A Clear Alternative: The How and Why of Hard Seltzer

By: Erik Myers

It’s hard to deny that this past summer was the summer of hard seltzer. In fact, it was a summer that saw hard seltzer grow to more than $1 billion dollars in sales. In just the week of July 4 this past summer, White Claw and Truly seltzers combined sold over 100,000 barrels of product. That’s enough to put them in the Top 50 Craft Breweries for production over the whole year. It’s no surprise that craft breweries large and small are looking to tap into the apparent gold mine that is hard seltzer, but how they approach it doesn’t quite seem to stand up against the segment’s largest competitors, and that’s worth thinking about. At a recent industry panel in Charlotte, NC, several craft brewers who make seltzers spoke about their perspectives on this new slice of the industry.

But… Why?

  This might seem fairly obvious with the sales numbers that hard seltzers are putting up, but a closer look at the craft beer industry tells a slightly different story. Recently in an interview, the senior vice president of marketing for Mark Anthony Brands (the makers of White Claw) noted that though White Claw has incredible penetration in grocery stores and liquor stores nationwide, only about 20 percent of bars and restaurants are currently selling hard seltzers. For the average small craft brewer, the opposite is true – while the limited shelf space of grocery is locked behind the arcane process of distributor-led Planograms, inaccessible to most small breweries, they are nearly ubiquitous on draft systems in bars and restaurants eager to serve local beer. So, why chase a segment which shows so little relevance in their primary market?

  “After the surge of LaCroix in the non-alcoholic market, we took a hard look, and it’s what our market research showed our customers wanted,” said Colleen Quinn, of Craft Beer Alliance (CBA). Their market research showed something else interesting – that while most hard seltzers are marketed specifically toward young women, their targeted demographic tended to skew almost 50-50 male-female. It led to CBA’s decision to package their multiple seltzer brands in regular 12 ounce cans, rather than slim cans like their competitors.

  “I’m looking for one more reason to keep the customer in their seat,” says Mike Rollinson of Joymongers Brewery, a brewery that enjoys two taproom locations in Central North Carolina, but no off-premise distribution. “I don’t see it as craft. I’m not making a seltzer for beer drinkers. I’m making a seltzer for the one person in a group of 5 people who will pressure the group into leaving if there’s not something for them to drink.” Rollinson just started making seltzers this year as he saw the trend grow, noting that one of his business partners is on a Keto diet and now drinks his seltzer almost exclusively – as a healthy alternative to beer.

Clear or Colored – the Question of Craft

  While the two major market players, White Claw and Truly, are both crystal clear beverages, two of the producers on the panel noted that color helped them differentiate. Both Brian Quinn of Town Brewing Company and Lindsay Sprick of NoDa Brewing Company pointed to their process as an advantage over the big seltzer makers.

  “I can guarantee that nobody at White Claw was sitting down last week processing a ton of raw ginger,” Quinn noted with a smile. “We’re small enough that we can use natural ingredients as a base for these seltzers.” Those natural ingredients come with their own colors and – he thinks – customers want to see the presence of those ingredients in the product when they’re ordered. “When you get something that’s wild cherry flavored and it’s clear, you ask yourself: where’s the cherry in this?”

  Sprick, of NoDa, shared a similar feeling: “We stand out because we’re using the same ingredients that we use make our beer.” She felt that it was more true to the brand and brewing ethos of NoDa Brewing Company than a clear, sparkling beverage. NoDa’s Brizo Seltzer, unlike other seltzers represented on the panel, is barley-based, which lends even more color to the finished product than the others.

  Rollinson had a different take at Joymongers. “When I see a color, like red or blue or purple in a glass, that reads ‘sweet’ to me, and that’s not what this is.” He mentioned that because his primary customer is not one that’s seeking this for a fruit flavor, but rather as an alternative beverage or a more healthy choice, that the neutral color was a better choice. “The only people who have complained about it being clear were bartenders because they throw it out by mistake because they think it’s water.”

Regulatory Loopholes

  Interestingly, hard seltzers fall into a slight grey area of regulation from both the Trade and Tax Bureau (TTB) and the Food and Drug Administration (FDA). Hard seltzers are the product of fermenting sugar into alcohol and fall under the manufacturing umbrella of a brewery, but labeling considerations vary based on what sugar base is used as the basis of fermentation. A brewer who uses a barley base – even a very light brewer’s malt – still falls under the definition of a beer, requiring a pre-market Certificate of Label Approval (or COLA) and is restricted by certain advertising laws. A brewery who uses sugar as the base for their seltzer is not required to obtain TTB approval as it is not a malt beverage. However, they do fall under FDA labeling guidelines which require a nutrition panel and a list of ingredients.

  While it might seem attractive to a brewery to skip TTB approval and jump straight to FDA labeling because the FDA does not have pre-market approval requirements, it’s important to know that FDA labeling is required to be in compliance before sales and that manufacturers can be held liable to both financial and regulator consequences. Consult your lawyer for best practices.

  None of the panelists chose to share which path they had taken from a regulatory standpoint.

What’s in the Mix

  Clearly, there are as many ways to approach making hard seltzers as there are reasons to make it. Fermenting white sugar seemed to be the preferential approach to creating a fermentation base for hard seltzers. Of the panelists, NoDa was the only one using barley.

  Most of the panelists spoke of these seltzers as good gluten-free alternatives to beer and marketed their seltzers as either gluten-free or gluten-reduced. NoDa used ClarityFerm from White Labs to reduce gluten content in their barley-based seltzer but others simply brewed on their normal equipment directly after “CIP day” in order to guarantee no gluten would be present in the final product. Quinn of Town Brewing shared that lab results showed no traces of gluten in his products.

  From there, the small producers all had a similar strategy of using whole ingredients to flavor as they would for any flavored beer, whether that’s the addition of aseptic fruit puree or hand processing ginger for additions during fermentation. They seemed to feel that the use of “real ingredients” was a way to stand out versus large scale competitors from a flavor standpoint as well as an ethical one. They appeared to share the belief that it “felt more like craft.”

  Yeast was a large differentiator between the producers. While Rollinson at Joymongers used ale yeast to ferment his seltzer, making a note that harvested yeast seemed to perform much better than a fresh pitch, Quinn of Town used Distiller’s Yeast, seeking a strong, healthy fermentation that would get as dry as possible. Both mentioned the need for high amounts of yeast nutrients. “As it turns out,” Rollinson joked, “yeast doesn’t really like to digest straight glucose.”

Where It’s All Going

  All of the panelists agreed: hard seltzer is a trend that is doing nothing but growing, and they all agreed that their futures had more and varied seltzers in it. Each of them was excited to experiment in the market and push the bounds of craft’s involvement in the segment.

  The question remains for you – will we continue to see on-premise growth in a meaningful way that the craft market can take advantage of, or will hard seltzer grow only in larger and larger stacks in grocery stores? We’ll have to wait for the next White Claw Summer to find out.

Lessons for the Start-Up Brewery

By: Tracey L. Kelley

Modern beer plant brewery , with brewing kettles, vessels, tubs and pipes made of stainless steel, monteiths beer factory, south island in New Zealand.

Three beverages are the most consumed in the world: water, tea…and beer.  Regional breweries, brewpubs, microbreweries, and contract brewing companies all experienced growth in 2018. In the United States, 219 breweries closed, but 1,049 opened last year. In Canada, there was a slight decline in domestic beer production last year—3.4%—and only a scant increase in sales—0.3%. Nevertheless, 178 breweries opened.

  Producers and consumers alike want the diverse selection, high quality and community connection craft brewing provides. This makes entering the industry an enticing option. So to answer some brewery start-up questions, we’ve compiled a few experts to share their acumen. They include:

•   Jeffrey Gunn, president and CEO of IDD Process & Packaging, based in Moorpark, California. IDD is a family-owned corporation that provides the consultation, design and manufacture of complete brewery and beverage plant systems.

•   Lindsay Johnson, operations manager, and Shawn Johnson, head brewer, Birds Fly South Ale Project (BFS) and tasting room in Greenville, South Carolina. Named one of 2019’s Top 10 Breweries by the U.S. Open Beer Championship, BFS specializes in Farmhouse and Saisons, along with sours, funky IPAs, barrel-aged brews, and range of wild and traditional styles. BFS is also on the 2019 Thrillist “Most Underrated Brewery in Every State” list.

•   Ben Parker, CEO, Scan American Corporation, located in Kansas City, Missouri; and Aubrey Dyer, business development manager, Flavourtech, represented by Scan American in North America. Flavourtech is a global technology manufacturer that specializes in aroma recovery, extraction and evaporation solutions for the food, beverage and pharmaceutical industries.

•   Christian Riemerschmid von der Heide, president and CEO of the Siebel Institute of Technology (SIT) in Chicago, along with John Hannafan, vice president and director of education. SIT is a for-profit vocational school for brewing education and brewing services. Founded in 1868, it’s oldest brewing school in the United States and home of the World Brewing Academy program, offering campus and web-based courses jointly developed with Doemens Academy of Munich.

  The three primary start-up takeaways they want you to remember:

1.   Take time to learn. Whether it’s refining your processes or understanding how to scale up, knowledge is power.

2.   Choose equipment wisely. Everyone makes different choices—research and compare to make the right decision for your business.

3.   Be patient, young Jedi. Slow, budgeted growth and the right partnerships make more sense for long-term sustainability and adaption to trends.

  These experts provided much more valued insight than print space allows, so we’ll highlight some of the top aspects.

Take Time to Learn

  The Johnsons were a Coast Guard family for more than 20 years, all the while gradually expanding their brewing and business knowledge. “We invested sweat equity first,” Johnson said. “We started home brewing while in Alaska. As we lived in different locations with the Coast Guard, Shawn was able to volunteer at several breweries, learning different aspects of business.”

  In 2016, Shawn officially retired from service, with a year or so of professional brewing experience as a contract brewer for Thomas Creek Brewery, also in Greenville. “This provided us an opportunity to test the idea and see how we wanted to proceed with a brewery buildout,” Johnson told Beverage Master Magazine. “This period of time made it simpler for us to find funding through investment, as we were an established brand and gained some national level recognition early on.” BFS has since received top medals in the Best of Craft Beer Awards, the Great American Beer Festival and the North American Beer Awards.

  Contract or nomadic brewing often reduces start-up risks. Some craft producers try the industry on for size, like the Johnsons. Others do it to gain gradual packaging and distribution knowledge and capital—a wise idea, since a full-scale packaging operation averages more than $300,000.

  Some brewers develop contract partnerships because their current facilities are out of capacity, but budget or geographical constraints prevent expansion. In rare circumstances, a contract partnership with a local brewery happens when someone only has interest in running a taproom.

  “We anticipated being small and niche and allowing the education and evolution of our products to happen slowly and organically,” Johnson said. “However, we quickly grew past all our projections and expectation models, and continually have to be extremely agile as our product line expands and as trends in the industry change. Our production model hasn’t found a ceiling yet.”

  Hannafan/von der Heide believe that every good brew begins with one key ingredient.

  “’First, you add knowledge’ is one of our favorite tag lines. A producer should begin their journey with education, and not after they run into issues,” Hannafan/von der Heide said. “Hopefully they come to us sooner than later to avoid many of the common pitfalls experienced by others. The same process applies brewing theory and understanding the ‘why’ of brewing. It’s not enough to open this valve or turn that pump on—there’s far more to brewing than the equipment side.”

  SIT creates viable paths for new producers through extensive courses on everything from the art and science of brewing to the nuts and bolts of business operations.

  “We share our knowledge by having assisted in numerous start-ups and real experience, not just theory. We offer a consulting arm which assists with recipe formulation all the way through to test batches and evaluating the product,” Hannafan/von der Heide said. “We assist with brewery start-ups and build-outs, supplier evaluation, business case review and staff training. We like to think that the art and science of brewing beer makes lifelong learners out of all in the brewing sector.”

  Hannafan/von der Heide said there are relatively short courses that can dramatically enhance your probability for success. These include the two-week “Siebel Concise” course, “Start Your Own Brewery” and “Executive Overview.”

  SIT also provides another valuable service: yeast banking. “Selecting the right yeast strain can be a key differentiator for better flavor profile, product innovation and brewery capacity utilization. Yeast banking, strain profiling, yeast propagation, fermentation optimization—you can never know enough about yeast,” Hannafan/von der Heide said.  

Choose Your Equipment Wisely

  Evolution in trends, products and other aspects of the brewing industry greatly influence how to source equipment. Spend time to evaluate options based on your ultimate goals and budget—not necessarily what everyone else does. 

  “For too many years, craft brewers grew up with the idea that the two-tank combi-brewhouse doing three–to–four brews in 24 hours was the only way to brew beer,” Gunn said. “As the industry grew, the systems expanded to four or five vessels, but were still stuck in the four–to–seven brews in 24 hours process, with low efficiencies in malt extract, water, energy, labor, effluent and so on.”

  IDD specializes in high-efficiency brewing systems, or HEBS. “HEBS mash filter brewhouses were an unknown entity to most and misunderstood by many that were aware of them. It continues to be an educational project, because it’s difficult for many to believe the efficiencies we publish and the misnomers perpetrated by conventional lauter tun brewhouse manufacturers,” Gunn said. “With HEBS capable of 95–to–98% extracts, up to 40% overall more efficiency and up to three times faster than a combi-brewhouse, there’s such a high ROI for a start-up or expanding craft brewer. Obviously, size has to be adjusted down from a conventional system because of the reduced turnaround time per brew. But 12–to–15 brews in 24 hours are the norm for HEBS.”

  If you’re planning a low-alcohol or non-alcoholic line, your equipment choice is even more specific. For example, Flavortech uses spinning cone column (SCC) technology to enhance flavor, efficiencies and budget. 

“The day-to-day operating expenses of the SCC are low, as it’s very energy efficient. The first two years of maintenance are also included, so these don’t need to be budgeted for until year three,” Dyer/Parker said. “The other main cost is dealing with the alcohol removed from the beer. Disposal can be expensive—however, it can be a valuable income stream if re-concentrated, or could potentially be used to fortify other products in the portfolio. It’s important to work through this part of the equation in advance to maximize the ROI of the system.”

  Scan American/Flavortech allows producers to test all its equipment. “We can teach the customer how the system works and showcase the different outcomes. A beer trial can be run with as little as 60 gallons of product,” Dyer/Parker said. “After each trial, we’ll complete a product tasting to see how it responds to the process. Typically, these trials are proof of concept.”

  Gunn noted an interesting trend that influences equipment choices. “Smaller, more efficient breweries and cans. HEBS, for example, have gone from 20–to–40 Hl brew capacity systems to 5 and 7.5 Hl brew capacity systems. This reflects on the matured craft brew market reverting back to brewpub/restaurant and taproom style operations: local market supply through their own establishment,” he said.

  BFS took a completely different approach to equipment. “Budgeting a brewery start-up is difficult. We’re so capital heavy,” Johnson said. “Don’t rush into purchases. A lot of times you see a deal, but it’ll come back. Some producers are better off sourcing used equipment when applicable.”

  Hannafan/von der Heide offered this important reminder. “If you don’t know about equipment or sizing or space planning, hire a seasoned, independent consultant. Don’t let your emotional side pick the equipment suppliers. There’s a lot of unsafe, poorly-designed equipment that will haunt your day-to-day operations and product consistency.”

Be Patient, Young Jedi

  Our experts offered numerous tips for new producers—here are just a few.

  “We always advise the producer to focus on employing a good industry experienced general contractor, experienced industry-related architect, an experienced industry equipment supplier and themselves doing their due diligence,” Gunn of IDD Process & Packaging told Beverage Master Magazine. “The four parties working together can achieve the best system, the right location and within budget.”  

  “Our initial vision was quite different, or I’d say 60-70% different,” said Johnson of Birds Fly South Ale Project. “We call ourselves an ale project because we’re constantly exploring new styles, techniques and flavors. Our process is unique in that we’re continually blending, and our beer has a chance to evolve through different fermentation processes.”

  “We knew from the beginning we wouldn’t have a ‘set’ product line,” Johnson continued. “This can cause some educational issues when first entering into a distribution partnership. Our brands slowly became a steady product line, but patience was key in our relationships with distributors and retailers. So be patience in all aspects, from hiring and budgeting finances to decision making. We like to say, ‘The beer takes two weeks or more to make—let’s give ourselves an extra hour before we make a decision.’”

  “My advice to someone coming to us with a new product idea would be for them to sit down with us and work through the processing details to make it a reality. The next step is to book some time in our pilot plant and produce some product,” Dyer/Parker with Scan American/Flavourtech said. “We have a great team of engineers with a real depth of knowledge and can assist with the practical realities of turning ideas in successful products.”

  Dyer/Parker also pointed out two exciting trends. “One is the move towards much higher-quality beers. I was in Brazil last month, and the local beer we were served was so good that we cancelled our wine order and continued to drink beer with our meal!” Dyer/Parker said. “Parallel to this trend is the development of the zero-alcohol segment. This fits really well with the SCC, as we enable zero-alcohol products to meet exact quality requirements.”

  The educators from the Sieble Institute of Technology offered two final thoughts. “Create a realistic business plan. Then, have others with industry knowledge challenge and build your plan,” Hannafan/von der Heide said. “The craft and brewing industry is an amazing place to be creative and excel in entrepreneurial activities. It is, however, a place for the long run, despite the hype—there are no quick sustainable wins. Product and process knowledge reigns.”

WOMEN AND CRAFT BEER: Brewing Networks & Profits One Beer at a Time

By: Cheryl Gray

When Meghann Quinn’s great-grandparents planted their first acres of hops in 1932, little did they know that their great-grand-daughter would be responsible for the business side of what is now Bale Breaker Brewing Company, a family-owned enterprise ranked last year as the fifth-largest independent craft brewery in Washington state.

  At Bale Breaker Brewing Company, women play an integral role in nearly all aspects of the business, from the farm to the tasting room.  It is a tradition that Quinn traces back to her great-grandmother, Leota Mae Loftus, the namesake of the brewery’s Leota Mae IPA.

  “It never occurred to Leota that there was a job she couldn’t do,” Quinn said. “If an irrigation ditch needed to be dug, crops needed to be picked, or workers needed to be fed, she was the lone woman on the crew beside—or in front of—the men, getting the job done.  In fact, throughout the 1940s, she was the only woman hop drier in the Yakima Valley.” In those days, Quinn says, hops drying was done by hand.

  Fast forward to the 21st century. Bale Breaker Brewing Company operates out of a 27,000 square foot facility housing a 30-barrel brewhouse. The brewery’s tasting room is right in the center of Hop Field #41, part of roughly 2,200 acres of the family farm in the heart of Washington’s Yakima Valley, where Quinn and her three brothers grew up.

  “My dad always says that when you grow up among them, hops become part of your DNA,” said Quinn. “I guess my brothers and I are pretty good examples of that.”

  Quinn earned a degree in Business Finance from the University of Washington. She now handles all things business at the brewery, including finance, accounting, reporting, marketing, public relations and the like. However, she proudly points to the team of women whose expertise gives Bale Breaker Brewing its competitive edge. 

  “Jackie Beard is our Quality & Sensory Manager. She has a degree in microbiology from Northwestern, has developed a robust in-house sensory program from scratch, and makes sure all of the beer we send out is up to our high-quality standards,” said Quinn. “Erin Schlect and Shayna Koch are two young moms who run our accounting department.  Our marketing department consists of Danika Norman (Marketing Manager), Sara Gottlieb (Social Media Manager) and Marguerite Washut (Marketing and Events Coordinator).  These three women are essential to driving our brand forward and effectively communicating to and connecting with our consumer base.”

  Quinn also said three of the company’s four-person outside sales team are women. Sara Verdieck covers western Washington, Kat Finn handles Oregon, and Justine Malland tackles eastern Washington and northern Idaho. “These women are the face of Bale Breaker with our distributors and accounts throughout our distribution footprint.”

Pink Boots Society

  Quinn and members of her team at Bale Breaker Brewing are among the more than 2,000 women worldwide who network through The Pink Boots Society. This nonprofit organization,  founded by brewing pioneer Teri Fahrendorf, supports women engaged in the brewing profession and, in particular, the craft brewing industry. The group, which began in 2007 with fewer than 20 members, helps women brewers connect with mentors and advance their brewing knowledge through education. Educational opportunities receive support through scholarship money the group raises to help women advance in the industry.  There are Pink Boots Society chapters across the United States and global chapters in Canada, Europe, Asia, South America, New Zealand and Australia.  

Bron Yr Aur Brewing Company

  Be it a global enterprise or a blossoming start-up in the U.S., women have come into their own in the craft brewing industry. Bron Yr Aur Brewing Company is among the latter, a fast-rising brewery and restaurant owned and operated by the Hatton family, who’ve called Yakima Valley home for seven generations. Annette Hatten, whose husband, Mike, had been a homebrewer for more than a decade, decided to turn an old fruit stand into a brewery with a restaurant. Bron Yr Aur Brewing Company opened for business in 2013 and the Hatten children, Zach, Amanda and Trevor, gave up their day jobs to pitch in and contribute to the brewery’s success. They’ve focused on capturing space in the competitive craft beer market by combining its brewery offerings with innovative restaurant fare, ranging from its popular pizza varieties to its beer brownies. 

  Annette Hatton is involved in day-to-day operations, brewing recommendations, as well as recipe development for the kitchen and distillery. Daughter Amanda, co-owner and Operations Manager, was recently awarded the Yakima Valley Tourism Ambassador of the Year Award. She sees to it that Yakima Valley produce gets featured on the restaurant menu. She also manages the brewery’s community outreach, creating innovative partnerships with local organizations and small businesses.  Amanda says that the opportunity to work side by side with her mother is a gift.

   “Not only do I get to spend time with her every day, but we get to collaborate on many great ideas and have a ton of creative energy flowing, which I love.”

Cowiche Creek Brewing Company

  Maria Nordberg worked side by side with husband Derrick to build the Cowiche Creek Brewing Company, which opened for business in 2017. What started as a homebrewing project evolved into a full-fledged business plan to launch a brewery that’s products would showcase the citrusy, piney, and tropical hops varieties of Yakima Valley. Nordberg has a background in food safety management from her position at Yakima’s Green Acre Farms, a fourth-generation family operation with a vineyard, orchard and hopyard, as well as row crops. Cowiche Creek Brewing gets much of their hops from Green Acres, although the Nordbergs also grow and use their own varieties of hops. 

  To keep a firm hold on construction costs, The Nordbergs built the brewery’s 20 barrel brewhouse and taproom by combining their own sweat equity with their skilled tradesmen friends who knew how to do tile work, plumbing and other construction trades. 

  Marketing strategies for Cowiche Creek include electronic gift cards available online, as well as business partnerships with restaurants, bars, hotels and casinos in the Yakima Valley area that feature the brewery’s products. Maria says that at the end of the day, it’s the customers ‘ appreciation for the brewery’s offerings that count. 

   “All the hard work is worth it when you see a smile on someone’s face and knowing you helped put it there. “

Like a Lady Boss

  Women who don’t directly brew craft beer have still found a way to incorporate it—or its ingredients – into their businesses. A prime example is HopTown Wood-Fired Pizza, which features pizzas sprinkled with hops from Yakima Valley.  Co-owners Lori Roy and Carrie Wright serve wood-fired fare, showcasing fresh-from-the-farm ingredients paired with local craft beers, wines and ciders. “We celebrate the hop heritage of our community with our award-winning pizzas and our local brews,” said Wright.

  There are also the women who keep the taproom flowing, responsible for everything from managing staff to operations. Such are the responsibilities of Rachel Verhey-Goicoechea, Taproom Manager and Cellar Assistant at Varietal Beer Company, located in the Yakima Valley community of Sunnyside, the second-largest city in Yakima County.  Varietal, which opened last year,  joins an already crowded field of craft beer establishments in the Lower Yakima Valley area but is holding its own as a popular gathering place. It’s headed by Verhey-Goicoechea, who not only runs the taproom but also assists in the cellar CIP, transfers, dry hopping, kegging and other related duties. 

  In addition to the Pink Boots Society, women are teaming up for special events that champion women in the craft brewing industry. Last year, Atlanta, Georgia was host to Dregs and Dames, a festival aimed at empowering women in craft brewing by presenting beers brewed by women and discussing community, business, brewing and legal issues affecting women’s success in the craft brewing world. There is also a push for more diversity as minority women enter into the craft brewing scene.

  For all of recorded history, women have played a role in craft brewing. The earliest civilizations considered brewing beer a “woman’s job.”  Today, according to an Auburn University study, women comprise 29% of beer industry workers. Women who have been in the business the longest say that mentoring is the key to sustaining and expanding the number of women who own, operate and work in the field of craft beer brewing.

The Best Canning Systems & Machines for Modern Breweries

By: Alyssa L. Ochs

Eugene, OR, USA – July 17, 2014: Can and bottle filling machine on an assembly line at Oakshire Brewing.

Canning has become an increasingly popular way to package craft beer, and more breweries than ever before are either exclusively moving to cans or incorporating cans alongside their traditional bottle offerings. Many brewers prefer canning over bottling because of the increased protection from light and oxygen, cost, portability, recyclability and freshness. However, a brewery needs the right type of canning system in its space to make this form of production profitable and efficient.

  With the input of top industry experts at SKA Fabricating, XpressFill Systems and OneVision Corporation, here’s what breweries should know before investing in a new canning system for the first time or upgrading a current machine.

Canning Products Available to Breweries

  Smaller and newer craft breweries may start off with manual canning systems that have a two-head filler and that can fill about 10 cans per minute because of these systems’ affordability. An upgrade from this is a micro-automated canning system with a three-head filler and capacity for 25 cans per minute with multiple can size options. Meanwhile, automated canning systems may have up to 10 head fillers and be able to fill more than 70 cans per minute. To operate a canning line, a brewery may also need to purchase blank or printed cans, can ends and lids, PakTech can carriers, shrink sleeves and corrugated case trays.

  One canning machine company based in San Luis Obispo, California, XpressFill, manufacturers affordable table-top machines that are used by craft breweries to fill both cans and bottles. Rod Silver, the marketing coordinator at XpressFill, told Beverage Master Magazine that his company has experienced a significant increase in can fillers from its brewery customers this year.

  “Our counter pressure fillers fill the cans in a pressurized environment to maximize the CO2 in solution,” Silver said. “Our open fill units have become increasingly more popular due to the lower cost and faster fill rate. Controlling filling conditions are critical in achieving optimum fills using either system. Both units purge the can with CO2 prior to the fill cycle.”

  Another relevant company that breweries will want to learn about is Ska Fabricating, which is based in Durango, Colorado and has over 700 customers worldwide. Matt Vincent, a partner in Durango’s largest and most award-winning craft beer brewery, told Beverage Master about Ska’s primary and most popular product called the Can-i-Bus Can Depalletizer. It is paired with either a water twist rinser or ionized air rinse and is an industry-leading depalletizer and rinser combo that covers the speed range of 30 CPM up to 400+ CPM. 

  “It allows for the opportunity to grow as your production grows, due to the wide range of speeds that it can handle,” Vincent said. “It also is a necessary part of a canning line because it eliminates the need for hand-loading cans onto a filling line, allowing operators to focus on quality by eliminating menial tasks.”

  Vincent also said that Ska Fabricating offers an extensive line of conveyance solutions, date coders, handle applicators, can and bottle drying equipment and machinery integration to assist in the post-fill needs of the brewery.

  Meanwhile, Neil Morris of OneVision Corporation in Westerville, Ohio told Beverage Master Magazine how OneVision “manufactures and markets inspection systems that empower beverage canners and food canners produce quality double seams.” This company’s expertise includes double seam evaluations, inspection systems and training and support at system installation, as well as electronic and phone support after installation to prevent seam leaks and keep products fresh.

  Ben Anacker, who manages sales and services for OneVision in the western U.S. and Canada and who is an expert in can manufacturing, said that OneVision arguably provides the most cost-effective craft brew system and support to empower brewers to have confidence in their canned products.

  “Evaluating double seam overlap and tightness is imperative to comprehensive analysis of seam integrity,” Anacker said. “The OneVision SeamMate® Inspection System, in combination with the Mini Drive Seam Stripper System, is unparalleled in performing the destructive seam dissection to allow close examination of these attributes.”

Important Features of Canning Machines

  Overall, canning systems feature a complex set of machines that share some similarities but are also very different in many ways. These differences lie in their speed, efficiency, size and other capabilities, such as low DO pickup, 15-20 ppb, dual cam driven seamers, nitro with a widget or no widget and monitors. Considerations to keep in mind are oxygen and light penetration, seamers, reliability, the ability to upgrade later and integration with your current system.

  Silver of XpressFill said that the most important features to consider are “cost, fill consistency, oxygen uptake, user-friendly, reliability, ease of cleaning and sanitizing and support by the manufacturer (both pre-sale and after).”

  Vincent of Ska Fabricating said that first and foremost, the most important factors for making a canning machine decision are identifying the proper speed line that works well with your budget, batch size, labor pool and desired level of automation. He said that the second priority is to make sure you understand the differences in the fillers and what level of quality you can expect from them. 

  “In the end, you get what you pay for,” Vincent said. “Rotary fillers tend to provide a higher level of fill quality than inline fillers, but they are typically four to five times the cost. 

  “All businesses evaluate the cost-competitive options when procuring capital assets to support their business,” said Anacker of OneVision Corporation. “For the craft brewery industry, there are many options for these canning investments. Sustainability versus initial investment cost is widely overlooked and should be evaluated more closely.”

Questions to Ask Before Buying a New Canning System

  There are many questions to ask before buying a new canning machine, either for the first time as a new brewery or to upgrade existing equipment. Here are some initial questions to start with:

•    Is the machine the right size for your needs?

•    Will you use printed cans or labels?

•    Are pneumatic seamers your best option?

•    How easy is it to clean the machine?

•    What other accessories are needed to operate the machine?

•    What are the financing options?

  Silver of XpressFill said that while many craft breweries are shifting to cans instead of bottles because of customer demand, switching production from bottles to cans is a significant undertaking that should not be taken lightly.

  “Canning lines and mobile canning could be prohibitively expensive depending on the initial scope of your production,” Silver said. “Table top units, like the XpressFill fillers, can be a cost-effective initial effort to meet the initial demand. Questions should be asked regarding the production capacity of the equipment, ability to upgrade, sell-back policies and warranty information to ensure a prudent investment.”

  Vincent of Ska Fabricating said that the most important questions to ask are about the machine’s cost, level of support offered, how many people it takes to operate the line efficiently and what level of dissolved oxygen the filler can maintain while filling.

  Anacker of OneVision Corporation recommends looking into the track record of the supplier company as well as the actual system being considered. He said to ask about if the system can be upgraded to match future growth and to check references of actual users with at least three years of experience using the system. How a “micro-canning” system compares to larger commercial canning systems and whether the system has the same fundamental function and repeatability to have confidence in long-term production capability and integrity are other considerations that Anacker recommends.

Expert Advice About Canning Machines & Lines

  With all of this information in mind, you may decide that now is the right time to start looking at new canning machine options, or it may be best to hold off for a while until you have fully assessed your needs. However, it seems that canned craft beer is here to stay and will only continue to increase in popularity in the future.

  Vincent of Ska Fabricating recommends that breweries do their homework in researching canning line equipment and identify reputable vendors that will provide the levels of customer service and project management that your brewery needs.

  “Budget for the suppliers to do the installations and training for their machinery,” Vincent said. “Many mistakes are made and inefficiencies are created without proper installation and training on the machinery. We have seen many customers that try to do the installations on their own and it ends up creating more problems in the long run, resulting in down time and/or machinery that doesn’t operate as well as intended.” 

  In terms of advice for craft breweries, Anacker of OneVision Corporation said,” Contract or employ resources with canning experience to help make procurement choices, develop production layout, oversee the production to get this business phase started well and develop other resources for sustainability.”

  Silver of XpressFill recommends finding other breweries that have worked with the particular machine and manufacturer that you are considering and asking them about the machine’s reliability and overall satisfaction with the canning equipment.

  “Also, search online for reviews of the equipment,” Silver said. “Real world experience is the best insight into what can be expected with purchasing and operating a new canning system.” 

Connected Closures: Meet the New Technology

By: Robin Dorhn-Simpson

Do you remember when microwaves came on the market? Or when computers replaced typewriters? How about the huge mobile cellphones the size of a shoebox? Technology is constantly changing. Just when we think we have it figured out, it changes. It can add much stress to our lives, or it can make it more enjoyable. Once you embrace it and see how relatively easy it is, the fun begins.

  Millennials have been raised around technology, making it very comfortable to them. They don’t have the fear that baby boomers sometimes experience when learning new technology. Since many businesses are focusing their marketing dollars on the millennial audience, technology in marketing is a natural progression. Many marketing studies on millennials state that, amongst other things, they want experiences. As a producer, are you satisfying their desire for something fresh, new and authentic? Are you connecting with them on their terms via mobile devices? Near Field Communication Technology can help producers do just that.

Near Field Communication

  Quizelet.com defines NFC as a short-range wireless connectivity standard that uses magnetic field induction to enable communication between devices when they are touched together or brought within a few centimeters of each other. Many consumers may already be familiar with this technology through their use of Google and Apple pay.

  Similar to Bluetooth technology, NFC communication is faster and sends information over radio waves. It takes less than one-tenth of a second to establish a connection between two devices.

  Smartphones are the most common form of NFC devices. Most Android smartphones and newer iPhones have the technology included. For older mobile phones, apps can be downloaded to allow these devices to read a variety of NFCs.

  NFC requires at least one transmitting device, and another to receive the signal. A range of devices can use the NFC standard and will be considered either passive or active. Active devices can send and receive data as well as communicate with one another. Passive devices often take the form of a tag or chip, sending information to active devices without needing a power source of their own.

What does all this mean for you?

  In August, Guala Closures, a company that has traditionally employed advanced technologies and connected closures, used NFC technology to add communication content into the cap of a Malibu rum bottle. The chip inside the enabled “smart cap” is so small it’s practically invisible. Each cap then has a 4-letter code, which acts as the proof of purchase inside the lid. 

  Tapping on this cap allows both the consumer and the brand to know more about one another. The producer will know where and when it was purchased. In return, the consumer has access to recipes, contests, and different communications offered by the brand. This will allow the relationship between producer and consumer to reach a new level.

  Many people today are concerned about companies accessing their personal information. Simon Yudelevich, General Manager for Guala Closures North America told Beverage Master Magazine about the concepts of connected closures.

  “When you tap your phone and connect, you give consent to the brand to gather information on when and where. When the consumer goes online to look at what this is all about, there is an explicit consent which requires the consumer to opt-in, in compliance with all applicable regulations,” said Yudelevich

  By committing to developing connected solutions in cooperation with its clients, Guala Closures help them learn more about their consumer habits and loyalty to their brands. In this framework, the company also deposited a patent of the solution that combines the NFC technology with aluminum closures.

Marketer’s Delight

  Since brand owners control the marketing of their product, they have an abundance of creative options with this new platform. The possibilities are endless.

  “By tapping the cap, you get access to great marketing content, which not only further strengthens the relationship between consumers and the brands they like, but also allows them to build a brand community of consumers via access to social media such as Facebook, etc.,” Yudelevich said. “Since the brand owner’s goal is also to engage the consumer, they can create recipes-of-the-month, which can be changed every day if wanted. They can create contests or ask the consumer to join their club. They can even ask the consumer to send a message to their friends about what they just purchased. Marketers can change the messages as often as they want. They can add, delete or amend the content. Since everything happens on the cloud, the changes are simple. They can tap, create video content whereby when the cap is tapped, a video uploads and the consumer can see how to use the product.”

  “Marketers want data from the consumer, including how much they paid to pay for the product. Businesses want the ability to track and trace where the product was purchased, as well as monitor anti-counterfeiting. This is already changing the face of marketing,” Yudelevich said.

  Malibu Rum has recently signed on with Guala Closures with limited-edition connected bottles currently circulating in Ohio and Texas. Marketers plan on including drink recipes and sweepstakes. Soon, consumers will be able to win prizes through a mobile game called Sunshine Slide.

  “Everyone’s excited with this new rollout for Malibu to develop these smart connected closures that enable the brand to get close to its consumers, Yudelevich said. “Once other companies see this new technology and its benefits, these closures for spirits and wine are going to be the leaders in direct-to-consumer marketing.”

Kilchoman Distillery Company Case Study

  In early 2018, Thinfilm Electronics of San Jose, California joined forces with Kilchoman Distillery Company, a producer of single malt Scotch on the island of Islay. Kilchoman distributes its whisky to 13 countries and wanted an effective way to interact with the end consumer. While they didn’t put their technology in the caps of bottles, they used NFC powered, interactive neck-tags for their Machir Bay and Sanaig Whiskey. Fully integrated with Thinfilm’s CNECT Cloud Platform, the tags were the digital touchpoint that consumers could tap to have an individual marketing channel.

  In a case study published at www.thinfilm.com, Thinfilm Electronics created a mobile-optimized product system where the CNECT Cloud Platform stored and managed all of the unique tag IDS. The tags allowed Kilchoman to track the time from “ship-to-shelf” across 13 countries as well as analyze item-level intelligence and consumer interaction data in real-time. Thinfilm produced a branded NFC scanner app called “Discover Kilchoman” available in Apple’s App Store.

  The results concluded that the end-to-end NFC mobile marketing solution was highly encouraging, with a 6.5% engagement rate. This rate is several times more effective than traditional digital marketing activities and created a way for Kilchoman to connect directly with consumers and build customer loyalty. It also mitigated the need for additional promotional support or omnichannel activities. 

  Compared to traditional digital marketing, the NFC display was 70 times more effective than email, search engines and social media. They concluded that there was a 35% virality rate (each bottle tapped by 1.35 consumers on average) and a 22% iOS engagement via the custom Kilchoman branded app. Finally, they were able to identify that it was an average of seven weeks “ship-to-shelf” time.

  Thanks to intelligent technology and the desire to connect with the end consumer, companies are now able to have a one-on-one relationship with those who love and use their products. Each brand has a unique story. Now they can make sure their customers know it.

  So, set yourself apart from the competition. While millennials are brand loyal, someone has to be the one they support. To gain loyalty and foster the next generation of consumers, have originality, offer a great experience, be authentic, have value, and keep the digital conversation going.

A HIGH-TEMPERATURE WASHDOWN STATION TO MEET YOUR HIGH-EFFICENCY PRODUCTION NEEDS

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FOR IMMEDIATE RELEASE:

(Warminster, PA USA) In food processing, dairy, beverage, chemical, petrochemical, and pharmaceutical facilities, maintaining a clean environment is critical to consistent product quality. To keep production running on time, high temperature washdown stations are used to quickly and efficiently clean and sanitize equipment in place. For facilities with a hot and cold water supply, the HCX Water/Water Washdown Station is an excellent solution.

The washdown station utilizes two individual globe valves to mix hot and cold water to a user adjusted temperature. Output temperature is clearly displayed on the integrated temperature display gauge for operational simplicity.

To prevent accidental scalding, the unit is offered with our unique SmartFlow feature. “This is an in-line, over-temperature safety valve whose only purpose is to keep your employees safe,” Nick Tallos, ThermOmegaTech®’s VP of Engineering commented. “It automatically stops flow if the unit’s output exceeds a specified temperature – 125°F, 135°F or 145°F depending on the model selected.”

The unit functions completely mechanically and requires no outside source of electricity to operate. Compact, reliable, and cost-effective, the HCX Washdown Station is a beneficial addition to any facility.

About ThermOmegaTech®:

For over 35 years, ThermOmegaTech® has been a leader in the design and manufacture of self-actuated thermostatic technology. Founded in 1983, ThermOmegaTech® is a privately held organization with 40,000 square feet of manufacturing and office facility located near Philadelphia, Pennsylvania. The company provides innovative solutions for a wide range of applications including freeze & scald protection, mixing & diverting, steam traps, thermal bypass, tepid water delivery, washdown, balancing, drain tempering, and many other applications where temperature control is critical. Key industries it serves include railroad, commercial plumbing, aerospace & defense and industrial. Over 95% of its products are manufactured, calibrated, and tested in-house. R&D, prototype development, and integrated solutions are managed on site. ThermOmegaTech® has been ISO 9001 certified for over a decade and its products are distributed and used worldwide.

For more information, please email ThermOmegaTech® at valves@thermomegatech.com.

ThermOmegaTech®, Inc.

353 Ivyland Road

Warminster, PA 18974

Phone: 877-379-8258

Website: www.ThermOmegaTech.com

LinkedIn: www.linkedin.com/company/thermomegatech Twitter: @thermomegatech  

Advice from Beyond the Grave: Distribution for Small Breweries

By: Eric Myers

When Mystery Brewing Company closed in 2018, it was difficult to articulate to people outside the company where things had gone wrong. We looked like a successful company from the outside; we had a well-attended pub and restaurant, we frequently won awards for our beer in both local and national competitions, and in general things looked great.

  We made the mistake many small businesses – particularly small breweries – make in having a debt load that outsized our resources. We were stretched too thin. It took months of introspection after the business closed for me to understand where things had really gone awry.

  What you’re missing in that picture is distribution. At our peak, we were distributed throughout our state of North Carolina to hundreds of grocery stores, convenience stores, bottle shops, bars, and restaurants. When we closed, we were self-distributing mostly draft beer in a 75-mile radius from the brewery.

  I now put the blame squarely on my own basic misunderstanding of what to realistically expect from my distributor, as well as their fundamental misunderstanding of what we needed and, what’s more, their misunderstanding of what they were actually offering us – or anyone.

  With the help of our distributor, we saw success in distribution into large grocery store chains in our state. Unfortunately, as a small brewery, we couldn’t handle the demand from those grocery stores. We picked up a loan to help meet that demand, but before we were able to put the pieces in place, we lost our placement in those grocery stores. We were weighed down with debt without a market to sell the expanded volume we had put into place. We could never recover those lost sales and ended up closing our doors in the face of rising costs – in ingredients, rent, and the cost of distribution – when we got to a point where we could no longer service our debt.

  It all tracks back to our relationship with our distributor.

Distributors As Sales Companies

  For years after Prohibition, beer was sold exclusively through the three-tier system: the mandated split of manufacturing, delivery, and retail sales of alcohol. The role of each tier was very clearly defined, and as beer manufacturers consolidated through the 20th Century, the role of sales could be taken on by distribution partners whose portfolio was primarily comprised of one brewery’s products. Distribution partners could essentially function as a brewery’s sales force: a mid-sized middleman industry built to act as logistics handlers between a large manufacturer’s output and the thousands of widely distributed small retail outlets.

  Enter the craft beer industry – a ragtag gaggle of creative innovators that disrupted traditional sales channels. From the first brewpub in the country, Bert Grant’s Yakima Brewing Company in 1982, to changes in distribution and franchise laws around the country, to the onset of the current popular “taproom-only” model, small breweries have been in the business of changing how beer is sold almost constantly.

  When Mystery Brewing Company opened in 2012, we were on the early end of the “taproom-only” trend. Because our local laws allowed it, we opened on a plan of self-distribution in our local area and selling what we could through our own taproom. At the time, I considered it a hybrid model between Production Brewery and Brewpub and it worked! We saw distribution success that quickly outgrew our ability to deliver on our own given our level of resources, and so before long we started looking at distributors to help shoulder the load.

  When I was contacted by the first distributor I worked with – an independent distributor (ie, not affiliated with either Anheuser-Busch or MillerCoors, primarily imported beers either from other states or other countries) – the title of the person that I talked to was “Statewide Sales Manager.” Her previous job was “Southeast Regional Sales Manager,” and she later went on to work for another distributor as “General Manager of Sales and Marketing”. After Mystery closed, I would often wonder how I was so confused about the role of distributors in the beer marketplace, but looking retrospectively suggests to me that the distributors were equally as confused.

  Later, when the relationship with that distributor soured and I moved onto the next, much larger distributor, we frequently met with the Sales team to train them on our products. We had Sales Goals in place. We had brewery reps on staff that would interface with those Sales Reps, but we weren’t allowed to do our own sales. We were required to turn over any potential customers to the distributor for their reps to handle and close the deal.

  Here’s the problem. Distributors don’t do sales. They do logistics.

Distributors are Logistical Experts

  According to the Brewers Association and the National Beer and Wine Wholesaler’s Association, over the course of the last 40 years the number of breweries in the country has gone from just over 70 to just over 7,000. Over that same time, the number of distributors has fallen from just over 4,500 (64 distributors per brewery) handling, on average, around 100 – 200 SKUs each to around 3,000 (.4 distributors per brewery) handling, on average, well over 1,000 SKUs each. The idea that any distributor rep working could know and sell any more than a small percentage of their portfolio is laughable.

  Distributors, on the other hand, are incredible logistics companies. Our primary distributor, through most of the life of our business, was a statewide distributor that handled thousands of SKUs across North Carolina and in most cases (ie – except for really rural customers), would perform overnight delivery anywhere in the state. They had one central warehouse that stored the majority of their products. That warehouse would send trucks to each of its 7 branches every single night based on orders put into the system each night. Those trucks would arrive at each location and loads would get broken down into individual delivery trucks that would go out from those branch locations and delivery every day of the week. It was breathtakingly complex.

  Distributors are experts at off-premise sales. Over the course of the past 70 years, grocery store chains have come to rely on distributors to both stock and manage their beer sections from product selection to daily stocking of shelves. Distributors don’t so much sell to grocery stores so much as they ensure that the grocery stores always have something on the shelves to sell. It is incredibly difficult for self-distributing breweries – small business partners that only represent one product – to compete with the efficiency of a distribution company in a grocery stores.

  If not for distributors, it’s hard to imagine the national craft breweries that we have today even existing. A startup in the 1980s, building a brewery out of cast-off dairy equipment had no way of possessing the knowledge, much less the resources to create or satisfy demand for its beers over the breadth of the country that was required at that time.

  It’s why it’s so seductively simple for small breweries to fool themselves into think that distributors inhabit the same role they used to. It’s the way they’ve been taught to think of distributors – and it’s the way distributors think of themselves.

Breweries Drive Sales

  This all might seem obvious to large breweries with wide distribution networks, but the majority of breweries in this country are small – they are 400bbls annually on average. Many are undercapitalized and understaffed, stretched thin, barely making payments on outsized debt. It’s easy to look to a distributor for relief, to take work off of your hands, but that’s not what they’re there for.

  In my current role, managing Tavern Operations at Durham’s Fullsteam Brewery, I work with 7 different companies to manage cider, guest beers, wine, and other non-alcoholic beverages. The only ones that sell to me – that approach me with new products and attempt to make a sale – are self-distributing breweries, cideries, and wineries. The distributors are order-takers and delivery-makers. That has become their role as their portfolios are too large to know and as their customer base is too wide to service personally.

  Learn from my mistake: As a small brewery, you are your own best asset when it comes to representing your brand. Use a distributor to increase your reach, but do so knowing the extra cost – that they will take a portion of your income AND require extra brewery staff to manage sales. More than that, set that expectation up front with your distributor so that you both agree what their role is, and yours. Distributors can manage off-premise and chain accounts for you in a way that can be transforming and positive, but they have no incentive to manage your supply, only deplete it, so be sure that you can handle the demand – or grow safely to meet it – before you take that step.

  Distributors are not your friends and they’re not your sales force. They’re a tool in your toolbox. Use them wisely.

YIKES! $2,600,000 Fine Against a Beer Wholesaler

By: Dan Minutillo, Esq., Minutillo Law

In March 2019, the Massachusetts Supreme Judicial Court (the Court) affirmed a $2.6 million dollar fine against Craft Brewers Guild (CBG), a wholesaler. The reason, alleged violation of anti-price discrimination statutes and other commercial bribery regulations.

Allegations

  CBG allegedly paid companies money as a rebate in exchange for an agreement to sell CBG product at bars and restaurants. To hide the payments, these companies allegedly billed CBG for services like marketing support and promotional services that never happened.

  The Court held that CBG violated commercial bribery regulations  and participated in a commercial bribery scheme to encourage retailers to supply CBG distributed products. The Court held that this type of commercial bribery falls with the purpose of the Massachusetts Liquor Control Act. CBG’s conduct was allegedly illegal because the regulations prohibit companies like CBG from providing money to induce the purchase of certain alcoholic beverages. When money is given to a company to persuade that company to purchase a product, at that point there is a possible violation of these regulations.

  In the present case CBG allegedly did not offer these rebates to all retailers, and rebate amounts differed among the retailers involved so it is held responsible for violating the anti-price discrimination statutes and allegedluy also the commercial bribery regulations.

  A bribe to induce a company to do something in violation of law or anti-discrimination policies is illegal no matter what form the bribe takes or how the paper trail is structured. Rebates, refunds and other incentives to illegally induce a company to sell its products could be construed as a bribe if there is no logical and legal basis for the transfer of money. A bribe is a bribe no matter what form it appears.

US antitrust laws regulate the relationship of companies involved in a supply chain at different levels. There cannot be an arrangement by these companies to reduce competition. Courts will lift the veil behind the name of written documentation (how an agreement is titled), or even behind the words used in documents to determine whether an agreement to pay money is actually a bribe.

  The courts look to substance (the real relationship between the parties and of their conduct) over form (the words in a document). This principle holds true in many transactions when documents are drafted to embody the terms of the transaction. During litigation, substance and conduct will usually trump form (a cleaverly written document disguising a bribe or anti-competitive conduct as something else).

  Massachusetts’ commercial bribery regulations are valid, banning discounts, rebates and other inducements to buy alcohol from only one particular vendor. These regulations help to prevent price discrimination and an even, fair, competitive playing field for all craft-brewing companies trying to sell product based on quality and market price as opposed to “buying” their way to higher sales using illegal practices.

  15 U.S. Code § 13 (15 USC 13), deals with pricing and selection of customers in the supply of products. In accordance with this Code section, It is unlawful for any person engaged in sales or distribution of products either directly or indirectly, to discriminate in price between different purchasers of commodities of the same type of grade and quality of that product if the  products  are sold for use, consumption, or resale within the US if the effect of such discrimination may be substantially to lessen competition.

This Code Section Also Indicates:

   “PAYMENT OR ACCEPTANCE OF COMMISSION, BROKERAGE, OR OTHER COMPENSATION  It shall be unlawful for any person engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid.”

  This rule does not apply if there are differences in the cost of manufacture, sale, or delivery relating to one purchaser and not to another. Also the rule does not prohibit price changes from time to time where a price change is in response to changing market conditions of the goods concerned, such as actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales due to the discontinuance of sales of the goods concerned. The US Federal Trade Commission has the power to stop any kind of unfair business practices including but not limited to exclusionary exclusive dealing contracts.

  Anti-bribery regulations are made, published and implemented all over the world. They are becoming more obvious in China, Ireland, and Saudi Arabia. Enforcement in other countries is somewhat irregular. Enforcement in the US is aggressive when the facts warrent investigatioin and punishment.

  The Massachuetts Supreme Judicial Court case discussed in this article will be followed closely by other jurisdictions in the US. This type of kick-back may be viewed as a form of bribery in other jurisdictions with large fines to follow. Be aware.

For more information contact…Dan Minutillo or www.minutillolaw.com

Beer & Food Pairing Dinners: Upping the Bar for Craft Breweries

By: Nan McCreary

Oenophiles have long known that wine dinners — where wine is selected and paired with a variety of foods based on complementary tastes and styles — can elevate the dining experience. Now, craft breweries are opening that door to customers who want to expand their culinary horizons with the plethora of flavors and styles of beers available on the market today.

  “We’ve been doing beer-food dinners for years, and they’re great fun for everyone,” said Ben Edmunds, partner and brewmaster at Breakside Brewery in Portland, which opened in 2010 as a restaurant and pub brewery. “The events introduce customers to a wide range of beers, plus we have an opportunity to reach a different audience than we usually have.”

  Indeed, according to the National Restaurant Association, food-and-beer pairings were listed as a top beverage trend in its “What’s Hot 2018 Culinary Forecast.”  This isn’t surprising, considering that beer — with its broad range of flavors, aromas textures, and styles — offers endless possibilities for pairing with food.  Whether it’s a light lager with a spicy Asian dish or an IPA with loaded fries and a decadent burger, the right pairing will deliver a flavor nirvana that far surpasses the flavors of each component. Ask any aficionado, and they will tell you: food makes beer better, and beer makes food better. It’s that simple.

  Like wine and food pairing dinners, beer and food events typically go through a progression of four or five courses, sometimes more if the occasion is more extravagant. Each course is paired with a different beer, depending on the strength, flavor and style and its compatibility with the food.

  According to Edmunds, each beer serving in Breakside’s dinner is five and eight ounces. The event, he said, is informal and educational. “We always have a brewery representative at the dinners to talk about the beer,” he said, “and we ask the chef to come out and introduce the food. It’s a fun way for customers to experience our beers, and from our end, we get to present our beer in an entirely different format.”

  While many customers are die-hard beer drinkers, Edmunds told Beverage Master Magazine the dinners often appeal to a wine-drinking crowd. “These events offer wine drinkers an opportunity to see how diverse and food-friendly beer can be.”  

Recently, Breakside featured wood-aged and acidic beers with lots of fruit flavors, components that are similar to those in wine. “It was a good way to challenge preconceived notions of what beer is and how it should be consumed.”

  Breakside’s dinners may seat as few as 10-to-15, or as many as 70-plus. Prices range from $35 to $120, depending on the number of courses and the complexity of the menu. The average for an all-inclusive dinner, said Edmunds, is $65 to $85. Breakside has sponsored events ranging from introductory beer pairing at gastropubs and bars, to more elaborate affairs at fine dining establishments. This year during Portland Beer Week, Breakside paired with renowned Icelandic chef Ólafur “Óli” Áugústsson, the culinary director for Portland’s forthcoming KEX hotel. The dinner featured aged and sour beers selected to complement local seafood and produce.

  Pairings, Edmunds explained, are a collaboration between brewery personnel, the restaurant’s chef, and others, such as a bar manager. “The dynamic that works best for us and leads to the best results for the consumer is for us to invite the restaurant people to our brewery and taste through a wide range of beers,” he said. “We’re lucky because we make many different styles of beer and aren’t limited to three or four options. We ask them to find the beers that inspire them, and we talk about food pairings.”

  Edmunds said that the collaborations always start with selecting the beer and then choosing a food pairing, rather than vice versa. “Once a beer is done, it’s done, and you can’t modify it. It’s easier to design a dish to a beer that’s already finished than to make a beer to complement a specific dish.”

  While the brewery generally does not interfere with the chefs once a menu is selected, occasionally they will use their expertise to “nudge” them one way or the other. For example, Edmunds said he is very particular about pairing desserts. “Even with a sweet beer, the dessert is likely to overpower it,” he told Beverage Master Magazine, “so I’ll ask the chef to do something with a savory element, like a cheese plate.”

  For Edmunds, whose interest in food preceded his interest in beer, the pairing dinners are a natural fit. “The two go hand in hand,” he said. “We also have three locations for our brewery, plus two restaurants, and we regularly do pairings when we release a new beer. The multi-course dinner is a natural extension of that.

Not Just for Breweries

  While breweries like Breakside typically collaborate with different restaurants to introduce their beers, some restaurants host regular beer and food pairing dinners to showcase the skills of their chefs. One such restaurant is the Session Room and Beer Garden in Ann Arbor, Michigan. With the theme, “Real Food, Craft Beer,” the restaurant focuses on fresh ingredients sourced locally and serves 70 rotating beer taps.

  Since opening three years ago, the restaurant, under the guidance of Executive Chef Traver Lucas, has offered pairing dinners every month or two, always featuring beers from Michigan breweries, including Bell’s Brewing, Founders Brewing Company, and Perrin Brewing Company. Like Breakside’s dinners, the Session Room pairings are a team effort, where the chef meets with the brewery’s personnel and tastes the beers, then decides what to cook. The beer dinners are inspired by French cuisine, with the food selected to complement the beer.

  According to Event and Marketing Director Jessica Smith, the Session Room dinners are very elaborate, with four courses and a beer to match each course. “The cost is $50 plus tax, so customers get a lot for their money. Generally, 30 to 50 people attend the dinners,” said Smith. The menus are not released ahead of the event, so the dinner is always a surprise. “That’s part of the fun,” Smith added.

Festival Pairings

  As competition among craft breweries heats up, many breweries and beer festivals are upping their game with pairing events to attract more visitors. Last year, at the California Craft Beer Summit, a “Brewed for Food” event featured specialty brewed beers from 12 breweries paired with specially crafted food from as many restaurants. The objective, said the advertising, was for “teams to partner to create the perfectly balanced bite that elevates the flavor profile of the beer.” The 2019 Portland Beer Week featured four pairing events. “Bean to Bar,” was a chocolate-and-beer festival hosted by Xocolatl de Davíd chocolatiers and Ruse Brewing, spotlighting 10 local chocolates and the beers paired for each one. “Mussels From Brussels,” featured four local brewery’s takes on the classic pairing of mussels and frites.

   At the “Brewer’s Burger Brawl,” four Oregon brewers served a carefully selected beer alongside a slider-sized burger to determine the best pairing. The “Nordic + Northwest” event was the event held by Breakside Brewery and Portland’s future KEX hotel.

Everyday Pairing

  “Culinary Brewhouses” are making waves across the country. In these establishments, brewmasters are applying culinary skills to create beers that showcase flavors and aromatics, and chefs create foods that transcend pub fare like burgers and chicken wings. Chicago’s Band of Bohemia, noted for “infusing culinary flavors into house beers and pairing them with global plates,” became the first brewpub to be awarded a Michelin star within its first year of opening. 

  Moody Tongue Brewing Company, also in Chicago, has classically-trained chef Jared Rouben at the helm as brewmaster. According to Moody Tongue’s website, Rouben “draws on his culinary training to forge this connection between the kitchen and our brewery, building recipes for our beers in the same manner a chef would for a dish.”

  Clearly, beer pairing beer and food is a hot trend throughout the country, and it shows no signs of stopping. According to the 2017 Nielsen Craft Beer Insights, 71% of consumers look for complementary foods when choosing a craft beer at restaurants and bars, and that isn’t about to change. If anything, the number is likely to increase, as more and more beer lovers become exposed to the wonders of the beer and food match-up. Stay tuned…as the market continues to ramp up, the best may be yet to come for the thirsty consumer with a discriminating palate.

Safety and Compliance: More Than Just a Checklist

By: Tracey L. Kelley

In the past 10 years, workplace injuries and illnesses declined in the craft beverage manufacturing industry. This is good news, as it’s a thriving employment sector. The U.S. Bureau of Labor Statistics reported that in 2016—the most recent data collected—breweries, distilleries and other artisanal beverage producers employed approximately 75,000 people. In Canada, according to information from the System of National Accounts in 2018, the craft industry had more than 15,000 workers.

  Some experts say a reduction in workplace incidents is the direct result of an attitudinal shift from reaction to prevention. Ashley Heiman is the MRO department manager for Nelson-Jameson in Marshfield, Wisconsin—a single-source food, dairy and beverage processing plant supplier. Heiman explained the vital importance of this approach. 

  “The Food Safety Modernization Act created a significant culture shift. The essential question that the FSMA pushes us and our customer base to ask is, ‘How can I most effectively and proactively create a safe, quality product?’” she told Beverage Master Magazine. “When you think proactively about your product, it pushes you to think proactively about your facility and the staff that produces that product. From floor drains to dust collection in your rafters, every facet of your facility and those operating that facility can make or break a brewery or distillery.”

  Established in 2011 by the Food and Drug Administration, FSMA compliance extended to beverage producers at a graduated rate. It began in 2016 for companies with over 500 full-time employees, scaling down to “very small businesses”—those with beverage sales of less than $1 million—finalizing compliance in September 2018. Inspections of beverage raw materials started this year. For some producers, this compliance required extensive examination and overhaul of processes and systems.

  One might assume that requirements by OSHA and the FDA already cover worker and product safety issues. In many ways, they do, but this additional layer of compliance mandated by the FSMA is a necessity for consumer products. It’s also another thread of bureaucracy to follow—one of many that can be challenging to untangle. 

  “It’s very difficult for business owners to dedicate time to learning all the nuances of compliance to both OSHA and the FDA. They’re really interested in creating and growing their businesses, so having a consultant who’s knowledgeable in these compliance areas allows the owner to both focus on the business and ensure that someone is keeping them compliant,” said Gary D. Morgan, Vice President and senior consultant of SafeLink Consulting in Cumming, Georgia. He’s also an authorized OSHA outreach trainer.

  “Our business is to know everything we can about OSHA safety requirements and FDA regulations on producing beverages that are safe for the public to consume, so we keep our clients as informed as possible in these areas,” Morgan said. He also pointed out that the Canadian Centre for Occupational Health and Safety and its Food Inspection Agency mirror OSHA and the FDA requirements rather closely, so producers sharing a national border are assured of similar compliance between partners.

Create an Environment of Safety

  Doing what’s best for the product starts with the optimum workplace atmosphere and training provided to employees. Ideally, owners and managers should establish these best practices in the early stages of the business.

  “Bringing a consultant onboard at start-up can ensure decisions can be made in the development stage that takes into consideration compliance issues for both OSHA and FDA,” Morgan said. “Trying to retrofit safety considerations into an existing design can be costlier than providing for it upfront. Implementing an FDA-compliant quality system initially can also prevent or handle issues in producing a product that’s fit for consumption.”

Morgan advised that instead of evaluating consultants by price, first outline facility specifications.

  “Then, I would suggest that as part of due diligence, talk to several consulting firms and ask the same questions of each one to ensure an apples¬-to-apples comparison, rather than just looking solely at pricing. A producer should include expenses for these services in the annual budget.”

  Another top-to-bottom safety solution, Heiman said, is color-coding. “We’ve seen a great interest in it. It’s proven to be an excellent proactive approach. Not only can color-coding help prevent cross-contamination in terms of allergens or yeast strains, but it also helps to organize and streamline workflow, designates critical control areas of a facility and assists many of our customers in isolating possible pathogen risks,” she said. “With the wide variety of products we offer, facilities can build a color-coded program to break up their operations into pragmatic zones.”   

  Josh Pringle is the vice president of CO2Meter in Ormond Beach, Florida. His company specializes in the design and manufacturing of gas detection and monitoring devices—mainly CO2—as well as consultancy and training. He advises producers not to rely on state or local inspectors to tell them to improve ventilation or install monitors: do it because it’s what’s best for your employees.

  “Producers should consider the following when preparing to train or educate staff: what’s in the best interest of our employees, what does our insurance provider require us to do, what will OSHA/NIOSH expect as part of a training package, and how should we plan to test and retrain staff,” he told Beverage Master Magazine. “We have a brewing partner who made the following statement: ‘Why would I pay a few hundred dollars for a safety monitor and then not train my staff on what to do if it goes off? Pointless!’”

  Pringle noted that many professional associations offer free training regarding CO2 safety, proper lockout/tagout procedures, and dozens of other critical topics.

  These organizations include, but are not limited to:

•    American Distilling Institute

•    Brewers’ Association

•    International Beverage Dispensing Equipment Association

•    Master Brewers Association of the Americas

•    WorkSafeBC

  OSHA and NIOSH also have online training, workbooks, visual aids and other resources for new employee and refresher training.

  He cautioned against complacency in your facility. “When employees work in and around hazardous situations, materials, ingredients and situations, no duty should be considered mundane or a ‘to do.’ Safety is an every moment, everyday project,” Pringle said. “The statistic always sited from the National Transportation Safety Board is the majority of car accidents occurred within five miles of someone’s home. The data demonstrated that drivers started to let their guard down in more familiar surroundings. Employee safety has no mileage areas. Any training that allows for complacency is flawed.”

  Morgan agreed. He offered these three tips:

1.  Always be vigilant to compliance issues. Oversight is demanding.

2.  Delegate responsibilities to duly-trained and competent individuals.

3.  Training is an ongoing activity, not a one-time event.

More Than a List on a Clipboard

  Workers in the craft beverage industry are prone to the following injuries and illnesses:

•    Overexertion, including medical conditions caused by repetitive motion or lifting heavy items such as barrels, kegs and crates.

•    Slips, trips and falls because of slick floors, ladders, obstacles and carrying heavy loads up and downstairs.

•    Working in fermenters, tanks, vats and other confined spaces, especially when carbon dioxide exposure is a concern.

•    Physical hazards such as pressurized equipment, forklifts, temperature extremes, and moving parts.

  It might require specialized products, protective gear, and consultation to maintain essential worker safety. “Safety concerns are widespread across a facility. Personal protective equipment, noise protection and respiratory protection are some of the most common product areas we deal with for our brewery and distillery customers,” said Heiman of Nelson-Jameson. “Lockout/tagout products are also popular. Additionally, it’s important to be specific with vendors if employees are handling chemicals, lab reagents, machinery, and so on. These details dictate the best products to utilize.”

  Even with a safety plan upon start-up, and as Pringle of CO2Meter expressed previously, crafting operations are integrated with safety in handling not only CO2 but throughout all functions. So the plan becomes more of a living document, refined by training, to help staff anticipate and correct issues before a more significant problem occurs.

  Here are the steps Pringle recommended:

•   Identify the hazard

•   Discuss the hazard

•   Create a plan of action to prevent the hazard

•   Create a secondary plan that accounts for and mitigates the hazard

•   Define methods to disperse the hazard

•   Understand the methodology to test an area to ensure safe conditions

•   Create and institute a policy and procedure to understand an incident

•   Create a safety plan

•   Including safe zones and rally points

•   Practice, practice, practice

“Be mindful. Be aware, Follow procedures, no matter how cumbersome. For example, lockout/tagout has become a mainstay because it’s effective,” Pringle said.

  Regarding C02 specifically, “The most likely points of CO2 incidents for beverage producers are at their canning and bottling lines. ‘Dosing’ areas typically register CO2 concentrations above the OSHA– and NIOSH–permissible time-weighted average standard of 5,000 ppm TWA for employees—placing a typical producer in violation,” Pringle said. “While working around CO2 can often be a necessity for beverage staff members, having proper training sessions and ensuring your staff is informed on the dangers of CO2 is the first step.”

  Morgan of SafeLink Consulting had some final thoughts. “Be proactive in establishing your compliance programs. If you have to be reactive, then something negative has happened that could be very detrimental to the business itself. It could be an employee injury or complaint, or a product that causes consumer complaints or worse, consumer injury or illness,” he said.

  “And there’s always the ever-present specter of an inspection from a regulatory agency with fines, penalties and even forced business suspension or closure. Give yourself peace of mind by being on top of compliance issues, not at the mercy of them.”