Author: Cyndi

Packaging With a Purpose

Cyndi

How the Right Packaging Can Protect, Promote & Preserve Your Craft Beer

By: Cheryl Gray

beer manufacturing facility

Putting a distinctive face on a craft beer product means giving it a good chance to shine in the marketplace spotlight. However, that’s only part of the role of packaging. It should also protect craft beer from outside contamination while preserving its flavor integrity.

Equipment

  Enter the expertise of companies that shape the multiple roles of packaging for breweries. Among them is SKA Fabricating of Durango, Colorado. Founded in 2012, SKA Fabricating is the result of a demand for a can depalletizer designed by Matt Vincent, one of three partners in Durango’s award-winning SKA Brewery. SKA Fabricating now employs more than 70 people and manufactures and sells depalletizers, conveyors and packaging line equipment to businesses worldwide.

  Ska Fabricating has more than 1,000 clients in 23 countries, providing them with depalletizers and other custom packaging line equipment. Beyond the craft beer industry, the company also provides packaging line equipment to producers of food and beverages such as coffee, tea, water, kombucha, soda and orange juice. Non-beverage industries include aerosol, paint cans and spice jars.

  The size and capacity of systems built by SKA Fabricating fit virtually any brewery packaging line need. They range from a 20’ x 20’ square at 20 containers a minute to a 60’ x 60’ square running 250 CPM and above. The company is big on automated packaging line systems, touting them as more economical since automation requires less manpower. However, SKA Fabricating provides manual systems for clients who prefer them, such as start-up breweries on a tight budget. Those manual systems are available for half-height use and do require more personnel. As breweries grow and want to advance to automatic packaging systems, SKA Fabricating can help with the transition. 

Filling

  Another part of packaging is filling the cans and bottles that craft brewers use as containers for their products. XpressFill offers multiple fillers for the craft brewing industries. Rod Silver spearheads marketing and sales for the company.

  “XpressFill’s filling equipment is suitable for breweries that are not ready to invest in a full-blown production line. Our artisan brewers can realize significant savings in their efforts to grow their markets before making such a significant investment.”

  Since XpressFill offers fillers specifically with start-ups and smaller craft brewers in mind, the company promotes its products as the gateway to an opportunity for artisan brewers to run efficient, cost-saving packaging production lines. The company cites its products as top industry choices when it comes to being affordable, compact, user friendly and easy to maintain.

  Silver added that customer support is an important key to client satisfaction and that XpressFill has products for production brewing lines, large and small. He described how brewery clients are already benefitting from the range of products that his company has on the market, all designed to optimize productivity.

  “We offer counter-pressure fillers for both bottles and cans. We also offer an open filler that will fill both bottles and cans,” Silver said. “The XF4500C is a counter pressure system for cans capable of filling 200 12 ounce cans per hour. The XF2200 (two-spout) and XF4400 (four-spout) are open fill systems for cans capable of filling 300 to 600 cans per hour. The XF2200 and XF4400 can also be adapted to open fill bottles. The XF2500 (two-spout) and XF4500 (four-spout) are counter pressure systems for bottles capable of filling 200 to 400 12 ounce bottles per hour.”

  Silver laid out the pros and cons of manual versus automated production lines. “The most obvious distinction is production capacity and cost. The XpressFill systems are affordable for start-up breweries, ranging from $2,500 to $6,500. Automated systems are, at a minimum order of magnitudes, more expensive. Often, brewpubs will provide cans or bottles to be sold at the pub in limited quantities. Brewers getting started in retailing their brews will want to start in a deliberate manner to test the market. Larger breweries will also use our fillers for small batch or specialized runs that do not require start-up of larger production facilities or mobile operators.”

  Silver described how XpressFill works to protect the integrity of the beer inside any container. “All of our fillers have a pre-fill CO2 purge cycle to minimize the oxygen in the container prior to the fill cycle. Our can-fillers also have a post-fill top-off function to ensure an adequate layer of foam on which to place the lid. The counter pressure systems require a minimal air compressor to operate the pneumatic actuators. Our fillers operate at 110 volts, although they can be provided at 220 volts for our international customers.”

  Ease of use is also important. Silver said that his company prides itself on the simple operation of its products.“XpressFill can-fillers can easily be operated by a single user. Weighing under 40 pounds, they are intended to be used on a tabletop for portability. A few test runs are required to dial in the settings and bring the equipment to temperature for best results. Our fillers will purge and fill the cans, and a separate seamer is required. To maximize the production and efficiency, many of our customers use a second operator for the seaming function.”

  Silver said that XpressFill products have state-of-the-art safety features, compliant with industry-standard safety measures, including all applicable electrical and mechanical requirements. All materials in the flow path are food grade and meet the standards set by the National Sanitation Foundation.

  Fillmore Packaging Solutions is another company focused on small craft brewers. Its history highlights how owner Tony Saballa, a craft brewer in his own right, founded the company because he couldn’t find products on the market catering to the needs of small breweries like his.

  Based in St. Louis, Missouri, Fillmore Packaging Solutions provides its clients with options for automated can filling machines that utilize an automatic shutoff feature. This prevents cans from overfilling, a costly and time-consuming production line mishap. The product’s four-head can-filler is designed to fit into small spaces and accommodate small budgets. The product features double pre-evacuation counter-pressure filling, designed as an effective method of reducing dissolved oxygen during beer packaging. It can fill 12 to 16 cans per minute. Standard features on the product include under lid gassing, automatic lid placement and seaming. Additional features such as tank and CO2  pressure sensing and temperature monitoring with onscreen readout help to enhance the product’s ease of use. 

  The firm has also created two- and four-head filler machines for bottles. The machines operate on 110v/220v and compressed air. Fill rates for the two-head machine range from six to eight bottles per minute. The four-head machine fills at a rate of 12 to 16 bottles per minute. Features for both include automatic filling and self-leveling to correct fill height. The four-head model has a feature that pushes bottles onto the production line’s packing table. The models are operator-controlled from start to stop, loading and unloading bottles and loading crowns onto crown heads for capping. Fillmore also created a keg washing machine featuring a 25-gallon detergent reservoir with heater and a 25-gallon sanitizer reservoir.

Labeling

  When it comes to the aesthetics of packaging craft beer, labeling is the star. Colorado-based Lightning Labels has provided clients with custom-designed labeling for nearly twenty years. The company uses HP Indigo digital printing technology, which combines the best features of traditional offset printing with digital techniques. This hybrid delivers top-notch quality whether the client’s order is large or small. 

  Lightning Labels prides itself on the vibrancy of its color palettes, produced in high-resolution and designed to be water-resistant. Labels can be affixed to bottles, cans, growlers and kegs in a wide range of finishes, using high gloss, matte or textured paper. There are separate front and back label options, or clients may opt for one large wrap-around. Lightning Labels touts that its print quality allows listing custom beer ingredients in a crisp, readable font. Bottle labels are available in paper,  vinyl and eco-friendly options as well as more durable alternatives. As the name implies, Lightning Labels touts a quick turnaround on product orders.

  Blue Label Packaging Company specializes in labels for beer cans. Headquartered in Lancaster, Ohio, the company also uses HP Indigo printing, offering its customers an array of materials and substrates, such as foil, film and paper cut and stack labels. Product finishes and decorative techniques aimed at creating high impact include hot foil stamping, die-cutting and embossing. 

  Cost, creativity, and careful planning matter when it comes to packaging for craft breweries. The combination results in products that distinguish themselves on store shelves and meet the benchmarks of industry standards and food safety requirements.

Pumps, Motors and Drives in the Distillery

Cyndi

By: Alyssa Ochs

distillery equipment set

There are various kinds of specialized machinery used in modern craft distilleries to produce the high-quality spirits we know and love. Among these are pumps, motors and drives, which are worth learning more about to choose the best options for your distilling needs. To kick off the new year, here are some best practices and tips for ensuring that these pieces of machinery are functional and effective for their intended distilling purposes.

Distillery Uses for Pumps, Motors and Drives

  Pumps perform many unique functions in a distillery, including bringing in water, mashing, wort recirculation and fermentation transfer. Distillers also use pumps during distillation, for filtration, to fill barrels for aging and fill bottles when the finished product is ready.

  Motors drive the pump and grinding mills using electricity. Motors serve various purposes in distilleries, including pumping cool water, charging, discharging the still, agitating tanks and transferring distillate and spirits. Explosion-proof motors are critical in a distillery as a safety precaution while handling high-proof liquids and vapors. Some motors used to make craft spirits are not explosion-proof, but the key to using them safely is strategic placement on the property.

  Drives are part of the mechanical device that brings about its dynamic movement and are a great way to streamline the bottling process.

  All of these moving parts contribute to the automation process that modern distilleries use to increase efficiency, improve safety and work around labor shortages.

Pump Recommendations and Tips

  Among the many types of pumps available, centrifugal and positive displacement pumps are common in distilleries. Distillers also use flexible impeller pumps and double diaphragm air pumps with grounding tags.

  Air-driven double diaphragm pumps work well in flammable distillery areas and are versatile and self-priming. Meanwhile, electrically-driven double diaphragm pumps tend to be more cost-effective because they do not require compressed or pneumatic air. Electrically-drive peristaltic hose pumps can discard botanical waste by pushing liquid through a rubber hose and ensuring the desired flavors and fragrances remain in the spirit.

  Typically constructed with stainless-steel and hygienic materials, air-operated diaphragms pumps can handle multiple fluid types and applications, and they can be trolley-mounted for greater versatility. Hygienic pumps comply with food and beverage safety requirements, while pumps with low flow rates can transfer spirits from tanks to barrels for maturation. However, it is important to have the capability to adjust the flow rate for different cask sizes to prevent spillage and product loss.

  Glenn Mulligan at FLUX Pumps Corporation in Kennesaw, Georgia, told Beverage Master Magazine that FLUX drum and container pumps are ideally suited for distilleries of all sizes.

  “The pumps are lightweight and portable for ease of operation in many areas of the plant,” Mulligan said. “Whether you are pumping concentrates, additives or sanitizing products or ingredients like honey, FLUX has a solution. Food-grade pump options and motors suitable for use in classified atmospheres, such as explosion-proof products, pose no problems for the equipment.”

  FLUX Pumps Corporation has been producing pump technology for over 70 years, starting with the invention of the first electric drum pump. Beyond its well-known drum pumps, FLUX’s product line includes eccentric worm-drive pumps, centrifugal immersion pumps, air-operated diaphragm pumps, flow meters, mixers and complete system solutions. The company also carries a comprehensive range of accessories to suit the needs of various industries and applications.

  Overall, distilleries need pumps that provide efficient transfer of their products over a wide range of head and viscosity conditions. Multiple seal options are also useful, as leaky seals are common. Other things to look for in a new distillery pump include clog-free check valves, durable integral mounting, corrosion-resistant materials and easy installation with quick disconnect ports.

  Jon Johnson from Carlsen and Associates told Beverage Master Magazine that using pumps in a distillery is tricky, and the only type of pump he would sell to a distillery is an air diaphragm pump. Johnson has been in the industry for over 30 years and understands that distilleries must abide by rules that vary between each city, county, state and fire department.

  Based in Healdsburg, California, Carlsen & Associates is primarily a wine equipment supplier that offers positive displacement pumps, centrifugal pumps and air pumps, along with various related tools and fittings.

  “If you use an explosion-proof, Division 2 pump––which means that all rotating devices are non-sparking and have a cast-iron frame on the motor––you can put the motor and pump in there, but you have to put the control on the outside of the building and can’t run the speed control into the room because that is still illegal,” Johnson said. “You also need to have three backups if the air pressure drops.”

  He said that air diaphragm pumps could be safely used to pump high-proof and mash anywhere in the distillery and an explosive environment. Some distilleries use positive displacement pumps, but this is only safe if not in an explosion environment.

  “Make sure the products are grounded and that elastomers in the pump are compatible with whatever you are pumping and cleaning it with,” Johnson said.

  Carlsen and Associates sells Yamada-brand diaphragm air pumps, and Johnson said that the NDP-25 and the NDP-40 pumps are the most popular options. An NDP-25 pump costs approximately $3,200, while an NDP-40 model is closer to $5,000. The main difference between the two is volume.

Recommendations and Tips for Motors and Drives

  Experienced distilleries prefer energy-efficient, hygienic and explosion-protected motors, as well as those with effective brakes and built-in encoders. Different types of pumps use different motors to power them, but distillers should seek out certified motors that are explosion-proof and have multi-phase power, as some motors only fit certain transmissions.

  Air motor pumps are small pumps used to ensure safety and prevent explosions. Air motor power costs considerably more than a direct drive electric motor; however, upgrading motors can dramatically improve safety and comply with standards.

  Variable frequency drives can provide power at low speeds and have options for efficient designs, normal and heavy-duty operation, safety functions and cooling systems. Distilleries use electric variable frequency drivers as motor controllers that vary the voltage and frequency of power. This is how the electric motor is driven within an RPM range instead of a binary on or off. Drives can be programmed to minimize hydraulic shock and provide great accuracy while maximizing the properties of heat exchangers.

Considerations

  When choosing new pieces of equipment, factors to keep in mind include having access to readily available parts and quality people who can install and repair the equipment when needed. Mobile machinery and multi-functional pumps can help save valuable square footage in small distillery operations.

  Distilleries benefit from having pump-related products built from materials that conform to FDA and 3A requirements and can be quickly taken apart, cleaned and put back together. Mulligan said that this is why FLUX pumps are perfect for pumping different liquids while preventing cross-contamination. He also said that there is a common misconception that drum pumps are pieces of “throw-away” equipment.

  “While this may hold true for the lesser-quality brands, FLUX is committed to providing the best pump on the market with the lowest overall cost of ownership,” Mulligan said. “Every part for all of our pumps and motors are sold as individual components, which can result in repairs costing as little as just a few dollars. FLUX has customers that have been using pumps for over 20 years–some by just completing only the bare minimum for maintenance.”

  Mulligan also said choosing the best pump should be easy because many drum pumps on the market will solve the customer needs, but with varying degrees of customer satisfaction.

  “Selecting equipment from a manufacturer that is long-lasting, with the ability to be repaired when necessary, will result in a pump life that can be counted in decades,” Mulligan said. “Quality equipment results in less downtime and more production, ultimately adding to the bottom line. We can show you how the break-even point for the return on investment comes in just a few months, with thousands of dollars saved over the lifetime of the pump.”

Blending In

Cyndi

By: Tod Stewart

distilling instruments in the table

It’s been said that spirit distilling is a science, and spirit blending is an art. As I am neither a scientist nor an art-ist, I prefer to simply enjoy the end result of the distiller’s science and blender’s art.

  That being said, in the interest of science (possibly art), I’ve subjected myself to the organoleptically humbling “blending exercise” on several occasions, trying to duplicate house styles with the Metaxa Master Blender in sunny Greece; with the Mount Gay Rum Master Blender in sunny Barbados; with the Appleton Estate Master Blender in sunny (sort of) Jamaica; and with the Brand Ambassador for the Famous Grouse Blended Scotch Whisky in the bowels of a definitely un-sunny bar in Toronto. I’m sure there were more. Most have been men-tally blocked, as the mind can only tolerate a finite number of crushing failures.

  So, acquiescing to the reality that I would never enter the sacred realm of Master Blender, I chose instead to live vicariously through the lives of those who have, in an effort to understand more about the art and science of blending.

  Enter Cécile Roudaut, Master Blender for St-Rémy, the French distiller of one of the world’s most popular brandies. To her mind, distilling and blending are equal parts art and science, but the approach to each differs slightly.

  “For me, both distillation and blending are arts, but they are expressed differently,” she said. “I think that the art of distillation requires a lot of know-how but also intuition, and depending on what you want to achieve…inspiration.” When it comes specifically to blending, Roudaut said that “the olfactory notes are a bit like music notes, they must be harmonious and not discordant. Blending is the art of harmony of notes; there is a part of intellectual, of artistic property.”

  To me, the art/science/frustration of spirit blending is twofold. First, it aims to create a sort of liquid gestalt, where the blend turns out to be something magically different than its component parts. Secondly, it seeks to do this consistently, day in day out. Most spirits are, in fact, blends. Whether you’re blending whisk(e)y, brandy, rum or tequila, you’ll be shooting for a common goal, though you may go about it somewhat differently.

  “The common objective [in blending] is to obtain a product that conforms to a standard,” said Karina Sanchez, Global Brand Ambassador for the tequila producer Casa Sauza. “For a specific [type of] spirit, the blending process has unique details related to customs and legal constraints, production and warehousing processes, ap-proval criteria and so on.”

  These blends are typically closely guarded secret recipes, sometimes passed down from hand to hand. Could someone who’s not a part of the covenant of the Master Blender/Knights Templar/Masonic Orders in general ever be able to duplicate a successful blend? Maybe it isn’t possible. Maybe trying to replicate a blend is a mug’s game.

  So I asked a few Master Blenders this: Is trying to replicate a blend a mug’s game? To which they replied: “Yeah, pretty much.” See, even if you had all the exact component liquids and mixed them in the exact propor-tions, you still wouldn’t get the correct mix down in a blend-off competition that might last an hour.

  Here’s a possible reason why.

  Spirit blenders have been likened to marriage counselors in many instances, or at least in one instance I know of for sure. In the book Goodness Nose, Richard Patterson, Master Blender for Whyte & MacKay scotch, revealed this about whisky blending: “Not all of the whiskies will immediately fall in love with each other. Indeed, some may be totally incompatible. The boisterous, younger malts may simply flirt, only to go their separate ways. The chosen whiskies must be given time to court, time to sort out their differences and to make the necessary compromises before a perfect partnership is achieved.” Obviously, all this cohabitating, marrying and getting-to-know-each-other isn’t really doable during a blending exercise that may only last a half-hour or less. Before that stage, the professional blender’s task is not only to select the spirits that will best work together to create a final product but also to ensure that there is sufficient stock of the components on hand to recreate this product in the volume required regularly.

  “I believe that blending is about controlling all phases of the rum-making process,” said Nelson Hernandez, Master Blender at Diplomático rum. Hernandez explained that crafting what he calls the  “Diplomático style” calls for a combination of elements and processes, including the final blending of distillates extracted from three distinct stills.

  “We have a continuous distillation system we call Barbet. It was designed in 1959 exclusively for our distillery, with a very particular internal shape that allows us to obtain a light but very aromatic distillate. Another unique system we have was imported from Canada. It is called a Batch Kettle, and we adapted it to get a semi-complex distillate. Finally, we have a discontinuous copper system, which was used in Scotland until 1959 to produce malt whisky. These distinct distillation systems allow us to obtain three completely unique and exclusive distillates, which we then age for different durations and blend them to achieve our specific expressions.”

  Be it rum, whisky, brandy or tequila, once the blender is satisfied with the profile of the new blend — or the proximity to the “standard” is so close that no differences can be detected — the blend is ready to be replicated on a commercial scale. However, given the advances in modern science and technology, I wondered how im-portant the human senses are in the finalizing process, especially when it comes to duplicating a pre-existing blend. Surely in the world of gas spectrometers and the like, this task would be best handled by machines. Or so I thought.

  “The Whisky Mastery Team at The Macallan are a truly unique group of individuals whose abilities to blend single malt whisky have put them at the forefront of the industry,” said Cameron Millar, The Macallan Brand Ambassador. “The human element of whisky making is largely down to the use of a whisky maker’s nose or olfactory sense. This team of whisky makers will nose each and every cask selected for use by The Macallan, providing a quality check that no machine or technology could ever replicate.”

  In fact, of the half dozen or so Master Blenders, Cellar Masters, and Brand Ambassadors I spoke to, all were unanimous in asserting that while technology can offer assistance, it is ultimately human senses that dictate the final blend. “So far, there is no modern technology that has managed to replace the talent of men and women Cellar Masters,” confirmed Anne Sarteaux, Cellar Master for French brandy producer De Valcourt. “Of course, there are analyses that ensure the organoleptic components serving as support for the daily work, but only the human palate identifies the subtlety of the Eaux-de-vie which make up the final blend.”

  Hernandez concluded that, from a strictly human perspective, a Master Blender has to have an exceptionally good memory for aromas and flavors. Probably a bit of an understatement.

  Once the ultimate blend has been settled on, it’s time for the Master Blender to unleash it on a thirsty world. This basically involves recreating the blend by the barrel rather than by the beaker. But it’s not quite as simple as a straight swapping of millilitres for casks.

  “To start, each blend is elaborated in our laboratories with graduated test tubes,” Sarteaux said. “Then we select the available blends that we regularly test. We then develop the blend on a larger scale, always testing the or-ganoleptic quality. Each selection is then tasted. Lastly, we test our brands blind with an independent and expert consultant.”

  Constantine Raptis heads up perhaps one of the most intricate blending regimes. As Metaxa Master, Raptis blends spirits, wines, and a special aromatic component together to create the signature spirit of Greece.

  “I create Metaxa by bringing together aged distillates, Muscat wines from the Aegean islands and a secret bou-quet of May roses and Mediterranean herbs,” Raptis said. “Every blend is created following the same philoso-phy. The first step is to collect, evaluate and record all the information (years of aging, origin, organoleptic characteristics) of every cask where distillates are left to age. Then, based on my experience and — sometimes small-scale tests — I decide which cask will be used for the specific blend. The content of the casks is emptied in a tank and stirred. The new blend is then tested, and if needed, I may add some specific distillate to achieve the final character of the blend that I am looking for. Usually, my blends are 20,000 or 70,000 litres, depending on the Metaxa style that I want to create.”

  Consistent flavor is what a blender aims for, but just as different casks bring different nuances in flavour and taste, color consistency also has to be considered and typically adjusted. Raptis said, “Every blend is created with distillates of different aging that may have certain variations in their appearance. Therefore, every final blend may present slight colour variations that are adjusted by the addition of natural caramel colour. This step is important so as to maintain stable all the other organoleptic qualities of the blends.” Note that the addition of natural caramel color is standard practice in the blended spirits industry and has no impact on the final taste of a brown spirit.

  Sometimes, for blenders to offer something truly unique, a break with traditional practices (and mindset) is re-quired. Canada’s Alberta Distillers Ltd. releases an annual, limited edition Alberta Premium Cask Strength Rye Whisky. In blending the final product, a bit of “coloring outside the lines” is necessary.

  “To create our award-winning Cask Strength Rye whisky, Alberta Distillers Ltd. breaks from the traditional blending technique that other Canadian distillers are known for and selects only pot stilled liquid that is aged in new white oak barrels,” said George Teichroeb, the distillery’s General Manager. “Once matured and drained directly from these barrels, nothing is added to the whisky. Additionally, we use both pallet and rack style warehouses during maturation. This, coupled with the unique weather we experience here at the foothills of the Rocky Mountains, offer distinctive nuances to this coveted whisky.”

  Like the end product itself, the art and science of spirit blending are complex. But whether they are mingling whisky, rum, tequila, brandy or exotic elixirs like Metaxa, the aim of the blender is the same — consistency and uniqueness in aroma, flavor and color. The Master Blenders and Cellar Masters use both talent and time to en-sure that, as a spirit aficionado, you can be confident that the second bottle you buy will be every bit as enjoya-ble as the first one.

If It’s Premium & Luxury, We’re Drinking It

Cyndi

By: Hanifa Sekandi

bartender mixing alcohol

Maybe we have been home too long? Could it be sheer curiosity leading us to develop a sophisticated spirits palate? It is true that when your life is busy, you tend to give very little thought to what goes into the cocktail you are drinking. You may know you like gin, bourbon, whiskey or tequila but, unless you are a spirits connoisseur, the quality of liquor you drink may evade you. Now that you have graduated from junior bartender to an award-winning at-home mixologist, drinking just anything does not cut it. You want premium and luxury spirits that are high quality and arouse the palate. You desire a tequila on the rocks that is as smooth to sip as it is when poured for a single shot. Your bar cart is the a la carte experience that your neighbors dream of; they sure do envy it in the community group chat. It is time to expand your horizons to premium and luxury spirits from around the world.

  You may not be able to travel to a far-off land, but you can feel its energy, the ingredients, the rich soils, and the minerals that make up the alcohol in each bottle. Alas, you can feel the African rhythm, the tranquility of India, the heat of Mexico when you savor one of their premium spirits. It is the road less traveled that leads one to incredible experiences. During this time, our hearts and minds come alive and begin to dream again. Until then, the road will be through the liquid poured and made with pure heart by people who want you to discover their lands and what makes them unique.

The Heat of Mexico: Tequila

  It is not that people were not drinking tequila in years past; they certainly were. As with all things great, it takes time for people to appreciate what has always been good. Tequila traces its beginning to Jalisco, Mexico. Travelers to this sunny destination learn very quickly that tequila is one of the essential elements of experiencing Mexican culture. Yes, there is more to Mexican culture than this ancient craft spirit, but there is no denying its pulsating effects. There is the ad-age that you may have heard, “tequila makes babies,” meaning that it goes down so smooth and keeps the party going, you most likely will not remember what happened the night before. With each sip, the heat rises, the party becomes passionate and livelier. What has changed? Why has tequila gained popularity in recent years? What seems like a newfound love for tequila is due to education. Premium tequila brands are going a step further by partnering with brand ambassa-dors, bartenders with in-depth knowledge about tequila and a deep understanding of how tequila is made and what makes a brand luxury.

  For some, tequila is a waist-friendly, craft-spirit-alternative that sips well. It is the alcohol of choice when mixed with low-caloric pre-made drinks. This trend might have been ushered in with popular diet-savvy cocktails, like the skinny margarita, since pared-down emphasizes the quality of tequila used.

  Premium tequila contains 100% de agave. Lower-quality tequila, called mixto, consists of other alcohols and less than 51% agave-derived alcohol. It is most likely what you tried years ago at your local bar before they upped their alcohol repertoire due to the patron’s elevation of tastes.

  If tequila is the main event for burgeoning spirit enthusiasts delving into premium alcohol, skip-ping the frills and enjoying it “just as” seems appropriate. A familiar mid-level premium brand is Clase Azul Reposado. Due to the white ceramic bottle with beautiful blue hand-painted details, it is a recognizable brand. Although this mid-range tequila only ages for 8-months in American oak barrels, it boasts a rich flavor profile. It is not unusual to find this bottle perched on the shelves of travelers who have visited Mexico and needed to take a piece of tequila splendor home with them. Another noteworthy premium tequila made with agave from the highlands of Jalisco and aged for five years is Tears of Llorona Extra Añejo Tequila.

  Word travels fast with the premium brands recognizing that tequila education increases aware-ness and demand. Hence the prevalence of tequila tastings has become a common occurrence not just in Mexico but in bars across the globe that showcase premium tequila as the main event.

Feel the African Spirit: Brandy

  South Africa is known for its Winelands but, for those who know, there is something rhythmical-ly beautiful about African-crafted spirits. Each country on this rich continent has homegrown spirits that keep the symphony of well-made liquor loud enough to entice explorers far and wide. It is not surprising that as the premiumization of this sector flourishes, South African spirits are found on the top shelf right next to the best American-made bourbon in town. Although South Africa is known for its brandy, there is a diverse array of spirits that never fail to impress. A standout spirit is a blue-hued botanical gin by Six Dogs that gets its color from a blue pea flower. The magic of this gin is apparent as it changes to a lovely pink when mixed with tonic.

  On the world stage, South African brandy has received prestigious accolades. KWV Centenary Limited Edition Brandy, made in the Paarl region of South Africa, has a premium price tag that will send chills down your spine. Its namesake and distiller is Ko-operatieve Wijnbouwers Vereniging van Zuid Afrika, a distillery that has been making brandy for over 100 years.

  The word brandy derives from the Dutch word ‘brandewijn,’ meaning burnt wine. Brandy’s long legacy dates back to the 17th century with Dutch settlers. This is apparent with the breathtaking gardens and Dutch farmhouses where spirits are still made. South African brandy is described as having a velvety texture with robust citrus and floral notes along with an enchanting aroma. A standout attribute is that distillers maintain traditional brandy-making practices. Although they have pivoted with the times, honoring the tested and true techniques produces a premium amber spirit.

  What brandy distilleries in this country have maintained is crafting beautifully aged batches with copper pot stills as the first stage. They follow this by further aging it in oak barrels. Batches un-dergo this process for at least three years before a brandy with an alcohol content of 38-43% is ready to be bottled.

  South African brandy is composed of Colombar and Chenin blanc grape varietals, fermented to make this chest-warming spirit. For those who love wine but turn their nose up at this deep-colored, rich, alcoholic beverage, the two are close relatives that share the same roots, often liter-ally.

  When sourcing authentic South African premium brandy, keep in mind that the rules are strict for brandy distillers. Therefore the real deal is only made from grapes endemic to the South Afri-can Winelands and distilled, aged, and bottled there.

The Tranquility of Spirits in India: Whiskey

  When most people think of India, they imagine themselves in an ashram meditating and doing yoga. India is a country where people travel to find what is missing within and, for some, to simply find what is yet to be seen. It is a land that is full of beauty and undiscovered treasures. It is not surprising that premium spirits are made in a country rich and diverse with indigenous plants. The climate is ideal for growing and harvesting; therefore, making unique premium whis-key was inevitable. 

  For Hermes Distillery, a premium spirit distillery founded in 2018, producing homegrown pre-mium whiskey was a necessary endeavor. Founder Amit Kore recognized that India could pro-duce top-shelf liquor just like America and Europe. The Rockdove premium label whiskey made by this nouveau distillery bouts all the luxuries that an avid whiskey drinker desires: A rich and deep-colored whiskey, light-bodied and smooth like scotch.

  The 100-year old technique used by Hermes Distillery at their Tomsa plant, the first in India, is from Spain, and it is the same technology used by familiar brands Crown Royal and Johnnie Walker. Moving at a pace that would take most distilleries decades, Hermes is opening the door for Indian-made premium liquor to join prestigious distilleries as a top-shelf selection.

  Drinking premium or luxury is not about social class. It is about quality. A survey conducted by Bacardi found that 75% of the people value cocktails made with high-quality spirits. For those looking to experience more than a night out with any old cocktail, premium spirits allow them to enjoy the moment with ease and appreciation. It is better to stretch your wallet just a little bit to drink the real deal. In the case of tequila, 100% de agave is a must! And wouldn’t you like your botanical gin to contain ingredients sourced from the lush gardens of South Africa? Seeing the meticulous effort that goes into an Indian-made whiskey, you must recognize that there are no shortcuts for luxury. So, as we usher in a new year, let’s take the long road down luxury lane, slowly sipping one premium spirit at a time.

“SHOW ME THE MONEY”

Cyndi

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

By: Quinton Jay

dollar bills flying

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

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

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

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

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

Understand the Realm of Private Equity Investments

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

Private Equity Funding

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

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

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

Alternative Lenders (Non-Bank Financing)

  Some sources of alternative financing include:

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

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

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

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

Traditional Lenders (Bank Financing)

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

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

Finding the Right Investor for Your Brewery or Distillery Business

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

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

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

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

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

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

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

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

Showing What Investors Want to See in Your Business

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

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

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

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

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

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

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

GETTING CRAFTY: How the Beverage Industry Can Secure Business Funding

Cyndi

By: Raj Tulshan, Founder of Loan Mantra

hand holding dollar sign

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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About the Author

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

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

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

About Loan Mantra

Loan Mantra

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

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

BREWERY AS A BUSINESS: Important Points to Consider

Cyndi

By: Jess Perkins

man writing on paper

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

Staffing

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

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

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

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

Labor Laws

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

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

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

Pricing

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

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

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

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

Branding

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

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

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

Taxes

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

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

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

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

Competition

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

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

Growth and Expansion

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

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

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

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

Cyndi

By: Becky Garrison

man carrying stack of beer on his shoulder

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

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

Half Time Beverage

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

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

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

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

Tavour

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

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

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

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

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

Localized Craft Beer Distribution

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

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

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

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

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

DIY Beer Distribution

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

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

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

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

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

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

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

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

Merchant du Vin: Specialty Beer Importer

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

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

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

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

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

Types of New Software & Technology in the Beverage Industry

Cyndi

By: Alyssa L. Ochs

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

How Technology Can Improve Beverage Production

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

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

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

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

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

Technology Spotlight: Refractometers

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

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

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

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

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

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

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

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

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

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

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

Benefits of Trying New Software and Technology

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

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

Choosing the Right Tech Upgrades for Your Business

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

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

Sustainability in Craft Brewing:

Cyndi

A Journey Without An End

By: Gerald Dlubala

4 beer bottles on solar panel

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

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

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

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

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

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

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

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

Carbon Capture Is Within Reach

For Craft Brewers

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

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

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

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

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

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

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

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

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

Packaging for a Sustainable Future

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

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

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

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

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

The Potential For Tax Credits Is Out There

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

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