuana laws are continuing to evolve, and protections for medical marijuana users are likely to increase.

Conclusion – Best Practices

An increasing number of states have legalized medical or recreational marijuana, yet the federal government continues to classify marijuana as an illegal drug. This conflict between state and federal law is not likely to be resolved anytime soon. In the meantime, employers should follow several best practices to manage employees where marijuana has been legalized.

Companies should carefully review these issues and create policies that balance legal compliance with the specific needs of the business. Until the conflict between state and federal law is resolved, this includes:

  • Stay up to date with evolving marijuana laws.
  • Determine specific requirements for drug testing and medical marijuana in each state in which your company has employees.
  • Develop state-compliant workplace drug policies that are appropriate for your business.
  • Confirm your drug testing policies in writing, distribute to employees, and apply the policies uniformly.
  • Consider eliminating strict drug testing practices in favor of reasonable suspicion drug testing.
  • Determine if you will test applicants for marijuana use or not.
  • Contact legal counsel if any specific concerns or incidents arise within your workforce.

If your company follows these simple guidelines for managing employees in the wake of legalized marijuana, you will be in a good position to adapt while protecting your business as marijuana legalization continues to evolve in the coming years.

For questions on specific state laws, consult with an attorney.

  Amy Lessa and Nicole Stenoish are attorneys in the San Diego office of Fisher Phillips.  Amy and Nicole counsel and defend employers, including breweries in employment law matters. They can be reached at alessa@fisherphillips.com and nstenoish@fisherphillips.com

New Water Technologies for Hops Growing and Brewing

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By: Kimberly Fontenot

If there is one thing craft beer growers, all brewers and drinkers can agree on it is that beer is made up to 95% water.  The link to hops growers is water is also an essential component needed to grow the hops and barley .  Water allows the hops to be turned into a beer that is rich and aromatic which may be one of the reasons why in 2019, the craft beverage market just keeps on growing.

However, there has recently been changes in the environment and climate that is grabbing the attention of both the hops growers and brewer industries because some of those changes are creating higher prices for hops which means there is a reduction of hops availability overall and some brewers and growers are even going out of business because they cannot compete when prices skyrocket, if a growing season is decimated by the weather or if a technologically enhanced competitor enters their market and is able to do more sales with less overhead costs.

Today brewers and growers are moving forward together to find environmentally enhancing technologies and systems to help grow hops and brew them effectively and efficiently.  Working together has taught them much and allowed them to start moving forward in ways they never even thought of previously.  One of those forward movements includes utilizing public and private funding which is now available to find innovative ways to configure water irrigation for hops growing and waste water used by brewers to treat and process the hops.

HOP GROWERS AND BREWER WATER USAGE SIMILARITIES AND DIFFERENCES

In the past hop growers worked with the knowledge that since hops are deep-rooted plants and their feeder root system they had to be kept moist during very vital growth and development time frames.  Therefore, access to dependable and plenteous water for irrigation purposes is one of the most important assets needed for healthy hops to grow.

Brewers on the other hand, understood that any wastewater they created after treating the hops was usually discharged to a municipal treatment center and most do not have any pre-treatment installed at their facility to treat the wastewater prior to the municipal discharge.  What’s more a lot of them pay an extra surcharge based on the wastewater strength (BOD and TSS).

To find out if growers and brewers were trying to eliminate some of these ongoing issues by implementing innovative technologies which may help them create more plentiful hops and better tasting craft beverages, we found one of the main sources for hops information through the Hops Growers of America/US Hop Industry Plant Protection Committee’s Executive Director, Ann George.

The main query revolved around if there is new technology which uses the best water data or science tools for premium hop growing and Ms. George stated, “Yes, soil profile moisture monitoring ensures precise application of water as needed by the plant, based on soil condition, plant growth stage and weather.”

Something else Ms. George asserted is that there is a sense of pride in helping the environment by using drip irrigation systems in hops growing as “runoff is not an issue due to its use which benefits the plant and soil and ultimately the environment. What’s more leaked water loss on-farm is minimal”

Proper irrigation is always critical when growing hops and at this time, most seem to be utilizing the drip irrigation system.  However, there are still some who are committed to using and keeping the overhead sprinkler system which is understandable as both do offer advantages to hops grower. However, for environmentally conducive systems and overall efficiency, drip irrigation is usually recommended because overhead irrigation can result in hops which have downy mildew and or powdery mildew ratios.  This occurs more frequently with overhead sprinkler systems which leads to diminished hops growth, viability, taste and can even destroy an entire crop.

Brewers on the other hand, have other types of water issues which originates in their malting and lautering practices and procedures.  To try to eliminate some of their waste water issues,  some brewers have built onsite water treatment plants which pretreats the biological and organic matter.  This enhances and improves the water they conduct to the municipal treatment plant lowering their overall costs.  There are some craft brewers that are now enabling anaerobic digestion which removes up to 90 percent of pollutants in their water, which in turn lowers their overall waste water costs when transported to municipal treatment centers.  Some breweries are even extracting useful substances from their waste water torrent and either use it or send it off to be used in fuel cells.  One brewer funded by a $1 million dollar grant to improve nitrogen reduction in their community wastewater, used hops weak wort to remove nitrate-nitrogen from the wastewater and after successful testing and results are now paid for their brewing wastewater as it provides the community a sustainable and cost-effective wastewater solution.

Ultimately, brewers have to decide for themselves, how best to compete both with other brewers and how to present themselves to customers in a way that highlights their competitive assets and advantages over other brewers.  In today’s market if you want to build your business, it is important to offer unique customer experiences and display business decisions that are based on fiscal and environmental responsibility.  Since, growers and brewers understand that their competition will keep searching for a competitive edge, they need to be diligent in finding ways they can become matchless in their technology improvement programs.

HOPS GROWERS AND BREWERS  ARE ALIGNED IN UTILIZING TECHNOLOGY FOR MARKETING

In 2016, the number of breweries grew to over 5,000 according to the Brewers Association.  The industry keeps growing yet within the United States there is some ongoing seasonal periods which are affecting both hops growers and brewers which consist of the environmental factors-draught or water deluge depending on what area of the country you reside.  To combat the unknown of the next season’s weather pattern, growers and brewers are learning how to do more with less water or are using more effective and efficient water technologies to help keep the hops crop plentiful thereby allowing for business profit.  These new technologies even come with the added bonus of giving back to the environment.

For instance, Pure Water Brew  is currently marketing craft beer made from reclaimed water in a pilot program which is designed to show proof of concept therefore the next step is to reproduce their success at a mass consumption level.  However, consumers may not take to it easily even with the environmentally friendly brewing technology, but it is a step in the right direction.  It also goes to show there are currently monetary competitions where brewers and growers can compete or apply to be awarded funding for trying new technologies that are innovative, adaptable and progressively based in water usage.

NEW WATER TECHNOLOGIES AND FUNDING FOR HOPS GROWERS AND BREWERS

Growers who wish to develop and apply new ways to utilize water technologies for hops growing and brewing can look to the U.S. Government.  The U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) announced nearly $89 million in available funding in 2019-2020 to support specialty crop growers which strengthen local and regional food and water systems and explore new market opportunities for farmers and ranchers.

Previously, one of the above grants offered through the above program, was for a grower who developed hops hydroponically.  Hydroponics to develops hops utilizes a method that doesn’t use soil at all while concentrating the hops flavors.  As an ultimate benefit it also saves water.  The end result means hops can be grown anywhere, no matter the environment or weather.  This assuages the hops shortages which happen year to year because of the unpredictability of weather and conditions.

To make sure that brewers were not left out of the funding equation additional resources have been created that provides new technological programs and assets that can be used to expand and enhance hops.

The Brewers Association (BA) recently awarded more than a half a million dollars in research grants to brewers of small and independent craft beer companies if they found a way to “further the development of a healthy and sustainable raw materials supply chain.”  This resulted in some very progressive and competitive breweries who began to look past their old ways and means of utilizing water for hops brewing to find ways they can increase water conservation and lower their water footprint.  One of the biggest advantages unexpectedly found in some of federal, state or privately awarded funding projects is that if hops wastewater is treated, it becomes an almost perfect medium for a brewer to use and create any taste or essence they want for their craft beverage creations.

Which goes to prove that some of the most flavorful beer can now be linked to new water technology which is environmentally accountable.  That is a win for the land, water, growers, brewers and all craft beer consumers.

Nitrogen Use In The Brewery: The Pour Says It All

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By: Gerald Dlubala

You only have to look at the rotating list of available craft beer flavor profiles and styles at your local brew pub to know that Brewmasters are always looking for ways to please their patrons. Adding the use of nitrogen within the craft brewing industry is one of those ways that breweries look to produce a better final product for both their loyal consumers and for the distributors as well.

Nitrogen use is gaining popularity in craft breweries because it can be used as a safeguard against harmful oxygenation of their product that can affect taste, aroma and quality, all the things craft beer enthusiasts really care about. But nitrogen is also used to pressurize the containers and extend the shelf life of packaged beer. When used in conjunction with widgets or nitrogen dosing machinery before capping, it’s also responsible for that unique, cascading pour and velvety mouthfeel that signifies a nitro beer.

“Since the eighties, our liquid nitrogen dosing equipment line has expanded and improved to meet certain needs amongst the brewing industry,” says Jackie Whitney, Technical Support and Application Engineer for Vacuum Barrier Corporation in Woburn, MA, a manufacturer of nitrogen dosing equipment for use in craft breweries. “Nitrogen is used to purge the oxygen of the empty container before filling, but also to purge the oxygen from the headspace of filled containers. Nitrogen is used to pressurize cans of lower carbonated products, helping with packaging stability. And of course, it’s used for nitrogenating beers.”

“Nitrogen can be used before filling or after filling and before capping and seaming. We have our Linerter doser, used to purge empty containers before filling. It doses in a larger quantity to ensure that enough liquid nitrogen is put into the container to completely purge the oxygen out from it, similar to how it’s done for wine bottles. Our other styles of dosers are more precise, limited by line speed and size, and able to dose in smaller and more precise liquid nitrogen drops into filled containers, reducing oxygen in the headspace while pressurizing the container.”

“For small scale breweries,” says Whitney, “Liquid nitrogen is accessible in rented portable Dewars that are generally available locally from gas distributors. For the larger scale breweries requiring greater amounts, it’s generally recommended that the liquid nitrogen be stored in a refillable bulk tank located outside. Depending on the magnitude of the brewery, liquid nitrogen can be efficiently transferred from the supply tank to the doser using a vacuum insulated piping system.”

Whitney says there are no other alternatives to nitrogen. “It is the most economically feasible, inert, cryogenic gas available. It helps extend shelf life while preserving flavor and pressurizing the containers, allowing them to more easily be stacked during packaging and transportation.”

But no use of nitrogen may be more noticeable to the dedicated craft beer drinker than the characteristics it brings to that silky-smooth end product coming out of that tapper.

Whitney says that many brewers are using nitrogen infused beer to create an alternate taste for beer lovers, and because this is a relatively new craft brewing method, they are experimenting with all different kinds of nitrogen-infused beer.

“By dosing with nitrogen, breweries transform their beer into nitro beer, meaning one that has and retains a smooth, creamy head after pouring, either with or without the widget. This benefit would seem to translate across all beer styles should the brewer want to do that. The receiver of a nitro beer will notice a taste and aroma that is much fresher than that of their normal, standard carbonated beer. Nitrogenated beers have an appealing, more attractive cascade upon pouring compared to standard or regular beers, and the nitro style beers will possess a creamier texture and a more evenly distributed flavor, while the normal carbonated beer is less delicate and has a stronger aroma.”

The Nitrogen Movement

“More than just a trend, nitrogen use in the craft brewery is really a movement that’s been continually building and now really coming into its own.”

These are the words of Tyler Jones, Production Manager of Dosing Systems at Chart Industries Inc, headquartered in Ball Ground, GA. He says there are two predominant reasons for this movement.

“One use is to push oxygen out of containers during the brewing process. By containers, we are talking mainly cans for now. There are certain amounts of dissolved oxygen (DO) that we just can’t do anything about,” says Jones. “But we can reduce the total package oxygen (TPO), specifically the headspace oxygen (HO) that is sitting above the beer and trying to get into the product during packaging. If you’re not dosing nitrogen, then your actual parts per billion (ppb) of DO is higher than you initially measured, and that means that you as the brewer, aren’t getting your product out to market in the taste profile that you initially intended.”

“The second reason is nitrogenation of the beer. Many brewers do it in the keg itself. You prefill the keg with gaseous nitrogen, and over time, the beer inside the keg transforms to nitro brew, which is then also pushed through the keg to tap process using only nitrogen. Carbon dioxide is a natural product but slows the nitrogenation process, so most breweries want to pull the carbon dioxide out. Nitrogen filled kegs keep the nitrogen in the beer where it belongs.”

Guinness is, of course, the name most synonymous with nitro brews, and has a patent on their cans featuring that familiar rattling ball. Other cans have a widget installed, which Jones says is about the size of a quarter in diameter and the width of a thumb. The widget contains an orifice with an exit valve and a slit for the in-valve. The brewer puts the beer in, the can is inverted so the liquid just covers the top orifice. As the nitrogen expands, it forces itself into the widget so that when the can is inverted again, the nitrogen is encased within the widget. When the beer is opened, it gets a slight shake or hard pour, charging the system. Nitrogen escapes, invigorating the beer and producing that great cascading pour that accompanies all nitro brews.

But because these cans were expensive and only available if ordered in standard, minimum order quantities, the smaller craft breweries simply couldn’t afford them. That’s when Jones and Chart started their Ditch The Widget program and website, allowing smaller and startup brewers the ability to give their beer a heavy nitrogen dose right on the filling line, immediately before seaming.

“Without giving away too much, it’s all about a pressure situation in the can or bottle. After a short time, the beer is completely nitrogenated, complete with the great taste, the great cascading pour, and the familiar long-lasting, tight head. Just everything. The whole deal,” says Jones. “And better yet, the best results have come when the beer is initially brewed completely flat, without the use of carbon dioxide or nitrogen.”

Dose size will vary due to the beer type as well as the size of can or bottle. One drop of liquid nitrogen expands seven hundred times its volume when going from liquid to gas. That expansion evacuates the oxygen and carbon dioxide that is present while adding pressurization.

Partnering with Left Hand Brewing in Colorado, Chart and Jones have been able to perform intensive nitro testing and help cultivate the nitro industry.

“The Brewmasters help us with testing because they know exactly what they are looking for in the way of head retention, pour and taste. Nitrogen is generally thought to be used with the darker beers, and although that is true, anything can be nitrogen dosed, including IPAs. The main thing is that nitrogen is smaller and less soluble than carbon dioxide, so it creates a creamier mouthfeel for those beers that are already more pleasant than some IPA or hop forward beers. If the beer is actually meant to have a bite to its final taste, then nitro dosing would defeat that purpose.”

Brew Pubs Are Perfect For Sampling

Left Hand Brewing is just one craft brewery that has become a proponent for nitrogen use in the craft beer industry. They continue to offer both nitro and non-nitro options in their milk stouts, allowing a side by side comparison of just how nitrogen dosed beers differ in aroma, taste and appearance. They’ve also been successful with bottling nitro beer. Their bottled Nitro Milk Stout met with wild enthusiasm and great reviews, paving the way for a series of nitro brews that included their Sawtooth Nitro and Wake Up Dead Nitro. By increasing the availability of nitro beers as a to-go product, Left Hand Brewing increases the availability and versatility of craft beer options, while also allowing nitro beer aficionados to be able to take their preferred beer with them away from the pub.

James Cain, co-owner of Vault Brewing Company in Yardley, PA is quick to sing the praises of using nitrogen within his brewery. Vault was the first to package their nitro beers in widgetless cans, opting for inline nitrogenation instead. But Cain also uses nitrogen with some of his traditionally carbonated beers as well.

“Capping our cans using nitrogen is very helpful in removing oxygen from the headspace because of the capacity the nitrogen displaces when transforming from a liquid to gaseous state. It promotes extended shelf life and because of that large amount of displacement, the walls of a beer canned using nitrogen will be noticeably more firm and rigid than their CO2 counterparts. This supports the idea of higher strength cans with better performance and more stacking power. But you have to be mindful that the extra strength is due to increased pressure, so there also is the possibility for more damage. It’s a six-of-one, half a dozen of the other kind of thing.”

“Not many are packaging with nitrogen,” Cain says, “But we feel that it’s a great way for those beer drinkers to be able to take our nitro beers with them for later enjoyment in their homes. They’ve asked if we could do it with our growlers, but it just wouldn’t work, so being able to can the nitro beer is a way to satisfy that customer demand.”

Within his brewpub, Cain says that there are always nitro brew beers on tap, with the choices usually being seasonal and/or session beers. These beers are pushed from keg to tap using a nitrogen system that allows a mixture of seventy-five percent nitrogen to twenty-five percent oxygen ratio.

“It ultimately comes down to personal preference,” says Cain. “Overall, using nitrogen gives a superior, cask-style pour, emphasizing the taste and flavor of the beer. It’s a way to provide a smoother mouthfeel without the fizziness of high carbonation. It takes away the carbonic acid and bite at the end of your drink of beer.”

The Proof Is In The Pour

Nitro beer drinkers notice immediate differences in initial mouthfeel, which plays a huge part in the overall perception of the beer from that point forward. That smoother, creamier, almost dessert-like foam head is all due to the nitrogen immediately forming a glassful of tiny, insoluble bubbles upon pouring.

And that pour is important. With agitation produced from either a mild shake or a fully inverted hard pour, nitrogen is released and those tiny, endless bubbles descend with the signature cascading action that signifies a nitro brew. By the time the container is emptied, those nitrogen bubbles reverse their flow and rise towards the top in a thick, heavy foam head with superior retention, providing the velvety mouthfeel of a luscious whipped dessert. The darker, more intensely flavored stout types of beer tend to better match with the creamier, velvety consistency of nitro brewing, and actually have their flavors amplified when introduced to nitrogen.