The idea to start a craft distillery can come from many places. If you talk with almost any brewer they will tell you the idea of a distillery is one they have considered. The tools needed to start a distillery are so similar to a brewery that much brewery equipment is identical to the equipment found in a distillery. Brewers who want to jump into making distilled spirits have most of the knowledge, tools and skills needed to manufacture spirits. One skillset brewers lack is in the art of operating a still but have no fear we are here to help. Let’s talk about selecting the right still for a brewery to make amazing, distilled spirits. Afterall good beer makes great whiskey so if you have a brewery why wouldn’t you do it?
Designing a Distillery
As the dream is put down on paper and planned for the specifics start to come into play. Are you going to make whiskey, vodka, gin , rum or do you plan to make all of them? What do you want your still to look like? Will it be a shiny copper showpiece or a stainless economical work horse? What ingredients you plan to utilize to produce distilled spirits is very important to consider when selecting the right still design. The equipment for distilling potato vodka is very different from that used to distill malt whiskey. If you are unsure where to start here, this may be a good point to bring in an expert to help you make these choices.
Selecting the Right Still Size
The first question many folks ask when selecting a still is something like how big of a still should I get? Should I get a column still or a pot still? What is more important to consider about how big is how small is too small? A common issue with many new distilleries is that they start off far too small. In fact some distilleries start so small that they outgrow the capacity to produce enough product within a year. The opinion held by most whiskey distillers is that a still any smaller than a 250 gallon will hinder your distillery from growing. Depending on the configuration of a still and the ABV of the wash a 250 gallon still can produce a single whiskey barrel per day. This key number is important to consider. Why this matters is that a larger still only costs slightly more than a smaller still. Secondly the larger your still is the less you will spend on labor per gallon of spirits produced.
Key Considerations
It can be easy to underestimate the real quantities of spirits a distillery needs to produce to be successful. This is especially true if you plan to distill any spirits like whiskey or brandy that need to age for years before they are ready to bottle.
Some of the best whiskies from around the world like bourbon, or single malt whiskey spent years in the barrel before they were bottled. If the products you plan to make are going to taste as good as other products on the market they will need to age as well. There are no proven shortcuts to age spirits faster, but there are plenty of examples of so called “rapid aged” products that were not successful. The point of all this is that you have to plan years into the future. If you buy a still that can only produce enough spirits to meet the demand you are planning for today this still will not be able to make enough spirits to age to meet your demand several years down the road. The more whiskey you are putting in barrels every day the more potential you have to grow. To put a cap on growth by selecting too small of equipment can be a costly mistake.
Selecting the perfect size still or stills is not an easy decision to make. There are a multitude of factors that must be carefully considered to make these decisions with confidence.
Budget is the critical factor. Budget not only for the cost of the still but also other equipment needed to support the still is important. A budget for operating expenses is also helpful as once you get the still it takes capital for raw materials, labor and overhead to operate the equipment.
Another consideration to take in is the size of the facility.. If you only have 500 square feet of space for your equipment, then it is unlikely that a 500 gallons still is going to fit well into your building and still leave room for the operation to function. You should not select your equipment until you know the amount of space you have for the equipment.
Production Goals are a critical factor that must be given thought and planning. If you want your distillery to be producing 1000 barrels of whiskey every year then there is no way a 250 gallon still can get the job done. Sizing the still for the long term production goals of a distillery will help you stay ahead of your growing pains. The size of the still will directly determine the quantities of spirits you can distill.
Skilled labor is an essential part of the equation. For a brewery to make the best spirits possible it is a wise investment to bring in an experienced distiller to help guide the process and handle the distilling. Although there are many similarities between the brewing and distilling, there are also vast differences in the process and in the regulation of the industries. A skilled distiller will bring the knowledge and experience to the table to help you make the best whiskeys possible and also ensure it is done in a way that is compliant with regulations.
Lets Make Whiskey!
Building a brewery is an expensive endeavor and most brewhouses in a brewery are not run constantly. The addition of a still can create the opportunity for a brewery to run its brewhouse more often to create distillers’ beer to be distilled into whiskey. This is good for the business as it can create greater economies of scale. To do this effectively is it paramount to select the right size still to meet your goals. This is a huge opportunity for most breweries and one that can create immense new value and also open new markets for a brewery. If your brewery is ready to take the leap into distilled spirits now is the time to do it. After All most brewers love a good whiskey and good beer can be transformed into great whiskey.
Breweries have to deal with many legal issues, including licensing requirements from various federal and state agencies, formation of a corporate entity, negotiating contracts, and registering trademarks. With so many new skills and requirements to learn, it can be easy to miss something. Below are examples of three legal issues that are often overlooked.
Failing to Require Employment Agreements
There are a million things to do when starting a brewery. Finding and hiring staff checks off a significant box on the list and it can be easy to overlook the need for an employment agreement for these early hires. Later, there is little enthusiasm to impose these agreements retroactively or to apply them to new hires when they were not required for original employees. Yet, employment agreements serve a variety of functions that are so essential that their omission can cause substantial problems down the line.
As a preliminary matter, an employment agreement defines the relationship between the parties. Often breweries will try to categorize workers as independent contractors as opposed to employees, because this distinction allows the brewery to avoid providing certain benefits that are required for
employees. But, the IRS does not care about the brewery’s characterization, it cares how the worker is treated, and the key determination is control. An independent contractor is hired to provide a function, but has significant autonomy to perform that function when, where, and how they see fit. Often they will provide their own equipment and set their own hours. By contrast, if the brewery exercises control over the worker by imposing certain work hours, requiring the job to be performed in a certain way, and providing the equipment used, the worker is considered an employee.
There are many important sections of an employment agreement, including designation of at-will employment, requirement to abide by rules set forth in the employee handbook, etc. But two often-overlooked sections relate to confidentiality and assignment of intellectual property. Although the brewing industry is far more collaborative and congenial than most, it is still a competitive business and certain information should be treated as confidential and/or trade secret. Employees should be made aware that unauthorized disclosure of business plans, growth plans, customer and supplier lists, recipes, and marketing ideas, to name a few, can cause harm to the business. This section of the employment agreement not only serves that notice function, but can set up more enforceable consequences if the terms of the agreement are breached.
Breweries generate a significant amount of material that can be protected by trademark or copyright registration. Label designs, beer names, domain names, and social media accounts are all valuable assets that should belong strictly to the business. An assignment of intellectual property section in an employment agreement sets forth the understanding that anything created during the term of employment is the sole property of the business. As an example, if an employee has artistic talents that are used to develop designs for labels, those artistic designs should be assigned to the company. Otherwise, the employee would have the right to sell the same designs to other companies or individuals who may use them in a way that is detrimental to the brewery’s brand.
Failing to Secure Music Licenses
Music is such a common part of the brewery experience that many people take it for granted. However, breweries must obtain the proper licensing to play copyrighted music in their establishments or they could face a copyright infringement suit and potentially crippling statutory damages that could be as much as $150,000 per instance.
Under U.S. copyright law, the owner of a piece of music has the exclusive right to control its use, including whether or not it may be played in a public setting. Typically, however, while the artist may own the copyright, s/he delegates the task of licensing its use to a Performing Rights Organization (PRO) such as the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI). In some cases, a single artist may have some of its songs licensed by one PRO and others licensed by another.
So, is a license required for every song played in a brewery? Generally, yes, in order to publicly play any piece of music, a brewery must obtain a license from the PRO that has the piece in its catalog. Below are some common situations where a license is required, followed by some exceptions to the general rule, and one very simple way to stay in compliance.
Disk Jockeys by their very nature play a variety of pre-recorded music. Although it may be the DJ that selects the pieces it plays, because the venue derives the benefit of the music, it is responsible for obtaining all necessary licenses.
Bands that play “cover songs” written by another artist fall under the same category as DJs. But, what about bands that play only original songs? The brewery should ask the band whether it is affiliated with a PRO. If so, even if the band is playing its own music, the venue needs a license for the performance.
Purchased music is only licensed for private use. Many people assume that when they buy a record, CD, or digital audio file that they own the music and can do anything they want with it. In reality, the purchase price of that music only covers private use and does not entitle the owner of that copy to broadcast it to the public. So, even if the brewery owner brings in her own collection of vintage vinyl, she must obtain a license to play the records in the taproom.
Generally, music licensing fees are not terribly expensive, but vary according to the size of the establishment and the type of music being played. In some cases, discounts may be available. For example, the Brewers Association has negotiated a discount with BMI of up to 20% for its members.
There are a few exceptions that will enable music to be played without a license, but they are narrowly construed and must be followed carefully. Music that is broadcast to the general public over the radio, television, cable, or satellite services may be played in a brewery without further license if the establishment is smaller than 3,750 gross square feet, including all interior and exterior spaces used for customer service. Larger spaces may also qualify for license-free performance, but other restrictions apply, such as: the music may not be played over more than six loud-speakers or more than four in one room; there may not be a cover charge to enter the establishment; and audiovisual content may not broadcast over more than four televisions or more than one in a single room. Music may also be played in the brewing space or offices for the benefit of employees, as long as it is not audible to the patrons in the tasting room.
By far, the simplest way to get music in the brewery is to use a commercial streaming service, such as Pandora For Business or Sirius XM For Business. The fees for these services include performance royalties and do not require any additional license.
Failing to Report Changes inProprietorship or Control
It should come as no surprise that when forming a brewery the TTB will want to know exactly who owns the business and who is in charge. It should be equally unsurprising, then, that if there is a change in ownership or control of the business, the TTB must be informed. Yet, this is an often-neglected requirement and failure to adhere to the letter of the law can have serious consequences.
It is important to understand the distinction between a change in proprietorship and a change in control. A change in proprietorship occurs when there is a change in the entity that owns and operates the brewery. The obvious example is if the brewery is sold to a new company. Clearly in that situation, the TTB must be made aware of the new ownership and the law requires that the notification be made well in advance of the proposed change. Specifically, 27 C.F.R. §25.72 requires that the successor brewer “qualify in the same manner as the proprietor of a new brewery” before beginning operations. Less obvious examples might be the conversion of an LLC to an S-Corporation or the folding of the brewery business under the umbrella of a parent corporation that has the same owners and officers as the brewery business. Both those situations involve changes to the proprietorship and must be cleared with the TTB before operating under the new structure.
By contrast, a change in control occurs when there are changes in stock ownership, LLC membership unit ownership, or major changes in the corporate officers or directors of a corporation. The same business entity continues to operate the business, so there is no change in proprietorship, but there is a change in who controls the business within that entity. In this situation, an amended Brewer’s Notice is required to be submitted within 30 days of the change. Further, if a new LLC member or stockholder holds more than 10% interest in the business, a new Personnel Questionnaire must also be filed. Common situations that involve a change of control may include the removal of a founder, death of a member, addition of a new corporate officer with ownership interest, addition of new members through a round of fund-raising investments, or the buy-out of previous investors.
Failure to abide by the notice requirements for changes in proprietorship or control can have serious consequences, including forced shutdown of operations until the licensing matters are resolved and possible monetary penalties.
Conclusion
These are just three of the legal issues that breweries often overlook. There are, of course, many more. Engaging an attorney that understands the industry early in the process of starting a brewery and maintaining the relationship throughout the life of the business is the best practice to ensure compliance with all requirements.
Brian Kaider is the principal ofKaiderLaw, a law firm with extensive experience in the craft beverage industry. He has represented clients from the smallest of start-up breweries to Fortune 500 corporations in the navigation of regulatory requirements, drafting and negotiating contracts, prosecuting trademark and patent applications, and complex commercial litigation.
Of course, the primary goals in the craft beverage industry are to drive a profit, make money and sustainably secure the business. However, an increasing number of breweries and distilleries have become so entrenched in their local communities that it only makes sense to give back to charitable causes when possible.
Craft beverage philanthropy is on the rise in the U.S., and there are many creative ways in which brewers and distillers can embrace this trend of doing good while drinking well. There are some valuable lessons to learn from beverage businesses that are focusing a portion of their efforts on philanthropy, which are inspiring if you are looking to host a charity event or donate a portion of sale proceeds to raise money for local causes in your community.
How Breweries & DistilleriesCan Approach Philanthropy
Breweries and distilleries can take a variety of approaches to add a charitable element to their operations. The level of community involvement may vary based on the owner’s interests, the size of the craft beverage establishment and the number of staff members available to help with projects outside the realm of making beer and spirits.
Some craft beverage businesses are skilled at hosting events, partnering with local nonprofits and using social media to get the word out about needs in the community. Other establishments are willing to try profit sharing with partner charities and give direct donations to organizations working in specific fields of interest, such as early childhood education, homelessness or workforce development. A craft beverage producer can also give back to the community through beer or spirit collaborations, supporting local growers by purchasing homegrown ingredients and hosting art shows featuring local artists. Meanwhile, some beverage producers choose to focus on their own internal sustainability practices instead to make their operations eco-friendlier through recycling, water conservation and energy-saving programs.
Besides just feeling good about what you do and what you brew, there are many benefits to embracing philanthropy in the craft beverage industry. Getting more involved with local causes increases exposure to a business and builds brand awareness. A brewery or distillery can build greater support among like-minded and community-supporting patrons while engaging with customers on a deeper level. Adding a philanthropic element to a business can help create a more community-centered taproom, generate good press to compensate for a past issue and even result in valuable tax benefits at the end of the fiscal year.
Examples of Craft Beverage Philanthropy
All across the country, you can find excellent examples of how craft beverage businesses engage in philanthropy without sacrificing product quality or putting a compromising strain on their budget. For instance, Ex Novo Brewing, which launched in Portland, Oregon and also has a presence in New Mexico, was the first nonprofit craft brewery in America and has referred to itself as a “permanent fundraiser to support causes.” Charitable causes supported by Ex Novo include Oregon Wild, Friends of the Children, Mercy Corps and Impact NW.
Deschutes Brewery in Portland, Oregon, teamed up with Dovetail Workwear to support women’s success in pursuing non-traditional occupations.
The Phoenix Brewing Company in Mansfield, Ohio, has been involved in philanthropy since it opened in 2014 through special beer releases, apparel sales, sponsorships and fundraising events. It has supported summer camps for children with special challenges, a community theater, a winter coat drive, a homelessness initiative and a brain cancer research organization. Phoenix Brewing is unique in that it accepts requests for donations and sponsorships directly through its website and is a non-tipping establishment. If customers leave cash behind as a tip, the brewery donates it to a designated charity each month.
Pennsylvania’s Tired Hands Brewing Company is another beverage business that streamlines the funding process and outlines its donation guidelines and application protocols on its website to be refreshingly accessible to local charities.
Service Brewing, started by an army veteran who served in Iraq, is a Savannah, Georgia brewery that has donated a portion of brewery tour profits and promoted charities that include police, fire and first-responder organizations. Over the years, the brewery has raised over $110,000 for local, regional and national groups.
Franklins, a family-friendly brewery in Hyattsville, Maryland, is dedicated to giving back to its local community and donated over $200,000 through a fundraiser program for local schools, environmental groups and progressive advocacy organizations. It also supports its community by partnering with local farms to source ingredients and the town’s art alliance organization to showcase the work of local artists.
Finnegans Brewing Company in Minneapolis, Minnesota, has a policy of supporting local food banks and helping food banks work with farmers in the area.
In Milton, Delaware, Dogfish Head is a large and well-known brewery that launched a Beer & Benevolence program to support over 150 nonprofits annually. Funded organizations include the Delaware Historical Society, Delaware Nature Society and Nature Conservancy.
To dip a toe into the realm of philanthropy without going overboard right away, breweries and distilleries might consider centering giving around just one special, limited-release beverage.
For example, an Ashland, Virginia brewery, Center of the Universe Brewing, made a Homefront IPA and donated all proceeds of the beer to a nonprofit that helps military troops and veterans. It often makes the most sense to link a beverage company’s history and the founders’ interests to philanthropic engagement.
An example is SweetWater Brewing Company in Atlanta, Georgia, which started a long-term, multi-year clean water campaign to improve the local water supply and focuses its giving on environmental groups in the region.
You might also tap into the intersection of craft beverages and art, like Horse Thief Hollow in Chicago, Illinois, which has partnered with a neighborhood art alliance to turn the business walls into an impromptu art gallery that displays the works of local artists.
Another way beverage businesses can boost community involvement is to partner with local sports teams. In Indianapolis, Indiana, craft breweries have created beers that pair with the charitable efforts of local sports teams, including the NFL’s Indianapolis Colts. The local brewery and bistro, Triton, created a Pink Ribbon Saison with pink and white peppercorns to celebrate Women’s History Month and compliment the breast cancer research funding of the city’s professional football team.
Creative Ideas and Looking Ahead
For breweries and distilleries that have a handle on their essential operations and are ready to take the next step in community involvement, now is a great time to establish partnerships with local charities. Business owners can harness the trendiness and popularity of craft beer to spark awareness about people, animals and natural resources in need of attention.
Yet there is no shortage of challenges that come with pairing craft beer and spirits with philanthropy. Selling products must always remain the top priority for these businesses to stay operational, and there will always be public scrutiny about which charities they support and transparency with regard to how the money is used. The quality of the beer and spirits produced must come first so that customers keep coming back and supporting the business and the affiliated charities. If the quality declines, craft beer fans may just as well donate to charities on their own without any craft beverage connection.
There are also challenges with finding staff members who can manage charitable work, getting the word out about philanthropic efforts, establishing donation guidelines and having enough money to go around. However, this is an exciting time to get involved in the world of craft beverage philanthropy because of how prominent beverage producers have become in their local communities and the potential power and influence they hold for rallying community members to enjoy their favorite drinks with a greater purpose.
As a craft beverage producer, one of the best ways to launch a philanthropic campaign is to learn from the examples of what other breweries and distilleries have done in the past and contact their teams for details, feedback and mentorship. If corporate philanthropy is an interest within your ownership and staff, it may also be worth reaching out to the local community foundation in your area to discuss options for opening up a fund, donating to specific programs or starting an endowment. Most major cities and even broader regions serving multiple counties have well-established community foundations that can offer advice, resources and training about taking a more philanthropic angle as a charitable side venture.
Despite hard hits from the pandemic, recession and labor crisis, specialized companies are also emerging to connect the business industry to the nonprofit sector. One example is Positive Legacy, a collective group of nonprofit and event industry professionals that created the Pours for Positive campaign to engage craft beverage companies in nonprofit engagement and outreach for mutually beneficial results and a more vibrant and sustainable community. The Brewers Association also provides resources and tips for producers navigating the complex world of philanthropy. Industry-specific recommendations include adding an online donation request form to your website, hosting events that bring a charity into your business and ensuring donations boost taproom sales with silent auctions and gift cards that draw more business to your doorstep.
Starting a beverage business can be a daunting undertaking, especially for the uninitiated. One of the biggest challenges for someone wanting to bring their beverage idea to the market can be budget. The cost of starting and scaling any business can be high, and when one is developing a new consumable product, the costs can be astronomical if they are not privy to the ways of bootstrapping their new business.
Regardless of the reason one has behind bootstrapping their business, it is a valid way of building any new venture from the ground up. By being savvy with one’s budget and careful to avoid overspending pitfalls, anyone can build a wildly successful beverage business.
Bringing One’s Vision to Life
Any great beverage company needs to start with an idea. If one wants to build a business around a beverage, the idea needs to be solid, and it needs to be able to be created with consistency, meaning the formula being used should be set before bringing a beverage to the market. Seeking out the opinions and assistance of industry experts can help one avoid costly formulation mistakes. New entrepreneurs should also do their due diligence in researching the market and ensuring their beverage idea has a strong place in the market. While friends and family may all love what an entrepreneur comes up with, that particular product may not translate to a beverage that could find traction with the market at large.
The formulation stage could lead to out-of-control costs if one is not going in well-researched and prepared. There can be a good amount of information online to help one research the industry, as well as quite a few books and workshops available that can help people with their beginning stages of business building — all for an affordable cost.
Estimating Startup Costs
Even when one is bootstrapping a business, costs can very often exceed expectations. When diving into initial market research, a new beverage business entrepreneur needs to be realistic about how much it will cost to bring their beverage to the masses.
To professionally formulate a beverage can cost upwards of $20,000 to $45,000. If one is planning multiple SKUs (stock-keeping units), costs can compound quickly. There are packaging costs, ingredients, shipping, and stocking costs to consider, all of which will add dollars to one’s budget and cut into their profits.
Bootstrapping this amount requires careful planning and budgeting. Many entrepreneurs have started small and put any money they make back into their businesses. They set up booths at farmer’s markets and sell their beverages piecemeal to raise capital for professional formulation and growing the brand. Though this approach can take time, it is a great way to slowly build a brand without accruing any significant debt.
Any business, regardless of budget, will often seek out cost-saving measures when it can. Overspending on aspects of the business that do not ultimately move the needle can spell disaster for any startup. Areas where a beverage startup can save include seeking out inexpensive ingredients, packaging options, or distribution avenues.
Being that costs will rise as the business expands, how does one fund their business if they wish to create a national (or international) beverage brand? Several options are available, from personal loans, investors, and small business loans. Whatever funding options one chooses, entrepreneurs should always weigh all pros and cons to ensure the selected option is the right fit.
Finding the Right Source of Capital
Any startup is going to need funding, and there are a number of options for receiving this funding. Bootstrapping typically involves forging relationships directly with retailers in order to get your beverage on shelves. This approach can be a slow burn but ultimately successful, depending on how much pavement-pounding you are willing to do on your startup’s behalf. When one doesn’t have the financial resources to fund thousands of dollars of marketing or development costs, that momentum has to be built bit by bit. Those entering the market with a bootstrap mentality must understand that patience is a virtue and that building the brand will take more time.
Even if one begins with a bootstrap mentality, the fundraising stage may get to a point where one also wants to consider the investor route. However, finding the right investor deal for an idea can also be a long road. Going into pitch meetings with a robust business plan and vision for the future of the product can help entrepreneurs land the best investor partnership for their venture. Any pitch meeting should include samples of your beverage and an idea of how the packaging and the marketing will look.
One of the best ideas for a small startup is to consider a larger pool of smaller investors instead of putting all of their eggs in the angel investor basket. For example, instead of trying to secure a few million dollars from one investor, work on securing $10,000 in investments from a collection of smaller investors. With those combined investments, one will not only have enough money to get their beverage idea off the ground but will also have a built-in support system from a variety of enthusiastic backers. Smaller investors ride out shifts in the stock market easier than large investment firms and venture capitalists. Individual investors also may request less control over a business than large investors often require.
Finding the right investor(s) or funding route can make or break a new beverage business. As such, one should consider all options before choosing how they plan to fund their startup.
With over 2,400 beverage companies operating in the US alone, startups will really need to communicate what makes their product special in order to court solid investment opportunities. Coming at the investor search with passion and an educated approach to the market will increase a startup’s chances of landing dedicated investors in it for the long haul.
The Beverage Industry has Changed
The pandemic changed many industries, and the beverage industry has not escaped the post-Covid shift towards more direct-to-consumer sales and social media marketing. When the world shut down, beverage entrepreneurs could no longer visit investors or retail partners in person.
With this in mind, those now seeking to step into the beverage industry with a great idea need to consider how reaching a target market has changed. Anyone looking to break into the somewhat crowded beverage market should work on establishing an online presence right away. Today, word-of-mouth marketing includes chatter online, meaning entrepreneurs could be leaving a lot of money on the table by failing to put effort into their digital marketing presence.
Any startup should have a website that can be built for a small out-of-pocket cost. The brand’s website is its handshake and introduction to the market and should reflect its feel and personality. Along with a website, the brand’s social media profiles should tie into the entrepreneur’s overall marketing approach. Engaging with one’s target market is a low-cost way to build a buzz around their beverage.
When building an online presence, one needs to consider what message their beverage and brand are sending. For instance, is the brand being built based on natural ingredients and a sustainable manufacturing approach? If so, its marketing is going to be different from a brand seeking to bring an energy drink to the market.
Marketing is all about tapping into who the entrepreneur is as a brand, as a business founder, and who their consumers are. Authentic connection with one’s market can go a long way in building a brand, especially when one is not starting with a large amount of capital.
Fight Off Failure
A staggering 42% of startups fail. With those numbers, it’s a wonder why anyone dives into the murky waters of entrepreneurship. Still, many do and succeed, but not without some hard work and research.
For instance, many startups fail because they don’t research their target market. They bring a product to the market that no one is interested in or too closely resembles another product. Other startups simply run out of money, which is why it is so important to have patience while one is bootstrapping, thoughtfully invest capital, and seek out partnerships with investors that best align with the product and brand being brought to market.
Bootstrapping any business starts with believing in a vision, first and foremost. When one is self-funding their startup, the passion for and belief in their product keeps them moving through the most difficult steps of the scaling process.
The entire concept of bootstrapping is about hard work and perseverance. If market research tells the entrepreneur that their beverage idea is a winner, then it is time for them to roll up their sleeves and get in the trenches. This willingness to get one’s hands dirty sends a message that they are willing to stick with their idea, put in the hard work, and do what it takes to see their beverage hit shelves.
Starting any business is not for the faint of heart. Bootstrapping a business could be considered insanity by some, given the difficulty of that journey. However, when the business ultimately succeeds and people all over the country — or even the world — are enjoying the beverage you created, all the hard work of bootstrapping will have been worth it.
Jorge S. Olson is the author of “Build Your Beverage Empire.” He’s a beverage industry mentor and consultant who has launched over 1,000 consumer packaged goods and worked with over 100 beverage entrepreneurs, large and small. Jorge has owned companies in the beverage industry, wholesale distribution, import and export, and beverage development and sales. His over 300,000 newsletter subscribers share his insight into beverages, marketing, and growth. Jorge now mentors beverage executives and lives in San Diego, California.
Despite a recent pandemic, record-high inflation, and several years of economic uncertainty, entrepreneurship continues to thrive, with more than 31 million entrepreneurs in the U.S. In fact, Americans’ confidence in small businesses has reached record highs, even exceeding confidence in the military, the medical system, public schools, and the U.S. Supreme Court. But is your business recession-proof?
Since World War II, the U.S. has experienced 12 recessions, averaging one every six years. Recessions are more common than most people realize, and most people will encounter several over the course of their careers. Therefore, it’s crucial for business owners to prepare to survive the next (inevitable) recession.
A recession is defined as a significant decline in economic activity – including gross domestic product (GDP), income, employment, industrial production, and wholesale-retail sales – and can last anywhere from two and 18 months. While recessions are common, they can be incredibly stressful for business owners, who will very likely experience some business disruptions. The key to surviving the disruption is to plan, differentiate your business from the competition, cut spending, and create additional revenue streams.
In addition, here are ten tips to survive – and thrive – during a recession.
1. A downturn doesn’t mean doom and gloom for every business. Nearly 75% of public companies with $50 million or more in annual sales had declining revenue growth during the last four economic downturns, but 14% actually accelerated revenue growth and increased profitability. The different outcomes depended largely on the type of products or services the companies sold and how well (or poorly) they met customers’ needs. Remember that even during economic downturns, customers still buy essentials (e.g., food, utilities, household items, etc.) and need certain services (e.g., healthcare, car repairs, etc.). “Recession-proof” your business, providing what people will continuously need, to maintain sales.
2. Plan for a recession. Ebbs and flows are a normal part of the business cycle, so plan accordingly. Focus on maintaining revenue, preserving cash flow, and generating demand. For instance, running out of cash is a major concern for business owners, so assess your cash balances, expenses, and incoming cash flow. Work within your budget. Track your key performance indicators and adjust if you aren’t meeting target metrics. Pay down debt. Reduce financial waste.
3.Prepare for the unexpected. You’ve likely heard the advice to establish an emergency fund to cover personal expenses, and this is a wise move for businesses, as well. Create an emergency fund that can cover up to six months of essential costs, including payroll, inventory, rent, and utilities. Proactively collect outstanding receivables. Talk to a financial advisor about whether you should consider revolving loans, alternative financing, small business loans, and/or other options.
4. Operate efficiently. Reducing operating expenses can be a challenging task, especially as you must continue providing extraordinary products and services. Whatever expenses you cut should be invisible to customers. Determine where you can make small tweaks that can add up to big reductions, such as leveraging early pay discounts from suppliers, automating manual tasks, and renegotiating supplier contracts.
5. Multiply revenue opportunities. This strategy will require some creative thinking. Brainstorm ways to capture new revenue without making any major investments. For instance, expand your brick-and-mortar retail store’s reach by selling goods online. Adjust your business model. For example, a bakery could start offering take-home kits for birthday parties. Or a bar could sell merchandise and specialized beer onsite and online, in addition to selling drinks and food.
6. Modify offerings. Adjust what you’re selling to make it more attractive to customers and prospects during tough economic times. Think of how restaurants changed their business models during the COVID pandemic to sell to people when they couldn’t dine onsite. To adjust to the changing climate, restaurants started offering more delivery, takeout, and curbside pickup options. And, as more people worked from home, clothing retailers adjusted, offering more loungewear instead of formal suits. During a recession, pivot accordingly. In addition to altering your business model, consider changing your pricing structure and offering more incentives to entice people to buy, even if they have less disposable income during a recession.
7. Strengthen relationships. Acquiring a new customer can cost five times more than retaining an existing customer. Create and maintain strong customer relationships. Understand their changing needs and give them what they want. Offer the “value add” that they can’t get from your competitors, whether that’s free shipping, personal shopping, or a willingness to place special orders on their behalf. At the same time don’t forget your valued vendors, partners and associates. When times get tough those relationships could save the business. Or you could help save someone else’s business. Whether it’s extra time on a delivery due to supply chain issues or just a pep talk, remembering those relationships is essential.
8.Stretch your tech. Most businesses purchase technology to be more efficient and productive but haven’t taken the time to maximize the full benefits of the system or appoint an expert that can fully leverage its benefits. Before you are investing in new systems, stretch your current tech. Tech tools can also help you change distribution methods, such as pivoting from in-person tutoring, which limits you to a specific geographic radius, to online tutoring, which expands your reach.
9.Continue marketing. You may consider cutting marketing to save a few bucks but resist that urge. To maintain revenue, you’ll need to stay in front of your key audiences with social media efforts, online ads, positive news stories, compelling blogs, etc. Launch (or continue) loyalty campaigns to recapture past customers and increase touchpoints with your current customer base. Target your messages to align with customer pain points in an uncomfortable economic climate. Spotlight loyalty programs. Incentivize customers and prospects with discounts, BOGO, and other deals. Maintaining visibility via marketing can help you increase market share, particularly if your competitors pause their efforts.
10.Insulate Finances. Consult financial experts, like those at Loanmantra.com, to develop a plan to become recession-proof. They’ll help you determine how to cut costs, adjust your business model, and secure any necessary loans. If you need a loan to boost your company’s financial health, they’ll help you calculate how much of a loan you’ll need (and qualify for). Financial experts can advise you on all aspects of the loan, including the application process and what types of information you’ll be required to provide.
Raj Tulshan is the founder and managing member ofLoanmantra.com, a one-stop FinTech business portal that democratizes the loan process by providing corporate sized services and access to entrepreneurs, small and medium sized businesses. Connect with Raj and Team Loan Mantra at 1.855. 700.BLUE (2583) orinfo@loanmantra.com.
Dubbed the Great White North, Canada has stereotypically been viewed as a country perpetually shrouded in snow – where herds of caribou and roaming packs of wild wolves play survival games in the streets, where the inhabitants (clad in parkas and donning toques and snowshoes) emerge from their igloos to dine on seal blubber and polar bear meat. And beer.
Okay, that’s pushing it a bit far. Anyone who lives in all but the most northern reaches can regale you with stories of asphalt-melting, paint-peeling summer heat. Interior British Columbia’s Okanagan Valley has literally caught fire on some occasions, with daytime temperatures reaching higher than 120 degrees Fahrenheit. In Winnipeg, Manitoba, you’re more likely to be eaten alive by ravenous hordes of summer mosquitos than a murderous hibernation-starved grizzly. No, the country’s really not a wasteland of frozen tundra. That being said, when it comes to the distribution and sale of beverage alcohol products, Canada has a ways to go before it really emerges from the Dark Ages.
For example, there are antiquated liquor laws that haven’t changed dramatically since being imposed in the 1920s, combined with an inability to shake off the chains of the Ghost of Prohibition Past. Health Canada has recently proclaimed that no amount of alcohol is safe, and any more than two drinks per week – yes, you read that correctly – increases your odds of being dead). Additionally, federal and provincial government bodies have gotten rather intoxicated on the gold they have mined from drinkers. All of these things together to create an odd cocktail of private, public and government interests. So, how does this all affect a producer – perhaps you – who wants to break into the Canadian market?
First, it’s important to understand that alcohol importation, distribution and, ultimately, sales are pretty much the sole domain of government liquor monopolies (“liquor boards”). Each province behaves somewhat differently in its approach, but all function in a fundamentally similar way. Let’s focus on Ontario (mainly because that’s where I live, and my knowledge of “the system” here is probably better than the workings of other provinces).
Second, it’s equally important to understand that provincial liquor boards exist to feed provincial government coffers. That’s it. That’s all. This wasn’t always the case. The Liquor Control Board of Ontario (LCBO), for example, was originally envisioned as a transitional mechanism to ease the province from prohibition (via a system of “controls” – many of which would likely today seem in violation of personal privacy if not being downright racist) back into the private retail sector. It wasn’t supposed to be still with us today. Of course, the original mandate was rethought over time as successive governments realized that in controlling booze sales, they had given birth to a proverbial golden revenue goose.
The upshot of this is that, though you may be convinced you’ve developed the most wondrous elixir thus far known to man (confirmed by family and friends), it really means nothing to the liquor board. What matters is how much money your concoction will rake in if the decision is made to give it a shot in the market. As with many other businesses, the salaries and bonuses of LCBO executives (which are substantial) are directly tied to “corporate performance” (read, sales numbers). If you can’t help them, they can’t help you.
There’s a saying: “If you want to make a small fortune in the wine industry, it’s best to start with a large one.” The same is true with trying to break into the Ontario market. Having a decent chest of loot socked away to market and promote your product – primarily through LCBO-controlled programs that you will be “strongly encouraged” to participate in – will significantly up the shelf space ante.
“Okay,” you say, “I get it. It’s all just business…but I still want a piece of Ontario action and I’ve got the resources to give it a serious go. So, how do I do it?”
Assuming you are a producer of “craft” products and don’t have a global corporation with an international sales force to help you, you will need someone in Ontario to act on your behalf. A “manufacturer’s representative” (aka, an “agent”) essentially acts as your sales and marketing (and often PR and government relations) wing in Ontario. A good agent likely has a decent working relationship with LCBO buyers (and possibly LCBO executives), knows how to navigate the system and work through the reams of often byzantine paperwork, knows which LCBO sales channel (and there are several) would work best for you, knows the market, can assist with pricing decisions and – perhaps most importantly – has the patience of a saint and the tenacity of a limpet. While you may luck out and get a bite on your first cast into LCBO waters, this typically isn’t the case.
Suppliers often become frustrated and blame their agents for the lack of LCBO purchase orders. Truth be told, it’s very rarely a failure on the agent’s part. Even the most seasoned of them are often left scratching their heads when it comes to explaining why a product was rejected, though there’s really no mystery (see “provincial liquor boards” paragraph five above).
Agents come in various shapes and sizes, from a one-person shop servicing Ontario only to corporations representing producers in each province and territory. Each type has its upside and down. Larger agents have a greater range, bigger budgets and more salespeople in the field. It’s also no secret that the LCBO tends to favor larger agencies when it comes to new and subsequent listings. The downside is that, as a craft producer, you may not have the volume of product to meet a large agent’s financial needs. Also, large agents often give the most attention to the suppliers in their portfolio that generate the most income. This might not be you.
A smaller agency, while not having the range or resources of the big guys, typically has a smaller portfolio and can dedicate resources to building your individual brand in the market. In any case, any agency will be projecting a bottom line and weighing the effort needed to reach it before taking on any new supplier.
Having an agent (of whatever size) doesn’t mean you can simply sign an agreement and then sit back and watch the revenue roll in. You and your agent must present a marketing plan to convince LCBO buyers to take a chance on an unknown brand. This chance will be better if your marketing plan includes numerous accolades and high scores from critics and the media.
Once accepted, you still have to physically get your goods into the province. Large orders – or orders within reach of convenient co-loading ports – are usually easy to deal with. In fact, the LCBO will take care of most of the shipping and customs clearance responsibilities (while marking up any incurred costs and applying that to the cost of your shipment). Looking to ship in five cases of craft spirit from upstate New York? Though Ontario might literally be just across the lake, getting these cases into the province can pose challenges and requires that you, the supplier, do some homework before attempting to ship.
Of course, once the goods do arrive, it’s not like the items are immediately shipped out to stores or offered for online purchase. The LCBO chemically analyzes all beverage alcohol products destined for sale in the province. It also holds the agent and supplier to specific labeling requirements (details here: https://www.doingbusinesswithlcbo.com/content/dbwl/en/basepage/home/quality-assurance/quality-assurance-policies—guidelines/labelling/-lcbo-product-packaging-standards-and-guidelines-for-chemical-an.html). Lab testing isn’t provided free of charge. If your product fails well, you have the option of having it shipped back (on your dime) or destroyed (also on your dime). If “corrective labeling” is required to make your labels compliant, you’ll be charged for that, too. Be forewarned, the time it takes to have your stuff available for sale once it landed can be frustratingly long, and the reasons given (or typically not given) for the delay will almost be guaranteed to cause further frustration.
You might also be (unpleasantly) surprised to find out what the retail price of your product will be once it’s available for sale (though, to be fair, you will know this before you even decide whether a sale to Ontario is worth the bother). To quote the LCBO’s website: “The price that is seen in a store or online is a combination of the supplier’s price plus import duties, freight, levies, a standard markup, HST and container deposit.” The “standard markup” on spirits is a modest 139.7 percent. The Harmonized Sales Tax (HST) is 13 percent. All of these costs are passed on to the end consumer.
Things aren’t much easier if you’re a craft brewer. You might have heard of The Beer Store (TBS) and think this might be a way around the burdensome LCBO process. Think again. TBS is simply another monopoly, only rather than being run by the government, Canada’s three big brewers run it. If you think they are interested in offering competing products on their store shelves, keep dreaming. As with distillers, foreign brewers really have no choice but to deal with the LCBO.
Finally (at least as far as this story goes), getting your product into the LCBO system is no guarantee it’ll stay there. You’ll be expected to meet sales quotas. If you do, reorders are likely – probably in larger amounts than your initial order. If it looks like you can’t, well, you can always try throwing more money into marketing, promotion and advertising. But in the end, if the consumer judges your product to be a dog or has no interest in trying it, it’s off the shelf – which is really no different from most retail products.
Believe it or not, I’m not trying to discourage any beer or spirits producer reading this from trying to get a toehold in the Ontario – or Canadian – market. Personally, I’d love to be able to sample your wares. It won’t be easy, but it could be worth it, given the adult populations of major centers. Look on the bright side, if things go well, you might be able to unload your entire annual production on one customer – and with that customer being a government agency, payment is hardly ever an issue. Or you might decide that the LCBO is just another four-letter word.
Expertise Now Rescues Craft Brewers from Costly Headaches Later
By: Cheryl Gray
Quality, precision and productivity are just some of the elements that factor in when deciding what brewery equipment to install.
Whether for a start-up or an expanding operation, equipment is a major investment, and there are companies whose expertise is to help guide their brewery clients toward making that investment pay off.
One of them is Craftmaster Stainless, a full-service stainless equipment provider that provides an expansive list of products for breweries, wineries and distilleries. The California-based company has clients across the United States and Canada. The company prides itself on the detail and finishing of every product its manufactures, as well as the customer service it provides before and after the sale.
Mackenzie Sant is a sales and equipment specialist for Craftmaster Stainless. He says that learning about craft brewing from the ground up introduced him to the company’s products. The team behind Craftmaster Stainless, Sant explains, has multiple years in brewing, technical detail and customer service. That experience supports the company’s ability to translate a client’s equipment wish list into a customized experience. It is just one of the company’s assets that Sant believes puts Craftmaster Stainless ahead of its competitors.
“We offer every piece of equipment someone needs to start a brewery. We want to be your one-stop shop. We won’t furnish your taproom or install your walk-in cooler, but we have all the equipment you need to upscale that popular homebrew batch or to upgrade from the ugly brewhouse you have been brewing in for four years. We wish we could have in-person meetings with everyone shopping for a new brewery, but a phone call works wonders. Tell us your business plan, what styles of beer you want to brew and projected production numbers, and we can spec out the equipment you need. We work closely with other manufacturers and suppliers in the U.S. to source equipment that we don’t produce, from the start of the brew day milling the grain, to chilling and carbonating before pouring a crispy pint.”
And just what does a newly-minted brewing operation need? Sant provides a checklist of essentials, beginning with a business plan and a building followed by must-have equipment, such as a mill/auger for crushing and transporting the grain to the mash tun, a mash tun/lauter tun for converting complex malt sugars into fermentable sugars and a kettle for “cooking” unfermented beer (wort), as well as for adding hops/adjuncts and pasteurizing the liquid to ensure a clean fermentation.
Sant adds that additional essentials include a heat exchanger to cool the wort down to fermentation temperatures, pumps for cleaning or transferring liquids, unitanks/conical fermenters for the bulk of fermentation, brite tanks for conditioning, clarification and carbonation and, lastly, a glycol chiller for controlling fermentation and conditioning temperatures. The latter, Sant advises pairs well with a cellar control panel to control each tank.
Regarding some of the most popular items on the product list for Craftmaster Stainless, Sant points to a number of items that highlight the company’s unique feel for what breweries need, including one piece of equipment that takes the tedium out of a very mundane but necessary chore.
“I would say our keg washer is the most popular piece of equipment at the moment. I think I speak for most brewers when I say that keg washing is probably one of the most repetitive jobs in the industry. This machine makes that job easy. It is seriously your best ‘employee.’ Once again, our customer service is always there to help with any trouble shooting. We understand downtime is not profitable, so we are always available to help. I would say our brewhouses are popular as well. They look great and they get the job done. Our level of customization on our brewhouses will catch your eye. We do have a couple other products releasing this year that will steal the spotlight for a while.”
The company’s new product launches include the Craftmaster Stainless Semi-Auto ‘Keggernaut’ Keg Washer and another new equipment item.
“We just released our Three Gallon Hop Doser. The Hop Doser is a great attribute in our equipment line up. When introducing hops into the brewing process, you don’t want to introduce oxygen. This hop doser allows you to dry hop without oxygen ingress. It can be used for other adjuncts as well, so use your imagination. Keep an eye out for equipment to come. There is so much technology in the industry that isn’t being used, and we have big plans for the future, while staying competitive.”
From Lincoln, Nebraska, is ABE Equipment Company, which designs and manufactures a variety of equipment for breweries. The company’s brewhouse equipment is custom-built, paying special attention to solving problem areas such as low ceilings, tight spaces, ventilation barriers and utility requirements. Ashlei Howell is the marketing manager for the firm’s parent company, Norland International.
“Our sweet spot is the 1,000 BBL to 5,000 BBL per year brewery. Our products cater to much larger breweries, and much of our equipment can be used on a much smaller scale, but the niche we serve will be a bit on the higher production end.
We pride ourselves on being able to offer a complete solution at a fair price. We handle everything from grain to glass. Everything is designed and assembled in Lincoln, Nebraska, and we employ over 130 hardworking Americans to make our suite of products. Our dedicated customer service technicians train our customers and make themselves available nearly anytime to answer questions.”
When it comes to introducing new products to the market, Howell explains that ABE Equipment Company is focused on what will increase its clients’ bottom line.
“Our newly released products have changed how breweries and distilleries package their product. The new CraftCan Go is a small footprint, one operator and a dual-purpose (atmospheric and counter pressure) canning machine. Breweries are packaging so much more than just beer in today’s environment.
A canning line capable of making beer, coffee, seltzer, tea, and anything else that may be high or low in carbonation adds versatility to the brewery. It sets that particular machine apart from anything else on the market.
The Patriot Fill Station allows companies to package virtually any beverage on a budget. It is a manual fill station allowing the user to package around eight bottles per minute. This machine can handle alcohol, syrups, oils and many more viscous or non-viscous liquids. With so many craft beverage companies coming to the market, having an affordable machine to get a product into a package at a reasonable price is a must for any beverage company wanting to stay ahead of the game.”
Howell offers input on some advanced equipment choices for breweries to consider.
“There are numerous products a brewery can add to its lineup to optimize production, save time, cut costs and much more. A yeast brink allows breweries to reuse yeast and can easily be added to your equipment lineup. If harvested and stored correctly, you can sometimes yield up to 10 generations of yeast, spreading the cost across multiple brews. With rising grain costs, adding a bulk grain silo is becoming a more economical option for breweries. Buying in bulk saves time when brewing, but you can cut significant costs when ordering large amounts of grain at a time. The ROI on a silo is easier to prove now more than ever. There are also a variety of smaller, simpler items, such as brite tank monitors, CIP carts, and brewhouse automation options that help improve production within a brewery.”
MISCO Refractometer and its 70-year history have earned a place in the specialty field of refractometry. Refractometers in the brewing industry are among the equipment needs experts say breweries should have on their checklist of items designed to ensure quality control. As the singular item that the company manufactures, MISCO offers a wide range of refractometer choices for different industries, but one specifically designed for brewing. The company says that its MISCO Digital Beer Refractometer deploys a patented design specific to wort and eliminates the need to use a refractometer correction factor when placing measurements into beer calculators.
Another advanced equipment option for breweries is a set of sieve plates for the mill. According to experts like Sant, even a one percent efficiency loss in this area could cost hundreds of thousands of dollars in a single year. Along with this, brewers may want to consider keg washers along with portable and inline flow meters. Sant recommends breweries make equipment choices with long-term gain in mind.
“Can you save money in the beginning by cutting cost on your equipment? Absolutely. But what about labor cost, repair cost for failing equipment and bad batch efficiency? The list goes on. Spend less time worrying about the equipment and more time worrying about the beer you are creating. A popular beer podcast said that every 10 minutes you save brewing is a cold beer at the end of the day. Spend that extra time focusing on different aspects of the process.”
From start to finish, a well-equipped brewhouse or distillery is a complex linked chain of equipment, including specialized tanks and storage vessels, each important to the final product. But brewery and distillery experts agree that before finalizing any decisions on the purchase or upgrade of your tanks and tank accessories, it’s critical that the equipment manufacturers know your business and production goals, both now and in the future, so that they can recommend the proper vessels for your needs.
It’s in Their Name: Quality Tank Solutions
To help sort through all of the possibilities, Jimmi Sukys, owner of Quality Tank Solutions(QTS), says that it’s critical to research and choose a manufacturer that carries an excellent reputation in your industry with the equipment they manufacture or import and with the knowledge and service capabilities for support of those products. Quality Tank Solutions brings over 50 years of expertise in the stainless-steel industry, providing sanitary liquid solutions to the brewing, food and beverage, dairy and pharmaceutical industries. QTS builds lifelong partnerships because of its willingness to work alongside each customer from start to finish and beyond. They offer everything a craft beverage producer needs in quality, right-sized equipment and accessories.
“Before we even get to the tanks, a producer should know the production goals that match and support their business plan,” said Sukys. “From there, we can determine the size and quantity of necessary equipment, develop a plan for future growth and plan for the type and size of the facility that will support this plan. Of course, there are exceptions. For example, when a craft producer finds their perfect location, say, a great space for a taproom, we work backward using the available space. A quality manufacturer helps clients determine the optimal equipment size for their production space and provides the production capabilities of that recommended equipment.”
“The first step is knowing the process or function required of the tank in question,” said Sukys. “A quality manufacturer should ask questions to be sure they design and offer a proper vessel for your needs. For example, is it a process tank, and if so, what will the process involve? What type of products will you be mixing, adding, heating or cooling, and to what extremes? The more details you provide to a manufacturer, the more value you get from your tank purchase.”
Sukys said that knowing the size of batches is critical as well. Too small of a tank limits production. Conversely, going too big with a goal of doing double or triple batches or more can raise issues when wanting to do only a single batch. Most tanks are not designed to heat or cool less than maximum volume production batches efficiently. Smaller batches may not hold temperatures correctly or cause stratification. A manufacturer that understands these limitations can be beneficial in presenting options that work for the producer’s needs.
“Stainless steel has become the standard choice of construction,” said Sukys. “Stainless steel tanks can withstand decades of use when properly maintained. The range of temperatures in stainless steel tanks is much greater than other material choices, allowing a craft producer to use them for a wider range of processes. Welded ports replace screw-on fittings, which may need more maintenance. Additionally, stainless steel offers superior sanitation capabilities and can withstand aggressive cleaning with different chemicals. Quality manufacturers provide maintenance schedules for any equipment they provide.”
Sukys told Beverage Master Magazine that any other accessories and equipment needed, like boilers and chillers, will depend on what the beverage producer plans to offer. Budgets must also include more minor things that add up, like hoses, gaskets, extra clamps, and fittings. He recommends using a manufacturer that helps with recommendations on what is necessary for startup and what additional equipment is good to have on hand. It’s common for equipment manufacturers to have accessories available to the beverage producer.
“The most important aspect of all of this is to choose a quality manufacturer that keeps current on the evolvement of the beverage industry and has the capability and expertise to design equipment that allows you to produce better beverages consistently,” said Sukys. “A strong warranty and service department is critical for peace of mind and knowing that you have a partner to have your back if unforeseen things happen. And remember that as your business and production goals grow, so do your equipment needs. The industry is constantly evolving, and better design of tanks and auxiliary equipment can help save energy, raw materials and production time. Finally, American-made equipment always has a higher resale value than Asian imports. That can be important when it comes time to resell your smaller tanks to replace them with larger capacity models.”
For questions, consultations, and more information on Quality Tank Solutions, visit www.qts4u.com.
Flexibility, Efficiency and Cost Effectiveness: Paul Mueller Company
Since 1940, the Paul Mueller Company has provided experienced help and demonstrated expertise in the processing equipment industry. Their reputation as being not only a quality manufacturer of brewing-related vessels and equipment but also a true partner of craft beverage producers is demonstrated through their equipment and industry knowledge and their respectfulness of client schedules and available workspaces to provide seamless transitions and minimal disruptions or interruptions, whether you’re purchasing new systems or replacing outdated or undersized equipment.
“The first thing we should look at, as far as necessary equipment and proper sizing, is the planned production, and then work back from there,” said Jon Sprenger, regional sales manager for the Paul Mueller Company. “We find the best way to do this is to consider what your business will look like and what production levels you expect to attain in five years. That number is critical because bottlenecks in brewing and production are generally about available cellar space rather than brewhouse issues. You can brew beer around the clock, but you’re at a dead end if you don’t have the cellar space.”
Sprenger also said that equipment like tanks could depend on the heat source chosen for the production space. Steam and direct fire are the two most popular, with steam being the easiest way to brew. The boiler can be pricey upfront. Conversely, with direct fire, you’ll be paying regular monthly payments for natural gas on a utility payment plan. It depends on available capital and the owner’s perspective from a cost standpoint.
Along with this, Sprenger adds that an owner has to consider if they want to distribute their products or remain true to being a craft taproom. How do you want to handle your packaging? A quality equipment manufacturer will use this information to develop a successful equipment plan that incorporates the entire business model, not just presently but also with an eye toward the future.
“And we can achieve that in different ways,” said Sprenger. “Consuming beer is like eating food. You do it first with your eyes. So many times, older, trendier and historic spaces have become desired locations for breweries and taprooms. That’s okay, and we can fill an already acquired space, or we can look at a producer’s projections and recommend comfortable square footage estimates to fulfill those goals. Either way of building a system is acceptable and falls under the umbrella of what we can do. Most manufacturers, including us, offer layout services and work with the available contractors and architects to develop a successful system. Stainless steel is advantageous simply because of its longevity. It’s built to last with simple and easy maintenance and cleaning capability. When compared to oak, which is difficult in this day and age to brew beer in, it becomes an easy and economically sound decision to go with stainless products just based on ease of cleaning and maintenance, lifespan and consistency in product endpoint and taste.”
Sprenger tells Beverage Master Magazine that Mueller offers everything for a complete brewing system that falls in between the raw ingredients and the end glass.
“We understand that it’s a lot easier and less time-consuming for beverage producers to deal with as few vendors as possible, so we offer all the necessary related equipment and accessories that they’ll need to complete their brewing system. That being said, we also easily adapt or integrate our products into any existing equipment that a craft producer already has in place. All of our equipment is customizable and will comfortably fit where it is supposed to go using as little movement as possible. Our equipment and installation successes are great marketing tools as well. Like consumers, we love to see our tanks on display in taprooms because they are also on display to other industry professionals that visit, including other brewers.”
Saving Money, Increasing EfficiencyWith Mueller’s Serving Beer Tank
“One thing we’re excited about, and brewers should be too, is our serving beer tanks,” said Sprenger. “They’re a great alternative to kegs, and they don’t require the cleaning or CO2 that kegs demand. Beer goes into a mylar or polymer, food-grade bag inside a pressurized tank using only compressed air. The serving beer tanks don’t require cleaning because the replaceable bag protects the stainless steel from ever contacting the enclosed product. The use of compressed air negates the use of CO2, and we all know about the cost and shortage issues there. They come in various sizes and are perfect for taprooms. The tanks are completely mobile, easily transported outside for parking lot events, off-site festivals or stacked above your bar or in cold rooms for an awesome visual experience. The uses and locations are endless, and our serving beer tanks provide ultimate flexibility, space savings and costs incurred with keg ownership. In addition, the serving beer tanks offer a self-cooling, streamlined process of serving beer directly from the tank that promotes longer shelf life and fresher beer. We do recognize the need for kegs for distribution and other uses, but our serving beer tanks give brewers a cost savings option to replace kegs where available.”
Mueller’s serving beer tanks show well in a copper or stainless finish, are ASME (American Society of Mechanical Engineers) code-rated and can easily push beer several hundred feet with no issues and serve multiple draft towers at once.
For those looking for a complete system, Mueller offers their Beer Genius brewery system, a space-saving craft brewery package customized for your space and featuring their serving beer tanks, making everything from buy to brew easy and efficient with expert help and advice along the way.
“We work with brewers through these types of things daily,” said Sprenger. “It’s critical to think through expected future growth. If you think you’ll need a size five tank, get a seven. The small extra cost will surely be less than the headache accompanied by a misjudgment in equipment sizing. Always consider your cellar tank needs, including brite and fermenter tanks, to accomplish your desired production goals. It’s always worth the effort.”
For questions, a consultation or more information on Paul Mueller or their serving beer tanks, go to www.paulmueller.com.
In the Market for QualityParts and Accessories
Many top tank and equipment manufacturers rely on parts and accessories from Gould Stainless Products. Gould Stainless Products sells everything you need except the tank and is a leading wholesale importer and distributor of stainless-steel sanitary tank accessories. Since 1991, Gould Stainless Products has filled the need for sanitary fittings, valves, pumps, tank manways and related accessories for the brewing, distilling and winemaking industries.
Their extensive catalog is available online and by mail order. You can order a single, threaded joint, sight glass or replacement fitting up through stainless tubing lengths and replacement manways in various shapes, sizes and closure choices compatible with your existing system equipment.
For more information and to view the extensive line of products that Gould Stainless Products offers, go to www.gouldstainless.com/home
Walk into the local supermarket or liquor store and its beer and wine sections all have one thing in common – a diverse array of macro, micro and craft beers all competing for the customers’ attention.
With all this visual noise, how can you ensure that your beer will stand out in a crowded and highly competitive marketplace? While product quality and taste are important, it is not always a guarantee for success. Often, success comes from a combination of factors that are led by an impactful visual identity that connects with your target audience.
Developing a successful brand is not simply designing an eye-catching label or logo. It requires the development of a powerful narrative that authentically connects with and motivates your existing and potential customers. What is your brand story? What promise are you making? What are your key attributes and fundamental pillars? What is your brand personality? Are you refined and sophisticated? Are you bold, edgy and sarcastic? Are you heartfelt, understanding and caring? Maybe you are a combination of all these traits.
Brands aren’t born iconic, but they do need to be strategically and meticulously crafted and launched with intention so as to allow for the opportunity to become widely recognized and well-established. With this in mind, the first step in developing your brand is understanding who you are, what you stand for and what values you wish to convey. As you solidify these fundamental tenets, you also need to dive head-first into the world of your customer base. Who are you selling to and what are their wants, needs, preferences and expectations?
Does this all sound overwhelming? Fortunately, it doesn’t need to be. Whether you’re preparing to launch your first craft beer brand, opening a brewpub or taproom, or have been in the beverage business for years and decided now is the time for a thoughtful re-branding, it’s imperative that you do your due diligence to guarantee that the brand you cultivate is the correct brand for the market. And how do you do that?
Understand the Sandbox You’re Playing In
Knowledge is power. Gather all available data on your marketplace, customer base, competition and if you’re an existing brand, your own history of successes and failures. What is your consumer looking for? What are your competitors providing? What is the market demanding and missing? Conducting extensive discovery and market research will allow you to make more informed and better decisions as you craft your own brand. Nothing happens in a vacuum and ignoring external factors as you cultivate your own image is a recipe for failure.
Beware the Lure of Trends
Trends come and go, so while you can ride the trend train in some of your marketing efforts, it’s best to ignore that tempting, low-hanging fruit as you develop your core identity. If what is popular in the moment is fundamentally tied into the foundation of your brand, the minute those trends go out of fashion, your brand will feel old and outdated. Brands that last feel timeless.
Strike the Right Balance –Be Different – Feel Familiar
Your brand needs to stand out from the crowd, but it should also feel like it belongs. Be new and fresh and different, but not to the point that it feels completely out of place. Strong brands differentiate themselves from the competition but also evoke a sense of familiarity and connectedness.
Don’t Try and Be Everything to Everyone
Know who you are and connect with your target customer base where they live through a sense of shared values and common sensibilities. While you want to cast the widest net possible to maximize potential sales, you also need to drive in the appropriate lane and take the right route to get where you want to go. Sometimes, trying to create a ubiquitous brand that is everything to everyone makes you nothing to no one.
Verbalize and Agree UponYour Company Goals
It is essential that you and your branding team are on the same page. Work together to ensure a mutual understanding of your short and long-term company goals. Do you want to always be a local or regional brand? Do you have lofty goals of national and international sales? Do you want to maintain an existing customer base while opening new markets? While this may not necessarily influence your brand narrative, it’s important to fully understand the factors that require consideration.
Set Brand Boundaries
To guarantee that the brand remains consistent over time, it is important to develop strong brand guidelines that will ensure proper representation of the brand through the various channels of execution over the life of the brand, such as advertising, public relations, digital, signage, etc. If these brand boundaries are not firmly established, the brand can easily veer off course as you implement new campaigns and diversify your product offerings.
Remember
Crafting a new brand takes the same level of care and attention to detail as making an award-winning double IPA. It also requires slight adjustments throughout the development process to ensure that the end result is what you want and need. So, assemble the right team, get crafting and never underestimate the power of a good tagline.
The basic concept of the cocktail revolves around mixing ingredients with traditional spirits, such as vodka, gin, whiskey and rum. However, craft beer can blend surprisingly well into cocktails, too – if you only have an open mind and give it a chance!
Mixing beer with other ingredients is nothing new, but it has never caught on popularly in the brewing industry. This drink strategy is still attempted mainly by at-home mixologists looking to entertain guests at parties. But as an increasing number of breweries are now branching out to offer wine and cocktails for non-beer drinkers, there are excellent opportunities to add craft beer cocktails to the menu for an even greater diversity of choice.
What’s In Craft Beer Cocktails?
Although you can use any kind of beer to make a cocktail, certain beer styles lend themselves better than others to mixing in creative ways. It is very common to see light, easily palatable beers, such as lagers and blonde ales, in beer cocktails because they are not overpowering and can easily take on the flavors of other ingredients. Dark and rich beers, namely stouts and porters, work well with cocktail recipes because of their inherent sweetness and full-bodied nature that pairs well with chocolate, coffee, caramel, berries and vanilla.
Some adventurous mixologists have found success mixing bright and hoppy IPAs with other ingredients to tame down a bold beer and make it more versatile for different palates. With a bit of mixing practice, certain cocktails, such as the Long Island iced tea, can work exceptionally well with an IPA or hoppy pale ale. Aside from the traditional beers that you’ll find at breweries, hard ciders are becoming especially popular in cocktails because of the sweet and tart flavors that work well with fruity mixers.
Some of the most common ingredients that you’ll find mixed with craft beer to make cocktails are non-alcoholic beverages, such as lemonade, orange juice, sparkling soda and ginger beer. To give beer cocktails an extra kick, mixologists can use hot sauce and Worcestershire sauce, or to make them sweet, they can add a bit of simple syrup or fruit-based liquor, which also increases the overall alcohol content. Garnishes make craft beer cocktails festive and fun, so, depending on the flavor profile, you can top them off with a lemon wedge, orange slice, cherry or salted glass rim.
Beer Cocktail Recipe Ideas
Within the realm of spirit-based cocktails are the tried-and-true favorites, such as the Manhattan, gimlet or martini. Even though craft beer cocktails aren’t quite as famous, there are still traditional recipes that are easy to make and familiar to recognize.
For example, a summer shandy recipe may mix wheat beer, lemonade, a splash of sparkling soda and lemon garnish. If you prefer beer over Champagne, try a beermosa, a beer-centric version of the mimosa that mixes a lager with orange juice and has an orange slice for the garnish. Yet one of the most common beer cocktails you will see on brewery menus is the michelada, a tamer take on a traditional bloody mary. A michelada mixes a light Mexican lager beer with clamato or tomato juice, lime juice, Worcestershire sauce, hot sauce, soy sauce, Tajín seasoning and a lime wedge for garnish.
Beyond these classic recipes, brewery bartenders can use their imaginations and get creative with mixing their own beer. Beer cocktails are ideal drinks for brunch because they’re light, fun and don’t take themselves too seriously. At your favorite local brewery, would you try a porter mixed with cold-brew iced coffee and a bit of cream? Or perhaps you might kick your weekend off with a peach-inspired beer cocktail that mixes an IPA with vodka, peach nectar and lime juice? Of course, these are just a few examples, but the sky is the limit with how you can alter your beer to create interesting combinations that excite the tastebuds and entice beer fans to walk into your tasting room.
The Appeal of Craft Beer Cocktails
When local craft beer scenes started emerging all over the country in the 2000s and 2010s, brewers focused on making traditional beers well, with some experimentation thrown in to keep things interesting. But these days, some beer aficionados will tell you that the craft beer market is oversaturated and that too many breweries are producing similar products for any one of them to stand out as unique and be successful.
In many places, breweries have become social gathering places, food destinations and event spaces just as much as they are beer providers. Consumers are always looking for the next big thing from their local breweries, whether it is a rotating schedule of events, versatile venues that welcome kids and dogs or expanded menus that cater to diverse tastes.
This evolution of modern breweries creates opportunities for craft beer cocktails to emerge and brewpubs to stand out in the competition. These cocktails have a unique appeal because they can be lighter and more balanced than a standard pint of beer. When you mix beer with other ingredients, the result is often a more complex body, enhanced carbonation, less acidity and altered sweetness or bitterness, depending on the desired style. Beer-inspired cocktails also challenge brewers and consumers to rethink everything they thought they knew about the taste of beer and celebrate the changing seasons.
Breweries Giving Beer Cocktails a Try
However, you still won’t find a list of craft beer cocktails on most breweries’ menus today. The trend has yet to catch on significantly, as these drinks remain niche and are only offered by the occasional brewery bartender with a cocktail background. Yet this only makes breweries with an open mind and spirit of experimentation stand out in the industry even more.
Located in Rio Rancho, New Mexico, Brew Lab 101 is a family-friendly brewery and cidery with an extensive cocktail list. In addition to serving spirit cocktails, Brew Lab 101 also serves beer and cider cocktails. Examples are the A La Chelada, a Mexican lager paired with bloody mary mix, and Dill with Pickle Beer, a blend of a lager or blonde ale with pickle juice and served with a big slice of pickle.
Dry Dock Brewing of Aurora, Colorado, introduced its Docktails line of drinks based on classic cocktails. The brewery’s first releases in this series were a beer-based strawberry basil daiquiri, cucumber margarita and paloma. Another Colorado brewery, Living the Dream Brewing Company, has released beer cocktails in cans to tap into this market. Living the Dream has produced beers replicating classic cocktails that people know and love, such as the old fashioned, Moscow mule, margarita and mojito. The Durango, Colorado-based Ska Brewing has offered a barrel-aged whiskey sour and raspberry julep on its menu to combine both beer and spirits – the best of both worlds.
Meanwhile, some breweries have also become interested in distilling spirits and dabbled in both industries at the same time. This unique craft beverage model lends itself well to craft cocktail mixing and individual experimentation. Maplewood Brewing & Distilling in Chicago, Illinois, is an excellent example of this model and has developed beer-inspired spirits, such as the Fat Pug American Malt Whiskey, inspired by the brewery’s popular oatmeal stout. Other Chicago breweries, including Burnt City Brewing and Casa Humilde, have been leaning into the michelada-inspired cocktail and hard soda trends to test the waters of alternative beverages and meet the demands of customers who want greater variety.
Proper Brewing Company in Salt Lake City, Utah and Brewery Ommegang in Cooperstown, New York are a couple of other breweries to keep an eye on if you are interested in what’s next for beer cocktails. In addition to breweries that produce their own in-house beer, trendy craft beer bars are also jumping on the beer cocktail trend. Vandaag in New York City, Jasper’s Corner Tap & Kitchen in San Francisco and The Tripel in Playa del Rey, California, are just a few examples of bars experimenting with beer mixology.
Integrating Beer Cocktails Into the Menu
Indeed, some challenges are involved in creating beer cocktails and serving them at local breweries. To start, traditionalists may scoff at the very notion of mixing beer with anything else and reject the idea because it ruins the way beer was intended to be. Adding beer cocktails to a brewery’s menu showcases the mixology talents of the brewery team, but it can also require additional training for the staff. In these post-pandemic times, many breweries are still struggling to retain staff at all, and adding more work to their teams could put a considerable strain on more essential operations.
Yet there are plenty of potential benefits to adding craft beer cocktails onto a brewery’s menu and seeing if this trend resonates with a loyal customer base. It may be worth offering discounted specials on beer cocktails on particular nights of the week to entice customers to try them. Seasonal-inspired beer cocktails featuring the flavors of pumpkin, apple and cranberry can be festive additions to a rotating menu lineup. Yet it’s essential to provide detailed descriptions of what is contained in each beer cocktail so that patrons understand exactly what they are and appreciate the flavor pairings. Mixing other ingredients with beer on tap is a great starting point for local breweries to try this trend, but there are also opportunities to branch out into pre-mixed, packaged beer cocktails for retail sale.
It’s impossible to tell whether craft beer cocktails will catch on in the industry in a big way or whether pure, authentic beer will always be the preferred drink of choice in the end. But for now, it’s definitely a fun way to switch up your standard drink order at the local watering hole or get crafty with a few ingredients in your kitchen for a cozy night at home.
